BAT BATANGAS POWER P OWER CORPORA CORPO RATION TION v NAPOCOR GR No. 152675 April 28, 2004 Buri, Kenneth Roger R. FACTS:
In the early 1990’s, the contry s!ere" #ro$ a cripplin% po&er crisis. A""ressin% the pro'le$, the %o(ern$ent, thro%h the National )o&er *orp *orpor orat atio ion n +N)* +N)*, , so% so%ht ht to attr attrac actt in(e in(est stor ors s in po&e po&err plan plantt oper operat atio ions ns 'y pro( pro(i" i"in in% % the$ the$ &ith &ith ince incent nti( i(es es,, one one o# &hic &hich h &as &as thro%h the N)*’s ass$ption o# pay$ent o# their ta-es in the il" /perate an" rans#er +/ A%ree$ent.
/n ne ne 19 1992, 92, nron nron )o&er o&er 3e(elo 3e(elop$e p$ent nt *orpor *orporati ation on +nro +nron n an" petitioner N)* entere" into a ast rac / )roect. nron a%ree" to spply a po&er station to N)* an" trans#er trans#er its plant to the latter latter a#ter ten +10 years o# operation. -
Sec Sectio tion 11 11.0 .02 2 of the the BOT Agre greemen ementt pro provid vided that hat N! "ha## a## $e re"pon"i$#e for the pa%ment of a## ta&e" that ma% $e impo"ed on the po'er "tation, "tation, e&cept income ta&e" ta&e" and permit fee".
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Su$"e(ue Su$"e(uent#% nt#%,, )nron )nron a""ig a""igned ned it" o$#igatio o$#igation n under under the BOT BOT Agreem Agreement ent to petitioner Batanga" o'er !orporation *B!+.
/n /cto'er 1998, atan%as *ity, thr its le%al ocer eo"l#o eo"l#o 3e%ito, sent sent a lett letter er to ) )* * "e$a "e$an" n"in in% % pay$ pay$en entt o# 'si 'sine ness ss tata-es an" an" penalties. e acno&le"%e" that )* enoye" a 6year ta- holi"ay as a pioneer in"stry 't its ta- e-e$ption perio" e-pire" on :epte$'er 22, 1998, si- +6 years a#ter its re%istration &ith the /I on :epte$'er 2;, 1992.
)* still re#se" to pay the ta-. It insiste" that its 6year ta- holi"ay co$$e co$$ence nce" " #ro$ #ro$ the "ate "ate o# its co$$erc co$$ercial ial operat operation ion on ly ly 16 16,, 199;, not #ro$ the "ate o# its /I re%istration in :epte$'er 1992. )* asserte" that the city shol" collect the ta- #ro$ the N)* as the latter ass$e" responsi'ility #or its pay$ent n"er their / A%ree$ent.
ISSUES: 1.)
On the date o BOI !e"#$t!at#on% :ec. 1;; +% o# the >G*, &hich proscri'es local %o(ern$ent nits +>G?s #ro$ le(yin% ta-es on /Icerti=e" pioneer enterprises #or a perio" o# siyears #ro$ the "ate o# re%istration, applies speci=cally to ta-es i$pose" 'y the local %o(ern$ent, lie the 'siness ta- i$pose" 'y atan%as *ity on )* in the case at 'ar. Reliance o# )* on the pro(ision o# -ecti(e /r"er No. 226, speci=cally :ection 1, Article ;9, itle III, is clearly $isplace" as the si- year ta- holi"ay pro(i"e" therein &hich co$$ences #ro$ the "ate o# co$$ercial operation re#ers to inco$e ta-es i$pose" 'y the national %o(ern$ent on /Ire%istere" pioneer =r$s. *learly, it is the pro(ision o# the >ocal Go(ern$ent *o"e that shol" apply to the ta- clai$ o# atan%as *ity a%ainst the )*. he 6year ta- e-e$ption o# )* shol" ths co$$ence #ro$ the "ate o# )*’s re%istration &ith the /I on ly 16, 199; an" en" on ly 15, 1999. he e!ect o# the >G* on the ta- e-e$ption pri(ile%es o# the N)* has alrea"y 'een e-tensi(ely "iscsse" an" settle" in the recent case o# National )o&er *orporation (. *ity o# *a'anatan. In sai" case, this *ort reco%ni@e" the re$o(al o# the 'lanet e-clsion o# %o(ern$ent instr$entalities #ro$ local ta-ation as one o# the $ost si%ni=cant pro(isions o# the 1991 >G*.:peci=cally, &e stresse" that :ection 19; o# the >G*, an e-press an" %eneral repeal o# all stattes %rantin% e-e$ptions #ro$ local ta-es, &ith"re& the s&eepin% ta- pri(ile%es pre(iosly enoye" 'y the N)* n"er its *harter.
