Scribd Logo
Upload

Welcome to Scribd!

  • 533 views

    08 Meralco Vs City Assessor of Lucena

    Uploaded by

    KIMMY
    This case involved a dispute between MERALCO and the City Assessor of Lucena over whether MERALCO's transformers, electric posts, transmission lines, insulators, and electric meters were subject to real property tax. While the Court found that these items qualified as machinery subject to real property tax under the Local Government Code, it declared null and void the assessments made by the City Assessor for failing to comply with the requirements of the Code and violating MERALCO's right to due process. Specifically, the Court found a lack of a valid appraisal and assessment, as the City Assessor simply lumped all the items together without providing basic details as required. However, a new assessment could be made if properly

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    08 Meralco Vs City Assessor of Lucena

    Uploaded by

    KIMMY
    533 views1 page
    This case involved a dispute between MERALCO and the City Assessor of Lucena over whether MERALCO's transformers, electric posts, transmission lines, insulators, and electric meters were subject to real property tax. While the Court found that these items qualified as machinery subject to real property tax under the Local Government Code, it declared null and void the assessments made by the City Assessor for failing to comply with the requirements of the Code and violating MERALCO's right to due process. Specifically, the Court found a lack of a valid appraisal and assessment, as the City Assessor simply lumped all the items together without providing basic details as required. However, a new assessment could be made if properly

    Original Description:

    08 Meralco vs City Assessor of Lucena(1)

    Original Title

    08 Meralco vs City Assessor of Lucena(1)

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This case involved a dispute between MERALCO and the City Assessor of Lucena over whether MERALCO's transformers, electric posts, transmission lines, insulators, and electric meters were subject to real property tax. While the Court found that these items qualified as machinery subject to real property tax under the Local Government Code, it declared null and void the assessments made by the City Assessor for failing to comply with the requirements of the Code and violating MERALCO's right to due process. Specifically, the Court found a lack of a valid appraisal and assessment, as the City Assessor simply lumped all the items together without providing basic details as required. However, a new assessment could be made if properly

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    533 views1 page

    08 Meralco Vs City Assessor of Lucena

    Uploaded by

    KIMMY
    This case involved a dispute between MERALCO and the City Assessor of Lucena over whether MERALCO's transformers, electric posts, transmission lines, insulators, and electric meters were subject to real property tax. While the Court found that these items qualified as machinery subject to real property tax under the Local Government Code, it declared null and void the assessments made by the City Assessor for failing to comply with the requirements of the Code and violating MERALCO's right to due process. Specifically, the Court found a lack of a valid appraisal and assessment, as the City Assessor simply lumped all the items together without providing basic details as required. However, a new assessment could be made if properly

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    8 MERALCO VS CITY ASSESSOR OF LUCENA

    [GR No. 166102; August 5, 2015]


    FACTS:
     MERALCO is a private corporation engaged in electricity distribution. MERALCO has been granted franchise to
    operate in Lucena City since 1922.
     On February 20, 1989, the City Assessor of Lucena sent a copy of MERALCO’s tax declaration to MERALCO. The
    following were covered by the tax declaration:
    o Transformers and Electric Posts ○ Insulation Meters
    o Transmission Lines ○ Electric Meters
     Under the tax declaration, the properties mentioned above had a market value of P81,811,000 and an assessed
    value of P65,448,800 and were subject to real property tax.
     MERALCO appealed to the LBAA of Lucena claiming that those properties were not taxable under real property
    and that it is only their substation facilities amounting to P9,454,000 which is taxable. MERALCO also claimed that
    they are exempt from real property tax.
    o On July 5, 1989, LBAA ruled that MERALCO is exempt from real property tax since MERALCO is only
    required to pay 5% of its gross earnings based on its franchise.
     On October 29, 1997, MERALCO was being assessed for delinquency real property tax beginning in 1990 which
    amounted to P17,925,117.34.
     MERALCO appealed to the LBAA claiming its exemption.
    o LBAA dismissed the appeal ruling that the Local Government Code repealed the franchise of MERALCO.
     MERALCO then appealed to the CBAA.
    o CBAA dismissed the appeal but ruled that the real property tax should be computed from 1992.
    o Motion for Reconsideration - DENIED
     MERALCO filed a petition for review to the Court of Appeals claiming that the properties being taxed are not real
    properties but the appeal was dismissed.
     Hence, this petition for review on Certiorati under rule 45.
    o MERALCO claims that the subject properties are not real properties, therefore not subject to real property
    tax.
    ISSUE: Are the subject properties real property, therefore subject to real property tax? –YES
    HELD: WHEREFORE, premises considered, the Court PARTLY GRANTS the instant Petition and AFFIRMS with MODIFICATION the
    Decision dated May 13, 2004 of the Court of Appeals in CA-G.R. SP No. 67027, affirming in toto the Decision dated May 3, 2001 of the
    Central Board of Assessment Appeals in CBAA Case No. L-20-98. The Court DECLARES that the transformers, electric posts,
    transmission lines, insulators, and electric meters of Manila Electric Company are NOT EXEMPTED from real property tax under the
    Local Government Code. However, the Court also DECLARES the appraisal and assessment of the said properties under Tax Declaration
    Nos. 019-6500 and 019-7394 as NULL and VOID for not complying with the requirements of the Local Government Code and violating
    the right to due process of Manila Electric Company, and ORDERS the CANCELLATION of the collection letter dated October 16, 1997
    of the City Treasurer of Lucena and the Notice of Assessment dated October 20, 1997 of the City Assessor of Lucena, but WITHOUT
    PREJUDICE to the conduct of a new appraisal and assessment of the same properties by the City Assessor of Lucena in accord with the
    provisions of the Local Government Code and guidelines issued by the Bureau of Local Government Financing.
    RULING:
     The Court finds that the transformers, electric posts, transmission lines, insulators, and electric meters of
    MERALCO are no longer exempted from real property tax and may qualify as "machinery" subject to real property
    tax under the Local Government Code. Nevertheless, the Court declares null and void the appraisal and
    assessment of said properties of MERALCO by the City Assessor in 1997 for failure to comply with the
    requirements of the Local Government Code and, thus, violating the right of MERALCO to due process.
     It was clear that under the 20-year franchise granted to MERALCO by the Municipal Board of Lucena City through
    Resolution No. 2679 dated June 13, 1972, the transformers, electric posts, transmission lines, insulators, and
    electric meters of MERALCO were exempt from real property tax. Paragraph 13 of Resolution No. 2679 is quoted
    in full below. This goes to show that those properties are actually real property.
     ARTICLE 415
    o (1) Land, buildings, roads, and constructions of all kinds adhered to the soil;
    o (3) Everything attached to an immovable in a fixed manner, in such a way that it cannot be separated therefrom without breaking
    the material or deterioration of the object;
    o (5) Machinery, receptacles, instruments or implements intended by the owner of the tenement for an industry or works which
    may be carried in a building or on a piece of land, and which tends directly to meet the needs of the said industry or works;
     The Court reiterates that the machinery subject to real property tax under the Local Government Code "may or
    may not be attached, permanently or temporarily to the real property;" and the physical facilities for
    production, installations, and appurtenant service facilities, those which are mobile, self-powered or self-
    propelled, or are not permanently attached must (a) be actually, directly, and exclusively used to meet the
    needs of the particular industry, business, or activity; and (2) by their very nature and purpose, be designed for,
    or necessary for manufacturing, mining, logging, commercial, industrial, or agricultural purposes.
     *extra* The Court cannot help but attribute the lack of a valid notice of assessment to the apparent lack of a valid appraisal and assessment
    conducted by the City Assessor of Lucena in the first place. It appears that the City Assessor of Lucena simply lumped together all the
    transformers, electric posts, transmission lines, insulators, and electric meters of MERALCO located in Lucena City under Tax Declaration
    Nos. 019-6500 and 019-7394, contrary to the specificity demanded under Sections 224 and 225 of the Local Government Code for appraisal
    and assessment of machinery. The City Assessor and the City Treasurer of Lucena did not even provide the most basic information such as
    the number of transformers, electric posts, insulators, and electric meters or the length of the transmission lines appraised and assessed
    under Tax Declaration Nos. 019-6500 and 019-7394. There is utter lack of factual basis for the assessment of the transformers, electric
    posts, transmission lines, insulators, and electric meters of MERALCO.

    You might also like