Padilla v. City of Pasay
REITERATIONFacts
The Antecedents: Plaintiff Teodoro Padilla owned property in Pasay City assessed at P113,000.00, with a total realty tax of P1,412.50 for 1963. He paid the first installment of P706.25 on time. However, he paid the second installment of P706.25 on December 23, 1963, which was after the due date of October 30, 1963. Procedural History: The City Treasurer imposed a penalty of P169.50. Plaintiff paid this under protest, arguing the penalty should only be P28.25, based on one month of delinquency. The lower court sustained the City Treasurer, ruling that delinquency is counted from June 1st, the original due date, even with installment payments. Plaintiff appealed. The Petition: The plaintiff-appellant contended that by paying the first installment on time, he should not be considered delinquent until after the second installment's due date (October 30th), and that the lower court's ruling negated the option to pay in installments.
Issue(s)
Whether the delinquency penalty for the late payment of a second installment of real estate tax should be computed from the original annual due date (June 1) or from the date the specific installment became overdue (October 31).
Ruling
The Supreme Court affirmed the decision of the lower court, holding that the penalty for late payment of realty tax is computed from the original due date of the tax (June 1st), regardless of whether the tax is paid in full or in installments. The Court ruled that the taxpayer is liable for the penalty from June 1st, as provided by law, and the option to pay in installments must be strictly complied with.
Ratio Decidendi
On Issue 1: The Supreme Court held that the specific language of Section 43 of the Pasay City Charter is controlling and mandatory, leaving no room for judicial interpretation. The law clearly states that all taxes on real estate are 'due and payable annually on the first day of June' and from this date, such taxes and penalties constitute a lien on the property. While the law provides an option to pay in installments, it explicitly specifies that the penalty shall be at the rate of two per centum for each full month of delinquency 'on the amount of the original tax due.' The Court reasoned that if the taxpayer fails to strictly comply with the installment schedule, the plain statutory command that the tax is due and payable on June 1 becomes unavoidable. Applying the principle from Acoje Mining Co., Inc. v. Commissioner of Internal Revenue, the Court emphasized that public policy necessitates full and unconditional compliance with tax laws to ensure the continuous flow of public revenue. Since the second installment was not remitted until December 23, the months of June through November were counted as full months of delinquency, and the 2% penalty was correctly applied to the entire original tax of P1,412.50.
Main Doctrine
The penalty for late payment of realty tax, even when paid in installments, is computed from the original due date of the tax (June 1st), not from the due date of the installment that was paid late, as the law mandates that taxes are due and payable annually on June 1st and delinquency accrues from that date.