LGC SEC. 234. Exemptions from Real Property Tax and SEC. 133. Common Limitations on the Taxing Tax ing Poers of Lo!al Lo! al Go"ernment #nits
G.R. $o. 1%11&%
'(ly 1)* 2&12
REP#+L,C - T/E P/,L,PP,$ES* represented 0y the P/,L,PP,$E RECLT,-$ #T/-R,T PR5*Petitioner, PR5*Petitioner, vs. C,T - PR$6#E* Respondent. PR$6#E* Respondent.
This is a petition for review on certiorari assailing the Order of the Regional Trial Court, Branch 195,Paranaque Cit !RTC", which ruled that petitioner Philippine Recla#ation $uthorit !PR$" is a govern#ent%owned and controlled corporation !&OCC", a ta'a(le entit, and, therefore, not e'e#pt fro# pa#ent of real propert ta'es.
The Pu(lic )states $uthorit !P)$" is a govern#ent corporation created ( virtue of P.*. +o. 1- 1- toprov toprovide ide a coord coordina inated ted,, econ econo#i o#ical cal and and effic efficie ient nt recla# recla#ati ation on of lands, lands, and and the ad#in ad#inist istra ratio tion n andop andopera eratio tion n of lands lands (elon (elongin ging g to, #anag #anaged ed and/o and/orr opera operate ted d (, (, the govern#ent with the o(0ect of #a'i#iing their utiliation and hastening their develop#ent consistent with pu(lic interest. On Oc Octo to(e (err 23, 23, 2 2,, then then Pres Presid iden entt &lor &loria ia 4aca 4acapa paga gal% l%$r $rro roo o issu issued ed ).O. ).O. +o. +o. - - transfor#ing P)$ into PR$, which shall perfor# all the powers and functions of the P)$ relating to recla#ation activities.
B virtue of its #andate, #andate, PR$ reclai#ed several portions of the foreshore and offshore areas of 4anila 4anila Ba,in Ba,includ cluding ing those those located located in Para6aq Para6aque ue Cit. Cit. Para6aq Para6aque ue Cit Treasu Treasurer rer issued issued 7arrants of 8ev on PR$s reclai#ed properties (ased on the assess#ent for delinquent real propert for ta' ears 21 and 22. PR$ clai#ed that it is not a &OCC under the $d#inistrative Code, nor is it a &OCC under :ection 13, $rticle ;<< of the 19-=Constitution (ecause it is not required to #eet the test of econo#ic via(ilit. corporation (ecause it has no #e#(ers and it is not organied for charita(le, religious, educational, professional, cultural, recreatio recreational, nal, fraterna fraternal, l, literar literar,, scientif scientific, ic, social, social, civil service, service, or si#ilar si#ilar purposes purposes,, li>e trade, trade, industr, agriculture and li>e cha#(ers as provided in :ection -- of the Corporation Code. Thus, PR$ insists that, as an incorporated instru#entalit of the +ational &overn#ent, it is e'e#pt fro# pa#ent of real propert ta' e'cept when the (eneficial use of the real propert is granted granted to a ta'a(le ta'a(le person. person. PR$ clai#s clai#s that (ased (ased on :ection :ection 1!o" 1!o" of the 8&C, local local govern# govern#ents ents cannot ta' the nationa nationall govern# govern#ent ent which which delegate delegate to local local govern# govern#ents ents the power to ta'.
,ss(e7 7hether or not Philippine Recla#ation $uthorit !PR$" is an incorporated instru#entalit of the national govern#ent and is, therefore, e'e#pt fro# pa#ent of real propert ta' under sections 2!a" and 1!o" of Repu(lic $ct =13? /eld7 @es it is a &overn#ent nor a non%stoc> corporation. corporation (ecause although it has a capital stoc> divided into no par value shares as provided in :ection = of P.*. +o. 1-, it is not authoried to distri(ute dividends, surplus allot#ents or profits to stoc>holders. PR$ is a govern#ent instru#entalit vested with corporate powers and perfor#ing an essential pu(lic service pursuant to :ection 2!1" of the or non%stoc> corporations, which is a necessar condition (efore an agenc or instru#entalit is dee#ed a &OCC. The funda#ental provision a(ove authories Congress to create &OCCs through special charters on two conditionsA 1" the &OCC #ust (e esta(lished for the co##on good and 2" the &OCC #ust #eet the test of econo#ic via(ilit.