Wednesday, February 29, 2012

City Government of QC vs. Bayantel

Facts: Section 234 of the Local Government Code withdrew any exemption from realty tax granted to or enjoyed by all persons, natural or juridical. 

Thereafter, Congress enacted Rep. Act No. 7633, amending Bayantel’s original franchise. It provided that the same, its successors or assigns shall be liable to pay the same taxes on their real estate, buildings and personal property, exclusive of this franchise, as other persons or corporations are now or hereafter may be required by law to pay. 

Within the territorial boundary of Quezon City, Bayantel owned several real properties on which it maintained various telecommunications facilities. 

In 1993, the government of Quezon City, pursuant to the taxing power vested on local government units by Section 5, Article X of the 1987 Constitution, in relation to Section 232 of the LGC, enacted City Ordinance No. SP-91, S-93, otherwise known as the Quezon City Revenue Code (QCRC), imposing, under Section 5 thereof, a real property tax on all real properties in Quezon City, and, reiterating in its Section 6, the withdrawal of exemption from real property tax under Section 234 of the LGC. Furthermore, much like the LGC, the QCRC, under its Section 230, withdrew tax exemption privileges in general. 

Conformably with the City’s Revenue Code, new tax declarations for Bayantel’s real properties in Quezon City were issued by the City Assessor. Bayantel wrote the office of the City Assessor seeking the exclusion of its real properties in the city from the roll of taxable real properties. With its request having been denied, Bayantel interposed an appeal with the Local Board of Assessment Appeals (LBAA). And, evidently on its firm belief of its exempt status, Bayantel did not pay the real property taxes assessed against it by the Quezon City government. 

On account thereof, the Quezon City Treasurer sent out notices of delinquency , followed by the issuance of several warrants of levy against Bayantel’s properties preparatory to their sale at a public auction. 

Threatened with the imminent loss of its properties, Bayantel immediately withdrew its appeal with the LBAA and instead filed with the RTC of Quezon City a petition for prohibition with an urgent application for a temporary restraining order (TRO) and/or writ of preliminary injunction. 

In the eve of the public auction, the lower court issued a TRO, followed, after due hearing, by a writ of preliminary injunction. 

RTC: declared exempt from real estate taxation the properties of Bayantel in QC. Denied petitioner's motion for reconsideration having been denied . 

Petitioners elevated the case directly to the Supreme Court on pure questions of law. 

Petitioners: Bayantel had failed to avail itself of the administrative remedies provided for under the LGC, thus the trial court erred in giving due course to Bayantel’s petition for prohibition. The appeal mechanics under the LGC constitute Bayantel’s plain and speedy remedy in this case. 

Issue: Whether or not Bayantel's failure to appeal its case to the LBAA precludes its filing of a petition for prohibition. 

Held: NO. 

With the reality that Bayantel’s real properties were already levied upon on account of its nonpayment of real estate taxes thereon, an appeal to the LBAA is not a speedy and adequate remedy within the context of the aforequoted Section 2 of Rule 65. This is not to mention of the auction sale of said properties already scheduled. 

Moreover, one of the recognized exceptions to the exhaustion- of-administrative remedies rule is when, as here, only legal issues are to be resolved. In fact, the Court, cognizant of the nature of the questions presently involved, gave due course to the instant petition. 

An appeal to the LBAA, to be properly considered, required prior payment under protest of the amount of P43,878,208.18, a figure which, in the light of the then prevailing Asian financial crisis, may have been difficult to raise up. Given this reality, an appeal to the LBAA may not be considered as a plain, speedy and adequate remedy. It is thus understandable why Bayantel opted to withdraw its earlier appeal with the LBAA and, instead, filed its petition for prohibition with urgent application for injunctive relief.

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