Case Digest (G.R. No. 166651)
Facts:
Republic of the Philippines (represented by the Department of Energy [DOE] and the Philippine National Oil Company‑Energy Development Corporation [PNOC‑EDC]) v. City of Kidapawan, Kidapawan City Assessor and Kidapawan City Treasurer, G.R. No. 166651, December 09, 2005, Supreme Court First Division, Ynares‑Santiago, J., writing for the Court.In pursuit of geothermal development, President Marcos issued PD No. 1442 enabling service contracts for exploration and development of geothermal resources. By Proclamation No. 853 (January 30, 1992) portions of Mt. Apo National Park were excluded and declared a geothermal reservation under PNOC administration, later called the Mt. Apo Geothermal Reservation Area (MAGRA). On March 24, 1992, the Office of Energy Affairs (now DOE) entered a service contract with PNOC‑EDC to conduct exclusive geothermal operations in MAGRA; PNOC‑EDC later constructed a 104‑megawatt plant there.
The Kidapawan City Treasurer assessed PNOC‑EDC with alleged real property tax delinquencies for MAGRA covering 1993–2002, issued a warrant of levy on the 701‑hectare MAGRA, and notified PNOC‑EDC of a public auction of delinquent property. PNOC‑EDC filed a petition for prohibition with prayer for a preliminary injunction/TRO to enjoin assessments and sale. The Regional Trial Court (RTC) Branch 23 issued orders (May 14 and June 3, 2003) directing respondents to desist from auction and levy pending resolution.
The RTC, Branch 17, rendered a September 8, 2004 Decision (Judge Francis E. Palmones, Jr., penning the decision) holding PNOC‑EDC not exempt from real property tax because it was the beneficial user of MAGRA, enjoining sale of the land (being public domain) but allowing sale of improvements; the court dissolved the ear...(Subscriber-Only)
Issues:
- Is PNOC‑EDC the beneficial user of the MAGRA and therefore liable for real property tax?
- Did the Local Government Code (RA No. 7160) withdraw any exemption in the service contract that might have exempted PNOC‑EDC from real property tax?
- If PNOC‑EDC is liable for real property tax, may the machineries, equipment, buildings and other improvements located in MAGRA be levied upon and sold at public auction to satisfy the tax delinquency?
- Has the assessment become final and executory such that judicial relief was properly ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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