Court of Appeals has no heart for Heart Center
Without touching on the merits, the Court of Appeals (CA) has dismissed the state-run Philippine Heart Center’s (PHC) petition seeking to stop the Quezon City government from collecting P36.5 million in real property taxes the hospital supposedly owes, citing a “procedural lapse.”
In a 14-page decision, the CA 13th Division junked the PHC’s petition to uphold its tax exempt status, saying the hospital failed to bring its plea before the proper fora—the Local and Central Boards of Assessment Appeals and the Court of Tax Appeals (CTA).
The PHC has been contesting the QC government’s demand for tax payment since collection efforts began in 2004, pointing to the tax exemption it was granted upon its establishment in 1975 during the martial law regime of dictator Ferdinand E. Marcos.
Associate Justice Luisa Quijano-Padilla penned the ruling which said that the hospital’s direct resort to the Court of Appeals was in violation of procedure that was “evidently fatal to the petitioner’s case.”
“This court deems it no longer necessary to resolve the remaining matters in this present case for any discussion would serve no useful purpose at this time,” the ruling said.
“This is also the more prudent action to take in order to prevent any future conflict with the ruling of the competent court should petitioner decide to pursue the proper remedy for the protection of its rights,” the court added.
The court deemed the suit an erroneous legal remedy as a local government unit’s taxing power “is not an exercise of a judicial or quasi-judicial function” that could be corrected by a certiorari petition.
The CA could only lament the PHC’s failure to take the correct legal action.
“This ruling notwithstanding, 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 ruling said.
It was the PHC’s second attempt to have the CA take jurisdiction of the case, first failing in 2012, when the appellate court dismissed the case due to the hospital’s “failure to observe the rule on exhaustion of administrative remedies.”
The court said the hospital should have followed the procedure for appeals under the Local Government Code (LGC), which provides that assailed tax collections should first be aired before the Local Board of Assessment Appeals.
From there, a petitioner unsatisfied with the local board’s ruling may bring a case before the Central Board of Assessment Appeals, and finally to the CTA.
Fighting the dismissal, the PHC got its second wind in 2013 when the CA reconsidered taking cognizance of the case, citing the import of the PHC’s operations as a public hospital specializing in cardiovascular health care.
But the Quezon City government countered the CA’s grant of reconsideration, asserting that the PHC had initiated legal action while failing to comply with the LGC’s requirement of a 2-percent deposit of the total tax liability.
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