G.R. No. 242255 - Province of Sulu vs. Salvador C. Medialdea

National Power Corporation (NPC) is a government-owned and controlled corporation created under Commonwealth Act No. 120, as amended by Republic Act No. 6395.
Mandated powers include developing hydroelectric, nuclear, geothermal, and other power sources; constructing, operating, and maintaining power plants, transmission lines, and substations; and supplying electricity nationwide.
Section 13 of RA 6395 characterizes NPC as a non-profit entity and exempts it from all taxes, duties, fees, imposts, and charges of national and local governments.

In 1992, NPC’s gross receipts from selling electricity in Cabanatuan City amounted to ₱107,814,187.96.
Pursuant to Section 37 of Cabanatuan City Ordinance No. 165-92, the city assessed NPC a franchise tax of ₱808,606.41 (75% of 1% of 1992 gross receipts).
NPC refused payment, arguing (a) local governments lack authority to tax national government instrumentalities, and (b) it is exempt under RA 6395’s non-profit tax-exemption provisions.

The City filed a collection suit in the RTC of Cabanatuan City for the assessed tax, 25% surcharge, and 2% monthly interest.
The RTC dismissed the case, ruling that (a) RA 6395 is a special law not repealed by the general LGC (RA 7160), (b) implied repeal is disfavored, and (c) local governments cannot tax national instrumentalities (citing Basco v. PAGCOR).
On appeal, the Court of Appeals reversed, holding that (a) LGC Section 193 expressly withdrew NPC’s tax exemptions, and (b) LGC Sections 137 (franchise tax) and 151 (scope of taxing powers) authorize the city to impose the tax. The CA ordered NPC to pay the assessed amounts, surcharge, and litigation expenses.
NPC’s motion for reconsideration was denied, prompting this petition for review under Rule 45 of the Rules of Court.

Whether LGC Sections 137 and 151, in relation to Section 131, limit the franchise-taxing power to private persons or corporations and exclude NPC as a government-owned, non-profit entity.
Whether NPC’s tax-exemption under RA 6395 is repealed or withdrawn by the general provisions of the LGC, specifically Section 193.
Whether NPC’s charter provisions enacted under the state’s police power should prevail over the LGC’s taxing authority.