Case Digest (G.R. No. 229706)
Facts:
National Power Corporation v. Power Sector Assets and Liabilities Management Corporation, G.R. No. 229706, March 15, 2023, Supreme Court First Division, Zalameda, J., writing for the Court.Petitioner National Power Corporation (NPC) was assessed by the Office of the Municipal Treasurer of Sual (the Municipal Treasurer) for local business taxes for calendar years 2006–2009. NPC protested the assessments on the ground that its generation function ceased by operation of law upon the effectivity of the Electric Power Industry Reform Act of 2001 (EPIRA, R.A. No. 9136) on 26 June 2001; the protest was denied and NPC filed an appeal in the Regional Trial Court (RTC), Civil Case No. 19076.
While that appeal was pending, the Municipal Treasurer filed a third‑party complaint impleading Power Sector Assets and Liabilities Management Corporation (PSALM), alleging that PSALM had acquired NPC’s generation assets and thus should be liable under the local tax lien for NPC’s alleged business tax liability. PSALM moved to dismiss the third‑party complaint, contending it only assumed NPC liabilities existing as of EPIRA’s effectivity and therefore is not liable for taxes that accrued in 2006–2009.
In an Order dated 3 March 2014, Branch 38, RTC of Lingayen denied PSALM’s motion to dismiss; the trial court held that the issues raised involved factual questions and that justice is better served by resolving them on the merits. PSALM’s motion for reconsideration was denied in an order dated 10 September 2014. PSALM then appealed to the Court of Appeals (CA), which, in a Decision dated 21 July 2016 (and Resolution of 27 January 2017 denying reconsideration), set aside the RTC’s March 2014 Order and dismissed the third‑party complaint, holding that PSALM assumed only liabilities existing as of 26 June 2001 and that tax liens cannot attach to properties no longer owned by the taxpayer when t...(Subscriber-Only)
Issues:
- Did the Court of Appeals gravely err in holding that the Regional Trial Court gravely abused its discretion in refusing to dismiss the third‑party complaint against...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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