Municipality of Alfonso Lista v. SN Aboitiz Power-Magat
REITERATIONFacts
The Antecedents: SN Aboitiz Power-Magat, Inc. (SNAPM), a corporation engaged in hydropower generating facilities, acquired the Magat Power Plant. SNAPM was registered as a BOI-registered pioneer enterprise, entitling it to a 6-year exemption from local business taxes (LBTs) from its registration date of July 12, 2007. SNAPM initially paid LBTs for 2007 and the first quarter of 2009, but later realized its exemption and sought a refund or tax credit. The Municipality of Alfonso Lista, Ifugao, represented by its Mayor, refused to recognize the exemption and threatened to withhold a mayor's permit. SNAPM paid the 2009 first quarter LBTs under protest and filed a complaint for injunction with the Regional Trial Court (RTC) to restrain the collection of LBTs, the refusal to issue a mayor's permit, and any acts obstructing its operation. Procedural History: The RTC denied SNAPM's application for a Temporary Restraining Order (TRO), finding SNAPM's entitlement to tax exemption "cloudy" and "vague," suggesting recourse to a tax credit or refund later. SNAPM filed a petition for certiorari with the Court of Appeals (CA) assailing the RTC's denial. The CA issued a TRO and later granted SNAPM's petition, setting aside the RTC's order and making its TRO permanent, subject to the RTC's final determination. The CA reasoned that the RTC gravely abused its discretion as Section 133 of the Local Government Code clearly limits the municipality's power to impose LBTs on BOI-registered enterprises. The municipality's motion for reconsideration was denied. The Petition: The Municipality of Alfonso Lista filed a petition for certiorari with the Supreme Court, alleging grave abuse of discretion by the CA. It argued that a CA TRO has a 60-day lifespan and cannot exist indefinitely, that no supervening events justified its extension, and that SNAPM's tax exemption was "cloudy" and "vague."
Issue(s)
Whether the Court of Appeals committed grave abuse of discretion in granting a writ of preliminary injunction against the Municipality of Alfonso Lista, and whether the Municipality of Alfonso Lista correctly availed of a petition for certiorari under Rule 65 instead of an appeal under Rule 45. Whether the petition has become moot due to the expiration of the tax exemption period.
Ruling
The Supreme Court dismissed the petition for lack of merit. It held that the Municipality of Alfonso Lista should have filed an appeal under Rule 45, not a petition for certiorari under Rule 65, as an appeal was available. Furthermore, the Court found the petition moot because SNAPM's alleged six-year exemption from LBTs had expired on July 12, 2013, rendering the determination of the propriety of the CA's injunctive writ a mere academic exercise.
Ratio Decidendi
On the propriety of the remedy and the availability of appeal: The Court reiterated that a petition for certiorari under Rule 65 is an extraordinary remedy of last resort and is only available when there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law. The availability of an appeal under Rule 45 precludes immediate resort to certiorari, even if the ascribed error was lack or excess of jurisdiction or grave abuse of discretion. The municipality failed to explain this "glaring defect" in its petition. Therefore, the municipality's chosen remedy was improper. On the mootness of the petition: The Supreme Court noted that the core issue revolved around SNAPM's entitlement to a tax exemption from LBTs for a specific period, which was the subject of the CA's injunctive writ. However, the alleged six-year exemption period expired on July 12, 2013. Consequently, the municipality acquired a clear and unmistakable right to collect LBTs from SNAPM from that date onwards. At this juncture, determining the propriety of the CA's injunctive writ would serve no practical purpose and would be a "useless academic exercise." The only remaining matter for the RTC to resolve is SNAPM's entitlement to an exemption for the years 2007 to 2013.
Main Doctrine
A petition for certiorari under Rule 65 is not the proper remedy when an appeal under Rule 45 is available, as certiorari is an extraordinary remedy of last resort. Furthermore, a case may be rendered moot by the expiration of the period in dispute, rendering the determination of the propriety of an injunctive writ a mere academic exercise.