REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QUEZON CITY

ENBANC

NLEX CORPORATION CTA EB NO. 2514

(FORMERLY MANILA NORTH (CTA AC No. 217)
TOLLWAYS CORPORATION,
AS THE SURVIVING Present:
CORPORATION AND HAS
ABSORBED TOLLWAYS DEL ROSARIO, P.J.,
MANAGEMENT RINGPIS-LIBAN,
CORPORATION), MANAHAN,
Petitioner, BACORRO-VILLENA,
MODESTO-SAN PEDRO,
-versus- REYES-FAJARDO,
CUI-DAVID, and
FERRER-FLORES, JJ.
MUNICIPALITY OF
GUIGUINTO, BULACAN AND
HON. GUILLERMA DL.
GARRIDO, IN HER CAPACITY
AS THE OIC-MUNICIPAL
TREASURER OF GUIGUINTO, Promulgated:
BULACAN,
Respondents.
){- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

DECISION

MANAHAN,J. :
The Case

This is a Petition for Review 1 under Section 3(b)2, Rule 8

of the Revised Rules of the Court of Tax Appeals3 (RRCTA),
without respondents' comment despite due notice, seeking for
1 See Petition for Review; Rollo, pp. 18-42, with Annexes.
2 "SECTION 3. Who May Appeal; Period to File Petition.- xxx
XXX XXX XXX
(b) A party adversely affected by a decision or resolution of a
Division of the Court on a motion for reconsideration or new tria l may
appeal to the Court by filing before it a petition for review within fifteen
days from receipt of a copy of the questioned decision or resolution. Upon
proper motion and the payment of the full amount of the docket and
other lawful fees and deposit for costs before the expiration of the
reglementary period herein fixed, the Court may grant an additional
period not exceeding fifteen days from the expiration of the original
period within which to file the petition for review."
3 A.M. No. 05-11 -07-CTA, November 22, 2005. ~
DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 2 of 10

the reconsideration of the Decision dated July 13, 2020

(Assailed Decision) and the Resolution dated June 30, 2021
(Assailed Resolution) rendered by the CTA Second Division in
CTA AC No. 217. Petitioner is also asking this Court to rule on
the following: (1) that it did not maintain a branch office, a
sales office, or a project office within the Municipality during
the taxable years (TY)s 2005 to 2007; (2) to cancel and annul
the Notice of Assessments for Regulatory Fees; and, (3) to
order respondents, their successors, agents, substitutes,
representatives, and all persons acting under their direction or
authority to permanently desist from imposing, assessing or
collecting Local Business Tax (LBT) and regulatory fees for TY s
2005 to 2007 against petitioner.

The Parties

Petitioner is a corporation duly organized and existing

under and by virtue of the laws of the Philippines, with office
address at North Luzon Expressway (NLEX) Compound,
Balintawak, Caloocan City. 4

On the other hand, respondent Municipality of

Guiguinto, Bulacan is a local government unit. Meanwhile,
respondent Guillerma DL Garrido is impleaded in her capacity
as the OIC-Municipal Treasurer of respondent municipality.s

The Facts

On April 1998, the Manila North Tollways Corporation

(MNTC), the Philippine National Construction Corporation and
the Republic of the Philippines through the Toll Regulatory
Board, entered into as Supplemental Toll Operation
Agreement. Said Agreement granted MNTC the concession to
finance, design, rehabilitate, expand, operate and maintain the
NLEX. Further, it granted MNTC the authority to appoint an
Operation and Maintenance Contractor to undertake any
aspect of defined operation and maintenance for a fixed service
fee. 6

4 Rollo, Decision dated July 13, 2020, p. 55.

5 Id.
• Id. at pp. 55-56. ~
 DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 3 of 10

Pursua nt thereto , MNTC entere d into an Operat ion and

Manag ement Agreem ent with Tollwa ys Manag ement
Corpor ation (TMC).7

On April 3, 2009, TMC receive d the subjec t local

busine ss tax (LBT) and regulat ory fees assess ments from
respon dents, requiri ng it to pay the total amoun t of Four
Million One Hundr ed Sixty-N ine Thous and Six Hundr ed
Ninety -Seven and 36/10 0 Pesos (Php4, 169,69 7.36), among
others. 8

On May 28, 2009, TMC filed its written protest . On June

18, 2009, plainti ffrecei ved the denial ofits protest . 9

On July 29, 2009, TMC filed a compl aint with the

Region al Trial Court (RTC)- Branch 21 of the City of Malolo s
("lower court") docket ed as Civil Case No. 487-M -2009 for:
Annul ment of Assess ment for Local Busine ss Taxes and
Regula tory Fees entitle d "Tollw ays Manag ement Corporation v.
Municipality ofGuig uinto Province ofBula can, et al.".

Meanw hile, on Novem ber 29, 2018, the Securi ties and
Exchan ge Comm ission (SEC) issued a Certifi cate of Filing of
the Article s and Plan of Merger betwee n petitio ner NLEX
Corpor ation and TMC with the NLEX Corpor ation as the
survivi ng corpora tion.1o

The lower court eventu ally ruled in favor of the

respon dents wherei n the disposi tive portion of its decisio n
reads as follows: 11

"Wheref ore, all premise s conside red, the compla int IS

hereby dismiss ed.

Plaintiff is directed to pay defenda nt Municip ality of

Guiguin to, Bulacan local busines s taxes in the amount of
P4,169, 697.36 and mayor's permit and other regulato ry fees in
the sum of P72,262 .35 for the year 2005 to 2007 as contain ed
in the Notice of Assessm ent dated April 3, 2009 plus
surchar ged (sic) penaltie s until fully paid.

SO ORDER ED."

7 Rollo, at p. 56.
8 Id.
9 Rollo, Decision dated July 13, 2020, p. 56.
1o Id.
11 Docket, CTA
AC No. 217, RTC-Bra nch 21, Malolos, Bulacan Decision dated August
17,2018 ,p. 45. ~
DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 4 of 10

On January 8, 2019, petitioner received the assailed

Decision.12 Thus, on February 7, 2019, petitioner filed its
petition for review in the Court in Division which was partially
granted under the Assailed Decision, which reads as follows: 13

"WHEREFORE, the instant Petition for Review is

PARTIALLY GRANTED, and the Decision of the Lower Court
dated August 17, 2018 is PARTIALLY REVERSED AND SET
ASIDE. Accordingly, the Local Business Tax Assessment in
the amount of Four Million One Hundred Sixty Nine
Thousand Six Hundred Ninety Seven and 36/100
(P4,169,697.36) is CANCELLED.

SO ORDERED"

Petitioner moved for the reconsideration of said decision

but was denied anew under the Assailed Resolution which
reads as follows: 14

"WHEREFORE, the instant Motion for Partial

Reconsideration (of the Decision dated 13 July 2020) is
DENIED, for lack of merit.

SO ORDERED."

Thus, the instant Petition for Review was posted on

October 27, 2021 but received by this Court on November 5,
2021.

On February 15, 2022, respondents were directed to file

their comment on petitioner's Petition for Review. However, per
Records Verification dated June 20, 2022, respondents failed
to file their comment.

Hence, on July 19, 2022, the instant case was submitted

for decision.1s

Issue

Whether the Court in Division erred in ruling that

petitioner has a branch or sales office in the Municipality and
that this Court has no jurisdiction to rule upon the validity of
the imposition of the Regulatory Fees.

12 Rollo, Decision dated July 13, 2020, p. 56.

13 Id. at p. 64.
14 Rollo, CTA AC No. 217, Resolution dated June 30, 2021, p. 72.
1s Id., Resolution dated July 19, 2022, pp. 121-122. ~
DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 5 of 10

Petition er's Argum ents

Petition er insists that it had no branch office or a sales

office in the municip ality.

Petition er also argues that this Court has jurisdic tion to

rule on the validity of the regulato ry fees assesse d by the
respond ent against petition er.

The Ruling of the Court En Bane

This Court shall determi ne first whether the instant

petition is filed on time. Sections 1 and 3(b), Rule 8 of the
Revised Rules of the Court of Tax Appeals (RRCTA) provide
that:

SECTION 1. Review of cases in the Court en bane.- In

cases falling under the exclusive appellate jurisdicti on of the
Court en bane, the petition for review of a decision or
resolutio n of the Court in Division must be preceded by the
filing of a timely motion for reconside ration or new trial with
the Division.
XXX XXX XXX

SEC. 3. Who may appeal; period to file petition.- (a) xxx

XXX XXX

(b) A party adversel y affected by a decision or

resolutio n of a Division of the Court on a motion for
reconsid eration or new trial may appeal to the Court by
filing before it a petition for review within fifteen days
from receipt of a copy of the question ed decision or
resolutio n. Upon proper motion and the payment of the full
amount of the docket and other lawful fees and deposit for
costs before the expiratio n of the reglemen tary period herein
fixed, the Court may grant an additiona l period not
exceeding fifteen days from the expiratio n of the original
period within which to file the petition for review. (Emphasis
supplied)

The records of the case reveal that the instant petition

was precede d by a Motion for Reconsi deration which is the
subject of the assailed Resolution dated June 30, 2021.

Based on the records of the instant case, petition er

received the Assailed Resolut ion on July 15, 2021. In
accorda nce with the abovem entioned provisio ns of the RRCTA, &r..-
DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 6 of 10

petitioner had until July 30, 2021 within which to file its
petition.

Petitioner then filed a Motion for Time to File Petition for

Review 16 on July 29, 2021 which was granted under Minute
Resolution dated July 31, 20211 7 where petitioner was given a
final and non-extendib le period of fifteen (15) days from July
30, 2021, or until August 14, 2021 within which to file its
Petition for Review.

However, under Supreme Court's (SC's) Administrativ e

Circular No. 56-2021 dated July 30, 2021, all courts were
physically closed from August 2, 2021 and the filing of
pleadings was suspended. It was only under SC's
Administrativ e Circular No. 83-2021 dated October 18, 2021
that the suspension of the filing of pleadings was lifted and
gave the litigants seven (7) calendar days from October 20,
2021 to file their required pleadings. Thus, the filing of the
instant petition on October 27, 2021 was on time.

Factual findings of the lower

courts are accorded the highest
degree of respect.

Petitioner argues that its Sta. Rita and Tabang Offices do

not fall within the definition of either a branch or a sales office
since they did not engage in transactions that generated and
recorded sales or revenues in TY s 2005 to 2007. However, the
Court in Division ruled otherwise.

It must be emphasized that such was the factual finding

of the Court in Division, hence, it deserves the highest degree
of respect as held in Heirs of Teresita Villanueva, et al. v. Heirs
of Petronila Syquia Mendoza, et al.: ts

"Findings of fact made by a trial court are accorded the

highest degree of respect by an appellate tribunal and,
absent a clear disregard of the evidence before it that can
otherwise affect the results of the case, those findings should
not simply be ignored. Absent any clear showing of abuse,
arbitrariness, or capriciousness committed on the part of the
lower court, its findings of facts are binding and conclusive
upon the Court. The reason for this is because the trial court

16 Rollo, pp. 1-6.

11 Id. at p. 17
18 G.R. No. 209132, June 05, 2017.~
 DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 7 ofiO

was in a much better position to determin e which party was

able to present evidence with greater weight."

Further , it was establis hed that the Sta. Rita and Tabang
Offices are being used to perform the core function s of the
petition er relative to the relevant portions of the NLEX, hence,
they are conside red branch or sales offices subject to LBT. 19

Absent any finding of grave abuse of discretio n, there is

no reason to disturb the abovem entioned findings of the Court
in Division .

The Court has no jurisdict ion

on regulatory fees but only on
local taxes.

The Court of Tax Appeals (CTA) is a court of special

jurisdic tion and can only take cogniza nce of such matters as
are clearly within its jurisdic tion. 20 The jurisdic tion of the CTA
regardin g local tax and real property tax (RPT) cases is
provided under Section 7(a)(3) of RA No. 1125, as amende d by
Republi c Act (RA) Nos. 9282 and 9503, which provides :

"SEC. 7. Jurisdict ion.- The CTA shall exercise:

(a) Exclusive appellate jurisdicti on to review by

appeal, as herein provided:
XXX XXX XXX
(3) Decisions , orders or resolutio ns of
the Regional Trial Courts in local tax cases
originally decided or resolved by them in the
exercise of their original or appellate
jurisdicti on;"

Similarl y, Section 3(a)(3) of Rule 4 of RRCTA states:

"SEC. 3. Cases within the jurisdicti on of the Court in

Division. -The Court in Division shall exercise:

(a) Exclusive original over or appellate jurisdicti on

to review by appeal the following:
XXX XXX XXX

(3) Decisions , resolutio ns or orders of the

Regional Trial Courts in local tax cases decided

19 Rollo, Resolution dated June 30, 2021, p. 68.

° Commissioner of Internal Revenue us. Silicon Philippines, Inc. (formerly Intel Philippines
2

Manufacturing, Inc.), G.R. No. 169778, March 12, 2014. a----·

DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 8 of10

or resolved by them in the exercise of their

original jurisdiction;" (Emphasis supplied)

In National Power Corporation v. Municipal Government of

Navotas, et al.2 1 , the Supreme Court ruled that local tax cases
consist of cases arising from local business tax (LBT) and RPT,
to wit:

"Here, the context in which the word 'local taxes' is

employed does not clearly indicate that the limited or
restricted view was intended by the legislature. In addition,
the specification of real property tax assessment under
Paragraph (a)(5) of Section 7 of R.A. 9282, in relation to the
decisions of the CBAA, is only proper given that the CBAA
has no jurisdiction, either original or appellate, over cases
involving local taxes other than real property taxes.

Based on the foregoing, the general meaning of 'local

taxes' should be adopted in relation to Paragraph (a)(3) of
Section 7 of R.A. 9282, which necessarily includes real
property taxes."

Petitioner, in the instant petition, admitted that the

subject matter of the assessment being appealed also include
regulatory fees. Hence, not being local taxes, the Court in
Division correctly ruled that this Court has no jurisdiction on
regulatory fees assessed by respondents pursuant to Section
7(a)(3) of RA No. 1125, as amended.

In Municipality of San Mateo, Isabela, represented by

Municipal Mayor Crispina R. Agcaoili, M.D., and Atty. Alfredo S.
Remigio, in his capacity as the Municipal Legal Officer v. Smart
Communications, Inc., 22 the Supreme Court differentiated the
local taxes from regulatory fees, to wit:

"The term 'taxes' has been defined by case law as 'the

enforced proportional contributions from persons and
property levied by the state for the support of government
and for all public needs.' While, under the LGC, a 'fee' is
defined as 'any charge fixed by law or ordinance for the
regulation or inspection of a business or activity.'

From the foregoing jurisprudential and statutory

definitions, it can be gleaned that the purpose of an
imposition will determine its nature as either a tax or a fee. If
the purpose is primarily revenue, or if revenue is at least one
of the real and substantial purposes, then the exaction is

21 G.R. No. 192300, November 24, 2014.

22 G.R. No. 219506, June 23, 2021.~
 DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 9 of 10

properly classified as an exercise of the power to tax. On the

other hand, if the purpose is primarily to regulate, then it is
deemed an exercise of police power in the form of a fee, even
though revenue is incidenta lly generated . Simply stated, if
generatio n of revenue is the primary purpose, the impositio n
is a tax, but if regulatio n is the primary purpose, the
impositio n is properly categoriz ed as a regulator y fee."

It must be emphas ized that jurisdic tion over the subject

matter or nature of an action is fundam ental for a court to act
on a given controve rsy, and is conferre d only by law and not
by the consent or waiver upon a court which, otherwi se, would
have no jurisdic tion over the subject matter or nature of an
action. Lack of jurisdic tion of the court over an action or the
subject matter of an action cannot be cured by the silence,
acquiesc ence, or even by express consent of the parties. If the
court has no jurisdic tion over the nature of an action, its only
jurisdic tion is to dismiss the case. The court could not decide
the case on the merits.23

Thus, the Court is preclud ed from ruling on petition er's

prayer relative to the regulato ry fees assesse d by respond ents
against it.

WHERE FORE, premise s conside red, petition er's Petition

for Review is DENIED. Accordin gly, the Decision dated July
13, 2020 and the Resoluti on dated June 30, 2021 are hereby
AFFIRMED.

SO ORDER ED.

~~~t,
CATHE RINE T. MANAHAN
Associa te Justice

WE CONCUR:

(With'ttcre N!'spect, ~issenting Opinion)

ROMAN G. DEL ROSARIO
Presidin g Justice

23 Nippon Express (Philippines) Corp. vs. Commissio ner of Internal Revenue, G.R. No.
185666, February 4, 2015.
DECISION
CTA EB NO. 2514 (CTA AC No. 217)
Page 10 of 10

~. ~ --z- L____
(With Concurring Opinion)
MA. BELEN M. RINGPIS-LIBAN
Associate Justice
"\...

JEAN MARl~ BACORRO-VILLENA

TO-SAN PEDRO
ustice

{ON OFfiCIAL IUSINESS)

MARIAN IVY F. REYES-FAJARDO
Associate Justice

L~!uf~VID
Associate Justice

c~if~oREs

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.

'l::uuuO
Presiding Justice

tJIIIt..../
 REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS
QUEZON CITY

ENBANC

NLEX CORPORATION CTA EB No. 2514

(FORMERLY MANILA NORTH (CTA AC No. 217)
TOLLWAYS CORPORATION, AS
THE SURVIVING CORPORATION Present:
AND HAS ABSORBED
TOLLWAYS MANAGEMENT DEL ROSARIO, P.J. ,
CORPORATION), RINGPIS-LIBAN,
Petitioner, MANAHAN,
BACORRO-VILLENA,
-versus- MODESTO-SAN PEDRO,
REYES-FAJARDO,
MUNICIPALITY OF GUIGUINTO, CUI-DAVID, and
BULACAN AND HON. FERRER-FLORES, JJ.
GUILLERMA DL. GARRIDO, IN
HER CAPACITY AS THE Ole-
MUNICIPAL TREASURER OF Promulgated :
GUIGUINTO, BULACAN,
Respondents.
JUL 19 2023
X-- - - - - - - - - - - - - - - - - - - - - --- -- - - - - - --- --- -

DISSENTING OPINION

DEL ROSARIO, P.J.:

With utmost respect, I am constrained to withhold my assent on

the ponencia which denies the Petition for Review.

I submit that it was proper for the Court in Division to assume

jurisdiction on petitioner's liability for mayor's permit and other
regulatory fees included in the same assessment for local business tax
(LBT) issued against petitioner.

Upon perusal of the records, there is only a single cause of action

involved, that is respondent's denial of petitioner's protest of the
assessment ordering the latter to pay not only LBT, but also the
regulatory fees included therein . This protest was denied by
respondent Municipal Treasurer, which led to petitioner filing an appeal
with the Regional Trial Court (RTC) of Malolos City{11
DISSENTING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 2 of 5

The RTC of Malolos City rendered a Decision on August 17,

2018, dismissing the appeal and ordering petitioner to pay the
assessed amount of LBT and regulatory fees.

Indeed, this Court's jurisdiction is over decisions or judgments of

RTCs in "local tax cases" as provided for under Section 7(a)(3) of
Republic Act (RA) No. 1125, as amended by RA No. 9282, in relation
to Section 3(a)(3), Rule 4 of the Revised Rules of the Court of Tax
Appeals (CTA), as amended.

In Mactel Corporation vs. The City Government of Makati, et a/., 1

the Supreme Court had the opportunity to define what a "local tax case"
is relative to the CTA's special jurisdiction, viz.:

"[A] local tax case is understood to mean as a dispute

between the local government unit (LGU) and a taxpayer
involving the imposition of the LGU's power to levy tax, fees, or
charges against the property or business of the taxpayer
concerned. A local tax case may involve: the legality or validity of
the real property tax assessment, protests of assessments,
disputed assessments, surcharges or penalties; the validity of a tax
ordinance; claims for tax refund/credit; claims for tax exemption;
actions to collect the tax due; and even prescription of assessments."
(Boldfacing and underscoring supplied)

Evidently, a "local tax case" includes protests of assessments of

"taxes, fees, or charges" imposed by a local government unit.
Considering that this case stemmed from the Municipal
Treasurer's denial of petitioner's protest over the assessment
which includes both LBT and regulatory fees, such is a "local tax
case" within the purview of the jurisdiction of the CTA.

To heed the ponencia's ruling that petitioner should have

separated its appeal of the RTC Decision -- the LBT component to be
filed with the CTA and the regulatory fee component with the Court of
Appeals-- is a form of "split jurisdiction" denounced for being inimical
to the effective and efficient functioning of the courts. The splitting of
appeals encourages multiplicity of suits and invites possible conflict of
dispositions between the reviewing courts which, needless to say, is
not conducive to the orderly administration of justice. 2

1 G.R No. 244602, July 14, 2021.

2 Lito Limpangog and Jerry Limpangog vs. Court of Appeals and People of the Philippines, G.R.
No. 134229, November26, 1999~
DISSENTING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 3 of 5

In The City of Manila, eta/. vs. Han. Caridad H. Grecia-Cuerdo,

et a/., 3 the Supreme Court elucidated on the dangers of "split
jurisdiction" between the CTA and the Court of Appeals, viz.:

"If this Court were to sustain petitioners' contention that

jurisdiction over their certiorari petition lies with the CA, this Court
would be confirming the exercise by two judicial bodies, theCA
and the CTA, of jurisdiction over basically the same subject
matter - precisely the split-jurisdic tion situation which is
anathema to the orderly administrati on of justice. The Court
cannot accept that such was the legislative motive, especially
considering that the law expressly confers on the CT A, the
tribunal with the specialized competence over tax and tariff
matters, the role of judicial review over local tax cases without
mention of any other court that may exercise such power. Thus,
the Court agrees with the ruling of the CA that since appellate
jurisdiction over private respondents' complaint for tax refund is
vested in the CTA, it follows that a petition for certiorari seeking
nullification of an interlocutory order issued in the said case should,
likewise, be filed with the same court. To rule otherwise would lead
to an absurd situation where one court decides an appeal in the main
case while another court rules on an incident in the very same case."
(Boldfacing supplied)

To allow an appeal of the regulatory fee aspect of the case to the

Court of Appeals, separately from an appeal of the LBT to this Court,
would present a scenario wherein a single decision of the RTC, arising
from a single cause of action, i.e., denial of petitioner's protest of
assessment, is appealed to two (2) different appellate courts, which on
its own presents procedural and logistical problems. Only one case
was filed before the RTC, hence there was only one case docket
from the RTC which may be elevated on appeal. To require
separate appeals to the CTA and the Court of Appeals triggers
administra tive confusion as to which court the docket a quo
should be elevated.

Truth to tell, the Court has previously promulgated decisions

which have tackled assessments containing demand for payment not
only for local taxes but also the concomitant regulatory fees
4
incorporated in such assessments. In these cases, the Court
cancelled the assessments containing both local taxes and regulatory
fees.

3G.R. No. 175723, February 4, 2014.

4See, e.g., Yamaha Motor Philippines, Inc. vs. City of Davao and Han. Bella Linda N. Tanjili, in her
official capacity as the City Treasurer of Davao City, CTA AC No. 233, March 7, 2022; The City
Government of Cagayan de Oro vs. Cagayan Electric Power & Light Co., Inc. (CEPALCO), CTA
AC No. 194, September 25, 2020; and, South China Resources, Inc. (now known as
"Socresources, Inc.") vs. Office of the City Treasurer and/or Makati City, CTA AC No. 196, October
17, 2018, among others. In Taguig City Government, eta/. vs. Serendra Condominium Corporation,
CTA AC Nos. 229 & 230, September 11, 2020, the Court in Division ordered the refund of regulatory
feestothetaxpaye~
DISSENTING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 4 of 5

The disquisition in Roberto R. De Luzuriaga, Sr. vs. Hon.

Midpantao L. Adil, et a/. ("Luzuriag a'V on the reason for the rule
against splitting of action is enlightening:

"In the forcible entry case (Civil Case No. 21-33C), the dispute
between petitioner Luzuriaga and respondent Young about the
possession of Agho Island arose out of their conflicting claims of
ownership over the said island. The issue of ownership is
indispensably involved. In a long line of cases We have ruled that
a party may institute only one suit for a single cause of action.
(Section 3, Rule 2 of the Rules of Court; Laperal vs. Katigbak, 4
SCRA 582). If two or more complaints are brought from different
parts of a single cause of action, the filing of the first may be
pleaded in abatement of the other or others, and a judgment
upon the merits in anyone is available as a bar in the others.
(Section 4, Rule 2; Bacolod City vs. San Miguel, Inc., 29 SCRA 819).
The reason for the rule against the splitting of a cause of action
is intended to prevent repeated litigation between the same
parties in regard to the same subject of controversy ; to protect
the defendant from unnecessar y vexation; and to avoid the
costs incident to numerous suits.

In the case at bar, Civil Case No. 13336 (an action to quiet
title) was filed on April21, 1980, whereas Civil Case No. 21-33C (the
forcible entry case) was instituted before the Municipal Circuit Court
of Estancia, Iloilo three (3) days thereafter, or on April 24, 1980. In
his complaint for ejectment, petitioner Luzuriaga anchored his claim
for rightful possession on his alleged ownership over the subject
property. Thus, it is clear that the issue of possession is connected
with that of ownership and, therefore, respondent CFI Judge Adil
rightfully enjoined the Municipal Circuit Court of Estancia, Iloilo from
proceeding with the trial of the ejectment controversy in Civil Case
No. 21-33C. Besides, the respondent court could also grant the relief
sought by petitioner by issuing a writ of preliminary mandatory
injunction ousting private respondent from the property and placing
him in possession thereof." (Boldfacing supplied)

In Luzuriaga, even though the Municipal Circuit Court has the

exclusive jurisdiction over the forcible entry case, the Court of First
Instance enjoined the Municipal Circuit Court from proceeding with the
trial of the ejectment controversy considering that the issue of
possession is connected with that of ownership, thus, there was only a
single cause of action.

With the foregoing doctrine applied by analogy, I submit that the

issue on whether petitioner is liable for LBT and the issue on whether
it is liable for regulatory fees should in fact be resolved in one case by
one court - such issues having arisen from one single assessment
issued against petitioner. Thus, it was indeed judicious for the RTC to
5
Roberto R. De Luzuriaga, Sr. vs. Hon. Midpantao L. Adtl, eta/. G. R. No. L-58912, May 7, 1985£11
DISSENTING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 5 of 5

have taken cognizance of, and resolved, both issues in the case
brought before it (Civil Case No. 487-M-2009) sans any disquisition
on jurisdiction over the subject matter thereof. This Court should do no
less, lest one single cause of action, that is - the validity of the
assessment- will result in the filing of two (2) separate cases which is
anathema to the procedural principle against splitting of a cause of
action.

ALL TOLD, I VOTE to PARTIALLY GRANT the Petition for

Review, and REMAND the case to the Court in Division for the
determination of petitioner's liability for regulatory fees.

Presiding Justice
 REPUBLIC OF THE PHILIPPINES
COURT OF TAX APPEALS
QUEZON CITY

ENBANC

NLEX CORPORATION CTA EB NO. 2514

(FORMERLY MANILA NORTH (CTA AC No. 217)
TOLLWAYS CORPORATION, AS
THE SURVIVING CORPORATION Present:
AND HAS ABSORBED TOLLWAYS
MANAGEMENT CORPORATION) Del Rosario, P.J.,
Petitioner, Ringpis-Lib an,
Manahan,
Bacorro-Villena,
Modesto-San Pedro,
Reyes-Fajardo,
Cui-David, and
Ferrer-Flores, JL
- versus-

MUNICIPALITY OF GUIGUINTO,
BULACAN AND HON.
GUILLERMA DL. GARRIDO, IN
HER CAPACITY AS THE OIC-
MUNICIPAL TREASURER OF Promulgated:
GUIGUINTO, BULACAN,
Respondents.

X------------------------------------------------------------------------------------------------X

CONCURRING OPINION

RINGPIS-LIBAN,J;_

T concur with th e ponenda of my esteemed colleague, Associate Justice

Catherine T .1\Ianahan, in denying the present Petition for Review and in
affirming the Decision dated July 13, 2020 and Resolution dated June 30, 2021
both rendered by the Second Division of this Court in CTA AC No. 217.

I just wish to discuss a few points if only to establish the basis of my

concurrence with the main opinion(V"
CONCURRING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 2 of 8

Jurisdiction is defined as the power and authority of a court to hear, try,

and decide a casc. 1 It is conferred by law. 2 Without a law that grants the power
to hear, try, and decide a particular type of action, a court may not, regardless of
what the parties do or fail to do, afford any sort of relief in any such action flied
before it. It follows then that, in those cases, any judgment or order other than
one of dismissal is void for lack of jurisdiction 3

Republic i\ct (RA) No. 1125, as amended, 4 delineates the special and limited
jurisdiction of the Court of Tax Appeals (CTA), in part, as follows:

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

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

XXX XXX XXX

3. Decisions, orders or resolutions of the Regional Trial Courts in local

tax cases originally decided or resolved by them in the exercise of their
original or appellate jurisdiction;

XXX XXX XXX

As a specialized court, the CTA can take cognizance only of matters which
are dearly and speciftrally mentioned in the law conferring its jurisdiction such as the
decisions, orders, or resolutions of the Regional Trial Courts (RTC) in local tax
rases originally decided or resolved by them in the exercise of either their original
or appellate jurisdiction. Crucial to this is the full and proper appreciation of what
constitute the term "lo(Cl/ tax cases" given that the jurisdiction of the CTA over
decisions, orders, or resolutions of the RTC becomes operative only when the
latter has ruled on a local tax case.

In Ignacio v. Office of the City Treasurer ofQuezon City, 5 the Supreme Court
held that before the case can be raised on appeal to the CTA, the action before
the RTC must be in the nature of a tax case, or one which primarily involves
a tax issue.

Accordingly, in CE Casecnan Water and Energy Company, Inc. v. The Province

of Nueva Ecija, et a/., 6 the Supreme Court had treated an injunction suit as a local
tax case. The Supreme Court held that the prayer to restrain the collection of real
property tax (RP'l) amounts to an implicit challenge to the propriety of the RPT
IV'

1
Commissioneroflnternal Revenue v. Court of Tax Appeals-Third Division and Citysuper, Incorporated, G.R.
No. 239464, May 10, 2021.
2
Victoria Manufacturing Corporation Employees Union v. Victoria Manufacturing Corporation, G.R. No. 234446,
July 24, 2019.
'Id.
4 As amended by RA 9282 and RA 9503.
5 G.R. No. 221620, September 11, 2017.
6 G.R. No. 196278, June 17, 2015.
 CONCURRING OPINION
CfA EB No. 2514 (CfA AC No. 217)
Page 3 of 8

assessm ent because in ruling as to whether to restrain the collectio n, the RTC
must first necessarily rule on the propriet y of the assessme nt.

Moreove r, in Municipality of Villanueva, Misamis Oriental v. Steag State Power,

Inc. and Municipality ofTagoloan, Misamis Oriental/ the Supreme Court treated as a
local tax case an appeal question ing the ruling of the RTC in resolvin g the correct
tax base for the local business taxes (LB1) to be imposed against the private
respond ent as well as in ordering the refund of excess LBT.

In The City of Makati v. The Muniapality of Bakun and Luzon Hydro

Corporation, 8 the Supreme Court also treated as a local tax case a special civil action
for interplea der involvin g the applicati on of the rules on situs on the paymen t of
LBT. That the case was in the mode of a special civil action for interplea der does
not detract from its nature as a local tax case.

On the other hand, in City ofIloilo v. Philippine Ports Authority, 9 the Supreme
Court refused to characte rize as a local tax case an appeal of the RTC decision
dismissing a complai nt for declarat ion of nullity of the notice of garnishm ent
issued for the collectio n of RPT and LBT liabilities consider ing that the
complai nt did not challenge the validity or correctn ess of the tax liabilities per se
but merely question s the propriet y of the remedy adopted for the collection
thereof.

It must be emphasi zed that in all of its rulings where the Supreme Court
had characte rized an action as a local tax case, the impositi on or exaction
involved are clearly in the nature of a tax, whether it be LBT, 10 local franchise
tax, 11 or RPT 12 Logically, therefor e, if the action before the RTC involves an
exaction or impositi on not in the nature of a tax, the same cannot be treated as
a local tax case. Such was, in fact, the Supreme Court's holding in Smart
Communitations, Inc. v. Municipality ofMalvar, Batangas, 13 where it upheld the CTA's
dismissal of Smart's Petition for Review for lack of jurisdiction. The Supreme
Court found that the action before the RTC did not involve a local tax case and,
as such, it did not fall within the ambit ofCTA' s appellate jurisdiction. In arriving
at the said conclusi on, the Supreme Court had determin ed that the "fees"
imposed thereon are not taxes.

"On whether the CTA ha.r;itriJdzdion over the pre.rent ca.re

,/V'
7 G.R. No. 214260, May 3, 2021.
8 G.R. No. 225226, July 7, 2020.
9 G.R. No.
233861, January 12, 2021.
10 The City of Makati v. The Mumdpality of Bakun and Luzon Hydro Corporation, G.R. No. 225226,
July 7,
2020.
11
National Power Corporation v. Provincial Government of Bataan, et a!., G.R. No. 180654, March
12 6, 2017.
City of Lapu-Lapu v. Philippine Economic Zone Authority, G.R. No. 184203, November 26,
2014; CE
Casecnan Water and Energy Company, Inc. v. The Province of Nueva Ecija, eta/., G.R. No. 196278,
June
17, 2015; Philippine Ports Authority v. The City of Davao, et. a!., G.R. No. 190324, June 6, 2018; Herarc
Realty Corporation v. The Provincial Treasurer of Batangas, et. a!., G.R. No. 210736, September
13
5, 2018.
G.R. No. 204429, February 18, 2014.
CONCURRING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 4 of 8

Smart contends that the CL\ erred in dismissing the case for lack
of jurisdiction. Smart maintains that the CTA has jurisdiction over the
present case considering the 'unique' factual circumstances involved.

The CT A refuses to take cognizance of this case since it

challenges the constitutionality of Ordinance No. 18, which is outside
the province of the CT1\.

Jurisdiction is conferred by law. Republic Act No. 1125, as

amended by Republic Act No. 9282, created the Court of Tax Appeals.
Section 7, paragraph (a), sub-paragraph (3) of the law vests the CTA with
the exclusive appellate jurisdiction over 'decisions, orders or resolutions
of the Regional Trial Courts in local tax cases originally decided or
resolved by them in the exercise of their original or appellate jurisdiction.'

The question now is whether the trial court resolved a local

tax case in order to fall within the ambit of the CTA's appellate
jurisdiction. This question, in turn, depends ultimately on whether
the fees imposed under Ordinance No. 18 are in fact taxes.

Smart argues that the 'fees' in Ordinance No. 18 are actually taxes
since they are not regulatory, but revenue-raising. Citing Philippine
Air!ine.r, Im·. v. Edu, Smart contends that the designation of 'fees' in
Ordinance No. 18 is not controlling.

The Court finds that the fees imposed under Ordinance No.
18 are not taxes.

Section 5, Article X of the 1987 Constitution provides that '[e]ach

local government unit shall have the power to create its own sources of
revenues and to levy taxes, fees, and charges subject to such guidelines
and limitations as the Congress may provide, consistent with the basic
policy of local autonomy. Such taxes, fees, and charges shall accrue
exclusively to the local government.'

Consistent with this constitutional mandate, the LGC grants the

taxing powers to each local government unit. Specifically, Section 142 of
the LGC grants municipalities the power to levy taxes, fees, and charges
not otherwise levied by provinces. Section 143 of the LGC provides for
the scale of taxes on business that may be imposed by municipalities
while Section 147 of the same law provides for the fees and charges that
may be imposed by municipalities on business and occupation.

The LGC defines the term 'charges' as referring to

pecuniary liability, as rents or fees against persons or property,
while the term 'fee' means 'a charge fixed by law or ordinance for
the regulation or inspection of a business or activity.'

In this case, the Municipality issued Ordinance No. 18, which is

entitled 'An Ordinance Regulating the Establishment of Special
Projects,' to regulate the 'placing, stringing, attaching, installing, repair
and construction of all gas mains, electric, telegraph and telephone wires,
conduits, meters and other apparatus, and provide for the correction,
~
CONCURRING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 5 of 8

condemnatio n or removal of the same when found to be dangerous,

defective or otherwise hazardous to the welfare of the inhabitant[s].' It
was also envisioned to address the foreseen 'environment al depredation'
to be brought about by these 'special projects' to the Municipality.
Pursuant to these objectives, the Municipality imposed fees on various
structures, which included telecommunications towers.

As clearly stated in its whereas clauses, the primary purpose

of Ordinance No. 18 is to regulate the 'placing, stringing,
attaching, installing, repair and construction of all gas mains,
electric, telegraph and telephone wires, conduits, meters and other
apparatus' listed therein, which included Smart's
telecommun ications tower. Clearly, the purpose of the assailed
Ordinance is to regulate the enumerated activities particularly
related to the construction and maintenanc e of various structures.
The fees in Ordinance No. 18 are not impositions on the building
or structure itself; rather, they are impositions on the activity
subject of government regulation, such as the installation and
construction of the structures.

Since the main purpose of Ordinance No. 18 is to regulate

certain construction activities of the identified special projects,
which included 'cell sites' or telecommun ications towers, the fees
imposed in Ordinance No. 18 are primarily regulatory in nature,
and not primarily revenue-rais ing. While the fees may contribute
to the revenues of the Municipality , this effect is merely incidental.
Thus, the fees imposed in Ordinance No. 18 are not taxes.

XXX XXX XXX

Considering that the fees in Ordinance No. 18 are not in the

nature of local taxes, and Smart is questioning the constitutionality of
the ordinance, the CT A correctly dismissed the petition for lack of
jurisdiction. Likewise, Section 187 of the LGC, which outlines the
procedure for questioning the constitutionality of a tax ordinance, is
inapplicable, rendering unnecessary the resolution of the issue on non-
exhaustion of administrative remedies." (EmphaJzj· supplied and afations
omitted)

Thus, the dismissal of the present appeal for lack of jurisdiction insofar as
the regulatory fees arc concerned is in congruence with the Supreme Court's
dictum in the above cited case.

In his Dissenting Opinion, Presiding Justice Roman G. Del Rosario

submits that it was proper for the Court in Division to assume jurisdiction on
respondent's liability for mayor's permit and other regulatory fees included in the
same assessment for LBT issued against petitioner. He posits that there is only a
single cause of action involved in the present case, i.e., respondent's denial of
petitioner's protest of the assessment ordering the latter to pay both the LBT
and the regulatory fees. Citing the case of Madel C01poration v. The City Government
~
CONCURRING OPINION
CfA EB No. 2514 (CfA AC No. 217)
Page 6 of 8

of Makati, et. a!., 14 PJ Del Rosario also asserts that a "local tax case" includes
protests of assessments of "taxes, fees, or charges" imposed by the local
government unit. He added that "[c]onsidering that this case stemmed from the
Municipal Treasurer's denial of petitioner's protest over the assessment which
includes both LBT and regulatory fees, such is a 'local tax case' within the
purview of the jurisdiction of the CTA." PJ Del Rosario likewise points out that
to follow the ruling in the main opinion would result to split jurisdiction which
is anathema to the orderly administration of justice.

With all due respect, I believe that the present case involves two (2)
distinct causes of action but only one of which falls within the appellate
jurisdiction of this Court. I also submit that the Supreme Court's decision in
Macte! does not support the view allowing this Court to take cognizance of
appeals of cases arising from the denial of assessment protests involving
exactions or imposition other than local taxes. I am also of the view that
following the ruling in the main opinion would not result to splitting of
jurisdiction.

In The City of Baco!od v. San Miguel Brewery, Im·.,15 the Supreme Court
discussed the concept of a cause of action and its elements, as follows:

"The classical definition of a cause of action is that it is 'a

delict or wrong by which the rights of the plaintiff are violated by
the defendant.' Its elements may be generally stated to be (1) a
right existing in favor of the plaintiff; (2) a corresponding
obligation on the part of the defendant to respect such right; and
(3) an act or omission of the plaintiff which constitutes a violation
of the plaintiffs right which defendant had the duty to respect. For
purposes, however, of the rule against splitting up of a cause of action, a
clearer understanding can be achieved, if together with these elements,
the right to relief is considered.

In the last analysis, a cause of action is basically an act or an

omission or several acts or omissions. A single act or omission can
be violative of various rights at the same time, as when the act
constitutes juridically a violation of several separate and distinct
legal obligations. This happens, for example, when a passenger of a
common carrier, such as a taxi, is injured in a collision thereof with
another vehicle due to the negligence of the respective drivers of both
vehicles. In such a case, several rights of the passenger are violated, inter
alia, (1) the right to be safe from the negligent acts of either or both the
drivers under the law on m!pa-acqui!iana or quasi-delict; (2) the right to be
safe from criminal negligence of the said drivers under the penal laws;
and (3) the right to be safely conducted to his destination under the
contract of carriage and the law covering the same, not counting
anymore the provisions of ,\rticle 33 of the Civil Code. The violation
of each of these rights is a cause of action in itself. Hence, such a
,/~""'
14
G.R. No. 244602, July 14, 2021 (''Mactel').
15
G.R. No. L-25134, October 30, 1969.
CONCURRING OPINION
CTA EB No. 2514 (CTA AC No. 217)
Page 7 of 8

passenger has at least three causes of action arising from the same act.
On the other hand, it can happen also that several acts or omissions
may violate only one of right, in which case, there would be only
one cause of action. Again the violation of a single right may give
rise to more than one relief. In other words, for a
single cause of action or violation of a right, the plaintiff may be
entitled to several reliefs. It is the filing of separate complaints for
these several reliefs that constitutes splitting up of
the cause of action. This is what is prohibited by the rule."
(Emphmir Jupp!ied)

In the present case, the action before the RTC contains two (2) distinct
causes of action corresponding to the two (2) items of assessment each of which,
standing alone, could validly support the action and could entide the petitioner
with distinct reliefs. To put it differendy, there are in this case two (2) wrongs
simultaneously committed against the rights of the petitioner. These are: (1)
allegedly incorrect and/ or illegal imposition of LBT; and (2) allegedly incorrect
and/or illegal imposition of regulatory fees. That the Notice of Assessment for
the LBT was simultaneously issued with the Notice of Assessment for the
regulatory fees does not necessarily mean that one item of assessment would
assume the nature and character of the other and that they would be considered
as a single assessment for purposes of filing of the administrative and/ or judicial
remedies against them.

It is also inaccurate to say that it is the denial by the municipal treasurer of

petitioner's protest of the assessment that constitutes the cause of action in this
case. On this point, there may be some confusion regarding facts constituting
the causes of action and the facts showing the accrual of the "right of action" i.e.,
the right to commence and maintain an action. 16 To reiterate, the causes of action
in this case are the simultaneous issuances of Notices of Assessment containing
the allegedly incorrect and/ or illegal imposition of LBT and regulatory fees. On
the other hand, the denial of petitioner's protest merely constitutes the ultimate
fact triggering the accrual of petitioner's right of action as contemplated under
Section 19 5 of the Local Government Code (LGC) .17 At the time the Notices of
Assessment were issued, the petitioner already had causes of action although its
right to commence judicial action against the assessments have not yet accrued.
;V
16 Spouses Abelardo Borbe v. Cala/o, G.R. No. 152572, October 5, 2007.
17 Section 195 of the LGC states:

SEC. 195. Protest of Assessment. - When the local treasurer or his duly authorized
representative finds that correct taxes, fees, or charges have not been paid, he shall issue
a notice of assessment stating the nature of the tax, fee, or charge, the amount of
deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt
of the notice of assessment, the taxpayer may file a written protest with the local treasurer
contesting the assessment; otherwise, the assessment shall become final and executory.
The local treasurer shall decide the protest within sixty (60) days from the time of its filing.
If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a
notice cancelling wholly or partially the assessment. However, if the local treasurer finds the
assessment to be wholly or partly correct, he shall deny the protest wholly or partly with
notice to the taxpayer. The taxpayer shall have thirty (30} days from the receipt of
the denial of the protest or from the lapse of the sixty (60}-day period prescribed
herein within which to appeal with the court of competent jurisdiction otherwise
the assessment becomes conclusive and unappealable. (Emphasis supplied)
CONCURRING OPINION
CfA EB No. 2514 (CfA AC No. 217)
Page 8 of 8

It is only when the protest was denied by the municipal treasurer can the
petitioner finally institute a judicial action to challenge the assessments before a
court of competent jurisdiction.

I also submit that Madel cannot be relied upon to support the assumption
of jurisdiction by this Court over denial of protest of assessment involving
regulatory fees. Notably, the said case does not in any way involve an appeal over
the denial of protest of assessment of regulatory fees.

In Martel, the Supreme Court was confronted with the issue of whether
the petition for declaratory relief ftled before the RTC assailing the Makati City
Governmen t's refusal to issue business permit to Mactel Corporation may be
characterized as a local tax case, and hence, may be elevated to the CTA on appeal.
The petition for declaratory relief sought to compel the Makati City Governmen t
to apply the doctrine of conclusiveness of judgment arising from a previous final
and executory judgment rendered by the RTC involving a protest of an LBT
assessment. The Supreme Court basically ruled that while the petition for
declaratory relief may be related to a tax case because the previous final and
executory judgment sought to be enforced is a local tax case, the same is actually
civil in nature.

Nowhere in the above cited case was it mentioned that once an assessment
for the payment of regulatory fees is lumped together with an assessment for any
type of local tax, then the entirety thereof would assume the character of a local
tax case within the meaning of Section 7 (a) (3) of RA 1125, as amended.

Given that the action before the RTC involves different causes of action,
the appeal for one of which is cogni;;:able by this Court and the other one by the
Court of Appeals (CA) pursuant to their respective jurisdictions, there will be no
splitting of jurisdiction to speak of. On the contrary, the ruling in the main
opinion is only but a judicious observance by this Court of the extent and limit
of its jurisdiction as duly granted by law. While it may be true that the appeal of
the RTC decision both to this Court (insofar as its LBT component) and to the
CA (as regards the regulatory fee component) might possibly create certain
procedural or logistical challenges, the same is not sufficient justification for this
Court to rule on matters outside of its spedal and limited jurisdiction. Such
concerns, if any, already pertain to the wisdom of the jurisdiction- conferring
statutes which is clearly beyond the province of this Court to inquire.

In view of the foregoing, I vote to DENY the present Petition for Review .

.t..,, ~ ~ '---
MA. BELEN M. RINGPIS-LIBAN
Associate Justice