On June 26, 1995, petitioner and the National Irrigation Administration (NIA) entered into a build-operate-transfer (BOT) contract known as the “Amended and Restated Casecnan Project Agreement” (Casecnan Contract) relative to the construction and development of the Casecnan Multi-Purpose Irrigation and Power Project (Casecnan Project) in Pantabangan, Nueva Ecija and Alfonso Castaneda, Nueva Vizcaya. The Casecnan Project is a combined irrigation and hydroelectric power generation facility using the Pantabangan Dam in Nueva Ecija.
On September 29, 2003, petitioner and NIA executed a Supplemental Agreement6 amending Article II of the Casecnan Contract which pertains to payment of taxes. Article 2.2 thereof states that NIA must reimburse petitioner for real property taxes (RPT) provided the same was paid upon NIA’s directive and with the concurrence of the Department of Finance.
On September 6, 2005, petitioner received from the Office of the Provincial Assessor a Notice of Assessment of Real Property for the years 2002 to 2005. Petitioner assailed the assessment with the Nueva Ecija Local Board of Assessment Appeals (Nueva Ecija LBAA) which dismissed it on January 26, 2006. Undeterred, petitioner filed a Notice of Appeal with the Nueva Ecija Central Board of Assessment Appeals (Nueva Ecija CBAA). During the pendency thereof, respondents collected from petitioner the RPT due under the said assessment as well as those pertaining to the years 2006 up to the second quarter of 2008, totalling ₱363,703,606.88. Petitioner paid the assessed RPT under protest; it also initiated proceedings questioning the validity of the collection with respect to the years 2006 up to the second quarter of 2008. Thereafter, petitioner received a letter dated July 9, 2008 from the Office of the Provincial Treasurer stating that it has RPT in arrears for the years 2002 up to the second quarter of 2008 amounting to ₱1,277,474,342.10. Petitioner received another letter dated August 29, 2008 from the same office clarifying that its arrearages in RPT actually amounted to ₱1,279,997,722.70 (2008 RPT Reassessment). Again, petitioner questioned this assessment through an appeal before the Nueva Ecija LBAA. While the same was pending, petitioner received from respondents a letter dated September 10, 2008 demanding payment for its alleged RPT arrearages.
Hence, on September 23, 2008, petitioner filed with the RTC of San Jose City, Nueva Ecija a Complaint for injunction and damages with application for temporary restraining order (TRO) and preliminary injunction praying to restrain the collection of the 2008 RPT Reassessment. Petitioner emphasized, among others, that it was not the one which should pay the taxes but NIA.
On September 24, 2008, the RTC denied petitioner’s application for a 72-hour TRO. Meanwhile, petitioner received from the Office of the Provincial Treasurer a letter dated September 22, 2008 further demanding payment for RPT covering the third quarter of 2008 (2008-3Q Assessment). Thus, petitioner filed on September 29, 2008 an Amended Complaint12 asking the RTC to likewise enjoin respondents from collecting RPT based on the 2008-3Q Assessment in the amount of ₱53,346,755.18.
On October 2, 2008, the RTC issued a 20-day TRO enjoining respondents from collecting from petitioner the RPT covered by the 2008 RPT Reassessment amounting to ₱1,279,997,722.70, including surcharges and penalties.
Subsequently, however, the RTC denied petitioner’s application for writ of preliminary injunction in its Order of October 24, 2008.It also denied petitioner’s Motion for Reconsideration thereof in an Order dated January 30, 2009.
On April 24, 2009, petitioner filed with the CA a Petition for Certiorari under Rule 65 of the Rules of Court seeking to annul and set aside the aforementioned October 24, 2008 and January 30, 2009 RTC Orders.
In its November 2, 2010 Decision, the CA observed that the Petition for Certiorari before it was actually an offshoot of the 2008 RPT Reassessment. And since in resolving the issue of whether the RTC committed grave abuse of discretion in denying petitioner’s application for a writ of preliminary injunction, the issue of the validity of the assessment and the collection of the RPT against petitioner must also be resolved, thus jurisdiction over the case lies within the Court of Tax Appeals (CTA). Hence, the CA dismissed the petition for lack of jurisdiction. Petitioner sought reconsideration; however, it was denied in a Resolution dated March 24, 2011.
Whether the CTA and not the CA has jurisdiction over appeals on the decisions of the RTC on Local Tax Cases.
Yes, with respect to the CTA, its jurisdiction was expanded and its rank elevated to that of a collegiate court with special jurisdiction by virtue of Republic Act No. 9282. This expanded jurisdiction of the CTA includes its exclusive appellate jurisdiction to review by appeal the decisions, orders or resolutions of the RTC in local tax cases originally decided or resolved by the RTC in the exercise of its original or appellate jurisdiction.
The Court ruled that the CTA likewise has the jurisdiction to issue writs of certiorari or to determine whether there has been grave abuse of discretion amounting to lack or excess of jurisdiction on the part of the RTC in issuing an interlocutory order in cases falling within the CTA’s exclusive appellate jurisdiction.