Republic of the Philippines

COURT OF TAX APPEALS

Quezon City

JOSEPHINE P. CALAJATE, ACTING AS

THE PROVINCIAL TREASURER OF THE
PROVINCE OF ILOCOS NORTE, CTA Case No. __________

Petitioner,

-versus-

NORTH LUZON RENEWABLE ENERGY

CORPORTATION,
Respondent.

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

PETITION FOR REVIEW

PETITIONER, in her capacity as Provincial Treasurer of the Provincial
Government of Ilocos Norte, unto this Honorable Court, most respectfully submits and
presents this Petition and avers that:

THE CASE

This is a Petition for Review pursuant to Section 11 of Republic Act (R.A.) No. 1125,
as amended by R.A. No. 9282, of the decision of the Central Board of Assessment Appeals
(CBAA) in the exercise of its appellate jurisdiction, entitled North Luzon Renewable Energy
Corporation, Petitioner-Appellant, versus, The Local Board of Assessment Appeals of the
Province of Ilocos Norte, Appellee, and Josephine P. Calajate, acting as the Provincial
Treasurer of the Province of Ilocos Norte, Respondent Appellee, which, pursuant to Rule VI
of the Consolidated and Revised Rules of Procedure before the Local Boards of Assessment
Appeals and the Central Board of Assessment Appeals, the appeal of the of the Petitioner-
Appellant mainly on the ground that the one and a half percent (1.5%) maximum realty tax
rate provided by the Republic Act No. 9513, otherwise known as the Renewable Energy Act
of 2008 (RE Law) applies to realty and all other taxes including the tax for the Special
Education Fund (SEF).

THE PARTIES

Petitioner is the Provincial Treasurer of the Provincial Government of Ilocos Norte with
office address at Ilocos Norte Capitol, J.P. Rizal Street, Brgy. 10, Laoag City, Ilocos Norte
AND the Respondent-Appellee in CBAA Case No. L-134-2016 (LBAA Case No. 2016-01).
 Respondent is a corporation organized and existing under the laws of the Republic of
the Philippines AND the Petitioner-Appellant in CBAA Case No. L-134-2016 (LBAA Case No.
2016-01).

TIMELINESS OF FILING THE PETITION

On 23 November 2017, the undersigned counsel received the decision of CBAA dated
10 October 2017, the dispositive portion of which reads:

“WHEREFORE, in view of all the foregoing, this Board hereby

renders judgment finding merit in the instant appeal and hereby further
rules the following:

1. Respondent-Appellee shall recompute the real property tax due and

apply the maximum special realty tax on one and half percent (1.5%)
to the original cost less accumulated normal depreciation or net
book value as provided by Section 15 (c) of Republic Act No. 9513;

2. Respondent-Appellee shall refund the amount of real property taxes paid

for the years 2015 to 2016 in excess of the maximum specialty real tax
of one and half percent (1.5%), or in the alternative issue a tax credit;
and

3. Respondent-Appellee shall refund the interests collected from

Petitioner-Appellant for year 2015 as regards the additional half percent
(.5%) of the specialty realty tax.

Within the period provided by law or on 08 December 2017, Petitioner filed a motion
to reconsider the above-mentioned decision. However, on 31 January 2018, the CBAA
rendered a resolution, which was received by Petitioner on 15 February 2018, denying the
latter’s Motion for Reconsideration.

Under Section 11 of R.A. No. 1125, as amended by R.A. No. 9282, with respect to
the decisions or rulings of the Central Board of Assessment Appeals and the Regional Trial
Court in the exercises of its appellate jurisdiction, appeal shall be made by filing a petition for
review under a procedure analogous to that provided for under Rule 43 of the 1997 Rules of
Civil Procedure with the CTA. Hence, Petitioner has fifteen (15) days within which to file her
Petition for Review.

This petition is, thus, timely filed as it is hereby filed today, 02 March 2018, by
registered mail due to distance and unavailability of delivery personnel.

Statement of Facts

The pivotal issue in the instant case is in relation to Section 15(c) of the RE Law, to
wit:

Section 15. Incentives for Renewable Energy Projects and Activities. - RE

developers of renewable energy facilities, including hybrid systems, in
 proportion to and to the extent of the RE component, for both power and
non-power applications, as duly certified by the DOE, in consultation with
the BOI, shall be entitled to the following incentives:

(c) Special Realty Tax Rates on Equipment and Machinery. - Any

law to the contrary notwithstanding, realty and other taxes on civil
works, equipment, machinery, and other improvements of a
Registered RE Developer actually and exclusively used for RE
facilities shall not exceed one and a half percent (1.5%) of their
original cost less accumulated normal depreciation or net book
value: Provided, That in case of an integrated resource development
and generation facility as provided under Republic Act No. 9136, the
real property tax shall only be imposed on the power plant.

Respondent claims1 that it had overpaid its realty tax imposed upon its machinery
and equipment located in the Municipalities of Bacarra, Pasuquin, Bangui and Pagudpud,
Ilocos Norte for the years 2015 and 2016.

Respondent anchors its claim of overpayment of realty tax on the ground that the
assessments upon its machinery and equipment for the aforesaid years were erroneous
because respondent should have been exempted from paying the additional levy on real
property for the SEF.

Respondent claims that as a registered Renewable Energy (RE) Developer as

defined under RE Law, although this claim is disputed by petitioner, its equipment and
machinery enjoy a Special Realty Tax Rate of 1.5% under Section 15(c) of the RE law.

Respondent maintains that the special realty tax rate of 1.5% prescribed in Section
15(c) covers all realty taxes imposed by the local government unit, be it basic realty tax, SEF,
and other realty taxes provided under the Local Government Code of 1991. Thus,
Respondent maintains that it is not liable for SEF.

On the other hand, Petitioner maintains that no overpayment of realty tax on the
machinery and equipment of the respondent occurred.

The Local Board of Assessment Appeals (LBAA), in its resolution denying the
Respondent’s petition before it, ruled in favor of the Petitioner, that:

“The Bureau of Local Government Finance (BLGF), a bureau under

the Department of Finance, has issued at least two letters, in response to
various queries relating to the same issue. One letter was sent to Ormoc City
on the same issue. One letter was sent to Ormoc City on August 24, 2012
and another one dated November 29, 2012 was sent addressed to Governor
Eugene M. Balintang of Ifugao.

1
Arguments of the Respondent are found in its Memorandum of Appeal, Position Paper and/or Reply to herein
Petitioners Position Paper submitted before the CBAA (hereto attached and marked as ANNEXES “A”, “B” and “C”,
respectively).
 As a bureau tasked in overseeing the affairs of all local government
units’ finances, BLGF opinion on the matters carries great weight. But aside
from being an expert in the field of taxation, BLGF has found a reference
directly interpreting the disputed provision. It said:

‘In view hereof, this Bureau finds no other recourse but rely on the
view of Senator Angara…, in effect adopting the opinion issued by the Senate
Tax Study and Research Office (STSRO) under Memorandum dated 10
August 2011, item 15 of which provides;

15. In view of the foregoing, the STSRO is of the opinion

that the SEF imposed under the LGC is apart and distinct from
the special realty tax levied pursuant under R.A. No. 9513. Ergo,
both impositions should be applied by the LGUs concerned,
separately as clearly provided by cited respective laws.’

Adopting and applying the above-quoted opinion of STSRO, LGUs

hosting RE developers/operator may therefore impose the maximum rate of
1.5% of real property tax on civil works, equipment, machinery, and other
improvements of a registered RE Developer actually and exclusively used for
RE facilities based on their original cost less accumulated depreciation or net
book value as prescribed under Department Circular NO. DC2009-05-0008 of
Department of Energy.

In the case of an integrated resource development and generation

facility, the tax shall only be imposed on the power plant pursuant to R.A. 9136,
also known as the Electric Power Industry Reform Act of 2001. On the other
hand, SEF imposed under Section 235 of R.A. No. 7160, otherwise known as
the Local Government Code of 1991, at the rate of one percent (1%) of the
assessed value of the real property, shall be levied separately from the
‘Special Realty Tax Rates on Equipment and Machinery’ provided under
Section 15(c) of R.A. No. 9513, also known as the Renewable Energy Act of
2008.
xxx

Considering that exemption or exclusion can only be given force when

the grant is clear and categorical and considering that the same does not hold
true in this case, the act makes no mention on the inclusion of SEF, petitioner
(herein Respondent) has to pay the Special Education Fund distinctly from the
realty taxes on its properties.”

Respondent appealed before the CBAA. The CBAA, in its decision dated 10 October
2017 (hereto attached and marked as ANNEX “D”) ruled in favor of the Respondent, holding
that:

1. Respondent-Appellee (herein Petitioner) shall recompute the

real property tax due and apply the maximum special realty tax on one
and half percent (1.5%) to the original cost less accumulated normal
 depreciation or net book value as provided by Section 15(c) of Republic
Act No. 9513;
2. Respondent-Appellee shall refund the amount of real property
taxes paid for the years 2015 and 2016 in excess of the maximum special
realty tax of one and a half percent (1.5%), or in the alternative issue a
tax credit; and
3. Respondent-Appellee shall refund the interests collected from
Petitioner-Appellant (herein Respondent) for year 2015 as regards the
additional half percent (.5%) of the special realty tax.

Petitioner filed a Motion for Reconsideration and maintained that (a) there is
ambiguity on the term, “realty and other taxes “ under Section 15(c) of R.A. No. 9513 in view
of the different interpretations of the STSRO, the BLGF, the LBAA and the CBAA; (b) this
ambiguity must be strictly construed against the Respondent and in favor of the Government;
(c) SEF is not included in Section 15(c) of the RE Law; and (d) herein Respondent is liable
for interests.

The CBAA, in its Resolution dated 31 January 2018 (hereto attached and marked as
ANNEX “E”), denied the aforementioned Motion for Reconsideration.

Hence, this Petition.

ARGUMENTS/DISCUSSIONS

I. ADDITIONAL LEVY ON REAL

PROPERTY FOR THE SPECIAL
EDUCATION FUND (SEF) IS APART
AND DISTINCT FROM THE SPECIAL
REALTY TAX LEVIED PURSUANT
UNDER REPUBLIC ACT (R.A. NO.
9513).

A. SEF is not intended to be included in Special Realty Tax provided under the
RE Law by its framers.

Contrary to the holding of the CBAA and claim of the Respondent, the intent of the law
is to exclude SEF from Special Realty Tax provided under the RE Law. As cited by the CBAA
and Respondent, herein is a portion of the deliberation during the Bicameral Conference
Committee on the Disagreeing Provisions of the RE Law, to wit:

“xxx

REP. MAGSAYSAY. Mr. Chairman, I just like to ask in the present set
up of the mga - who are engaged in this business, are they paying special realty
tax already on the equipment and machine and how much?

REP. VILLAFUERTE. Yes, yes. Alam mo, ang mawawala diyan

‘yung special education fund.
 (Emphasis and underlining supplied.)

It is apparent from the above conversation that right after Representative Magsaysay
asked if those who are engaged in RE business are already paying special realty tax on their
equipment and machine, Representative Villafuerte immediately answered in the affirmative
and expressly stated that what will not be included in such exemption is the “special education
fund”.

Moreover, prior to such conversation, SEF is likewise mentioned in the following, to

wit:
“xxx

REP. PEREZ. On equipment - any land and other real estate

permanented here to the soil so I have to check the data.

REP. JAVIER. I think, the rate under the Local Government Code is 1
percent ‘no plus the additional assessment of 1 percent for SEF so its total, 2.
So, total 2 percent.

REP. PEREZ. This is two and half.

REP. JAVIER. That’s right. It’s more than 2 percent.

REP. VILLAFUERTE. No, net book value.

REP. JAVIER. Minus depreciation ito eh.

REP. PEREZ. Ah, I see. Okay Net Book Value.”

(Emphasis and underlining supplied.)

While it is true the SEF was mentioned twice during the Bicam Conference, it was
mentioned for the purpose of clarifying that the SEF is expressly, as it is the intention of the
law, excluded from the Special Realty Tax under Section 15(c) of the RE Law. In addition,
while Representative Javier made mention of the rate under the LGC of one percent (1%)
basic real property tax and the additional assessment of one percent (1%) for SEF, this was
immediately corrected by Representative Villafuerte, as it was not the real subject of the
conversation, since the basis of the aforementioned rates is ASSESSED VALUE AND NOT
BOOK VALUE.

B. SEF is bases on the ASSESSED VALUE while Special Realty Tax under the
RE Law is based on the NET BOOK VALUE.

The preceding claim by Petitioner should be so due to the fact the special levy for SEF
and the Special Realty Tax under the RE Law have different bases. Petitioner agrees with
the CBAA and Respondent that the RE Law intend to provide fiscal and non-fiscal incentives
to RE Developer which includes the grant of Special Realty Tax. However, contrary to the
holding and claims of the latter, Special Realty Tax cannot include special levy for SEF as the
same is based on the ASSESSED VALUE of the real property involved. Has it been the
intention of the law to base the Special Realty Tax on the assessed value of the real property,
then it would have not expressly stated that it shall be based on the net original cost less
accumulated normal depreciation or net book value of the real property. (Emphasis
supplied.)

It will be observed from the pleadings2 of Respondent before the CBAA, it highlighed
and emphasized the 1.5%f tax rate by underlining and boldfacing it, but intentionally did not
emphasize its tax base which is Net Book Value. Such act is misleading because a tax rate
without a tax base is useless. The appropriate tax base for the Special Realty Tax under the
RE Law is 1.5% of the NET BOOK VALUE of the real property. (Emphasis supplied.)

It will be observed that the realty taxes imposed by the LGC were all based on the
“assessed value” and NOT on NET BOOK VALUE of the real property. (Emphases
supplied.)

Assessed value is the fair market value of the real property multiplied by the
assessment level. It is synonymous to taxable value.3 Assessment level is the percentage
applied to the fair market value to determine the taxable value of the property.4 Fair market
value is the price at which a property may be sold by a seller who is not compelled to sell and
bought by a buyer who is not compelled to buy.5 From these definitions alone, it can be
surmised that the Special Levy for SEF and the Special Realty Tax under the RE Law, if
multiplied by their respective bases, will never arrive at the same amount. Hence, even
assuming without admitting, that the Special Realty Tax under the RE Law includes the basic
realty tax and the special levy for SEF, in as much as Petitioner based its assessment of the
tax due to Respondent by multiplying basic real property tax and the special levy for the SEF
against the ASSESSED VALUE of the its real properties, the latter cannot claim
overpayment since there is no showing that the tax due collected is in excess of the 1.5% of
the net original cost less accumulated normal depreciation or net book value of its real
properties, representing Special Realty Taxes under the RE Law. (Emphases supplied.)

C. The RE Law cannot impliedly repeal Section 235 of the Local Government
Code of 1991 inasmuch as Section 15(c) is concerned.

Petitioner acknowledges the basic principle in statutory construction that in “a conflict

between a general law and a special statute, the special statute should prevail since it evinces
the legislative intent more clearly that the general statute.”6

However, in this instance case, Petitioner does not agree with the Respondent that
insofar as Section 15(c) is concerned, the RE Law is considered a special statute; thus, it
should prevail over Section 235 of the LGC which states:

2
Annexes “A”, “B” and “C”.
3
Section 199 (h), LGC.
4
Section 199(g), Ibid.
5
Section 199 (l), Ibid.
6
Laguna Lake Development Authority vs. Court of Appeals, G.R. No.s. 120865-71, 07 December 1995.
 “Section 235. Additional Levy on Real Property for the Special
Education Fund. - A province or city, or a municipality within the
Metropolitan Manila Area, may levy and collect an annual tax of one
percent (1%) on the assessed value of real property which shall be
in addition to the basic real property tax. The proceeds thereof shall
exclusively accrue to the Special Education Fund (SEF). “

A general statute is one which embraces a class of subjects or places and does not
omit any subject or place naturally belonging to such class. A special statute, as the term is
generally understood, is one which relates to particular persons or things of a class or to a
particular portion or section of the state only.7

There is no question that the RE Law is a special act since it relates to RE

Developers while the Local Tax Code is a general law because it applies universally to all
local governments. However, the principle in statutory construction as above-quoted readily
yields to a situation where the special statute refers to a subject in general, which the general
statute treats in particular. This is exactly the circumstance obtaining in the instant case.
Section 15(c) of the RE Law speaks of Special Realty Tax on Equipment and Machinery of
RE Developers in general since it includes REALTY and OTHER TAXES; hence, irrespective
of the nature and scope thereof, whereas, Section 235 of the LGC SOLELY relates to special
levy specifically for SEF. (Emphases supplied.)

In regard, therefore, to REALTY AND OTHER TAXES on equipment and machinery

of RE Developers, the RE Law is, doubtlessly dominant, but, that dominant force loses its
continuity when it approaches the realm of special levy specifically for SEF. Here, as always,
a general provisions must give way to a particular provision. Special provisions
governs.8

It is true that, insofar as its framework or structure is concerned, the RE Law is a

special law and the LGC is a general legislation; but, as regards the subject matter of the
provisions afore-quoted, Section 15(c) of the RE Law establishes a general rule regulating
the tax liability of RE Developers on REALTY and OTHER TAXES. Upon the other hand,
Section 235 of the LGC constitutes a particular levy, which is SOLELY a levy on real property
for the SEF.

Judicial precedents are conclusive to the effect that no implied repeal of a special
provisions of the character of the one now under consideration will result from the enactment
of broader provision of a general nature. In other words, a general statute without negative
words does not repeal a previous statute which is particular, even though the provisions of
one be different from the other.9

A general law and a special law on the same subject are statutes in pari materia
and should, accordingly, be read together and harmonized, if possible, with a view to giving
effect to both. The rule is that where there are two acts, one of which is special and particular
and the other general which, if standing alone, would include the same matter and thus
7
Agpalo, Statutory Construction, Second Edition (1990), p. 197.
8
Bagatsing v. Ramirez, G.R. No. L-41613, December 17, 1976, 74 SCRA 306, 311-312.
9
Rymer vs. Luzerne County, 12 L. R. A., 192; Petri vs. F. E. Creelman Lumber Co., 199 U. S., 487; 50 L. ed., 281.
conflict with the special act, the special law must prevail since it evinces the legislative intent
more clearly than that of a general statute and must not be taken as intended to affect the
more particular and specific provisions of the earlier act, unless it is absolutely necessary so
to construe it in order to give its words any meaning at all.10 (Emphasis added.)

The circumstance that the special law is passed before or after the general act does
not change the principle. Where the special law is later, it will be regarded as an exception
to, or a qualification of, the prior general act; and where the general act is later, the special
statute will be construed as remaining an exception to its terms, unless repealed expressly or
by necessary implication.11

Moreover, Section 39 of the RE Law made mention of those specific provision

expressly repealed by the same, to wit:

(c) Section 39. Repealing Clause. - Any law, presidential decree

or issuance, executive order, letter of instruction,
administrative rule or regulation contrary to or inconsistent
with the provisions of this Act is hereby repealed, modified or
amended accordingly.

Consistent with the foregoing paragraph and Section 13 of this Act,

Section 1 of Presidential Decree No. 1442 or the Geothermal
Resources Exploration and Development Act, insofar as the
exploration of geothermal resources by the government, and Section
10 (1) of Republic Act No. 7156 otherwise known as the "Mini-
Hydro Electric Power Incentive Act", insofar as the special
privilege tax rate of two percent (2%) are hereby repealed, modified
or amended accordingly. (Emphases supplied.)

A perusal of the above provisions shows that as regards the imposition of taxes,
Section 10(1) of the R.A. 7156, otherwise known as the Mini-Hydro Electric Power Incentive
Act, has been expressly repealed, despite the phrase added under Section 15(c) of the RE
Law, “any law to the contrary notwithstanding.” (Emphasis supplied.)

If it is, indeed the intention of the law to repeal, modify or amend Section 235 of the
LGC, it would have likewise stated so. It is well settled that repeals by implication are not to
be favored. And where two statutes cover, in whole or in part, the same matter, and are not
absolutely irreconcilable, the duty of the court — no purpose to repeal being clearly expressed
or indicated — is, if possible, to give effect to both. In other words, it must not be supposed
that the Legislature intended by a latter statute to repeal a prior one on the same subject,
unless the last statute is so broad in its terms and so clear and explicit in its words as to show
that it was intended to cover the whole subject, and therefore to displace the prior statute.12
It is in this sense and to this extent that the RE Law did not divest the Petitioner of her
authority, as conferred by the LGC, to collect special levy for SEF so long as it is based on

10
Id. at 197-198.
11
Id. at 198.
12
Frost vs. Wenie, 157 U. S., 46; 39 L. ed., 614, 619.
the ASSESSED VALUE of the real property. Hence, the additional lavey on real property for
the SEF is apart and distinct from the Special Realty Tax imposed under the RE Law.

Consequently, respondent is not entitled to any refund or tax credit because it is

mistaken as to the proper amount of realty tax to be applied. As discussed above,
Respondent is still liable to pay basic realty tax and SEF for real properties at the rate of one
percent (1%) of the ASSESSED VALUE of the real property for each tax.

II. SECTION 15(C) OF R.A. NO. 9153 IS

AMBIGUOUS.

Petitioner completely agrees with the Respondent that administrative interpretation

must be germane to the objects and purposes of the law, and that the interpretations be not
in contradiction to, but in conformity with, the standards prescribed by the law. However,
Petitioner firmly maintains her position that the term, “OTHER TAXES” under Section 15(c)
of the RE Law is admissible to different possible meanings; thus, ambiguous.
Assuming without conceding that the intentions of the RE law are indeed clear, there
are only two (2) things which appear to be clear from the subject provision, to wit:
a. It is the intention of the law to limit realty and other taxes on
1.5% of the NET BOOK VALUE, not on the ASSESSED VALUE; AND

b. It is the intention of the law to apply the 1.5% limitation only to

the machineries and equipment of the RE Developer, not on the LAND of
such RE Developer.

To conclude otherwise is a clear evasion on the part of Respondent of its responsibility

to pay the taxes due to it. Undeniably, there is a clear legislative intent of the law to provide
RE Developers a special tax rate. Petitioner is not questioning that fact. Still, the ambiguity
does not lie there. The ambiguity lies on the possible or real meaning of the term, “other
taxes”. (Emphasis added.)

The different interpretations of the STSRO, BLGF, LBAA and CBAA, given their
respective competencies, where based upon by the Petitioner only in support to her claim
that there is indeed ambiguity in the subject provision, REGARDLESS of who among
them has a better position to interpret or who has the best interpretation. (Emphasis
ours.)
The STSRO was of the opinion that the SEF imposed under the Local Government
Code (LGC) is apart and distinct from the special realty tax levied pursuant under
Republic Act (R.A.) No. 9513. Ergo, both impositions should be applied by the Local
Government Units (LGUs) concerned, separately as clearly provided by the cited respective
laws. (Emphasis ours).
 This interpretation of the STSRO was adopted and relied upon by the BLGF in the
latter’s letters13 to the queries of Ormoc City and the province of Ifugao. The BLGF viewed
that the applicable Special Real Property Tax (RPT) Rates for the civil works, equipment,
machinery, and other improvements of a registered Renewable Energy (RE)
Developer/Operator and the power plant of an integrated RE Resource Development and
Generation Facility should not exceed one percent (1%) basic RPT and an additional levy of
one percent (1%) for the SEF.

Convinced by STRSO and BLGF, the Local Board joins the same position. In doing
so, it ruled14 that:

“In sum, the BLGF opined, and so we adopt, as follows:

xxx
2. In addition to the Basic Real Property Tax, an additional levy of
1% of the Net Book Value shall accrue to the SEF.”

At this point, it is worthy to mention that the basis of the STSRO, and so are the BLGF
and the Local Board, is the view of Senator Edgardo Angara, Chairman of the Senate Panel,
during the Bicameral Conference (Bi-cam Conference) Committee on the Disagreeing
Provisions of Senate Bill No. 2046 and House Bill No. 4193 on 07 October 2008. The Bi-cam
Conference is the same basis which the Honorable Board relied upon in ruling that the SEF
is also included in crafting the disputed provision, Section 15 (c) of the RE Law.

Petitioenr maintains that even assuming that BLGF or the STSRO had no authority in
interpreting the subject provision, the mere actuality that they have, different interpretation
sas compared to that of the Honorable Board, already ignites ambiguity on the REAL
INTENTION of the law. (Emphasis ours).

Inasmuch as the intention of the legislature is open to doubt and the undertaking to
uncover its true purpose only led to different versions of conclusion, then, it cannot be said
that the words of the subject provisions are too plain to be mistaken and too categorical to be
misinterpreted.

III. SUCH AMBIGUITY MUST BE

CONSTRUED AGAINST THE
TAXPAYER.

It follows, thereofre, ncertainty in the term, “realty and other taxes” in Section 15(c) of
the RE Law on whether or not it includes SEF must be construed strictly against herein
Respondent.

13 Letter dated August 24, 2012 sent to the Ormoc City and letter dated November 29, 2012 addressed to
Governor Eugene M. Balintang of Ifugao.
14 Page 6, LBAA Resolution.
 Tax exemptions are never presumed and are strictly construed against the taxpayer
and liberally in favor of the taxing authority.15 They can only be given force when the grant is
clear and categorical.16 The surrender of the power to tax, when claimed, must be clearly
shown by a language that will admit of no reasonable construction consistent with the
reservation of the power. If the intention of the legislature is open to doubt, then the intention
of the legislature must be resolved in favor of the State.17
Time and again, the Supreme Court has stated that taxation is the rule and exemption
is the exception. The law does not look with favor on tax exemptions and the entity that would
seek to be thus privileged must justify it by words too plain to be mistaken and too categorical
to be misinterpreted.18

The power to tax is an incident of sovereignty and is unlimited in its magnitude,

acknowledging in its very nature no perimeter so that security against its abuse is to be found
only in the responsibility of the legislature which imposes the tax on the constituency who are
to pay for it.19 The right of local government units to collect taxes due must always be upheld
to avoid severe tax erosion. This consideration is consistent with the State policy to guarantee
the autonomy of local governments20 and the objective of the Local Government Code that
they enjoy genuine and meaningful local autonomy to empower them to achieve their fullest
development as self-reliant communities and make them effective partners in the attainment
of national goals.21
In conclusion, we reiterate that the power to tax is the most potent instrument to raise
the needed revenues to finance and support myriad activities of the local government units
for the delivery of basic services essential to the promotion of the general welfare and the
enhancement of peace, progress, and prosperity of the people.22

PRAYER

ABOVE PREMISES CONSIDERED, it is most respectfully prayed unto this Honorable

Court that judgment be rendered in favor of the Petitioner and for the granting of the following:

1. the Petition be given due course;

2. After due proceedings, judgement be rendered setting aside the questioned

decision and resolutions of the Central Boards of Assessment Appeals; and

15 Commissioner of Internal Revenue v. Visayan Electric Company, 132 Phil. 203, 215 (1968).
16 Commissioner of Internal Revenue v. Rio Tuba Nickel Mining Corporation, G.R. Nos. 83583-84, September 30,
1991, 202 SCRA 137.
17 Philippine Long Distance Telephone Company, Inc. v. City of Davao, 415 Phil. 764, 775 (2001).
18 National Power Corporation, vs. Central Board Of Assessment Appeals (CBAA), Local Board Of Assessment
Appeals (LBAA) of La Union, Provincial Treasurer, La Union and Municipal Assessor Of Bauang, La Union, G.R.
No. 171470, January 30, 2009
19 Mactan Cebu International Airport Authority v. Marcos, G.R. No. 120082, September 11,1996, 261 SCRA 667,
679.
20 CONSTITUTION, Section 25, Article II, and Section 2, Article X.
21 Mactan Cebu International Airport Authority v. Marcos, G.R. No. 120082, September 11,1996, 261 SCRA 667,
679.
22 Energy, Inc. v. The Province of Batangas, G.R. No. 170628, February 16, 2007, 516 SCRA 186.
 Other just and equitable relief are likewise asked and prayed for.

Respectfully submitted.

Laoag City for Manila City, Philippines, 02 March 2018.

VERIFICATION AND CERTIFICATION AGAINST FORUM SHOPPING

I, JOSEPHINE P. CALAJATE, acting as the Provincial Treasurer of Ilocos Norte, after

having been sworn to in accordance with law, hereby depose and state that:

1. I am the Petitioner in the above-captioned case and I have caused the preparation of the
foregoing Petition for Review.

2. I have read and understood the contents thereof and the facts stated therein are true and
correct of my personal knowledge and/or on the basis of the documents and records in
my possession;

3. I have not commenced any other action or proceeding involving the same issues in any
tribunal, agency or body;

4. To the best of my knowledge and belief, no such action or proceeding is pending before
any tribunal, agency or body;

5. If I should thereafter learn that a similar actions has been filed before any tribunal, agency
or body, I undertake to report the fact within five (5) days therefrom to this Honorable
Court;

IN WITNESS WHEREOF, I have hereunto set my hand this 2nd day of March 2018 at
Laoag City, Ilocos Norte.

JOSEPHINE P. CALAJATE
Petitioner
PGIN ID. No. ___________

SUBSCRIBED AND SWORN to before me, this 2nd day of March 2018, affiant who is
personally known to me and who exhibited to me her Identification Card issued by the
Provincial Government of Ilocos Norte indicated below her name. I have examined the
Petitioner and that she declared to me that she has read and understood the foregoing and
the same are true to the best of her knowledge and based on authentic records.

Doc. No. ______ ;

Page No. _______;
Book No. _______;
Series of 2018.
Cc: San Diego Ycasiano Macias Estorco
Castañeda and Sanchez Law
Respondent
Registry Receipt No. ____________

Central Board of Assessment Appeals

of the Province of Ilocos Norte
Registry Receipt No. ____________

EXPLANATION

Pursuant to the Rules, service is done by registered mail with return card owing to the distance
and want of personnel to effect personal service.

JOSEPHINE P. CALAJATE
Petitioner
PGIN ID. No. ___________