Quezon City wins tax case vs MWSS in CA

By Ina Reformina, ABS-CBN News

Posted at 11/02/2010

MANILA, Philippines - The Court of Appeals Special 17th Division has denied an instant petition by Metropolitan Waterworks and Sewerage System (MWSS) versus the local government of Quezon City, its city mayor, treasurer, among others, for lack of merit and thereby lifting a writ of preliminary injunction in connection with real property tax delinquencies incurred by the company.

In a 27-page decision penned by Associate Justice Isaias Dicdican, the appellate court affirmed an action by the local government of Quezon City to tax MWSS properties within the city's jurisdiction and consequently publicizing a Notice of Sale of Delinquent Real Properties for MWSS'  failure to pay real property taxes amounting to some P237,108,043.

The notice was publicized on September 10, 2007.

MWSS assailed such action claiming that its properties located in Quezon City were intended for public purpose and exclusively "devoted to public use and, hence, were exempt from the payment of real property tax as the same forms part of public domain."

Hence, the instant petition for certiorari and prohibition before the appellate court with an urgent application for the issuance of a temporary restraining order and/or Writ of Preliminary Injunction filed by MWSS on September 26, 2007.

The court granted MWSS its request for a TRO on September 27, 2007 "in view of the extreme urgency presented by the instant case and in order not to render moot and academic whatever judgment maybe rendered".

But in the Special 17th Division's ruling, the appellate court noted that the Local Government Code only exempts real properties owned by the Republic of the Philippines or any of its political subdivision from the payment of real property tax, the court further notes that MWSS is neither.

The court said that "petitioner MWSS does not perform a purely governmental function".

"On the contrary, MWSS is engaged in corporate, proprietary or business functions. Thus, MWSS could not invoke immunity from real property taxation" the decision further states.