Quezon City v.

Bayantel
March 6, 2006
Garcia, J.
Digest by Eins Balagtas
Topic and Provision: Powers of Taxation and Fiscal Administration
Facts:

Bayantel is a legislative franchise holder under RA 3259. Under RA 3259, all of Bayantels
properties that are actually, directly, and exclusively used in the pursuit of its franchise
were exempt from tax.

The LGC then took effect and Section 234 of the LGC withdrew any exemption from realty
tax heretofore granted to or enjoyed by all persons, natural or juridical.

On July 1992, a few months after LGC took effect, RA 7925 was enacted by Congress. Said
Act reiterated the exemption in RA 3259.

In 1993, QC, pursuant to its taxing power under 5, Article X of the Constitution, in relation
to 232 of the LGC enacted City Ordinance No. SP-91, S-93 otherwise known as the Q C
Revenue Code (QCRC).

On January 1999, Bayantel wrote the office of the City Assessor seeking the exclusion of its
real properties in the city from the roll of taxable real properties.

This request was denied. Bayantel appealed to the Local Board of Assessment Appeals.

Because Bayantel did not pay the real property tax assessed. Notices of delinquency for
the amount of P43,878,208.18, were sent by the QC Treasurer. This was followed by the
issuance of several warrants of levy against Bayantels properties with the public auction
scheduled on July 30, 2002.

Threatened with the imminent loss, Bayantel withdrew their appeal and instead filed with
the QC RTC a petition for prohibition with an urgent application for a temporary restraining
order.
Petitioners arguments:

Bayantel failed to avail itself of the administrative remedies provided for under the LGC.
The appeal mechanics constitute as Bayantels plain and speedy remedy

The language of 11 of RA 7633 is neither clear nor unequivocal. Bayantel was in no time
given any express exemption from the payment of real property tax.
Respondents arguments:

The appeal to the LBAA is not a speedy and adequate remedy.

Bayantel is only liable to pay the same taxes, as any other persons or corporations on all
its real or personal properties, exclusive of its franchise.
Note: RTC: owing to the phrase exclusive of the franchise found in 11 of RA 7633 = exemption of
properties used actually, directly and exclusively in the conduct of its business under the franchise.
Issue: Are Bayantels real properties in QC are exempt from real property taxes under its
legislative franchise
Held: NO, By virtue of 5, Art. X of the Constitution, LGUs are empowered to levy taxes and
pursuant to this power QC enacted the QCRC. However, such enactment does not effectively
withdraw the tax exemption enjoyed by Bayantel since the power of LGUs to tax is limited.
Dispositive: WHEREFORE, the petition is DENIED. No pronouncement as to costs. SO ORDERED.

Ratio:

Congress may grant an exemption, previously withdrawn through the enactment of the
LGC, through subsequent legislation since the grant of taxing powers to LGUs under the
Constitution and the LGC does not affect the power of Congress to grant exemptions.

PLDT v. City of Davao: The grant of taxing powers to local government units under the
Constitution and the LGC does not affect the power of Congress to grant exemptions...

Aware that the LGC has already withdrawn Bayantels former exemption, Congress opted to
pass RA 7633 using exactly the same defining phrase exclusive of this franchise which
was the basis for Bayantels exemption prior to the LGC. The Court views this
subsequent legislation as an express and real intention on the part of Congress
to once again remove from the LGCs delegated taxing power all of Bayantels

properties that are actually, directly exclusively used in the pursuit of its
franchise