87. VICTORIAS MILLING v.

CTA
In 1947, the Provincial Assessor assessed for purposes of the 1948 real property tax, machineries
belonging to Victorias Milling Co., Inc. after allowing a deduction of 50% for depreciation. In 1949, the same
machineries were assessed which is equivalent to the assessed value for 1948 minus 3% depreciation. In both
instances, Victorias paid the taxes under protest. For 1950 to 1953, the same machines were assessed and
corresponding taxes were paid under protest.
Victorias did not appeal from all the aforesaid assessments to the Provincial Board of Assessment
Appeals as required in Section 17 of the Assessment law. Instead, it filed a complaint with the CFI against the
Provincial Treasurer of Negros Occidental alleging that the assessor erroneously did not follow the straight line
method in determining the depreciation of its machineries as provided for by Provincial Circular and
respectively prayed for the refund of the sum of P134, 969.70. The CFI ordered the refund. The Provincial
Treasurer appealed to the Supreme Court but was dismissed. Upon motion of Victorias, the CFI issued a writ of
execution. The Supreme Court set aside the judgment and rendered that the trial court did not have
jurisdiction over the case, jurisdiction having been transferred to CTA.
ISSUE:
Whether the CFI had jurisdiction to entertain the complaint.
RULING:
No.
Where an assessment is illegal or void, the remedy of the taxpayer who has already paid the tax
under protest is to sue for refund before CFI. Where the assessment is merely erroneous, his recourse is to
file an appeal in Provincial Board of Assessment Appeals within 60 days from receipt of assessment. An
appeal is illegal or void when the assessor has no power to act at all. It is erroneous when the assessor has
power but errs in the exercise of that power.
Since the Provincial Assessor had the power to make the assessments, but in the exercise of such
power he deviated from the procedure set down by law, in that he employed the “fixed percentage of
diminishing book value method” instead of the “straight line method” in depreciating the machineries,
logically the assessment should be considered as erroneous. In which event, Victorias’ remedy pursuant to
Section 17 of the Assessment Law was to appeal to the Provincial Board of Assessment Appeals.
88. ALLIANCE OF QUEZON CITY HOMEOWNER’S ASSOC. v. QUEZON CITY
Facts:
In 2010, the Department of Interior and Local Government and the Department of Finance (DOF)
issued Joint Memorandum Circular No. 2010-01, directing all local government units to implement Section 219
of the LGC, which requires assessors to revise the real property assessments in their respective jurisdictions
every three (3) years.
On December 5, 2016, the Sangguniang Panlungsod of QC enacted the assailed 2016 Ordinance, which:
(a) approved the revised schedule of FMVs of all lands and Basic Unit Construction Cost for buildings and other
structures, whether for residential, commercial, and industrial uses;[9] and (b) set the new assessment levels
at five percent (5%) for residential and fourteen percent (14%) for commercial and industrial classifications.
[10] The revised schedule increased the FMVs indicated in the 1995 Ordinance to supposedly reflect the
prevailing market price of real properties in QC.
On April 7, 2017, Alliance of Quezon City Homeowners' Association, Inc. (Alliance), allegedly a non-
stock, non-profit corporation, filed the present petition. Alliance argued that the 2016 Ordinance should be
declared unconstitutional for violating substantive due process, considering that the increase in FMVs, which
resulted in an increase in the taxpayer's base, and ultimately, the taxes to be paid, was unjust, excessive,
oppressive, arbitrary, and confiscatory as proscribed under Section 130 of the LGC.
Moreover, it averred that the hike in the FMVs up to 500% of the previous values was arbitrary and has
no factual basis because the 2016 Ordinance contains no standard or explanation on how the QC Assessor
arrived at the new amounts in the Schedule of FMVs.
Issue:
WoN the petition is infirm for violation of the doctrine of exhaustion of administrative remedies.
Ruling:
NO.
Although a petitioner's failure to exhaust the required administrative remedies has been held to bar
a petition in court, the Court has relaxed the application of this rule "in view of the more substantive
matters," as in this case. In particular, a local government unit's authority to increase the FMVs of
properties for purposes of local taxation is a question that indisputably affects the public at large. As for QC,
the widespread effect of the 2016 Ordinance to its constituents is glaringly apparent, considering that QC
has a land area of 16,112.8 hectares, which is almost one-fourth of the entire Metro Manila. Moreover, QC
holds 23.3% of Metro Manila's total population. While taxation is an inherent power of the State, the
exercise of this power should not be unjust, excessive, oppressive, or confiscatory as explicitly prohibited
under the LGC.
As Alliance proffers, the alleged exorbitant increase in real property taxes to be paid based on the
assailed Ordinance triggers a strong public interest against the imposition of excessive or confiscatory taxes.
Courts must therefore guard the public's interest against such government action. Accordingly, the Court
exempts this case from the rule on administrative exhaustion.
89. ESTATE OF CONCORDIA T. LIM v. CITY OF MANILA
FACTS:
The late Concordia Lim obtained a real estate loan from GSIS, secured by a mortgage
constituted or 2 parcels of land. For failure to pay the loan, the GSIS being the highest bidder in a foreclosure
sale obtained the properties. This led to the consolidation of Titles in favor of GSIS in 1977.However, the
Board of Trustees issued Resolution No. 188, wherein the estate of Lim was allowed to repurchase the
properties. The City Treasurer of Manila required the petitioner to pay the real estate taxes due on 1977, 1978
and on the first quarter of 1979, before the titles could be transferred. The petitioner paid but under protest.
A demand for reimbursement was sent against the GSIS. GSIS refused. A demand for refund was also sent to
the City Treasurer, likewise refused also. A case was filed before the RTC but dismissed the case for lack of
jurisdiction. It ruled that the case involves a protested action of the City Assessor which should have been filed
before the Local Board of Assessment.
ISSUE:
Whether the trial court has jurisdiction over the action for refund of real estate taxes paid under protest.
Ruling:
YES.
Judicial review may be resorted to via an action for refund or reimbursement without exhausting
administrative remedies before LBAA, where the plaintiff alleges that he is not the owner or the user of the
property assessed.
Section 30 of the Real Property Tax Code is not applicable because what is questioned is the imposition of the
tax assessed and who should shoulder the burden of the tax. There is no dispute over the amount assessed on
the properties for tax purposes.

90. CALTEX PHILS. INC v. CBAA

Facts:
This case is about the realty tax on machinery and equipment installed by Caltex (Philippines) Inc. in its gas
stations located on leased land. The machines and equipment consists of underground tanks, elevated tank,
elevated water tanks, water tanks, gasoline pumps, computing pumps, water pumps, car washer, car hoists,
truck hoists, air compressors and tireflators. The Board characterized the said items of gas station equipment
and machinery as taxable realty. The realty tax on said equipment amounts to P4,541.10 annually.
On May 2, 1979 Caltex filed this certiorari petition wherein it prayed for the setting aside of the Board's
decision and for a declaration that the said machines and equipment are personal property not subject to
realty tax.
Issue:
Whether or not the certiorari petition is proper.
Ruling:
YES.
The Solicitor General's contention that the Court of Tax Appeals has exclusive appellate jurisdiction over this
case is not correct. When Republic act No. 1125 created the Tax Court in 1954, there was as yet no Central
Board of Assessment Appeals. Section 7(3) of that law in providing that the Tax Court had jurisdiction to
review by appeal decisions of provincial or city boards of assessment appeals had in mind the local boards
of assessment appeals but not the Central Board of Assessment Appeals which under the Real Property Tax
Code has appellate jurisdiction over decisions of the said local boards of assessment appeals and is,
therefore, in the same category as the Tax Court.