The Court of Appeals on Thursday dismissed the bid of the Philippine Heart Center (PHC) that it be declared exempt from paying real property tax.
In a 14-page decision, the appeals court’s 13th Division dismissed the petition on technicality.
The Quezon City government is demanding payment of P36.5-million for unpaid real property taxes in 2004 despite the exemption granted to PHC by former President Ferdinand Marcos.
PHC sought the legal advice of the Office of the President, however, due to inaction, it opted to enter into an amicable settlement with the local government where it agreed to extend hospitalization, surgical and medical services to qualified Quezon City residents in lieu of payment of the assessed tax liabilities.
Then, in 2006, the Office of the Government Corporate Counsel (OGCC) informed PHC that following the Supreme Court ruling in the case of Manila International Airport Authority (MIAA) vs Court of Appeals, like MIAA, PHC is exempt from paying real property taxes.
PHC then suspended tax payments in Quezon City, eventually, the local government issued final notices of delinquency with corresponding warrants of levy, prompting PHC to take the case to the appeals court.
The appeals court, in a September 2012 ruling, denied the petition filed by PHC for failure to exhaust administrative remedies.
PHC sought a reconsideration arguing that the core issue on the case is whether they are exempt from payment of real property taxes or not which is beyond the competence of the City Assessor.
PHC added that its case also falls within the exceptions provided under the law and at the same time it called on the appeals court to intervene in the case because public welfare is at stake and petitioner “fears that the operations of the hospital might be left to untrained hands.”
The appeals court in 2013 granted the appeal filed by PHC and agreed that non-compliance with the principle of exhaustion of administrative remedies is justified in this case.
The Quezon City government appealed the decision.
In its recent ruling, dismissing PHC’s original petition, the appeals court again said PHC should have observed the exhaustion of administrative remedies, meaning from the local treasurer, PHC should have filed the petition before the Local Board of Assessment Appeals (LBAA), then to the Central Board of Assessment Appeals (CBAA) and eventually the Court of Tax Appeals.
“The premature invocation of the intervention of the court is fatal to one’s cause of action. The doctrine of exhaustion of administrative remedies is based on practical and legal reasons. The availment of administrative remedy entails lesser expenses and provides for a speedier disposition of controversies,” the appeals court said.
“This Court is not insensitive to petitioner’s obvious desire to champion its cause by securing a definitive ruling on its claim for tax exemption. Regrettably, this vehemence was not complemented with circumspection to make sure that the correct remedy under the rules was availed of,” the appeals court added. RAM