NATIONAL POWER CORPORATION, PETITIONER, VS. HON. PRESIDING JUDGE, REGIONAL TRIAL COURT, 10TH JUDICIAL REGION BRANCH XXV, CAGAYAN DE ORO CITY, PROVINCE OF MISAMIS ORIENTAL, MUNIC…

In this Special
Civil Action for Certiorari, petitioner National Power Corporation
(NAPOCOR for brevity) questions the jurisdiction of the Regional Trial Court of
Cagayan de Oro City, Branch
XXV to hear Civil Case No. 9901 filed by respondents Province of Misamis Oriental and Municipality of Jasaan
for the collection of real property tax and
special education fund tax from petitioner covering the years 1978 to
1984.

The antecedent facts are as follows:

On October
10, 1984, the Province of Misamis Oriental filed a complaint^[1] with
the Regional Trial Court of Cagayan de Oro City, Branch XXV against NAPOCOR for the collection
of real property tax and special education fund tax in the amounts of P11,105,008.10 and P11,104,658.10, respectively, covering the
period 1978 to 1984.  Petitioner NAPOCOR
then defendant therein, filed a motion to dismiss^[2] dated January 12, 1985 on the grounds that the court has no
jurisdiction over the action or suit and that it is not the proper forum for
the adjudication of the case.  In support
of this motion NAPOCOR cited Presidential Decree No. 242 dated July 9,
1973 which provides
that disputes between agencies of the government including government-owned or
controlled corporations shall be administratively settled or adjudicated by the
Secretary of Justice.

The court through Judge Pablito C. Pielago issued an
order^[3] dated January 28, 1985 denying the motion to dismiss.  NAPOCOR filed a supplemental motion to
dismiss^[4] on February 22, 1985 citing a resolution of the Fiscal Incentive
Review Board, No. 10-85 effective January 11, 1984, restoring the tax and duty exemption
privileges of petitioner.

On March
27, 1985, NAPOCOR
filed its answer to the complaint
with counterclaim.  Treating the same as
a second motion to dismiss and finding the affirmative defenses therein stated
to be unmeritorious, the court a quo issued an order on June 27,
1985, denying the
second motion to dismiss and requiring both parties to appear before the court for the purpose of submitting a stipulation of facts.

On July 23, 1985, Barangay Aplaya, Municipality of Jasaan, Misamis Oriental filed a complaint in intervention^[5] contending that non-payment by NAPOCOR of
real property taxes would adversely affect its interest since under the law,
ten percent (10%) of the real property tax collected on properties within its
jurisdiction shall accrue to the general fund of the barangay.  Thereafter, the case was set for trial
pursuant to the court’s order dated August 20, 1985.^[6]

On October 30, 1985,
petitioner NAPOCOR filed before this Court
the present special civil action for certiorari,^[7] setting forth the following issues, to wit:

“1)
Respondent Court acted without or in excess of jurisdiction and with grave
abuse of discretion when it issued the orders dated January 28, 1985, June 27,
1985 and August 20, 1985, denying petitioner’s motions to have Civil Case No.
9901 dismissed on the grounds of lack of jurisdiction and/or improper venue.

“2)
Petitioner is exempt from payment of real property taxes.”

Relied upon by NAPOCOR in assailing the jurisdiction of the lower court and/or the venue of the action are Sections 2 and 3 of
Presidential Decree No. 242, entitled “PRESCRIBING THE PROCEDURE FOR
ADMINISTRATIVE SETTLEMENT OR ADJUDICATION OF DISPUTES, CLAIMS AND CONTROVERSIES
BETWEEN OR AMONG GOVERNMENT OFFICES, AGENCIES AND INSTRUMENTALITIES, INCLUDING
GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS, AND FOR OTHER PURPOSES” dated
on July 9, 1973.  Sections 2 and 3 of
this Decree provide:

Section 2. 
In all cases involving only
questions of law, the same shall be
submitted to and settled or adjudicated by the Secretary
of Justice, as Attorney
General and ex officio legal adviser of all
government-owned or controlled corporations and
entities, in consonance with section 83
of the Revised Administrative Code.  His ruling or determination of the question in each case shall be conclusive and
binding upon all the parties concerned.

Section 3. 
Cases involving mixed questions of law and of fact or only factual
issues shall be submitted to and settled or adjudicated by:

(a)     The Solicitor General, with respect to
disputes or claims or controversies between or among the departments, bureaus,
offices and other agencies of the National Government;

(b)     The Government Corporate Counsel, with
respect to disputes or claims or controversies between or among the
government-owned or controlled corporations or entities being served by the
office of the Government Corporate Counsel; and

(c)     The Secretary of
Justice, with respect to all other
disputes or
claims or
controversies which
do not fall under
the categories
mentioned in
paragraphs (a)
and (b).  (Underscoring supplied)

In upholding the lower court’s jurisdiction, respondent municipal
corporations, on the other hand, rely on Presidential Decree No. 464, entitled “THE REAL PROPERTY TAX CODE” enacted
on July 1, 1974,
specifically Section 82 thereof which provides:

Section 82.  Collection of real property
tax through the courts. – The delinquent real property
tax shall constitute a lawful indebtedness
of the taxpayer to the province or
city and collection of the tax may be enforced by civil action in
any court of competent jurisdiction.  The civil
action shall be filed by
the Provincial or City Fiscal within fifteen days after receipt of the statement of delinquency
certified to by the provincial or city treasurer.  This remedy shall be in addition to all other
remedies provided by law.

It is indeed desirable and beneficial to the
Judiciary’s on-going program of decongesting court dockets that
intra-governmental disputes such as this be settled administratively.  Unfortunately, our consideration of the legal
provisions involved leads us to a different conclusion.  In reconciling these two conflicting
provisions of P.D. 242 and P.D. 464 on the matter of jurisdictions, we are guided by the basic rules on statutory construction.

An examination of these
two decrees shows that P.D. 242 is a general law which deals with
administrative settlement or adjudication of disputes, claims and controversies
between or among government offices, agencies and instrumentalities, including
government-owned or controlled corporations.  The coverage is broad and sweeping, encompassing all disputes, claims and
controversies.

P.D. 464 on the other
hand, governs the appraisal and assessment of real property for purposes of
taxation by provinces, cities and municipalities, as well as the
levy, collection and administration of real property tax.  It is a special law which
deals specifically with real property taxes.

It is a basic tenet in
statutory construction that between a general law and a special law, the
special law prevails.  GENERALIA
SPECIALIBUS NON DEROGANT.^[8]

Where a later special law
on a particular subject is repugnant to, or inconsistent with, a prior general
law on the same subject, a partial repeal of the latter will be implied to the
extent of the repugnancy or an exception grafted upon the general law.

A special law must be
intended to constitute an exception to the general law in the absence of
special circumstances forcing a
contrary conclusion.^[9]

The conflict in the
provisions on jurisdiction between P.D. 242 and P.D. 464 should be
resolved in favor of the latter law, since
it is a special law and of later enactment. 
P.D. 242 must yield to P.D. 464 on the matter of who or which tribunal
or agency has jurisdiction over the enforcement and collection of real property
taxes.  Therefore, respondent court has jurisdiction to hear and decide Civil Case No. 9901.

On the question of
whether or not NAPOCOR is liable to pay real property taxes and special
education fund taxes for the years 1978 to 1984, we rule in the
affirmative.

Presidential Decree No.
1177, entitled “REVISING THE BUDGET PROCESS IN ORDER TO INSTITUTIONALIZE
THE BUDGETARY INNOVATIONS OF THE NEW SOCIETY” was passed on July 30,
1977.  Section 23 thereof provides:

Section 23.  Tax and Duty Exemptions.
– All units of government, including government-owned
or controlled corporations, shall pay income taxes, customs duties
and other taxes and fees as are imposed under revenue laws; provided, that organizations otherwise exempted by law from the
payment of such taxes/duties may ask for a
subsidy from the General Fund in the
exact amount of taxes/duties due; provided, further, that a procedure shall be
established by the Secretary of Finance and the Commissioner of the Budget,
whereby such subsidies shall automatically
be considered as both revenue and expenditure of the General Fund.  (underscoring
supplied)

Petitioner alleges that
what has been withdrawn is its exemption from taxes, duties, and fees which are
payable to the national government while its exemption from taxes, duties and
fees payable to government branches, agencies and instrumentalities remains
unaffected.  Considering that real
property taxes are payable to the local government, NAPOCOR maintains that it
is exempt therefrom.

We find the above
argument untenable.  It reads into the
law a distinction that is not there.  It
is contrary to the clear intent of the law to withdraw from all units of
government, including government-owned or controlled corporations their
exemptions from all kinds of taxes.  Had it been otherwise, then the law would have said so.  Not having distinguished as to the kinds of
tax exemptions withdrawn, the plain meaning is that all tax exemptions are covered.  Where the law does not distinguish, neither must we.

Moreover, Presidential Decree No. 1931 entitled “DIRECTING
THE RATIONALIZATION OF DUTY AND
TAX EXEMPTION PRIVILEGES GRANTED TO GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS
AND ALL OTHER UNITS OF GOVERNMENT” which was passed on June 11, 1984,
categorically states:

“WHEREAS, Presidential Decree
No. 1177 has already
expressly repealed the grant of tax privileges
to any government-owned or controlled corporation
and all other units of government.” (underscoring
supplied)

Thus, any dubiety on NAPOCOR’S liability to pay taxes, duties and
fees should be considered unequivocally resolved by the above provision.

In the case of National Power Corporation
vs. The Province of Albay, et.al.,^[10]
herein petitioner was held liable for
real property taxes to the provincial government of Albay
for the period June 11, 1984 to March 10, 1987, when it claims to have been
enjoying tax exemptions under Resolutions Nos. 10-85, 1-86 and 17-87 of the
Fiscal Incentives Review Board (FIRB). 
It must be noted that Resolution 10-85 was the same resolution cited by petitioner in its supplemental
motion to dismiss^[11]
in Civil Case No. 9901.  If the attempt
(found ineffective for lack of authority in the above-cited case of NPC vs. The Province of Albay) to restore petitioner’s tax
exemptions began only in 1985 with the issuance
of FIRB Resolution No. 10-85, it stands to reason that prior thereto, i.e., from 1977 when P. D. 1177 was promulgated up
to 1984, petitioner did not enjoy any tax privilege as would exempt it from the payment of the taxes under consideration.

In the same case of NPC vs. The Province of
Albay,^[12] this
Court had occasion to state:

“Actually, the State has no reason to decry the taxation of NAPOCOR’s properties, as and by way of real property taxes. 
Real property taxes, after all,
form part and parcel of the financing apparatus of the Government in
development and nation-building, particularly in the local government level.

x   x   x

“To all intents and purposes, real property taxes are funds
taken by the State with one hand and given to the other.  In no measure can the Government be said to have lost anything.”

The proceeds of the real
property tax are divided among the
province, city or municipality
where the property subject to the tax is situated and shall be applied by the
respective local government unit for its own use and
benefit.  Even the barrio where the
property is situated shares in the real property tax collections.  Likewise, the entire proceeds of the
additional one per cent (1%) real property tax levied for the Special Education
Fund created under R.A. 5447, are divided among the
province, city and municipalities where the property is situated.

WHEREFORE, the petition is DISMISSED.  Petitioner having been found liable for the
taxes being collected in Civil Case No. 9901, the respondent court is hereby
directed to proceed with deliberate dispatch in hearing the case for the purpose
of determining the exact liability of petitioner.  No Costs.

SO ORDERED.

Gutierrez, Jr., Bidin, and Cortes, JJ., concur.

Feliciano, J., on leave.

^[1]
Rollo, pp. 18-21.

^[2]
Rollo, pp. 22-24.

^[3]
Rollo, pp. 25-26; 28-30.

^[4] Rollo, pp. 31-33.

^[5]
Rollo, pp. 65-66.

^[6]
Rollo, pp. 72-73.

^[7]
Rollo, pp. 2-16.

^[8]
Lagman vs. City of Manila,
G.R. No. 23305, June 30, 1966,
17 SCRA 579.

^[9]
Baga vs. PNB, 99 Phil. 889, cited in Butuan Sawmill, Inc. vs. City of Butuan,
et al., No. L-21516, April 29, 1966,
16 SCRA 755.

^[10]
G.R. No. 87479, June 4, 1990.

^[11]
Rollo, pp. 31-33.

^[12]
Ibid.