National Development Company v. Province of Nueva Ecija
REITERATIONFacts
The Antecedents: The Province of Nueva Ecija filed a complaint against the National Development Company (NDC) for the collection of real estate taxes on properties located in Gabaldon, Nueva Ecija. Procedural History: The trial court rendered judgment in favor of the Province of Nueva Ecija, ordering the NDC to pay P32,402.94 in unpaid real estate taxes and penalties from the fourth quarter of 1970 up to 1972, and to continue paying thereafter, plus costs. The Petition: The NDC appealed, arguing that as a government-owned and controlled corporation, its real properties are exempt from real estate taxes. It also contended that the Province of Nueva Ecija should refund taxes paid from 1962 to 1970.
Issue(s)
Whether the National Development Company (NDC), as a government-owned and controlled corporation, is exempt from payment of real estate taxes on its properties. Whether the Province of Nueva Ecija should refund real estate taxes paid by the NDC from 1962 to 1970.
Ruling
The appeal of the National Development Company is dismissed, and the decision of the lower court is affirmed.
Ratio Decidendi
On the issue of exemption from real estate taxes: The Court held that Commonwealth Act No. 182, which created the NDC, contains no provision exempting it from real estate taxes. The properties in question, located in Gabaldon, Nueva Ecija, were acquired for resale to qualified persons and were developed for this purpose. Therefore, they were not devoted to public use. The Court emphasized that the NDC is a business corporation engaged in proprietary or business functions, not sovereign ones, and thus cannot invoke exemptions applicable to the government itself. The exemption from taxation applies only when properties are devoted to public use. The Court also noted the substantial territory these properties occupied and the potential deprivation of much-needed revenue for the municipality if NDC were exempt. On the issue of refund: This issue was not explicitly ruled upon in the provided text, but the affirmation of the lower court's decision, which ordered NDC to pay unpaid taxes, implicitly denies the claim for a refund. The NDC's argument for exemption was found to be without merit, thus negating any basis for a refund of taxes previously paid under the assumption of exemption.
Main Doctrine
Government-owned and controlled corporations are not exempt from real estate taxes on properties acquired for resale, as these are considered proprietary or business functions, not sovereign ones, unless explicitly provided by law.