Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 168557 February 16, 2007 FELS ENERGY, INC., Petitioner, vs. THE PRO"INCE OF #$T$NG$S a%& THE OFFICE OF THE PRO"INC $L $SSESSOR OF #$T$NG$S, Respondents. !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! G.R. No. 170628 February 16, 2007 N$TION$L PO'ER CORPOR$TION, Petitioner, vs. LOC$L #O$R( OF $SSESSMENT $PPE$LS OF #$T$NG$S, L$URO C. $N($Y$, )% *)+ ,a-a,).y a+ .*e $++e++or o/ .*e Pro0)%,e o/ #a.a%1a+, a%& .*e PRO"INCE OF #$T$NG$S re-re+e%.e& by ).+ Pro0)%,)a2 $++e++or, Respondents. D " # I S I O N C$LLE3O, SR., J.: $efore us are t%o consolidated cases doc&eted as G.R. No. ()*++, and G.R. No. (,-).*, %hich %ere /led b0 petitioners 1"2S "ner30, Inc. 41"2S5 and National Po%er #orporation 4NP#), respectively. The /rst is a petition for revie% on certiorari assailin3 the 6u3ust .+, .--7 Decision( of the #ourt of 6ppeals 4#6) in #6!'.R. SP No. ),78- and its Resolution. dated June .-, .--+: the second, also a petition for revie% on certiorari, challen3es the 1ebruar0 8, .--+ Decision; and Nove<ber .;, .--+ Resolution7 of the #6 in #6-G.R. SP No. ),78(. $oth petitions %ere dis<issed on the 3round of prescription. The pertinent facts are as follo%s= On Januar0 (*, (88;, NP# entered into a lease contract %ith Polar "ner30, Inc. over ; ;- M> diesel en3ine po%er bar3es <oored at $ala0an $a0 in #alaca, $atan3as. The contract, deno<inated as an "ner30 #onversion 63ree<ent+ 463ree<ent), %as for a period of /ve 0ears. 6rticle (- reads= (-.( R"SPONSI$ILIT?. N6POCOR shall be responsible for the pa0<ent of (a) all ta es, import duties, fees, char3es and other levies imposed b0 the National 'overn<ent of the Republic of the Philippines or an0 a3enc0 or instru<entalit0 thereof to %hich POL6R <a0 be or beco<e subject to or in relation to the perfor<ance of their obligations under this a3ree<ent (other than (i) ta es imposed or calculated on the basis of the net inco<e of POL6R and Personal Inco<e Ta es of its e<plo0ees and (ii) construction per<it fees, environ<ental per<it fees and other si<ilar fees and char3es) and (b) all real estate ta es and assess<ents, rates and other char3es in respect of the Po%er $ar3es.) SubseAuentl0, Polar "ner30, Inc. assi3ned its rights under the 63ree<ent to 1"2S. The NP# initially opposed the assign<ent of rights, citin3 para3raph (,.. of 6rticle (, of the 63ree<ent. 1 On 6u3ust ,, (88+, 1"2S received an assess<ent of real propert0 ta es on the po%er bar3es fro< Provincial 6ssessor Lauro #. 6nda0a of $atan3as #it0. The assessed ta , %hich like%ise covered those due for (887, a<ounted to P+),(*7,-**.7- per annu<. 1"2S referred the <atter to NP#, re<indin3 it of its obligation under the 63ree<ent to pa0 all real estate ta es. It then 3ave NP# the full po%er and authorit0 to represent it in an0 conference re3ardin3 the real propert0 assess<ent of the Provincial 6ssessor. In a letter, dated Septe<ber ,, (88+, NP# sou3ht reconsideration of the Provincial 6ssessorBs decision to assess real propert0 ta es on the po%er bar3es. Ho%ever, the <otion %as denied on Septe<ber .., (88+, and the Provincial 6ssessor advised NP# to pa0 the assess<ent.* This pro<pted NP# to /le a petition %ith the Local $oard of 6ssess<ent 6ppeals 42$66) for the settin3 aside of the assess<ent and the declaration of the bar3es as non-ta able ite<s: it also pra0ed that should 2$66 /nd the bar3es to be ta able, the Provincial 6ssessor be directed to <a&e the necessar0 corrections.8 In its 6ns%er to the petition, the Provincial 6ssessor averred that the bar3es %ere real propert0 for purposes of ta ation under Section (88(c) of Republic 6ct (R.6.) No. ,()-. $efore the case %as decided b0 the 2$66, NP# /led a Manifestation, infor<in3 the 2$66 that the Depart<ent of 1inance (DOF) had rendered an opinion (- dated Ma0 .-, (88), %here it is clearly stated that po%er bar3es are not real propert0 subject to real propert0 assess<ent. On 6u3ust .), (88), the 2$66 rendered a Resolution(( den0in3 the petition. The fallo reads= >HER"1OR", the Petition is DENI"D. 1"2S is hereb0 ordered to pa0 the real estate ta in the a<ount ofP+),(*7,-**.7-, for the 0ear (887. SO ORDER"D.(. The 2$66 ruled that the po%er plant facilities, %hile the0 <a0 be classified as <ovable or personal propert0, are nevertheless considered real propert0 for ta ation purposes because the0 are installed at a specific location %ith a character of per<anenc0. The 2$66 also pointed out that the o%ner of the bar3esC1"2S, a private corporation–is the one bein3 ta ed, not NP#. 6 <ere a3ree<ent <a&in3 NP# responsible for the pa0<ent of all real estate ta es and assess<ents %ill not justif0 the e e<ption of 1"2S: such a privile3e can only be 3ranted to NP# and cannot be e tended to 1"2S. 1inally, the 2$66 also ruled that the petition %as /led out of time. 633rieved, 1"2S appealed the 2$66Bs rulin3 to the #entral $oard of 6ssess<ent 6ppeals 4#$66). On 6u3ust .*, (88), the Provincial Treasurer of $atan3as #it0 issued a Notice of Lev0 and >arrant b0 Distraint(;over the po%er bar3es, see&in3 to collect real propert0 ta es a<ountin3 to P.;.,)-.,(.+.8( as of July ;(, (88). The notice and %arrant %as officially served to 1"2S on Nove<ber *, (88). It then /led a Motion to Lift Lev0 dated Nove<ber (7, (88), pra0in3 that the Provincial 6ssessor be further restrained b0 the #$66 fro< enforcin3 the disputed assess<ent durin3 the pendenc0 of the appeal. On Nove<ber (+, (88), the #$66 issued an Order(7 liftin3 the lev0 and distraint on the properties of 1"2S in order not to pree<pt and render ineffectual, nu3ator0 and illusor0 an0 resolution or jud3<ent %hich the $oard %ould issue. 2 Meantime, the NP# /led a Motion for Intervention(+ dated 6u3ust ,, (88* in the proceedin3s before the #$66. This %as approved b0 the #$66 in an Order() dated Septe<ber .., (88*. Durin3 the pendenc0 of the case, both 1"2S and NP# /led several <otions to ad<it bond to 3uarantee the pa0<ent of real propert0 ta es assessed b0 the Provincial 6ssessor (in the event that the jud3<ent be unfavorable to the<). The bonds %ere duly approved b0 the #$66. On 6pril ), .---, the #$66 rendered a Decision(, /ndin3 the po%er bar3es e e<pt fro< real propert0 ta . The dispositive portion reads= >HER"1OR", the Resolution of the Local $oard of 6ssess<ent 6ppeals of the Province of $atan3as is hereb0 reversed. Respondent-appellee Provincial 6ssessor of the Province of $atan3as is hereb0 ordered to drop subject propert0 under 6RP/Ta Declaration No. -(*!--8+* fro< the List of Ta able Properties in the 6ssess<ent Roll. The Provincial Treasurer of $atan3as is hereb0 directed to act accordin3l0. SO ORDER"D.(* Rulin3 in favor of 1"2S and NP#, the #$66 reasoned that the po%er bar3es belon3 to NP#: since the0 are actually, directly and e clusively used b0 it, the po%er bar3es are covered b0 the e e<ptions under Section .;7(c) of R.6. No. ,()-.(8 6s to the other jurisdictional issue, the #$66 ruled that prescription did not preclude the NP# fro< pursuin3 its claim for ta e e<ption in accordance %ith Section .-) of R.6. No. ,()-. The Provincial 6ssessor /led a <otion for reconsideration, %hich %as opposed b0 1"2S and NP#. In a co<plete volte face, the #$66 issued a Resolution.- on July ;(, .--( reversin3 its earlier decision. The fallo of the resolution reads= >HER"1OR", pre<ises considered, it is the resolution of this $oard that= (a) The decision of the $oard dated ) 6pril .--- is hereb0 reversed. (b) The petition of 1"2S, as %ell as the intervention of NP#, is dis<issed. (c) The resolution of the Local $oard of 6ssess<ent 6ppeals of $atan3as is hereb0 affir<ed, (d) The real propert0 ta assess<ent on 1"2S b0 the Provincial 6ssessor of $atan3as is like%ise hereb0 affir<ed. SO ORDER"D..( 1"2S and NP# /led separate <otions for reconsideration, %hich %ere ti<ely opposed b0 the Provincial 6ssessor. The #$66 denied the said <otions in a Resolution.. dated October (8, .--(. Dissatis/ed, 1"2S /led a petition for revie% before the #6 doc&eted as #6-G.R. SP No. ),78-. Mean%hile, NP# /led a separate petition, doc&eted as #6-G.R. SP No. ),78(. 3 On Januar0 (,, .--., NP# /led a Manifestation/Motion for #onsolidation in #6-G.R. SP No. ),78- pra0in3 for the consolidation of its petition %ith #6-G.R. SP No. ),78(. In a Resolution.; dated 1ebruar0 (., .--., the appellate court directed NP# to re!/le its <otion for consolidation %ith #6-G.R. SP No. ),78(, since it is the ponente of the latter petition %ho should resolve the reAuest for reconsideration. NP# failed to co<ply %ith the aforesaid resolution. On 6u3ust .+, .--7, the T%elfth Division of the appellate court rendered jud3<ent in #6-G.R.