Case Summary (G.R. No. 226716)
Background Facts
On September 23, 2010, NPC received a Notice of 2010 Assessment from the Municipality of Sual, requiring payment of local business taxes. This assessment was purportedly based on a Supreme Court decision affirming NPC's tax liability to local government units and Municipal Ordinance No. 121 from Sual. Following the assessment, the Municipality filed a complaint for collection against NPC for unpaid taxes from 2006 to 2009. In response, NPC filed an appeal contesting its tax liability for the years 2006 to 2009. Subsequently, NPC received a Notice of Seizure regarding unpaid local business taxes for 2010, leading to further communications from the Philippine National Bank about the garnishment of its funds due to the Municipality's threat of enforcement.
Legal Proceedings
NPC sought a Petition for Injunction to stop the collection of the local business tax for 2010, which was dismissed by the Regional Trial Court (RTC) on grounds of forum shopping and the doctrine of non-interference between concurrent courts. NPC subsequently appealed to the Court of Tax Appeals (CTA), asserting numerous grounds for contesting the local tax assessment.
Issues on Appeal
The CTA Second Division dismissed NPC’s petition, affirming the RTC's decisions based on findings that the 2010 assessment notice had become final and collectible given NPC's failure to protest the assessment within the statutory period outlined in Section 195 of the Local Government Code. The CTA ruled that the taxpayer must formally contest tax assessments to avoid finality.
CTA En Banc Decision
NPC's appeal to the CTA En Banc reiterated several arguments, including the assertion that it was no longer operational in the municipality due to provisions in the Electric Power Industry Reform Act (EPIRA), which transferred its business activities to another entity, the Power Sector Assets and Liabilities Management Corporation (PSALM). The CTA En Banc upheld the Second Division's ruling, indicating that NPC still conducted business in Sual as of 2010, and therefore remained liable for local business taxes.
Supreme Court Considerations
The Supreme Court examined the CTA En Banc's decision and the issues raised by NPC, particularly focusing on whether the assessment had attained finality absent a timely protest and whether NPC qualified as the proper party subject to the tax. The Court acknowledged the doctrine established in the earlier Bataan case, which likewise involved NPC's tax liability post-EPIRA, establishing a precedent that NPC should not be held liable for local taxes tied
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