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[G.R. No. 114231. February 1, 2002.]

MANILA ELECTRIC COMPANY, Petitioner, v. NELIA A. BARLIS, in her capacity as Officer-in-Charge/Acting Municipal Treasurer of Muntinlupa, substituting EDUARDO A. ALON, former Municipal Treasurer of Muntinlupa, Metro Manila, Respondent.



Submitted for resolution is petitioner’s Motion for Reconsideration of our Decision promulgated on May 18, 2001 affirming the Decision of the Court of Appeals dated August 11, 1993 and its Resolution dated February 28, 1994.chanrob1es virtua1 1aw 1ibrary

The said Decision of the Court of Appeals declared as void the June 17, 1991 Order of the Regional Trial Court (RTC) of Makati City, Branch 66, denying respondent Municipal Treasurer’s Motion to Dismiss the petitioner’s Petition for Prohibition.

In our Decision, we ruled, among others that the RTC had no jurisdiction to entertain petitioner’s Petition for Prohibition to enjoin respondent Municipal Treasurer of Muntinlupa from garnishing petitioner’s bank deposits to the extent of its unpaid real estate taxes inasmuch as petitioner did not comply with the legal requirement of paying under protest the taxes assessed against it as provided for in Section 64 of the Real Property Tax Code. We also held that the petitioner had no cause of action since its failure to question the notice of assessment before the Local Board of Assessment Appeals (LBAA) prior to the filing of the suit in the RTC was tantamount to a failure to exhaust administrative remedies.

In urging us to reconsider our Decision, petitioner questions our finding that what was sent to it by former Municipal Treasurers Norberto A. San Mateo and Eduardo A. Alon were the tax assessment notices contemplated by law and not mere collection notices. As movant-petitioner puts it, having received mere collection notices, how could petitioner avail of the proper administrative remedies in protesting an erroneous tax assessment before the LBAA? 1 Petitioner’s argument merits our attention.

Anent movant-petitioner’s allegation that the September 3, 1986 and October 31, 1989 notices were actually tax collection notices and not tax assessment notices as we found them to be, a second and more careful examination of the said notices leads us to concede that petitioner indeed has a point.

We reproduce hereunder a sample of one of the notices sent to petitioner. 2

" _____________ Patalastas


Ortigas Avenue, Pasig

Metro Manila

Mahal na G./Gng.

"Ipinababatid po namin sa inyo na ayon sa talaan ng aming tanggapan, ang buwis sa mga ari-arian ng nakatala sa inyong pangalan ay hindi pa nakakabayad tulad ng nasasaad sa ibaba:chanrob1es virtual 1aw library

Tax Decl. No. Location Assessment Year Tax Due Penalty Total

B-009-05501 Sucat P86,874,490 1976-78 6,515,586.75 -

+1,563,740.82 P8,079,327.57

B-009-05502 Sucat P81,082,860 1977-78 4,054,143.00 -

+972,994.32 P5,027,137.32

B-009-05503 Sucat P75,291,220 1978 1,882,280.50 -

+451,747.32 P2,334,027.82

TOTAL P15,440,492.71

"Inaasahan po namin na di ninyo ipagwawalang bahala ang patalastas na ito at ang pagbabayad na nabanggit na buwis sa lalong madaling panahon. Ipinaaala-ala po lamang ang sino mang magpabaya o magkautang ng buwis ng maluwat ay isusubasta (Auction Sale) ng Pamahalaan ang inyong ari-arian ng sangayon sa batas.

"Subalit kung kayo po naman ay bayad na, ipakita po lamang ang katibayan ng pagbabayad (Official Receipt) at ipagwalang bahala ang patalastas na ito." (Emphasis supplied)

It is apparent why the foregoing cannot qualify as a notice of tax assessment. A notice of assessment as provided for in the Real Property Tax Code should effectively inform the taxpayer of the value of a specific property, or proportion thereof subject to tax, including the discovery, listing, classification, and appraisal of properties. The September 3, 1986 and October 31, 1989 notices do not contain the essential information that a notice of assessment must specify, namely, the value of a specific property or proportion thereof which is being taxed, nor does it state the discovery, listing, classification and appraisal of the property subject to taxation. In fact, the tenor of the notices bespeaks an intention to collect unpaid taxes, thus the reminder to the taxpayer that the failure to pay the taxes shall authorize the government to auction off the properties subject to taxes or, in the words of the notice, "Ipinaaala-ala po lamang, ang sino mang magpabaya o magkautang ng buwis ng maluwat ay isusubasta (Auction Sale) ng pamahalaan ang inyong ari-arian ng naaayon sa batas."cralaw virtua1aw library

The petitioner is also correct in pointing out that the last paragraph of the said notices that inform the taxpayer that in case payment has already been made, the notices may be disregarded is an indication that it is in fact a notice of collection.

Furthermore, even the Bureau of Local Government Finance (BLGF), upon whose recommendation former Municipal Treasurer Alon relied in the collection of back taxes against petitioner, deemed the September 3, 1986 notice as a "collection letter." Hence;

"The Bureau should be informed of any recent action taken by MERALCO on the collection letter dated September 3, 1986 of that Office and whether NAPOCOR was also advised thereof and its reaction thereon, if any, for our record and reference." 3

We therefore take this opportunity to correct that portion of our decision that declare the September 3, 1986 and October 31, 1989 notices to be tax assessment notices, to wit:jgc:chanrobles.com.ph

"From the tone and content of the notices, the 3 September 1986 notices sent by Former Municipal Treasurer Norberto A. San Mateo to petitioner MERALCO are the notices of assessment required by the law as it merely informed the petitioner that it has yet to pay the taxes in accordance with the reassessed values of the real property mentioned therein. The 31 October 1989 notices sent by Municipal Treasurer Eduardo A. Alon to MERALCO is likewise of the same character. Only the letter dated 20 November 1989 sent by Municipal Treasurer Eduardo A. Alon to petitioner MERALCO could qualify as the actual notice of collection since it is an unmistakable demand for payment of back taxes."cralaw virtua1aw library

We now hold that the September 3, 1986 and October 31, 1989 notices were actually notices of collection only as contended by petitioner.

In the instant Motion for Reconsideration, movant-petitioner also asseverates that contrary to the ruling of this Court that it is taking diverse positions, 4 it allegedly never admitted in its pleadings that the properties subject to tax were assessed and declared for taxation purposes as of November, 1985.

In petitioner’s Petition for Prohibition before the trial court, it alleged, among others, that:jgc:chanrobles.com.ph

"14. Respondent cannot levy additional real estate taxes without a prior reappraisal of the property and an amendment of the tax declaration by the Assessor. Assuming arguendo that there was such a re-appraisal made and new tax declarations issued, such re-appraisal shall operate prospectively and not retroactively as was done in this case;" 5 (Emphasis supplied.)

The pertinent allegations in petitioner’s Petition for Review on Certiorari before this Court is of similar content, thus:jgc:chanrobles.com.ph

"The ancillary issue is the question: whether the Regional Trial Court has the jurisdiction to prohibit the collection of real estate taxes which purport to be due to under-declaration and undervaluation of the property by the original owner (MERALCO) when no new assessment was made and served on the new owner (NAPOCOR), especially when the supposed undervaluation and underdeclaration was discovered after the sale of the property to the new owner." ; 6 (Emphasis supplied.);


"At the very outset, the court’s error is evident. The Court, in its Decision stated that the controversy is about the municipal treasurer’s right to assess realty taxes. But in justifying its conclusion, the court, in its Resolution, cited a provision authorizing the municipal deputy assessor to assess realty for tax purposes.

"Assuming arguendo that respondent Alon can issue assessments, the Court of Appeals’ decision is still erroneous as it proceeded from wrong premises. The respondent court believes the case involves a taxpayer questioning an assessment made by Respondent Treasurer and therefore Section 64 of the Realty Property Tax Code prevents the filing of the PETITION FOR PROHIBITION without first paying the tax "assessed" under protest.

"The respondent court is gravely in error for the following reasons:chanrob1es virtual 1aw library

x       x       x

" 2. There was no "assessment" issued by the respondent treasurer.

x       x       x

"In striking down Petitioner’s arguments, the Honorable Court of Appeals ruled that" [a] remedy is also made available by law to the private respondent [Petitioner herein] where he disagrees with the assessment levied upon it.

"Again, the respondent Court acted on the misguided premise that an assessment was issued in this case, and that Petitioner is the taxpayer for purposes of real property taxes. As discussed above, the Petitioner cannot be considered a taxpayer for purposes of appealing a realty tax assessment over the Napocor Plants. Neither was there any assessment served on the Petitioner. Considering the same, no appeal or other remedy is available to the Petitioner save for the petition for prohibition." 7 (Emphasis supplied.)

As there has been no apparent admission by petitioner that it had received the 1985 tax assessment notices allegedly sent by respondent Municipal Treasurer, and because we have found that the records are bereft of evidence showing actual receipt by petitioner of the real property tax declaration allegedly sent by the Municipal Assessors. We are thus compelled to declare that a question of fact has been raised before this Court: On the one hand, said respondent claims that, aside from the September 3, 1986 and October 31, 1989 notices, he had transmitted to petitioner tax assessment notices in the form of real property tax declarations in November of 1985. On the other hand, petitioner denies having received any tax assessment notice from said respondent prior to receipt of the notices of collection.

Whether or not a tax assessment had been made and sent to the petitioner prior to the collection of back taxes by respondent Municipal Treasurer is of vital importance in determining the applicability of Section 64 of the Real Property Tax Code inasmuch as payment under protest is required only when there has in fact been a tax assessment, the validity of which is being questioned. Concomitantly, the doctrine of exhaustion of administrative remedies finds no application where no tax assessment has been made.

Ordinarily, in the light of the foregoing facts, we would remand this case to the trial court pursuant to the basic tenet that this Court is not a trier of facts. Under the present circumstances, however, a remand of this case to the trial court would be a superfluity.

The Petition for Review on Certiorari of petitioner before us raises the same grounds which petitioner relies upon in its Petition for Prohibition before the trial court that the respondent Municipal Treasurer arbitrarily and despotically issued the writ of garnishment against petitioner’s funds, to wit: 1) The petitioner is not the taxpayer contemplated by the Real Property Tax Code for purposes of an assessment; 2) There was no assessment made prior to the collection of back taxes thereby rendering irregular the collection of taxes by the respondent; and 3) Respondent cannot garnish petitioner’s funds for the satisfaction of delinquent taxes. His remedy is merely to levy upon the real property subject of the tax pursuant to the legal principle that unpaid real property taxes constitute a lien upon the real property subject to back taxes.

By the parties’ own doing, all the issues that bear upon the propriety of the issuance of the warrants of garnishment against petitioner’s bank deposits for the collection of back taxes have been raised before this Court in its Petition for Review on Certiorari and properly resolved in favor of respondent Municipal Treasurer. In resolving all those issues presented before us by petitioner, we have, in effect, resolved petitioner’s amended petition for prohibition filed before the trial court. In other words, we have already decided that said respondent did not act arbitrarily and despotically in garnishing petitioner’s funds.

Hence, should the trial court find that there has indeed been a prior assessment, petitioner’s petition for prohibition would be dismissed for failure to pay under protest and to exhaust administrative remedies. However, a finding by the trial court that there was no tax assessment made prior to the collection of taxes would render inapplicable the requirement of paying under protest and exhausting administrative remedies by first appealing to the LBAA before the trial court takes cognizance of petitioner’s petition for prohibition. Unfortunately therefore, even if the trial court can assume jurisdiction over the said petition for prohibition, there is nothing substantial left for it to do.

Finally, petitioner’s insistence that its petition for prohibition before the trial court should be allowed as it does not question the validity of a tax assessment but only the arbitrary garnishment of its funds should be given scant consideration. As we have said, to resolve the petition for prohibition, it would not only be the question of the validity of the warrants of garnishment that would have to be tackled, but in addition the issues of tax assessment and collection would have to be dealt with too. We would like to stress here that despite petitioner’s representations, its Amended Petition for Prohibition does in fact assail the validity of the tax assessment made on its properties. The following allegations in petitioner’s Amended Petition for Prohibition before the RTC should make this glaringly clear:jgc:chanrobles.com.ph

"13. Respondent based his claim that petitioner was delinquent in the payment of its real estate taxes on the flimsy ground that there was a big discrepancy in the valuation reported by petitioner to the Municipal Assessor in 1974 and the selling price of the machineries and equipment when petitioner sold them to National Power Corporation in 1978. Naturally in times of rising cost, especially of imported machinery and equipment like those installed at the Sucat power plants, the prices of articles several years after a lapse of time from their acquisition will be very much higher. Following respondent’s theory, he should assess himself delinquency taxes for his own house and lot because, for sure, the values of his house and lot today is many times more than when he bought it."cralaw virtua1aw library

x       x       x

"18. The allegedly delinquent real estate taxes claimed by respondent as shown in the annex to the Notices of Garnishment, Annexes "E", "F" and "G" were arrived at by respondent taxing the same property twice and in one case, even three times; by evaluating the property based on selling price of the machineries and equipment rather than the actual acquisition cost thereof; by taxing as undeclared machineries, items that were already declared by petitioner in 1974 and by including the value of the land and other tax-exempt property in the computation of said alleged deficiency tax." 8

WHEREFORE, the instant Motion for Reconsideration is hereby DENIED with finality.chanrob1es virtua1 1aw 1ibrary


Bellosillo, Mendoza, Quisumbing, and Buena, JJ., concur.


1. Rollo, p. 459.

2. Except for a variation in the dates and figures, the September 3, 1986 and October 31, 1989 notices sent to petitioner are uniformly worded.

3. Rollo, p. 271.

4. Rollo, p. 444.

5. Records, p. 4.

6. Rollo, p. 14.

7. Rollo, pp. 15-18.

8. Rollo, pp. 460-461.

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