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Telecommunications, Inc., G. R. No. 162015, March 6, 2006)

A telecommunications company filed a petition for a writ of prohibition claiming exemption from a city's real property tax under its legislative franchise. The city argued that the company failed to exhaust administrative remedies and that its properties were not exempt from taxation. The court resolved the issues by finding that exhaustion was not required given the urgency, and that the company's properties were exempt as they were used directly and exclusively for its franchise operations based on the intent expressed in the franchise.

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49 views1 page

Telecommunications, Inc., G. R. No. 162015, March 6, 2006)

A telecommunications company filed a petition for a writ of prohibition claiming exemption from a city's real property tax under its legislative franchise. The city argued that the company failed to exhaust administrative remedies and that its properties were not exempt from taxation. The court resolved the issues by finding that exhaustion was not required given the urgency, and that the company's properties were exempt as they were used directly and exclusively for its franchise operations based on the intent expressed in the franchise.

Uploaded by

johnkyle
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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28.

A telecommunications company was granted by Congress on July 20,


1992, after the effectivity of the Local Government Code on January 1, 1992, a
legislative franchise with tax exemption privileges which partly reads, The
grantee, its successors or assigns shall be liable to pay the same taxes on their
real estate, buildings and personal property, exclusive of this franchise, as other
persons or corporations are now or hereafter may be required by law to pay. This
provision existed in the companys franchise prior to the effectivity of the Local
Government Code. A City then enacted an ordinance in 1993 imposing a real
property on all real properties located within the city limits, and withdrawing all tax
exemptions previously granted. Among properties covered are those owned by
the company from which the City is now collecting P43 million. The properties of
the company were then scheduled by the City for sale at public auction.
The company then filed a petition for the issuance of a writ of prohibition
claiming exemption under its legislative franchise. The City defended its position
raising the following:
a. There was no exhaustion of administrative remedies because the matter
should have first been filed before the Local Board of Assessment Appeals;
b. The companys properties are exempt from tax under its franchise.
Resolve the issues raised.
SUGGESTED ANSWERS:
a.
There is no need to exhaust administrative remedies as the appeal to the LBAA is not a
speedy and adequate remedy within the law. This is so because the properties are already scheduled
for auction sale.
Furthermore one of the recognized exceptions to the rule on exhaustion is that if the issue is purely
legal in character which is so in this case.
b.
The properties are exempt from taxation. The grant of taxing powers to local governments
under the Constitution and the Local Government Code does not affect the power of Congress to grant
tax exemptions.
The term exclusive of this franchise is interpreted to mean properties actually, directly and
exclusively used in the radio or telecommunications business. The subsequent piece of legislation
which reiterated the phrase exclusive of this franchise found in the previous tax exemption grant to the
company is an express and real intention on the part of Congress to once against remove from the
LGCs delegated taxing power, all of the companys properties that are actually, directly and exclusively
used in the pursuit of its franchise. (The City Government of Quezon City, et al., v. Bayan
Telecommunications, Inc., G. R. No. 162015, March 6, 2006)

29. The owner operator of a BOT and not the ultimate owner is subject to
real property taxes. Consistent with the BOT concept and as implemented, BPPC the ownermanager-operator of the project is the actual user of its machineries and equipment. BPPCs
ownership and use of the machineries and equipment are actual, direct, and immediate, while
NAPOCORs is contingent and, at this stage of the BOT Agreement, not sufficient to support its claim for
tax exemption. (National Power Corporation v. Central Board of Assessment Appeals, et al., G, R. No. 171470,
January 30,

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