MARCELINO S. BUL-LONG (NOW DECEASED), CARMEN D. CORDOVA (NOW DECEASED) AND WILMA T. BOMOWEY, TERIO B. KENIS, CAROLINE P. BADECAO, DALEN L. PAYDOAN, AMELIA N. BINAYAT, JUNALYN D.…

Bul-long versus Municipal Government of Buguias

The Case

This is an appeal by taxpayers and vendors of Buguias, Benguet, led by Marcelino Bul-long and Carmen Cordova, against the Municipal Government of Buguias. They asked the courts to declare Municipal Tax Ordinance Number 03, series of 1998, null and void and to order a refund of taxes paid under it, claiming that the ordinance never became law for want of public hearings and publication. The case matters because it fixes the procedural gate for attacking a local tax ordinance: the remedy is an appeal to the Secretary of Justice within thirty days, and that appeal does not suspend the tax. It also teaches how a later revenue code repeals an earlier one, and when a challenge becomes moot.

Procedural History

The vendors filed their Petition for declaration of nullity and refund in the Regional Trial Court of Abatan, Buguias, Benguet, Branch 64. The trial court first issued a temporary restraining order, then lifted it on reconsideration by the municipality. The municipality later moved to dismiss on the ground that a new ordinance, Municipal Ordinance Number 2008-17, had superseded the old one. The trial court granted the motion and dismissed the Petition for lack of cause of action, and it denied the vendors' Motion for Reconsideration. The vendors elevated the matter to the Supreme Court by appeal, and the Supreme Court denied the appeal and affirmed the dismissal.

Facts

On September 4, 1998, the Sangguniang Bayan of Buguias approved Municipal Tax Ordinance Number 03, series of 1998. Notices of a public hearing were sent to barangay captains, store owners, and organizations, and a public hearing was held on November 20, 1998. Copies of the ordinance were posted in four conspicuous places in December 1998, the municipality explaining that there was no newspaper of local circulation in Buguias at the time. The ordinance was then sent to the Sangguniang Panlalawigan of Benguet, which, upon the favorable recommendation of the Provincial Legal Office, approved it by Resolution Number 00-173 in March 2000.

Concerned stall owners later asked the Sangguniang Panlalawigan to recall the ordinance. The Sangguniang Panlalawigan referred the matter to the Sangguniang Bayan, which passed Resolution Number 168-2000 urging the mayor to suspend implementation of some provisions for the year 2001 until the Committee on Taxation submitted its recommendations. In 2008, the Sangguniang Bayan clarified by Resolution Number 2008-044 that Resolution Number 168-2000 had no effect on the ordinance after the end of 2001.

In January 2008, the vendors sued, alleging that the ordinance never became law because there were no public hearings and no publication, and that it contained penal sanctions and errors. In June 2008, the Sangguniang Bayan passed Municipal Ordinance Number 2008-17, the Revised 2008 Revenue Code, with a repealing clause covering all inconsistent ordinances. The trial court dismissed the Petition, and the vendors appealed.

Issues

• Whether or not the vendors' cause of action became moot and academic by virtue of the passage of the new tax ordinance.
• Whether or not the trial court correctly interpreted the Sangguniang Bayan resolutions in holding that the old ordinance was suspended only for the year 2001.
• Whether or not the new tax ordinance is valid.

Applicable Provisions

Section 187 of Republic Act Number 7160, the Local Government Code, provides:

Section 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings. — The procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided further, That any question on the constitutionality or legality of tax ordinances or 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 of 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.

This is the provision the vendors failed to use, and it is why their direct action in court could not prosper.

Section 188 of the same Code provides:

Section 188. Publication of Tax Ordinances and Revenue Measures. — Within ten (10) days after their approval, certified true copies of all provincial, city, and municipal tax ordinances or revenue measures shall be published in full for three (3) consecutive days in a newspaper of local circulation: Provided, however, That in provinces, cities and municipalities where there are no newspapers of local circulation, the same may be posted in at least two (2) conspicuous and publicly accessible places.

This provision supplies the publication and posting requirements that the Court found were satisfied, and it contains no second publication after provincial review.

Section 511 of the same Code provides:

Section 511. Posting and Publication of Ordinances with Penal Sanctions. (a) Ordinances with penal sanctions shall be posted at prominent places in the provincial capitol, city, municipal or barangay hall, as the case may be, for a minimum period of three (3) consecutive weeks. Such ordinances shall also be published in a newspaper of general circulation, where available, within the territorial jurisdiction of the local government unit concerned, except in the case of barangay ordinances. Unless otherwise provided therein, said ordinances shall take effect on the day following its publication, or at the end of the period of posting, whichever occurs later.

The Court held that this second publication applies only to ordinances with penal sanctions, not to a tax ordinance.

Ruling

On the first issue, the Court held that the cause of action had indeed become moot. The vendors assailed only the old ordinance, never amended their Petition to attack the new one, and the new ordinance's repealing clause, which states that all ordinances in conflict with it are repealed or modified accordingly, was broad enough to repeal the old ordinance. Since the old ordinance no longer existed, there was nothing left to annul.

On the second issue, the Court held that the suspension was only for the year 2001. The legislative body that passed the suspending resolution had itself interpreted it through Resolution Number 2008-044, and courts will not second-guess that legislative intent. The Court also stressed that the vendors never appealed to the Secretary of Justice within thirty days, and that even such an appeal would not have suspended the ordinance, because Section 187 says the appeal shall not have the effect of suspending the effectivity of the ordinance.

On the third issue, the Court held that the new ordinance was valid. Sections 187 and 188 require public hearings before approval and publication or posting within ten days after approval, but nothing requires a second publication after provincial approval. The provincial board's review is limited to checking whether the ordinance is within the municipality's powers, and the vendors' real complaint, that the tax was unjust and excessive, was a question that belonged to the Secretary of Justice on appeal. Their failure to appeal within the prescribed period was fatal to their cause.

Doctrine

A question on the constitutionality or legality of a tax ordinance must be raised by appeal to the Secretary of Justice within thirty days from its effectivity, and that appeal does not suspend the ordinance or the accrual of the tax. A tax ordinance requires public hearings before enactment and publication or posting within ten days after approval; there is no second publication after provincial review, and the publication to the Official Gazette under Section 511 applies only to ordinances with penal sanctions. A later ordinance with a broad repealing clause repeals an earlier inconsistent tax ordinance, and a challenge to the earlier ordinance then becomes moot.

Disposition

The Supreme Court denied the appeal and affirmed the trial court's dismissal of the Petition, with the municipality prevailing.

Remember This

Memorize this line: the remedy against an invalid tax ordinance is an appeal to the Secretary of Justice within thirty days, and that appeal does not suspend the tax. Examiners use this case to test the Section 187 remedy, the Section 188 publication rule, and mootness through implied repeal.