G.R. No. 120082, September 11, 1996
MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY, petitioner, vs. HON. FERDINAND J. MARCOS, in his capacity as the Presiding Judge of the Regional Trial Court, Branch 20, Cebu City, THE CITY OF CEBU, represented by its Mayor HON. TOMAS R. OSMENA, and EUSTAQUIO B. CESA, respondents
note this ruling is already changed: The petition has merit. The petitioner is an instrumentality of the government; thus, its properties actually, solely and exclusively used for public purposes, consisting of the airport terminal building, airfield, runway, taxiway and the lots on which they are situated, are not subject to real property tax and respondent City is not justified in collecting taxes from petitioner over said properties.FIRST DIVISION
G.R. No. 181756 June 15, 2015
MACTAN-CEBU INTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner,
vs.
CITY OF LAPU-LAPU and ELENA T. PACALDO, Respondents.
Facts:
Petitioner Mactan Cebu International Airport Authority (MCIAA) was created by virtue of Republic Act No. 6958 and since the time of its creation, the petitioner enjoyed the privilege of exemption from payment of realty taxes in accordance with Section 14 of its Charter.
However, on October 11, 1994, Mr. Eustaquio B. Cesa, the Officer-in-Charge of the Office of the Treasurer of the City of Cebu, demanded payment for realty taxes on several parcels of land that is owned by the Petitioner.
Petitioner objected to Cesa's demand, claiming that such demand is baseless and unjustified since Section 14 of RA 6958 exempts the petitioner from payment of realty taxes. Petitioner also asserted that it is an instrumentality of the government performing governmental functions, citing Section 133 of the Local Government Code of 1991.
Respondent refused to cancel and set aside petitioner's realty tax account, insisting that MCIAA is a government-controlled corporation whose tax exemption privilege has been withdrawn by virtue of Sections 193 and 234 of the Local Government Code that took effect on January 1, 1992
The petitioner was compelled to pay its tax account "under protest" and thereafter filed a Petition of Declaratory Relief before the RTC of Cebu.
The trial court dimissed the petition and so petitioner filed a motion for reconsideration, however, it was denied by the trial court. And so the Petitioner filed a Petition for certiorari before the Supreme Court.
Issue:
Whether or not MCIAA is exempted from paying its realty taxes?
Ruling:
No.
The SC held that, tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons, including government-owned and controlled corporations, Section 193 of the LGC prescribes the general rule, viz., they are withdrawn upon the effectivity of LGC, except upon the effectivity of the LGC, except those granted to local water districts, cooperatives duly registered under RA No. 6938, non stock and non-profit hospitals and educational institutions, and unless otherwise provided in the LGC.
Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from real property taxes granted to natural or juridical persons, including government-owned corporation, except as provided in the said section, and the petitioner is, undoubtedly, a government-owned corporation, it necessarily follows that its exemption from such tax granted it in Section 14 of its Charter, RA No. 6938, has been withdrawn.
In short, the petitioner can no longer invoke the general rule in Section 133.
Also, If Section 234(a) intended to extend the exception therein to the withdrawal of the exemption from payment of real property taxes under the last sentence of the said section to the agencies and instrumentalities of the National Government mentioned in Section 133(o), then it should have restated the wording of the latter. Yet, it did not. Moreover, the Congress did not wish to expand the scope of the exemption is Section 234(a) to include real property owned by other instrumentalities or agencies of the government including government-owned and controlled corporations is further borne out by the fact that the source of this exemption is Section 40(a) of P.D. No. 646, otherwise known as the Real Property Tax Code.
Prepared by: Mary Choleene M. Bautista
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