Abra v.

Hernando [GR L-49336, 31 August 1981]

Second Division, Fernando (p): 3 concur, 1 concur in result, 1 on leave
Facts: The provincial assessor made a tax assessment on the properties of the Ro
man Catholic Bishop of
Bangued. The bishop claims tax exemption from real estate tax, through an action
for declaratory relief. Judge
Hernando of the CFI Abra presided over the case. The petitioner province filed a
motion to dismiss, based on
lack of jurisdiction, which was denied. It was followed by a summary judgment gr
anting the exemption
without hearing the side of the petitioner.
The Supreme Court granted the petition, set aside the 19 June 1978 resolution, a
nd ordered the respondent
judge, or whoever is acting on his behalf, to hear the case on merit; without co
sts.
1. Exemptions in 1973 Constitution different from 1935 Charter; Actually and dir
ectly
Under the 1935 Constitution: Cemeteries, churches, and parsonages or convents app
urtenant thereto,
and all lands, buildings, and improvements used exclusively for religious, chari
table, or educational purposes
shall be exempt from taxation. The 1973 Constitution added charitable institutions
, mosques, and non-profit
cemeteries and required that for the exemption of lands, buildings, and improvemen
ts, they should not
only be exclusively but also actually and directly used for religious or charitable pu
rposes. The
Constitution is worded differently. The change should not be ignored, and must b
e duly taken into
consideration. Reliance on past decisions would have sufficed were the words actu
ally as well as directly
not added. There must be proof therefore of the actual and direct use of the lan
ds, buildings, and
improvements for religious or charitable purposes to be exempt from taxation.
2. Construction of tax exemption
Exemption from taxation is not favored and is never presumed, so that if granted
it must be strictly
construed against the taxpayer. Affirmatively put, the law frowns on exemption f
rom taxation, hence, an
exempting provision should be construed strictissimi juris.
3. Procedural due process violated
Judge accepted at its face the allegation of Bishop
that the certain parcels of
land owned by it, are
used actually, directly and exclusively as sources of support of the parish priest
and his helpers and also of
the Bishop instead of demonstrating that there is compliance with the constituti
onal provision that allows an
exemption. There was an allegation of lack of jurisdiction (contesting that the
validity of the assessment may
be questioned before the Local Board of Assessment Appeals and not the court), a
nd of lack of cause of action
(contesting that declaratory relief is not proper, as there had been breach or v
iolation of the right of
government to assess and collect taxes on such property), which should have comp
el the judge to accord a
hearing to the petitioner rather than deciding the case immediately in favor of
the Bishop.
4. Action for declaratory relief
An action for declaratory relief would be proper only before a breach or violati
on of any statute,

executive order or regulation. In the case at bar, there being a tax assessment
made by the Provincial Assessor
on the properties of the Bishop, the latter failed to exhaust the administrative
remedies available under PD
464 before filing the court action. [Petitioner s contention, not resolved]
5. Exhaustion of administrative remedies
PD 464 provides that no court shall entertain any suit assailing the validity of
a tax assessed under
this Code until the taxpayer, shall have paid, under protest, the tax assessed a
gainst him nor shall any court
declare any tax invalid by reason of irregularities or informalities in the proc
eedings of the officers charged
with the assessment or collection of taxes, or of failure to perform their dutie
s within this time herein
Taxation Law I, 2003 ( 1 )
Haystacks (Berne Guerrero)
specified for their performance unless such irregularities, informalities or fai
lure shall have impaired the
substantial rights of the taxpayers; nor shall any court declare any portion of
the tax assessed under the
provisions of this Code invalid except upon condition that the taxpayer shall pa
y the just amount of the tax, as
determined by the court in the pending proceeding. [Petitioner s contention, not r
esolved]