CITY OF PASIG, REPRESENTED BY THE CITY TREASURER and THE CITY ASSESSOR vs. REPUBLIC OF THE PHILIPPINES, G.R. No. 185023, August 24, 2011
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Republic Act No. 7160 or the Local Government Code of 1991, clearly sets forth the administrative remedies available to a taxpayer or real property owner who is not satisfied with the assessment or reasonableness of the real property tax sought to be collected. The Supreme Court outlined said remedies, to wit:
Should the taxpayer/real property owner question the excessiveness or reasonableness of the assessment, Section 252 directs that the taxpayer should first pay the tax due before his protest can be entertained. There shall be annotated on the tax receipts the words “paid under protest.” It is only after the taxpayer has paid the tax due that he may file a protest in writing within thirty days from payment of the tax to the Provincial, City or Municipal Treasurer, who shall decide the protest within sixty days from receipt. In no case is the local treasurer obliged to entertain the protest unless the tax due has been paid.
If the local treasurer denies the protest or fails to act upon it within the 60-day period provided for in Section 252, the taxpayer/real property owner may then appeal or directly file a verified petition with the LBAA within sixty days from denial of the protest or receipt of the notice of assessment, as provided in Section 226 of R.A. No. 7160[.]
And, if the taxpayer is not satisfied with the decision of the LBAA, he may elevate the same to the CBAA, which exercises exclusive jurisdiction to hear and decide all appeals from the decisions, orders and resolutions of the Local Boards involving contested assessments of real properties, claims for tax refund and/or tax credits or overpayments of taxes. An appeal may be taken to the CBAA by filing a notice of appeal within thirty days from receipt thereof.
From the Central Board Assessment Appeals, the dispute may then be taken to the Court of Tax Appeals by filing a verified petition for review under Rule 42 of the Revised Rules of Court; to the Court of tax Appeals en banc; and finally to the Supreme Court via a petition for review on certiorari pursuant to Rule 45 of the Revised Rules of Court.
We are not convinced with PCGG’s stance that their recourse of filing the petition for certiorari, prohibition and mandamus before the trial court is proper as they are questioning not merely the correctness of the tax assessment but the actions of Pasig City, through its City Assessor and City Treasurer, which were done in grave abuse of discretion amounting to lack or excess of jurisdiction.
The well-established rule is that allegations in the complaint and the character of the relief sought determine the nature of an action. A perusal of the petition before the trial court plainly shows that what is actually being assailed is the correctness of the assessments made by the City Assessor of Pasig City on the subject parcels of land. PCGG claims, among others, that: 1) the subject parcels of land are exempt from real property taxation as they are public property; 2) even if the subject parcels of land are subject to tax, as the beneficial use thereof was granted to private persons and entities, only the portion thereof used for commerce is subject to tax and the users thereof are the ones liable to pay the tax; and 3) the right of Pasig City to collect the real property taxes pertaining to 1987 to 1998 has already prescribed. These claims essentially involve questions of fact, which are improper in a petition for certiorari, prohibition and mandamus; hence, the petition should have been brought, at the very first instance, to the Local Board Assessment Appeals, which has authority to rule on the objections of any interested party who is not satisfied with the action of the assessor. Under the doctrine of primacy of administrative remedies, an error in the assessment must be administratively pursued to the exclusion of ordinary courts whose decisions would be void for lack of jurisdiction.
Granting that the assessor’s authority and the legality of the assessment are indeed an issue, the proper remedy is a suit for the refund of the real property tax after paying the same under protest. It must be pointed out that in order for the trial court to resolve the instant petition, the issues of the correctness of the tax assessment and collection must also necessarily be dealt with; hence, a petition for certiorari, prohibition and mandamus is not the proper remedy. x x x [T]he resolution of the issues raised in the instant case involve examination and determination of relevant and material facts, i.e. facts relating to the ownership of the subject parcels of land, the portion of the subject parcel of land used for commercial purposes and the identities of the lessees and the users thereof. Since resolution of factual issues is not allowed in a petition for certiorari, prohibition and mandamus, the trial court is precluded from entertaining the petition.
Finally, Section 252 of the R.A. No. 7160 requires payment under protest in assailing real property tax assessment. Even an appeal shall not suspend the collection of the atx assessed without prejudice to a later adjustment pending the outcome of the appeal. This principle is consistent with the time-honoredprinciple that taxes are the lifeblood of the nation. But the PCGG failed to pay the tax assessment prior to questioning it before the trial court; hence, the trial court should have dismissed PCGG’s petition in line with the Supreme Court pronouncement that a trial court has no jurisdiction to entertain a similar petition absent payment under protest.
In conclusion and taking all the foregoing into account, we hold that the trial court had no jurisdiction to take cognizance and decide PCGG petition for certiorari, prohibition and mandamus; the trial court should have dismissed the petition.6
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