National Power Corporation v. Regional Trial Court, 10th Judicial Region, Branch XXV, Cagayan de Oro City
REITERATIONFacts
The Antecedents: The Province of Misamis Oriental and the Municipality of Jasaan filed a complaint against the National Power Corporation (NAPOCOR) for the collection of real property tax and special education fund tax for the years 1978 to 1984. NAPOCOR filed a motion to dismiss, citing Presidential Decree No. 242, which mandates administrative settlement of disputes between government agencies. Barangay Aplaya intervened, asserting its right to a share of the real property tax collected within its jurisdiction. Procedural History: The Regional Trial Court (RTC) denied NAPOCOR's motions to dismiss. NAPOCOR then filed a special civil action for certiorari before the Supreme Court, questioning the RTC's jurisdiction and asserting its exemption from real property taxes. The Petition: NAPOCOR assailed the RTC's orders denying its motions to dismiss, arguing that the court lacked jurisdiction and that it was exempt from real property taxes.
Issue(s)
Whether the Regional Trial Court has jurisdiction to hear and decide the case for the collection of real property taxes from NAPOCOR. Whether NAPOCOR is liable for real property taxes and special education fund taxes for the years 1978 to 1984.
Ruling
The petition is DISMISSED. The respondent court is directed to proceed with the hearing of Civil Case No. 9901 to determine the exact liability of petitioner NAPOCOR.
Ratio Decidendi
On the issue of jurisdiction: The Court held that the Regional Trial Court has jurisdiction to hear the case. It applied the principle of statutory construction that a special law prevails over a general law. Presidential Decree No. 464, the Real Property Tax Code, is a special law specifically governing the collection of real property taxes, while Presidential Decree No. 242 is a general law on the administrative settlement of disputes among government entities. Therefore, PD 464, being the special law, governs the jurisdiction over real property tax collection cases, granting jurisdiction to the courts. The Court emphasized that PD 242 must yield to PD 464 on this specific matter, as PD 464 was of later enactment and dealt with the particular subject of real property taxation. The Court acknowledged the desirability of administrative settlement but found the legal provisions compelling a different conclusion in this instance. On the issue of tax liability: The Court ruled in the affirmative, holding NAPOCOR liable for real property taxes and special education fund taxes. This ruling is based on Presidential Decree No. 1177, which mandates that all government units, including government-owned or controlled corporations, shall pay income taxes, customs duties, and other taxes and fees imposed under revenue laws. The Court found NAPOCOR's argument that its exemption from national taxes was withdrawn while its exemption from local taxes remained to be untenable, as PD 1177 did not make such a distinction. Furthermore, Presidential Decree No. 1931 categorically stated that PD 1177 had repealed the grant of tax privileges to government-owned or controlled corporations. The Court also cited a previous case, National Power Corporation vs. The Province of Albay, where NAPOCOR was held liable for real property taxes, reinforcing the conclusion that any tax exemptions were effectively withdrawn prior to the period in question, and that attempts to restore them were ineffective. The Court further noted that real property taxes are crucial for local government financing and nation-building, and that taxing NAPOCOR's properties does not result in a net loss for the government as the proceeds are redistributed among local government units.
Main Doctrine
A special law on a particular subject prevails over a general law. Therefore, Presidential Decree No. 464, being a special law on real property taxes, prevails over Presidential Decree No. 242, a general law on administrative settlement of disputes, regarding jurisdiction over collection of real property taxes. Furthermore, government-owned or controlled corporations are liable for all taxes, including real property taxes, unless expressly exempted by law, as tax exemptions previously granted were withdrawn by Presidential Decree Nos. 1177 and 1931.