REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QUEZON CITY

FIRST DIVISION
*************

SURFIELD DEVELOPMENT CORP.,

Petitioner,

C.T.A. A.C. NO. 005

Members:
-versus-
ACOSTA, Chairperson
BAUTISTA, and
CASANOVA, JJ.
HON. CITY TREASURER AND Promulgated:
HON. CITY ASSESSOR,
MANDALUYONG CITY,
Respondents.
X---------------------------------------------------------X

DECISION
CASANOVA, J.:

This is a Petition for Review before this Court filed on December 16, 2004, under

Republic Act No. 9282, seeking the annulment or setting aside of the Decision rendered by

Branch 212 of the Regional Trial Court of Mandaluyong City dated October 15, 2004,

thereby dismissing the Petition for Mandamus filed by herein petitioner in the case entitled

"Surfield Development Corporation vs. Hon. City Treasurer, Mandaluyong City and Hon. City

Assessor, Mandaluyong City".

The facts as culled from the records of the case are as follows:

Petitioner is a corporation duly organized and existing under the laws of the Republic

of the Philippines, with business address at 2263 Pasong Tamo Extension, Makati City,

Philippines. It is engaged in the business of real property development and it owns a parcel

of land with improvements located at Mandaluyong City. On the other hand, respondents

4
DECISION
C.T.A. A.C. NO.5
Page 2

City Treasurer and City Assessor of Mandaluyong City are impleaded in their official

capacities as such with office address at the Office of the City Mayor, City Hall Compound,

Mandaluyong City.

On the belief that the case of Suguitan vs. Marcelino (CA-G.R. SP No. 44155,

December 22, 1997) nullified the Schedule of Zonal Values in the City of Mandaluyong,

petitioner filed with the City Treasurer on March 28, 2001 its claim for refund for the alleged

excess real estate tax payments it had paid for the years 1995 to 2000 in the amount of

P8,048,368.44.

In a letter dated April 3, 2001, respondent City Treasurer replied that he could not

act on petitioner's request "due to diverse opinions of the Supreme Court and the Court of

Appeals in which one ruling uphold (sic) the validity of the council resolution while the other

is adversed (sic) to the resolution ".

On October 23, 2002, petitioner sent its last and final demand that respondent City

Treasurer grant its claim for refund within five (5) days from his receipt of the demand

letters.

In a letter dated November 5, 2002, the City Legal Department of Mandaluyong City

denied petitioner's claim. Petitioner's motion for reconsideration thereof was likewise

denied.

Thus, on the basis of the denial of its claim for refund, petitioner filed with the

respondent City Treasurer, a Special Action for Mandamus on June 11, 2003 which was

raffled to Branch 214 of the Regional Trial Court of Mandaluyong City and docketed as SCA

No. MC 03-2142 to compel herein respondents to refund or issue a tax credit for the alleged

excess real estate taxes it had paid during the years 1995 to 2000 in the amount of

P8,048,368.44. Subsequently, an Amended Petition for Review was filed by petitioner to

include the years 2001 to 2003 "because a further demand for a refund of taxes paid for the

years 2001-2003 would be a futile exercise", thereby resulting to an increased claim of

alleged excess real property taxes paid of P13,084,061.43.

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C.T.A. A. C. NO. 5
Page 3

On April 19, 2004, the case was re-raffied to Branch 212 of the Regional Trial Court

of Mandaluyong City which rendered the assailed Decision on October 15, 2004 denying the

Petition for Mandamus for lack of merit.

Hence, this petition with the following Assignment of Errors:

1. The lower court gravely erred in not finding the questioned

ordinances void ab initio for violating PD 921;

2. The lower court gravely erred in not finding that the petitioner is
entitled to a tax refund or credit;

3. The lower court gravely erred in not finding that the petitioner
filed its claim for tax refund within the prescribed period;

4. The lower court gravely erred in not finding that the Doctrine of
Exhaustion of Administrative Remedies does not apply in this case;
and

5. The lower court gravely erred in not finding that a Petition for
Mandamus is proper in this case.

Petitioner maintains that it is entitled to its claim for tax refund of excess real estate

taxes on the ground that the real property tax ordinances, more particularly, Ordinance Nos.

119, S-1993 and 135, S-1994, issued by the City of Mandaluyong, are void ab initio, in view

of the Supreme Court and the Court of Appeals' decisions in the cases of Ty vs. Trampe

(250 5CRA 500), Suguitan vs. Marcelino (CA-G.R. SP No. 4415~ December 22, 1997) and

Marcelino vs. Suguitan (G.R. No. 141412, February 28, 2000).

It is petitioner's submission that sometime in the year 1992 or 1993, respondent City

Assessor of Mandaluyong City, all by himself and without participation from other city

assessors in the Second Local Treasury and Assessment District, adopted a Schedule of

Zonal Values for real properties in Mandaluyong City. Accordingly, in the case of Ty vs.

Trampe, supra, the Supreme Court declared that a unilateral adoption of a schedule of zonal

values by the City Assessor of Pasig City is null and void in violation of the provisions of

Presidential Decree (P.D.) 921. In the preparation of a Schedule of Values of Real

Properties in Metropolitan Manila, the Supreme Court held that the Local Government Code

did not supersede nor dispense with the process as provided in Section 9 of P.D. 921. In

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DECISION
C.T.A. A.C. NO. 5
Page 4

this regard, there was a need to harmonize both the provisions of Republic Act (R.A.) 7160

and P.D. 921. Thus, the Supreme Court laid down therein the correct process to follow in

the proper preparation of a schedule of values. And considering that th is case is an en bane

decision, and pursuant to the principle of stare decisis et non quieta movere, this Court is

now bound by the doctrine established in t he said case.

Likewise, petitioner argues that, in the case of Suguitan vs. Marcelino {CA-G.R. SP

No. 44155, December 22, 1997), the Court of Appeals resolved against the validity of

Ordinance Nos. 119, S-1993 and 135, S-1994. Accordingly, there was nothing in the said

Ordinances that would show that the schedule of market values was jointly prepared by the

Assessors of the said cities and municipalities, thus:

"We have carefully examined the documentary evidence of the

appellants, and searched in vain for proof of compliance with Section 9 of
Presidential Decree No. 921. There is nothing in Ordinance 119, S-1993
and 135, S-1994 which shows that the Schedule of Base Unit Market
Value in Section 5 of Ordinance No. 119, S-1993 was prepared jointly by
the Assessors of the cities and municipalities comprising the Second
District, conformably with Section 9 of Presidential Decree No. 921 and
the procedure laid down by the Supreme Court in Ty vs. Trampe, supra. "

In disposing of the above case, the Court of Appea ls held that:

"Clearly then, the court a quo committed a reverstble error when it

held that in this case there was compliance with Section 9 of Presidential
Decree No. 921. We find that the Decision in Ty vs. Trampe, supra,
which annulled the 1994 schedule of real property values in Pasig City
applies as well to the schedule of market values for Mandaluyong City for
the same assessment period, inasmuch as both cities belong to the same
Local Treasury and Assessment District where there was no joint action
taken by the Assessors concerned. ''

Consequently, the case of Suguitan vs. Marcelino, supra, became final and executory

on August 16, 2000 after the Supreme Court, in a Resolution dated February 28, 2000,

resolved to deny respondent's Petition for Review on Certiorari/ in the case entitled

Marcelino vs. Suguitan, GR No. 141412.

On the same vein, petitioner is in disagreement with the lower court's reliance of the

case of Figuerres vs. CA (305 SCRA 206}, for the same allegedly never established that the

assailed Ordinance Nos. 119, S-1993 and 135, S-1994 complied with the provisions of P.D.

44
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C.T.A. A.C. NO. 5
Page 5

921. Accordingly, the Supreme Court did not rule nor made any pronouncement as to

whether or not these assailed Ordinances were issued with the participation of the other city

assessors in the Second Local Treasury and Assessment District in the adoption of the

Schedule of Zonal Values for real properties in Mandaluyong City.

In addition, petitioner submits that this instant petition was filed within the two-year

prescriptive period allowed by law within which to file its claim for tax credit or refund.

Petitioner contends that, pursuant to Section 253 of the Local Government Code of 1991

(R.A. 7160), it has a period of two (2) years from the date it became entitled to the tax

refund or credit within which to file its claim. In this case, when the Supreme Court upheld

the nullity of the questioned ordinances, as found by the Court of Appeals, in a Resolution

dated February 28, 2000, and the same having became final and executory on August 16,

2000, as evidenced by the Entry of Judgment of the Clerk of Court of the Supreme Court in

the case of Marcelino vs. Suguitan, supra, it is on this latter date that petitioner became

entitled to its claim for tax credit or refund . Therefore, the two-year prescriptive period

within which to file its claim counting from August 16, 2000, petitioner's claim made on

March 28, 2001 with the City Treasurer of Mandaluyong City was well within the prescribed

period.

Lastly, petitioner asserts that the doctrine of exhaustion of administrative remedies

does not apply to cases involving purely questions of law, to which it maintains that this

instant case involves. Accordingly, the dispute relates not to the truth or falsehood of facts

but rather, refers to the correct applicability of the law or jurisprudence to the case in

dispute. In the recent case of Information Technology Foundation of the

Philippines, et. al. vs. Comelec, et. al., GR No. 159139, January 13, 2004, the

Supreme Court enumerated the following as exceptions to the doctrine of exhaustion of

administrative remedies:

1. where there is a violation of due process;

2. when the issue involved is purely a legal question;
3. when the administrative action is patently illegal amounting

45
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C.T A A.C. NO. 5
Page 6

to lack or excess of jurisdiction;

4. when there is estoppel on the part of the administrative agency
concerned;
5. when there is irreparable injury;
6. when the respondent is a department secretary whose acts as an alter
ego of the President bears the implied and assumed approval of the
latter;
7. when to require exhaustion of administrative remedies would be
unreasonable;
8. when it would amount to a nullification of a claim;
9. when the subject matter is a private land in land case proceedings;
10. when the rule does not provide a plain, speedy and adequate
remedy; and
11. when there are circumstances indicating the urgency of judicial
intervention.
(Emphasis supplied.)

Petitioner contests the lower court's argument that it took an "unwarranted shortcut"

by not resorting to the legal remedies as provided under Sections 187, 226 and 252 of RA

7160 otherwise known as the Local Government Code of 1991. Apparently, petitioner cannot

bypass the authority of the concerned administrative agencies and directly seeks redress

from the courts even on the pretext of raising a supposedly pure question of law without

violating the doctrine of exhaustion of administrative remedies. Petitioner strongly

disagrees.

Petitioner maintains that it had in fact filed its claim for refund or tax credit with the

City Treasurer in accordance with Section 252 of R.A. 7160. Secondly, the remedies under

Sections 187 and 226 are not plain, speedy and adequate remedies in the ordinary course of

law for the petitioner. Thirdly, it would have been a waste of time to appeal to the

Secretary of Justice, as well as, the Local Board of Assessment Appeals, to question the

legality or validity of the questioned ordinances, when in fact, the Supreme Court, the

highest tribunal of the land, and the Court of Appeals have already ruled on their nullity.

Clearly then, there is no need for petitioner to exhaust administrative remedies, and the only

proper remedy the petitioner can take is to file for a Petition for Mandamus, which the lower

court had mistakenly dismissed.

t '.
DECISION
C.T.A. A.C. NO. 5
Page 7

On the other hand, respondents submit that this Court has no jurisdiction over the

case. As pointed out by petitioner, this case involves purely questions of law. It is

respondents' contention that with the elevation of this Court to the level of that of the Court

of Appeals pursuant to R.A. 9282, all the rules which govern the Court of Appeals applies to

this Court as well. Accordingly, this petition is in the nature of a first appeal to the Court of

Tax Appeals from the decision rendered by the Regional Trial Court of Mandaluyong City in

the exercise of its original jurisdiction. This appeal, therefore, partakes of an ordinary

appeal under Rule 41 of the 1997 Rules of Civil Procedure. Consequently, under Section 2

of Rule 50 of the same Rules, "an appeal taken under Rule 41 taken from the Regional Trial

Court to the Court of Appeals raising only questions of law shall be dismissed, issues purely

of law not being reviewable by the said court." This appeal, partaking of the nature of an

ordinary appeal under Rule 41 of the same Rules, is modified only by the procedure and

form which should be analogous to that of Rule 42. It is argued that Rule 42 refers to an

appeal from a decision of the Regional Trial Court rendered in the exercise of its appellate

jurisdiction, which this case is not. Such being the case, this appeal is covered by the

principles embodied in Rule 41 and Rule 50 of the 1997 Revised Rules of Civil Procedure.

Respondents further argues that petitioner's much-relied case of Ty vs. Trampe is

not applicable in the case at bar, considering that in the said case, what was involved is the

unilateral adoption of the Schedule of Zonal Values involving real properties located in Pasig

City, thus, the City of Mandaluyong was never or even made a party thereto. It is stressed

by respondents that the ruling in the case of Ty vs. Trampe does not automatically nullify

the Schedule of Zonal or Market Values of real properties in Mandaluyong City, just because

both the cities belong to the same Assessment District.

It is further alleged by the respondents that inspite of the fact that the Schedule of

Zonal Values implemented by the City of Mandaluyong predated the decision in Ty vs.

Trampe, there was still substantial compliance with the three steps as laid down in the said

case, to wit:

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DECISION
C.TA A.C. NO. 5
Page 8

1. There was Resolution 1-92 dated August 14, 1992 and the General
Provisions on the Appraisal and Assessments of Building and other
Structure which was prepared and adopted by the City and Municipal
Assessors of the Second Assessment District consisting of Quezon
City, San Juan, Pasig, Mandaluyong and Marikina;

2. Prior to August 14, 1992, the Metro Manila City and Municipal
Assessors met on April 16, 1992 and discussed the general revision of
the real property assessments and the preparation of the schedule of
values, which is indicated in Resolution 1-92; and

3. On July 9, 1992, the City and Municipal Assessors of the Second

Assessment District composed on Quezon City, San Juan, Pasig,
Mandaluyong and Marikina convened and adopted the schedule of
based unit market value for their district.

Subsequently, the schedule for values for the district contained and incorporated in

Ordinance Nos. 119 S-1993 and 125 S-1994 were enacted and published in the newspaper

of general circulation, Filipinas News (Annex "3", Affidavit of Publication, Answer/Comment),

as a compliance with the requirements as laid down in the provisions of law.

Lastly, respondents are in agreement with petitioner's stand as to the applicability of

the principle of stare decisis et non quieta movere. However, said principle should apply to
cases involving the same issues. While there is no doubt that Ty vs. Trampe is a doctrinal

ruling, nevertheless, respondents argue that, when petitioner filed its claim for refund, there

was yet no ruling as to the nullity or constitutionality of the assailed Ordinances. The

position of petitioner that the ruling in the case Ty vs. Trampe automatically nullified the

assailed Ordinances is clearly misplaced.

With the above arguments and counter-arguments, the issues involved in this case

may be summarized as follows:

1. Whether or not this Court has jurisdiction over the present

petition;

2. Whether or not the lower court erred in not finding that the
Petition for Mandamus was the proper remedy for petitioner;

3. Whether or not the ruling in the case of Ty vs. Trampe applies in

the instant case;

4. Whether or not the assailed Ordinances 119 S-1993 and 135 s-

1994 issued by the City of Mandaluyong were automatically
nullified by the ruling in the case of Ty vs. Trampe; and

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DECISION
C.T.A. A.C. NO. 5
Page 9

5. Whether or not petitioner is entitled to its claim for refund or

credit or excess real estate taxes for the year 1995 to 2003.

As regards the first issue, under Section 7 (a)(3) and (a)(5) of Republic Act No.

9282, otherwise known as the Act Expanding the Jurisdiction of the Court of Tax Appeals, it

is provided that:

Sec. 7. Jurisdiction.- The CTA shall exercise:

a. Exclusive appellate jurisdiction to review by appeal, as herein provided:

1. XXX
2. X X X
3. XXX
4. Decisions of the Centra l Board of Assessment Appeals in the exercise of
its appellate jurisdiction over cases involving the assessment and taxation
of real property originally decided by the provincial or city board of
assessment appeals.

Likewise, Section 11 of the same Act provides that :

Sec. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. - Any
party adversely affected by a decision, ruling or inaction of the Commissioner
of Internal Revenue, the Commissioner of Customs, the Secretary of Finance,
the Secretary of Trade and Industry or the Secretary of Agriculture or the
Central Board of Assessment Appeals or the Regional Trial Court may file an
appeal with the CTA within thirty (30) days after the receipt of such decision
or ruling or after the expiry of the period fixed by law for action as referred to
in Section 7(a)(2) herein.

Appeal shall be made by filing a petition for review under a

procedure analogous to that provided for under Rule 42 of the 1997
Rules of Civil Procedure with the CTA within thirty (30) days from the
receipt of the decision or ruling or in the case of inaction as herein provided,
from the expiration of the period fixed by law to act thereon. A Division of
the CTA shall hear the appeal: Provided, however, That with respect to
decisions or rulings of the Central Board of Assessment Appeals and
the Regional Trial Court in the exercise of its appellate jurisdiction,
appeal shall be made by filing a petition for review under a
procedure analogous to that provided for under rule 43 of the 1997
Rules of Civil Procedure with the CTA, which shall hear the case en bane.
XXX
(Emphasis and underscoring supplied.)

Pursuant to the law afore-quoted, the CTA has ju risdiction over decisions of the

Central Board of Assessment Appeals in the exercise of its appellate jurisdiction over cases

involving the assessment and taxation of real property originally decided by the provincial or

city board of assessment appeals which appeal may be filed through a petition for review

49
DECISION
C.T.A. A.C. NO. 5
Page 10

under a procedure analogous to that provided for under rule 43 of the 1997 Rules of Civil

Procedure with the CTA, which shall hear the case en bane.

It must be emphasized that this Court is a court of special jurisdiction which is

governed by the law which created it, as well as, the rules regarding procedural processes

implemented by it. As such, it shall take cognizance of matters which are clearly within its

jurisdiction . Undoubtedly, appeals of the decisions or rulings of the Regional Trial Court

concerning real property taxes evidently do not fall within the jurisdiction of the CTA.

Moreover, Section 253 of the Local Government Code (R.A. 7160) provides for the

legal procedures on claims for refund or issuance of tax credits for real property taxes which

have been illegally or erroneously collected, thus:

"SEC. 253. Repayment of Excessive Collections. -When an

assessment of basic real property tax or any other tax levied under this Title,
is found to be illegal or erroneous and the tax is accordingly reduced or
adjusted, the taxpayer may file a written claim for refund or credit for taxes
and interest with the provincial or city treasurer within two (2) years form the
date the taxpayer is entitled to such reduction or adjustment.

The provincial or city treasurer shall decide the claim for refund or
credit within sixty (60) days from receipt thereof. Incase the claim for refund
or credit is denied, the taxpayer may avail of the remedies as provided in
Chapter 3, Title II, Book II of this Code."

Chapter 3, Title II, Book II of the Local Government Code (R.A. 7160) provides for

the remedies which the aggrieved taxpayer may resort to. Under Section 226 thereof, it is

provided that:

"SEC. 226. Local Board of Assessment Appeals. - Any owner or person

having legal interest in the property who is not satisfied with the action of the
provincial, city or municipal assessor in the assessment of his property may,
within sixty (60) days fr9m the date of receipt of the written notice of
assessment, appeal to the Board of Assessment Appeals of the province or
city by filing a petition under oath in the form prescribed for the purpose,
together with copies of the tax declarations and such affidavits or documents
submitted in support of the appeal."

As pointed out by the lower court, petitioner is taking an unwarranted shortcut. The

procedures laid down by law have not been properly followed by the petitioner. It must be

stressed that claims for refund or issuance of tax credit certificates arising from the alleged
DECISION
C.T.A. A.C. NO. 5
Page 11

illegality of the Schedule of Zonal Valuations adopted by the respondents must find recourse

under pertinent provisions of the Local Government Code of 1991. Legal remedies, being

made available for the taxpayer, may certainly be availed of. With the remedies available

however, petitioner cannot hide under the guise of raising purely questions of law to

circumvent the law on legal procedures. No matter how one looks at it, this case definitely

involves a claim or credit of alleged excess real property taxes. Section 253 of the Local

Government Code of 1991 lays down the legal procedures relative thereto. For failure of the

petitioner to avail of the proper remedies allowed by law, this Court acquires no jurisdiction

over the case.

The law provides for legal procedures to give chances to administrative bodies to

reconsider its stand on the issues raised. Apparently, before the intervention of court is to

be sought, it is a precondition that the aggrieved party must first avail of all the means

afforded by the administrative processes. To quote the ruling of the lower court, viz:

"To the court's min~ the petitioner is taking an unwarranted

short cut It must be emphasized that petitioner's claim for tax
refund/credit arose from the alleged illegality of the Schedule of Values
adopted by respondents and incorporated in the assailed Ordinance No.
119~ S-1993 of Mandaluyong City. Republic Act 7164 otherwise known
as the Local Government Code of 1991 provides for legal remedies in
cases where taxes are excessively assessed or collected by local
government units. Under Section 187 of the said Code~ it reads:

"the procedure for approval of local tax ordinances

and revenue measures xxx provided xxx provided,
further, that any question on the constitutionality or
legality of tax ordinances revenue measures may be
raised on appeal within thirty (30) days from the
effectivity thereof to the Secretary of Justice who shall
render a decision within sixty (60) days from the date or
receipt of the appeal; Provided, however, that such
appeal shall not have the effect of suspending the
effectivity of the ordinance and the accrual and payment
of the tax, fee or charge levied therein: Provided, finally,
that within thirty (30) days after receipt of the decision
or the lapse of the sixty-day period without the
Secretary of Justice acting upon the appeal, the
aggrieved party may file appropriate proceedings with a
court of competent jurisdiction."

Under Section 226 of the aforecited Code~ it provides:

Sl
DECISION
C.T.A. A.C. NO. 5
Page 12

"Any owner or person having legal interest in the

property who is not satisfied with the action of the
provincial, city or municipal assessor in the assessment
of his property may, within sixty (60) days from the date
of receipt of the written notice of assessment, appeal to
the Board of Assessment Appeals of the province or city
by filing a petition under oath xxx"

In Section 252/ it states:

"(a) No protest shall be entertained unless the taxpayer

first pays the tax. There shall be annotated on the tax
receipts the words "paid under protest". The protest in
writing must be filed within thirty (30) days from
payment of the tax to the xxx, city treasurer xxx, who
shall decide the protest within sixty (60) days from
receipt.

(b) XXX
(c) In the event that the protest is finally decided in
favor of the taxpayer, the amount or portion of the tax
protest shall be refunded to the protestant, or applied as
tax credit against his existing or future tax liability.

(d) In the event that the protest is denied or upon the

lapse of the sixty (60) day period prescribed in
subparagraph (a), the taxpayer may avail of the
remedies as provided for in Chapter 3, Title II, Book II
of this Code."

Section 253 on the other hand provides:

"When an assessment of basic real property tax or any

other tax levied under this title, is found to be illegal or
erroneous and the tax is accordingly reduced or
adjusted, the taxpayer may file a written claim for
refund or credit for taxes and interest with the xxx city
treasurer within two (2) years form the date the
taxpayer is entitled to such reduction or adjustment.

The City Treasurer shall decide the claim for refund or

credit within sixty (60) days from receipt thereof. Incase
the claim for refund or credit is denied, the taxpayer
may avail of the remedies as provided in Chapter 3, Title
II Book II of this Code."

Considering the foregoing/ the petitioner cannot bypass the

authority of the concerned administrative agencies and directly seeks
redress from the court even on the pretext of raising a supposedly a pure
question of law without violating the Doctrine of Exhaustion of
Administrative remedy. Simply stat~ before the petitioner could seek
the intervention of the Court it is a precondition as a rule that petitioner
should first avail of all the means afforded by the administrative
processes. "

S2
DECISION
C.T.A. A.C. NO. 5
Page 13

We see no reason to deviate from the above pronouncement of the lower court and

uphold the same.

IN VIEW OF THE FOREGOING, the Petition for Review is hereby DISMISSED for

lack of jurisdiction.

SO ORDERED.

CAESAR A. CASANOVA
Associate Justice

WE CONCUR:

~~ Cl~
ERNESTO D. ACOSTA

CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified

that the conclusions in the above Decision were reached in consultation before the

case was assigned to the writer of the opinion of the Court's Division.

L----~. o ~
Court of Tax Appeals ERNESTO D. ACOSTA
Chairperson, First Division
Library Presiding Justice

:J ,