Case Summary (G.R. No. 127383)
Key Dates
• Effectivity of Local Government Code (R.A. 7160): January 1, 1992
• Notices of levy and public auction: April 8, July 28 and August 29, 1994
• GSIS petition and RTC TRO issuance: September 13, 1994
• RTC decision affirming GSIS exemption: May 28, 1996
• Supreme Court decision: August 18, 2005
Applicable Law
• 1987 Philippine Constitution, Article X (local autonomy)
• Local Government Code of 1992 (R.A. 7160), especially Sections 193 (withdrawal of tax exemptions), 232 (power to levy real property tax), 234 (enumeration of real property tax exemptions), and Section 5 rules of interpretation
• Presidential Decree No. 1146, Section 33 (tax exemption for GSIS), as amended by P.D. 1981
• Presidential Decree No. 1931 (withdrawal of GOCC tax exemptions)
• Jurisprudence: Mactan-Cebu International Airport Authority v. Marcos (330 Phil. 392, 1996)
Facts
GSIS failed to pay real property taxes for 1992–1994, prompting the City of Davao to issue warrants of levy and notices of public auction. GSIS petitioned the RTC for certiorari, prohibition, mandamus, and declaratory relief and secured a temporary restraining order and a preliminary injunction. At pre-trial, the sole issue was whether the Local Government Code abrogated GSIS’s exemption under Section 33 of P.D. 1146, as amended.
RTC Ruling
The RTC held that Section 33 of P.D. 1146 continued to shield GSIS from all taxes unless (a) expressly and categorically repealed by law and (b) a substitute provision was enacted to preserve GSIS’s solvency. As neither condition appeared in the Local Government Code, the court declared the tax levies void and enjoined their enforcement.
Issue Before the Supreme Court
Whether the Local Government Code of 1992 effectively withdrew the GSIS’s real property tax exemption despite the conditional repeal requirements in Section 33 of P.D. 1146, as amended.
Supreme Court’s Legal Analysis
1. Irrepealable or condition-bound statutes infringing on legislative plenary power violate fundamental principles of statutory construction and democratic governance. Only the Constitution may impose substantive limits on legislative repeal or amendment of laws.
2. Section 33’s second paragraph, introduced by P.D. 1981, unconstitutionally attempted to fetter future legislatures by prescribing special conditions for repeal of GSIS’s tax exemption. Such restraints are void.
3. The Local Government Code, enacted under the 1987 Constitution’s directive on local autonomy (Art. X, Secs. 2 and 5), withdrew all tax exemptions previously granted to GOCCs (Sec. 193) and authorized local governments to levy real property taxes except on those properties specifically exempted (Secs. 232 and 234). GSIS does not fall within the enumerated exemptions of Section 234.
4. Mactan-Cebu International Airport Authority v. Marcos established that Section 133’s broad exemption for nat
Case Syllabus (G.R. No. 127383)
Facts
- On April 8, 1994, the GSIS Davao City branch received a Notice of Public Auction for properties in Matina and Ulas for unpaid realty taxes covering 1992–1994, amounting to ₱295,721.61.
- Davao City extended the payment deadline, resetting the auction schedule.
- On July 28, 1994, GSIS received Warrants of Levy and Notices of Levy on three land parcels; on August 29, 1994, another auction notice set the sale for September 20, 1994.
- GSIS filed a petition for certiorari, prohibition, mandamus, and/or declaratory relief in the RTC of Davao City on September 13, 1994, seeking a temporary restraining order against the auction.
- Branch 12 of the RTC issued a 20-day temporary restraining order on September 13, 1994, and on April 3, 1995, granted a writ of preliminary injunction for the suit’s duration.
Procedural History
- Parties agreed at pretrial that the sole issue was a pure question of law: whether Sections 234 and 534 of the Local Government Code (LGC) withdrew GSIS’s real property tax exemption.
- After submission of memoranda, the RTC rendered its decision on May 28, 1996, upholding GSIS’s exemption based on Section 33 of P.D. No. 1146 as amended by P.D. No. 1981.
- GSIS’s motion for reconsideration was denied on October 30, 1996.
- The City of Davao elevated the case directly to the Supreme Court on a pure question of law.
Issue
- Whether the Local Government Code of 1992, specifically Sections 193, 234, and 534(f), withdrew the real property tax exemption previously enjoyed by the GSIS under Section 33 of P.D. No. 1146, as amended.
Relevant Statutory Provisions
- P.D. No. 1146 (Revised GSIS Act of 1977), Section 33: Declared GSIS assets and revenues exempt from all taxes, “unless expressly and specifically revoked.”
- P.D. No. 1981 (1985 amendment): Added that exemptions “shall not be affected by subsequent laws to the contrary…unless this section is expressly and categorically repealed by law and a provision is enacted to substitute…exemption…as essential factor for solvency.”
- P.D. No. 1931 (1976): Withdrawn all exemptions granted to GOCCs, unless restored by application to the Secretary of Finance.
- Republic Act No. 7160 (Local Gover