Case Summary (G.R. No. 125909)
Applicable Law
- 1987 Philippine Constitution
- Presidential Decree No. 464 (Real Property Tax Code), as amended by P.D. 1621
- Executive Order No. 73 (Nov. 25, 1986)
- Executive Order No. 1019 (Apr. 18, 1985)
- Joint Local Assessment/Treasury Regulations No. 2-86
Nature of the Petition
Chavez challenges Executive Order No. 73 as unconstitutional for accelerating the effectivity of a general revision of real property values—resulting in tax increases of 100–400% on improvements and up to 100% on land—during adverse economic conditions. The intervenor adds that (1) P.D. 464 is itself unconstitutional for imposing a one-percent levy for education, (2) the general revision lacked due-process safeguards, and (3) Joint Regulation No. 2-86 is oppressive.
Scope and Content of Executive Order No. 73
Section 1 of E.O. 73 provides that real property values determined in the 1984 general revision shall take effect January 1, 1987 for tax purposes. Sections 2–5 direct implementing rules, repeal E.O. 1019 (which had deferred the effectivity to January 1, 1988), and modify inconsistent issuances.
Mandate of P.D. 464 Section 21
Under Section 21 of P.D. 464, a general revision of assessments must occur every five years, beginning 1979, or sooner if property values have “greatly changed,” with the approval of the Secretary of Finance. The 1984 revision thus represents a continuing, mandatory process under existing law.
Absence of Direct Challenge to the Underlying Statute
Chavez did not assail P.D. 464 itself, the true source of authority for the 1984 revision. A petitioner cannot nullify an order implementing a decree without first challenging the decree’s validity. Only ROAP questioned P.D. 464—and intervention is limited to issues properly before the original petition.
Administrative Remedies for Assessment Disputes
P.D. 464 provides a two-tier appeals mechanism:
• Local Board of Assessment Appeals (appeal within 60 days of notice; decision in 120 days)
• Central Board of Assessment Appeals (further appeal within 30 days; final decision in 12 months, executory after 15 days)
Chavez and ROAP could invoke these procedures to contest any alleged overassessment.
Due Process and the Power to Tax
The cases relied on by Chavez (Ermita-Malate Hotel; Sison v. Ancheta) address procedural safeguards in the imposition of new taxes. E.O. 73 neither creates new taxes nor raises tax rates; it merely advances the date for applying values already authorized by law. Accordingly, no due-process violation arises from the order alone.
Policy Justifications for E.O. 73
The “whereas” clauses of E.O. 73 cite the obsoles
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Facts
- On November 25, 1986, President Corazon C. Aquino issued Executive Order No. 73, advancing the collection of real property taxes based on the 1984 general revision of property values, effective January 1, 1987.
- Executive Order No. 73 expressly repealed Executive Order No. 1019 (April 18, 1985), which had deferred the implementation of the 1984 assessments’ tax increases until January 1, 1988.
- Memorandum Order No. 77 (March 31, 1987) temporarily suspended the implementation of EO 73 until June 30, 1987.
- Francisco I. Chavez, a taxpayer and owner of three parcels of land, filed a petition to declare EO 73 unconstitutional, claiming it triggered abrupt increases in real property taxes (100%–400% on improvements, up to 100% on land), was oppressive in a time of economic hardship, and lacked due process.
- Realty Owners Association of the Philippines, Inc. (ROAP) intervened, joining Chavez in challenging EO 73 and further asserting that:
• Presidential Decree No. 464 (the Real Property Tax Code) is unconstitutional insofar as it imposes an additional 1% tax for education;
• The 1984 general revision of assessments violated procedural due process (notice, hearing, publication) and exceeded PD 464’s scope by using “replacement cost” for improvements;
• The Joint Local Assessment/Treasury Regulations No. 2-86 (December 12, 1986) was oppressive, mandating successive 150% tax hikes over the 1986 rate.
Issues
- Whether Executive Order No. 73 is constitutional in accelerating the effectivity of the 1984 general revision of real property assessments.
- Whether EO 73 unlawfully imposes new taxes or infringes due process or constitutes confiscation.
- (ROAP’s broader challenges to PD 464 and related regulations were also raised but are ancillary to the validity of EO 73.)
Petitioner’s Contentions (Chavez)
- EO 73 unlawfully accelerates the general revision of assessments, resulting in massive tax hikes during an economic downturn.
- The increase in market values reflected in the 1984 schedule was purely inflationary and thus oppressive.
- The abrupt tax in