LUCENA D. DEMAALA vs. COMMISSION ON AUDIT, REPRESENTED BY ITS CHAIRPERSON COMMISSIONER MA. GRACIA M. PULIDO TAN, G.R. No. 199752, Fe!"#!$ 17, 2%15 J. Leonen
FACTS& The Sangguniang Sangguniang Panlalawigan Panlalawigan of Palawan Palawan enacted Provincial Provincial Ordinanc Ordinance e No. 332-A, 332-A, Series of !!", entitled #An Ordinance A$$roving and Ado$ting the %ode &overning the 'evision of Assess(ents, %lassi)cation and *aluation of 'eal Pro$erties in the Province of Palawan+ Ordinance.%ha$ter ", Section / of the Ordinance $rovides for an additional lev0 on real $ro$ert0 ta1 for the s$ecial education fund at the rate of one-half $ercent or ." . 4n confor(it0 with Section / of the Ordinance, the 5unici$alit0 of Narra, Palawan, with 6e(aala as (a0or, collected fro( owners of real $ro$erties located within its territor0 an annual ta1 as s$ecial education fund at the rate of ." of the assessed value of the $ro$ert0 su78ect to ta1. This collection was e9ected through the (unici$al treasurer. On $ost-audit, Audit Tea( Leader Juanito A. Nostratis issued Audit O7servation 5e(orandu( AO5 No. 3-" dated August :, 23 in which he noted su$$osed de)ciencies in the s$ecial education fund collected 70 the 5unici$alit0 of Narra. ;e nown as the Local &overn(ent %ode of !! Local &overn(ent %ode. After evaluating AO5 No. 3-", 'egional %luster 6irector S0 issued N% No. 2-- dated August 3, 2 in the a(ount of P,2",=."=. ;e held 6e(aala, the (unici$al treasurer of Narra, and all s$ecial education fund $a0ors lia7le for the de)cienc0 in s$ecial education fund collections. The 5unici$alit0 5unici$alit0 of Narra, Narra, through through 6e(aala, )led the 5otion for 'econs 'econsideration ideration dated 6ece(7er 2, 2. 4t stressed that the collection of the s$ecial education fund at the rate of ." was (erel0 in accordance with the Ordinance. On 5arch !, 2", 'egional %luster 6irector S0 issued an 4ndorse(ent den0ing this 5otion for 'econsideration. ?ollowing this, the 5unici$alit ?ollowing 5unici$alit0 0 of Narra, through 6e(aala, )led an a$$eal with the %o((ission on Audit@s Legal and Ad8udication Oce. 4n Local 6ecision No. 2="=/ dated A$ril !, 2=, this a$$eal was denied. The 5unici$alit0 5unici$alit0 of Narra, Narra, through through 6e(aala, then )led a Petition Petition for 'eview 'eview with the %o((ission on Audit. 4n 6ecision No. 2/-/: dated Se$te(7er 22, 2/, the %o((ission on Audit ruled against 6e(aala and ar(ed LAO Local 6ecision No. 2=-"= with the (odi)cation that for(er Palawan *ice &overnor Joel T. 'e0es and the other (e(7ers of the Sangguniang Panlalawigan of Palawan who enacted the Ordinance were held 8ointl0 and severall0 lia7le with 6e(aala, the (unici$al treasurer of Narra, and the s$ecial education fund $a0ors. Thereafter, 6e(aala, who Thereafter, who was no longer longer the (a0or of of the 5unici$alit0 5unici$alit0 of Narra, Narra, )led a 5otion for 'econsideration. ?or(er *ice &overnor Joel T. 'e0es and the other (e(7ers of the Sangguniang Panlalawigan of Palawan who were held lia7le under 6ecision No. 2/-
/: )led a se$arate 5otion for 'econsideration. The %o((ission on Audit@s 6ecision No. 2-/3 dated Nove(7er =, 2 ar(ed its Se$te(7er 22, 2/ 6ecision. 6e(aala then )led with this court the $resent Petition for %ertiorari. 'es$ondent %o((ission on Audit, through the Oce of the Solicitor &eneral, )led its %o((ent on A$ril 2, 22. Petitioner 6e(aala )led her 'e$l0 on Se$te(7er =, 22. Thereafter, the $arties )led their res$ective 5e(oranda.
ISSUE& a Bhether res$ondent co((itted grave a7use of discretion a(ounting to lac> or e1cess of 8urisdiction in holding that there was a de)cienc0 in the 5unici$alit0 of Narra@s collection of the additional lev0 for the s$ecial education fund. Su7su(ed in this issue is the (atter of whether a (unici$alit0 within the 5etro$olitan 5anila Area, a cit0, or a $rovince (a0 have an additional lev0 on real $ro$ert0 for the s$ecial education fund at the rate of less than C 7 Assu(ing that res$ondent correctl0 held that there was a de)cienc0, whether res$ondent co((itted grave a7use of discretion a(ounting to lac> or e1cess or 8urisdiction in holding $etitioner $ersonall0 lia7le for the de)cienc0.
RULING& a YES. %onsistent with the !/: %onstitution@s declared $reference, the ta1ing $owers of local govern(ent units (ust 7e resolved in favor of their local )scal autono(0. 4n City Government of San Pablo v. ReyesD The $ower to ta1 is $ri(aril0 vested in %ongress. ;owever, in our 8urisdiction, it (a0 7e e1ercised 70 local legislative 7odies, no longer (erel0 70 virtue of a valid delegation as 7efore, 7ut $ursuant to direct authorit0 conferred 70 Section ", Article E of the %onstitution. The li(its on the level of additional lev0 for the s$ecial education fund under Section 23" of the Local &overn(ent %ode should 7e read as granting )scal Fe1i7ilit0 to local govern(ent units. Goo> 44 of the Local &overn(ent %ode governs local ta1ation and )scal (atters. Title 44 of Goo> 44 governs real $ro$ert0 ta1ation. Section 23" of the Local &overn(ent %ode allows $rovinces and cities, as well as (unici$alities in 5etro 5anila, to collect, on to$ of the 7asic annual real $ro$ert0 ta1, an additional lev0 which shall e1clusivel0 accrue to the s$ecial education fund. The o$erative $hrase in Section 23"@s grant to (unici$alities in 5etro 5anila, cities, and $rovinces of the $ower to i($ose an additional lev0 for the s$ecial education fund is $re)1ed with #may,+ thus, #(a0 lev0 and collect an annual ta1 of one $ercent .+ 4n Buklod nang Magbubukid sa Lupaing Ramos, In. v. !.M. Ramos and Sons, In . the (eaning of #(a0+ was discussed as followsD
Bhere the $rovision reads #(a0,+ this word shows that it is not (andator0 7ut discretionar0. 4t is an au1iliar0 ver7 indicating li7ert0, o$$ortunit0, $er(ission and $ossi7ilit0. The use of the word #(a0+ in a statute denotes that it is director0 in nature and generall0 $er(issive onl0. 'es$ondent concedes that Section 23"@s grant to (unici$alities in 5etro 5anila, to cities, and to $rovinces of the $ower to i($ose an additional lev0 for the s$ecial education fund (a>es its collection o$tional. 4t is not (andator0 that the lev0 7e i($osed and collected. The controvers0 which the %o((ission on Audit created is not whether these local govern(ent units have discretion to collect 7ut whether the0 have discretion on the rate at which the0 are to collect. 4t is res$ondent@s $osition that the o$tion granted to a local govern(ent unit is li(ited to the (atter of whether it shall actuall0 collect, and that the rate at which it shall collect should it choose to do so is )1ed 70 Section 23". 4n contrast, it is $etitioner@s contention that the o$tion given to a local govern(ent unit e1tends not onl0 to the (atter of whether to collect 7ut also to the rate at which collection is to 7e (ade. Be sustain the $osition of $etitioner. Section 23"@s $er(issive language is un
7 YES. 4t was an error a(ounting to grave a7use of discretion for res$ondent to hold $etitioner $ersonall0 lia7le for the su$$osed de)cienc0. ;aving esta7lished the $ro$riet0 of i($osing an additional lev0 for the s$ecial education fund at the rate of .", it follows that there was nothing erroneous in the 5unici$alit0 of Narra@s having acted $ursuant to Section / of the Ordinance. 4t could thus not 7e faulted for collecting fro( owners of real $ro$erties located within its territor0 an annual ta1 as s$ecial education fund at the rate of ." of the assessed value su78ect to ta1 of the $ro$ert0. Li>ewise, it follows that it was an error for res$ondent to hold $etitioner $ersonall0 lia7le for the su$$osed de)cienc0 in collections. Hven if a contrar0 ruling were to 7e had on the $ro$riet0 of collecting at a rate less than , it would still not follow that $etitioner is $ersonall0 lia7le for de)ciencies. The actions of the ocials of the 5unici$alit0 of Narra are consistent with the rule that ordinances are $resu(ed valid. The (a0or@s actions were done $ursuant to an ordinance which, at the ti(e of the collection, was 0et to 7e invalidated. 4t is 7asic that laws and local ordinances are #$resu(ed to 7e valid unless and until the courts declare the contrar0 in clear and une
de)cienc0 in s$ecial education fund collections.
