TAXATION Part SEVEN

TAX REMEDIES
REMEDIES UNDER THE LOCAL GOVERNMENT CODE
Local Taxes in General a. Assessment / Collection
ACCRUAL / TAX PERIOD / MANNER OF PAYMENT / SURCHARGE & PENALTIES Sec 165 to 171, LGC, supra COLLECTION OF THE TAX Sec 172 to 185, LGC, supra ASSESSMENT OF DEFICIENCY / DELINQUENT TAX Sec 194, LGC, supra BLGF Ruling (June 13, 2006), supra California Mfg Co. v. City of Las Pias - The requirement for an assessment notice to be valid is a statement of the nature of the tax, fee or charge, the amt of deficiency, the surcharges, interests & penalties. - W/in 60d fr receipt of assessment, aggrieved taxpayer may file a protest w/ local treasurer in case of local tax assessments and w/ LBAA in case of real prop tax assessments.

- Ordinances w/c fix assessment levels, being in the nature of a tax ordinance, Sec 188 likewise applies. - Ordinance w/c fixes assessment levels applicable to the diff classes of real prop in an LGU and imposing penal sanctions for violations thereof shld be published in full. - In the absence of proof that the ordinances werent enacted in accordance w/ such regulations, said ordinances must be presumed to have been enacted in accordance w/ such regulations. Hagonoy Market Vendors Assn v. Munipality of Hagonoy, supra - An appeal of a tax ordinance / revenue measure shld be made to Sec of Justice w/in 30d fr effectivity of ordinance and even during its pendency, the effectivity of assailed ordinance shall not be suspended. - The timeframe fixed by law for parties to avail of their legal remedies before competent courts isnt a mere technicality that can be easily brushed aside. The periods stated in Sec 187 of LGC are mandatory. - Collection of revenues by govt is of paramount importance. The funds for operation of agencies & provision of basic services are largely derived fr revenues & collections. Thus, its essential that the validity of revenue measures isnt left uncertain for considerable length of time. Hence, the law provided a time limit for an aggrieved party to assail legality of revenue measures & tax ordinances. - Public hearings are conducted by legislative bodies to allow interested parties to ventilate their views on proposed law / ordinance. These views, however, arent binding on legislative body & it isnt compelled by law to adopt the same. Sanggunian members are elected by people to make laws that will promote general interest of constituents. They are mandated to use discretion & best judgment in serving. Parties who participate in public hearings shouldnt expect that their views would be patronized by their lawmakers. Coca-cola Phils Inc v. City of Manila - Failure to follow the procedure in enactment of tax measures renders the same null & void. Failure to follow the procedure in enactment of tax measures as mandated by Sec 188 LGC, in that they failed to publish Tax Ordinance for 3 consecutive days in newspaper of local circulation renders the same null & void. - If an order or law sought to be amended is invalid, then it doesnt legally exist, there shld be no occasion or need to amend it.

b. Taxpayers Remedies
PROTESTING AN ASSESSMENT Sec 195, LGC, supra PROTEST TO THE CITY / MUNICIPAL TREASURER California Mfg Co. v. City of Las Pias, supra San Juan v. Castro Mandamus doesnt lie to compel City Treasurer to accept as full compliance of tax payment w/c in his reasoning and assessment is deficient & incorrect. APPEAL TO THE REGULAR COURT OF COMPETENT JURISDICTION CLAIM FOR REFUND / TAX CREDIT - period: 2 yrs - written claim Sec 196, LGC, supra CONTESTING THE VALIDITY OF A NEW TAX ORDINANCE - when a taxpayer can contest the legality of a tax ordinance: 30d fr effectivity - appeal to Sec of Justice: 60d to decide - appeal to court of competent jurisdiction Sec 186 to 193, LGC, supra Figuerres v. CA - RA 7160 (LGC) provides that an ordinance levying taxes, fees, charges shall not be enacted w/o any prior public hearing conducted for the purpose. - Lack of public hearing is a negative allegation to w/c the party asserting has the burden of proof. - An ordinance imposing real prop taxes must be posted / published as required by LGC Sec 188.

Real Property Taxes a. Assessment / Collection

ASSESSMENT OF LAND VALUE Sec 219 to 225, LGC, supra COLLECTION OF REAL PROPERTY TAX Sec 246 to 251, LGC, supra PAYMENT IN INSTALLMENTS CONDONATION OF TAX Sec 276 to 277, LGC, supra REDUCTION / DISCOUNT REMEDIES OF GOVERNMENT TO COLLECT Sec 254 to 270, LGC, supra Sps Ramon & Rosita Tan v. Bantegui - Auction sale of real prop for collection of delinquent taxes is in personam, not in rem. Although sufficient in proceedings in rem, mere notice by publication will not satisfy requirements of proceedings in personam. It is still incumbent upon city treas to send the notice directly to taxpayer the registered owner in order to protect the latters interests. Although preceded by proper advertisement and publication, an auction sale is void absent an actual notice to a delinquent taxpayer. - Notice of sale to the delinquent landowners and to the public, in general, is an essential and indispensable requirement of law, nonfulfillment of w/c vitiates the sale.

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b. Taxpayers Remedies
CONTESTING THE ASSESSMENT OF LAND VALUE Sec 226, LGC Local Board of Assessment Appeals. - Owner / person w/ legal interest in prop whos not satisfied w/ action of provincial, city, municipal assessor in assessment of his prop may, w/in 60d fr date of receipt of written notice of assessment, appeal to Board of Assessment Appeals of province / city by filing - petition under oath - copies of tax declarations - affidavits / docs in support of appeal Sec 227, LGC Organization, Powers, Duties, and Functions of the Local Board of Assessment Appeals. a. Board of Assessment Appeals of province / city is composed of - Registrar of Deeds as Chairman - provincial / city prosecutor AND engineer as members, in ex officio capacity w/o addl compensation b. Chairman has power to designate any employee of province / city to serve as secretary also w/o addl compensation. c. Chairman & members assume positions w/o need of further appointment / special designation immediately upon effectivity of Code. They take oath / affirmation of ofc. d. - Where theres no provincial / city engineer, the district engineer serves as member of Board. - In absence of Registrar of Deeds, or prosecutor, or provincial / city / district engineer, the persons performing their duties, whether in acting capacity or as OIC, automatically becomes Chairman or member, respectively, of Board. Sec 228, LGC Meetings and Expenses of the Local Board of Assessment Appeals. a. - Board of Assessment appeals of province / city meets once a mo AND as often as necessary for prompt disposition of appealed cases. - No member of Board is entitled to per diems / traveling expenses for attendance in Board mtgs, except when conducting ocular inspection in connection w/ case under appeal. b. - Expenses of Board are charged against gen fund of province / city. - Sanggunian appropriates funds to enable Board to operate. Sec 229, LGC Action by the Local Board of Assessment appeals. a. - Board decides appeal w/in 120d fr date of receipt of appeal. - Board, after hearing, renders decision based on substantial evidence or relevant evidence on record as reasonable mind might accept as adequate to support conclusion. b. - In appellate jurisdiction, Board has power to - summon witnesses - administer oaths - conduct ocular inspection - take depositions - issue subpoena & subpoena duces tecum - Proceedings are conducted solely for ascertaining facts w/o necessarily adhering to technical rules in judicial proceedings. c. - Secretary of Board shall furnish owner of prop or person w/ legal interest AND provincial / city assessor w/ copy of decision of Board. - In case assessor concurs in revision or the assessment, its his duty to notify owner of prop or person w/ legal interest of such fact using form prescribed. - Owner or person w/ legal interest OR assessor who isnt satisfied w/ decision of Board may, w/in 30d after receipt of decision of Board, appeal to Central Board of Assessment Appeals. Decision of CBAA is final & executory. Sec 230, LGC Central Board of Assessment appeals. - CBAA is composed of Chairman AND 2 members - appointed by President - serve for term of 7y w/o reappointment - Of those first appointed, chairman holds ofc for 7y, one member for 5y, and the other for 3y. - Appointment to vacancy is only for unexpired portion of term of predecessor. - In no case shall any member be appointed in temporary / acting capacity. - Chairman & members shall be - Filipino citizens - at least 40y old at time of appointment - members of Bar or CPAs for at least 10y immediately preceding appointment - Chairman has salary grade equivalent to rank of Director III under Salary Standardization Law exclusive of allowances & other emoluments. Members have salary grade equivalent to rank of Director II. - Board has appellate jurisdiction over all assessment cases decided by LBAA. - There are Hearing Officers appointed by CBAA pursuant to civil service laws, rules - one ea for Luzon, Visayas, Mindanao - ofc in Manila, Cebu City, Cagayan de Oro City - term of 6y w/o reappointment until successors are appointed & qualified - same qualifications as that of Judges of Municipal Trial Courts - salary grade equivalent to rank of Director I - shall try & rcv evidences on appealed assessment cases as directed by Board - CBAA may - establish & organize staffs, offices, units - prescribe titles, functions & duties of members - adopt own rules - Unless otherwise provided, annual appropriations for CBAA are included in annual budget of DoF in General Appropriations Act. Sec 231, LGC Effect of appeal on the Payment of Real Property Tax. - Appeal on assessments of real prop shall, in no case suspend collection of realty taxes as assessed by provincial / city assessor, w/o prejudice to subsequent adjustment depending upon outcome of appeal. APPEAL TO THE LOCAL BOARD OF ASSESSMENT APPEALS (LBAA) Systems Plus Computer College v. Caloocan City - Remedy of appeal to LBAA is available fr adverse ruling / action of provincial, city, municipal assessor in assessment of prop. - The determination by City Assessor w/ regard to taxability of subject real prop is subject to appeal before LBAA. - Doctrine of exhaustion of administrative remedies: Before seeking the intervention of courts, its a precondition that petitioner shld first avail of all means afforded by administrative processes. APPEAL TO THE CENTRAL BOARD OF ASSESSMENT APPEALS (CBAA) Caltex v. CBAA, supra - Central Board of Assessment Appeals, and not the CTA, has appellate jurisdiction over decisions of local boards of assessment appeals and is in same category as Tax Court. - Real Prop Tax Code provides that decision of CBAA becomes final & executory after 15d fr receipt of decision. W/in that period, reconsideration may be filed. Code doesnt provide for review of the Boards decision by this Court. - The only remedy available for seeking a review by this Court of the decision of CBAA is the special civil action of certiorari. Chavez v. Ongpin, supra - PD 464 furnishes the procedure by w/c a tax assessment may be questioned.

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- W/in 60d fr date of receipt of written notice of assessment, any owner who doubts assessment of his prop may appeal to Local Board of Assessment Appeals. In case owner / administrator of prop or assessor isnt satisfied w/ decision of LBAA, he may, w/in 30d fr receipt of decision, appeal to Central Board of Assessment Appeals. The decision of CBAA becomes final & executory after lapse of 15d fr date of receipt of decision. Cagayan Robina Sugar Milling v. CA Where owner / administrator of prop OR assessor isnt satisfied w/ decision of LBAA, he may, w/in 30d fr receipt of decision, appeal to CBAA. Perfection of appeal w/in period therefor is both mandatory and jurisdictional, and that failing in this regard renders decision final & executory. PAYMENT OF REAL PROPERTY TAX UNDER PROTEST Sec 252, LGC, supra Manila Electric Co. v. Barlis Payment of tax assessed under protest is a condition sine qua non before trial court could assume jurisdiction over the petition and for failure to do so, the RTC has no jurisdiction to entertain it. Emerlinda Talento v. Escalada & Petron Corp - The question whether collection of taxes may be suspended by reason of filing of an appeal & posting of surety bond is a pure question of law w/c shld be appealed to SC by petition for rvw on certiorari under R45 and not thru special civil action of certiorari under R65. - An exception to the rule that appeal shall not suspend the collection of realty taxes is where taxpayer has shown a clear & unmistakable right to refuse or to hold in abeyance the payment of taxes. FILE PROTEST WITH THE LOCAL TREASURER PROTEST TO BE FILED WITH THE LBAA: WITHIN 60 DAYS FROM RECEIPT OF ASSESSMENT; 120 DAYS TO DECIDE City Government of Quezon City v. Bayan Telecommunications Inc, supra - Since taxpayers real props were already levied upon on acct of its nonpayment of real estate taxes, an appeal to LBAA is not a speedy & adequate remedy. - An appeal to LBAA required prior payment under protest. If amount is difficult to raise, appeal to LBAA may not be considered as plain, speedy, adequate remedy California Mfg Co. v. City of Las Pias, supra National Power Corp v. CBAA, LBAA of La Union - Law provides that, when owner / person w/ legal interest in prop who isnt satisfied w/ assessment, may file appeal w/in 60d to LBAA. - Under the Rules of Procedure before LBAA, its also provided that owner, administrator or person who isnt satisfied w/ assessment of his prop may, w/in 60d fr date of receipt of written notice of assessment, appeal to LBAA (Sec 2(a), Rule V). - Likewise, Sec 4 of same Rules provides that "any action of Provincial, City, Municipal Assessor in assessment of real prop, and any action / inaction of Provincial / City Treasurer, or Municipal Treasurer, on taxpayer's claim for refund of taxes pd under protest, or on claims for reduction / adjustment of taxes pd or for tax credits on illegally / erroneously collected realty taxes and such other real prop taxes / special levies under LGC", may be appealed to LBAA. - An appeal to LBAA must necessarily involve questioning of the correctness of assessment of prop. - An assessment is defined as "the act / process of determining value of prop, or proportion thereof subject to tax, incl discovery, listing, classification, appraisal of prop" (Sec 199(f), LGC) APPEAL TO THE CBAA: WITHIN 30 DAYS FROM RECEIPT OF DENIAL APPEAL TO THE CTA RA 9282 amending RA 1125 * Refer to NIRC Remedies. APPEAL TO THE SC CLAIM FOR REFUND OF REAL PROPERTY TAX PAID Sec 253, LGC Repayment of Excessive Collections. - When assessment of basic real prop tax, or other tax under this Title, is found to be illegal / erroneous AND tax is accordingly reduced / adjusted, taxpayer may file written claim for refund / credit for taxes & interests w/ provincial / city treas w/in 2y fr date the taxpayer is entitled to reduction / adjustment. - Treas shall decide claim for refund / credit w/in 60d fr receipt thereof. - If claim is denied, taxpayer may avail of remedies in Ch 3, Title II, Book II.

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