Case Digest (G.R. No. 166102)
Facts:
Manila Electric Company v. The City Assessor and City Treasurer of Lucena City, G.R. No. 166102, August 05, 2015, Supreme Court First Division, Leonardo‑De Castro, J., writing for the Court. MERALCO, a private corporation operating as an electric distribution utility under successive local and national franchises, was assessed by the City of Lucena for real property tax on its transformers, electric posts (poles), transmission lines, insulators, and electric meters. The City Assessor issued Tax Declaration No. 019‑6500 (covering certain facilities, assessed as early as 1985) and later a Notice of Assessment and Tax Declaration No. 019‑7394 increasing the appraised values; a City Treasurer collection letter dated October 16, 1997 claimed alleged delinquencies from 1990 onward totaling approximately P17.9 million.MERALCO appealed the 1997 assessment to the Local Board of Assessment Appeals (LBAA) of Lucena City, posting a surety bond to guarantee payment, and contended that (a) its substation facilities alone comprised its capital investment, (b) its poles, wires, transformers, insulators and meters were personal property exempt from realty tax under earlier franchise provisions and prior administrative rulings, and (c) the 1997 assessment was procedurally defective for lack of itemized appraisal and notice. The LBAA (June 17, 1998) dismissed MERALCO’s appeal, holding that the Local Government Code (R.A. No. 7160) repealed prior exemptions and directing assessment based on the 1991 schedule of market values; the CBAA (May 3, 2001) affirmed in part, ruling MERALCO lost exemption status under the Code but limiting the effective date of new assessment to 1992.
MERALCO moved for reconsideration before the CBAA (denied August 16, 2001), then filed a Rule 43 petition to the Court of Appeals (CA‑G.R. SP No. 67027). The Court of Appeals (Decision May 13, 2004; Res. Nov. 18, 2004) affirmed the CBAA, finding the assessment valid, that the Local Government Code withdrew MERALCO’s exemption, and that the transformers and relate...(Subscriber-Only)
Issues:
- Did MERALCO’s posting of a surety bond in lieu of cash payment constitute the required "payment under protest" to satisfy Section 252 of the Local Government Code and permit its appeal to be entertained?
- Were MERALCO’s transformers, electric posts, transmission lines, insulators, and electric meters still exempt from real property tax by virtue of its franchise and prior administrative rulings, or did R.A. No. 7160 (Local Government Code) withdraw those exemptions?
- Do the described facilities qualify as "machinery" and therefore real property subject to real property tax under Section 199(o) of the Local Government Code?
- Was the 1997 appraisal and assessment (and the Notice of Assessment and collection letter) valid under the Local Government Code and related rules, and ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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