Case Digest (G.R. No. 192945)
Facts:
This case involves the City of Iriga as the petitioner and the Camarines Sur III Electric Cooperative, Inc. (CASURECO III), as the respondent. CASURECO III is an electric cooperative established under Presidential Decree No. 269, registered with the National Electrification Administration (NEA), and engaged in electricity distribution within Iriga City and neighboring municipalities in Camarines Sur. Starting in 2003, the City of Iriga demanded that CASURECO III submit its gross receipts for the years 1997-2002 to compute franchise and other taxes. CASURECO III complied but later refused to pay the assessed franchise and real property taxes for periods covering 1995-2003, claiming exemption as an electric cooperative provisionally registered with the Cooperative Development Authority (CDA) under Republic Act No. 6938.
In response, the City of Iriga filed a collection complaint for these local taxes with the Regional Trial Court (RTC) in 2004, citing its taxing authority under t
Case Digest (G.R. No. 192945)
Facts:
- Background and Parties
- CASURECO III is an electric cooperative organized under Presidential Decree (PD) No. 269, registered with the National Electrification Administration (NEA).
- It operates electric power distribution to consumers in Iriga City and several neighboring municipalities of Camarines Sur Province, collectively known as the Rinconada area.
- Events Leading to Dispute
- In 2003, the City of Iriga (petitioner) required CASURECO III to submit reports of its gross receipts covering 1997 to 2002 for the purpose of computing franchise taxes, fees, and other charges.
- CASURECO III complied and was assessed local franchise taxes based on the submitted reports.
- On January 7, 2004, the City of Iriga demanded payment of franchise taxes due for 1998-2003 and real property taxes for 1995-2003.
- CASURECO III refused, claiming exemption from local taxes as a cooperative provisionally registered with the Cooperative Development Authority (CDA).
- Litigation History
- On March 15, 2004, the City of Iriga filed a complaint before the Regional Trial Court (RTC) of Iriga City to collect local taxes from CASURECO III, citing its taxing authority under the Local Government Code (LGC) and city revenue code.
- The RTC found:
- Real property taxes for 1995-1999 had prescribed based on Section 194 of the LGC.
- CASURECO III was liable for franchise taxes for 2000-2003 based on its gross receipts from Iriga City and the Rinconada area.
- CASURECO III appealed only the RTC ruling on franchise tax liability.
- Court of Appeals (CA) Ruling
- The CA reversed the RTC decision, ruling that CASURECO III, being a non-profit entity, was not a "business" subject to franchise tax under Section 137 of the LGC.
- The CA held that CASURECO III’s non-profit status excluded it from businesses “enjoying a franchise”.
- The CA denied the City’s motion for reconsideration due to a late filing.
- Present Petition to the Supreme Court
- The City of Iriga filed a petition under Rule 45 seeking to set aside the CA Decision and Resolution and to reinstate the RTC ruling.
Issues:
- Whether an electric cooperative registered under PD 269 but not under Republic Act (RA) 6938 is liable to pay local franchise taxes.
- Whether the situs of taxation for franchise tax purposes is the place where the franchise holder exercises its franchise, irrespective of where services or goods are delivered.
- (Raised by CASURECO III) Whether the CA Decision had already attained finality due to an untimely motion for reconsideration.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)