Republic vs City of Paranaque Digest Gr No. 191109

LGC SEC. 234. Exemptions from Real Property Tax and SEC. 133. Common Limitations on the Taxing Tax ing Poers of Lo!al Lo! al Go"ernment #nits

G.R. $o. 1%11&%

'(ly 1)* 2&12

REP#+L,C - T/E P/,L,PP,$ES* represented 0y the P/,L,PP,$E RECLT,-$ #T/-R,T PR5*Petitioner, PR5*Petitioner, vs. C,T - PR$6#E* Respondent. PR$6#E* Respondent.

This is a petition for review on certiorari assailing the Order of the Regional Trial Court, Branch 195,Paranaque Cit !RTC", which ruled that petitioner Philippine Recla#ation $uthorit !PR$" is a govern#ent%owned and controlled corporation !&OCC", a ta'a(le entit, and, therefore, not e'e#pt fro# pa#ent of real propert ta'es.

The Pu(lic )states $uthorit !P)$" is a govern#ent corporation created ( virtue of P.*. +o. 1- 1- toprov toprovide ide a coord coordina inated ted,, econ econo#i o#ical cal and and effic efficie ient nt recla# recla#ati ation on of lands, lands, and and the ad#in ad#inist istra ratio tion n andop andopera eratio tion n of lands lands (elon (elongin ging g to, #anag #anaged ed and/o and/orr opera operate ted d (, (, the govern#ent with the o(0ect of #a'i#iing their utiliation and hastening their develop#ent consistent with pu(lic interest. On Oc Octo to(e (err 23, 23, 2 2,, then then Pres Presid iden entt &lor &loria ia 4aca 4acapa paga gal% l%$r $rro roo o issu issued ed ).O. ).O. +o. +o. - - transfor#ing P)$ into PR$, which shall perfor# all the powers and functions of the P)$ relating to recla#ation activities.

B virtue of its #andate, #andate, PR$ reclai#ed several portions of the foreshore and offshore areas of  4anila 4anila Ba,in Ba,includ cluding ing those those located located in Para6aq Para6aque ue Cit. Cit. Para6aq Para6aque ue Cit Treasu Treasurer rer issued issued 7arrants of 8ev on PR$s reclai#ed properties (ased on the assess#ent for delinquent real propert for ta' ears 21 and 22. PR$ clai#ed that it is not a &OCC under the $d#inistrative Code, nor is it a &OCC under  :ection 13, $rticle ;e cha#(ers as provided in :ection -- of the Corporation Code. Thus, PR$ insists that, as an incorporated instru#entalit of the +ational &overn#ent, it is e'e#pt fro# pa#ent of real propert ta' e'cept when the (eneficial use of the real propert is granted granted to a ta'a(le ta'a(le person. person. PR$ clai#s clai#s that (ased (ased on :ection :ection 1!o" 1!o" of the 8&C, local local govern# govern#ents ents cannot ta' the nationa nationall govern# govern#ent ent which which delegate delegate to local local govern# govern#ents ents the power to ta'.

,ss(e7 7hether or not Philippine Recla#ation $uthorit !PR$" is an incorporated instru#entalit of the national govern#ent and is, therefore, e'e#pt fro# pa#ent of real propert ta' under sections 2!a" and 1!o" of Repu(lic $ct =13? /eld7 @es it is a &overn#ent corporation. corporation (ecause although it has a capital stoc> divided into no par value shares as provided in :ection =  of P.*. +o. 1-, it is not authoried to distri(ute dividends, surplus allot#ents or profits to stoc>holders. PR$ is a govern#ent instru#entalit vested with corporate powers and perfor#ing an essential pu(lic service pursuant to :ection 2!1" of the or non%stoc> corporations, which is a necessar condition (efore an agenc or instru#entalit is dee#ed a &OCC. The funda#ental provision a(ove authories Congress to create &OCCs through special charters on two conditionsA 1" the &OCC #ust (e esta(lished for  the co##on good and 2" the &OCC #ust #eet the test of econo#ic via(ilit.