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BENGUET CORP.

V CENTRAL BOARD The CBAA cited, inter alia, that the object mentioned
G.R. NO. 106041 | JANUARY 29, 1993 comes under the ambit of Art. 415 (1) and (2) hence it
CRUZ, J. is taxable under Sec. 38 of PD 464. Thus this appeal.
CAGA | GRP. 7 ISSUES:
WON the tailings dam is an "improvement" on the
PETITIONER: Benguet Corporation (BengCo). mine of BengCo. (Thus making it taxable under PD
RESPONDENTS: Central Board of Assessment Appeals 464)
(CBAA), Board of Assessment Appeals of Zambales, Provincial
Assessor of Zambales, Province of Zambales, and Municipality RULING: YES. The Dam is an improvement
of San Marcelino. According to the Petitioner, they should not have
been assessed a separate tax for the tailings dam
TOPIC: and the land thereunder because the said object is
Definition > Classification under the Civil Code> not an improvement on the mine of BengCo.
Immovable or Real Property > Movable or Personal Sec. 38 of PD 464 is silent about what constitutes a
Property. real property so the Court used the definition provided
by Art. 415 of the NCC.
CASE SUMMARY: A realty tax was imposed against BengCo's SC ruled that said tailings dam is under Art. 415 (3)
tailings dam and the land thereunder. BengCo appealed the SC also looked at the definition of an improvement.
assessment to the Board of Assessment Appeals of Zambales Sec. 3 (k) of PD 464 was used as basis. It found that
which dismissed the appeal on the grounds of BengCo's failure the degree of permanence in its intended construction
to pay the realty tax during the pendency of the appeal. and use is what defines an improvement so as to
BengCo appealed this decision to the CBAA who reversed the constitute it as a realty.
dismissal of the appeal but on the merits agreed that the
SC ruled that since the dam is an integral part of the
tailings dam and the land thereunder were subject to realty tax.
mine and increases its utility thus it is an
The CBAA cited, inter alia, that the dam comes under the ambit
improvement, hence, taxable.
of Art. 415 (1) and (2) hence it is taxable under Sec. 38 of PD
DISPOSITIVE: WHEREFORE, the petition is dismissed for
464. Thus BengCo appealed to the SC. According to BengCo,
failure to show that the questioned decision of [CBAA] is tainted
the tailings dam is not subject to a separate tax (from the mine
with grave abuse of discretion except as to the imposition of
from which the dam is connected) because it is not an
penalties upon the petitioner which is hereby set aside. Costs
"improvement" upon the land within the meaning of PD 464. SC
against petitioner. It is so ordered.
dismissed this petition. Stating that the tailings dam is taxable
because: 1) it is covered by Art. 415 (3); and 2) it is an
improvement according to Sec. 3 (k) of PD 464. " Improvements PROVISIONS:
is a valueable addition made to property or an amelioration in its
condition, amounting to more than more repairs or replacement Art. 415 NCC. The following are immovable property:
of waste, costing labor or capital, and intended to enhance its 1) Land, building, roads and constructions of all kinds
value, beauty or utility or to adapt it for new or further purposes." adhered to the soil;
2) Trees, plants, and growing fruits, while they are
TERMS: attached to the land or form an integral part of an
immovable;
Tailings Dam is typically an earth-filled 3) Everything attached to an immovable in a fixed
embankment dam used to store byproducts of mining manner, in such a way that it cannot be separated
operations after separating the ore from the rest. therefrom without breaking the material or
deterioration of the object;
PRECEDENTS: n/a xxxxx
Sec. 38 of PD 464 (The Real Property Tax Code).
FACTS: Incidence of Real Property Tax. There shall be levied,
A realty tax, assessed by the Provincial Assessor of assessed and collected in all provinces, cities and
Zambales at P11,319,304.00, was imposed against municipalities an annual ad valorem tax on real property,
Benguet Corporation's (BengCo) tailings dam and the such as land, buildings, machinery and other improvements
affixed or attached to real property not hereinafter
land thereunder.
specifically exempted.
BengCo appealed the assessment to the Board of
Assessment Appeals of Zambales which dismissed Sec. 3 of PD 464. Definition of Terms. When used in this
Code:
the appeal on the grounds of BengCo's failure to pay
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the realty tax during the pendency of the appeal. (k) Improvements is a valueable addition made to property
BengCo appealed this decision to the CBAA who or an amelioration in its condition, amounting to more than
reversed the dismissal of the appeal but on the merits more repairs or replacement of waste, costing labor or
agreed that the tailings dam and the land thereunder capital, and intended to enhance its value, beauty or utility
were subject to realty tax. or to adapt it for new or further purposes.
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