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DOTC, MNTC lose appeal on tax case vs Mandaluyong city gov’t

MRT3 at Boni Avenue Station in Mandaluyong City. (Bernard Testa, InterAksyon)

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MANILA - The Court of Appeals has upheld the Mandaluyong lower court’s decision to auction off properties of the Department of Transportation and Communications and its private partner, Metro Rail Transit Corp., for failure to pay real property taxes to the city government amounting to P2.4 billion.

In dismissing the appeal of the DOTC and the MRTC, the appellate court’s former Sixth Division resolved that the position of MRTC’s claim in using a Supreme Court decision in National Power Corporation vs. Provincial Government of Bataan and Republic vs. City of Mandaluyong as their anchor had no basis in this particular case.

“There was no ruling that the Court of Appeals can take cognizance of certiorari petitions involving real property tax cases decided by the Regional Trial Court,” the ruling penned by Associate Justice Noel Tijam said.

The resolution explained that the SC case concerned with the propriety of execution on former NPC properties that had been taken from it and transferred to other government corporations.

The DOTC and MRTC had questioned the orders issued by the Mandaluyong RTC in 2006 and 2007 in favor of the city government for real property taxes covering the period from 2003 to 2005.

Because the MRTC failed to pay real property taxes, the city government said it has no other recourse but to auction off the company’s properties located in three MRT stations in the city.

The CA further explained that even the SC has ruled in the case of Manila vs Grecia-Cuerdo that the Court of Tax Appeals (CTA) has jurisdiction over petitions for certiorari challenging or questioning interlocutory orders of courts or administrative agencies.

The DOTC has argued that the city government cannot impose taxes on MRT properties since actual possession, use and operation is under it and not with the company.

If allowed auction off the properties, the DOTC reasoned that it would affect the delivery of public services and would be prejudicial to public interest.

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