G.R. No. 126232 - Province of Bulacan vs. Court of Appeals

On June 26, 1992, the Sangguniang Panlalawigan of Bulacan passed Provincial Ordinance No. 3, titled "An Ordinance Enacting the Revenue Code of the Bulacan Province," effective July 1, 1992.
Section 21 of the ordinance imposed a tax of 10% of the fair market value per cubic meter on ordinary stones, sand, gravel, earth, and other quarry resources extracted from public lands or beds of seas, lakes, rivers, streams, creeks, and public waters within Bulacan's jurisdiction.

On November 11, 1993, the Provincial Treasurer of Bulacan assessed Republic Cement Corporation (Republic Cement) P2,524,692.13 for extracting limestone, shale, and silica from private lands within Bulacan from the third quarter of 1992 until the second quarter of 1993.
Republic Cement contested the assessment on December 23, 1993, arguing that the province lacked authority to tax quarry resources extracted from private lands.
The Provincial Treasurer denied the contestation on January 17, 1994.

Republic Cement filed a petition for declaratory relief with the Bulacan Regional Trial Court (RTC) on February 14, 1994.
The RTC granted the Province’s motion to dismiss the petition on May 13, 1994, ruling declaratory relief as inappropriate due to alleged ordinance breach.
On July 11, 1994, Republic Cement filed a petition for certiorari with the Supreme Court (SC) to reverse the RTC's dismissal.
The SC, in a resolution dated July 27, 1994, referred the case to the Court of Appeals (CA), docketed as CA G.R. SP No. 34915.
During the proceedings, Bulacan issued a warrant of levy against Republic Cement for unpaid tax liabilities.
Negotiations led to an agreement and modus vivendi on December 12, 1994: Republic Cement would pay half the assessed tax (P1,262,346) under protest in exchange for lifting the warrant of levy.
They limited the issue for the CA to whether the provincial government could impose taxes on quarry resources extracted from private lands under Section 21 of the ordinance. This agreement, signed by Governor Pagdanganan, the Provincial Treasurer, and Provincial Legal Officer, was approved by the CA on December 29, 1994.

On September 27, 1995, the CA rendered a judgment declaring the Province of Bulacan without authority to levy and collect taxes on quarry resources extracted from private lands, nullifying the assessment against Republic Cement.
The CA denied the Province's motion for reconsideration on August 26, 1996.

Bulacan Province, Governor Pagdanganan, Treasurer Chavez, and Legal Officer Siayngco filed a petition for certiorari seeking reversal of the CA decision and denial of reconsideration.
Petitioners claimed errors including: impropriety of the remedy used, violation of Supreme Court Circular 2-90, finality of RTC order, overstepping appellate jurisdiction, estoppel issues, misinterpretation of the Local Government Code (LGC), unjust deprivation of taxing power, collateral attack on the ordinance, and failure to consider the Regalian doctrine.

Whether the proper remedy from the RTC's dismissal order was a petition for certiorari or an appeal.
Whether the CA properly took cognizance of the case and did not overstep its jurisdiction.
Whether the Province of Bulacan has legal authority to impose tax on quarry resources extracted from private lands under the LGC and relevant laws.
Whether the assessment by Bulacan against Republic Cement was valid or null and void.
Whether the petitioners are estopped from questioning procedural rulings and the appellate court’s jurisdiction.
Whether the Regalian doctrine or other provisions justify the province's taxation of quarry resources on private lands despite existing excise taxes.
Whether the CA's declaration amounts to an improper collateral attack on Provincial Ordinance No. 3.