sumingcan

Philippine Fisheries Development Authority
Vs
Central Board of Assessment Appeals, Local Board of Assessment Appeals of Lucena City, City of Lucena, Lucena City Assessor and Lucena City Treasurer

FACTS:

Lucena Fishing Port Complex (LFPC) is one of the fishery infrastructure projects undertaken by the National Government under the Nationwide Fish Port Package.
The Philippine Fisheries Development Authority (PFDA) was created by virtue of P.D. 977 as amended by E.O. 772, with powers to manage, operate and develop the Navotas Fishing Port Complex and such other fishing port complexes that may be established by the Authority. PFDA took over the management and operation of LFPC in February, 1992.
On October 26, 1999 in a letter addressed to PFDA, the City Government of Lucena demanded payment of realty taxes on the LFPC property for the period from 1993 to1999 in the total amount of P39, 397,880.000. This was received by PFDA on November 24, 1999.
On October 17, 2000 another demand letter was sent by the Government of Lucena City on the same LFPC property, this time in the amount of P45, 660, 080.00 covering the period from 1993 to 2000.
PFDA filed its Appeal before the Local Board of Assessment Appeals of Lucena City, which was dismissed for lack of merit. It filed its Motion for Reconsideration and this was denied by the Local Board. It appealed to the Central Board of Assessment Appeals (CBAA) and the latter dismissed the appeal for same lack of merit. The Court of Tax Appeals denied PFDA’s petition for review and affirmed the Decision of the CBAA.
According to the Court of Tax Appeals, PFDA is a government-owned or controlled corporation, and is therefore subject to the real property tax imposition by the Local Government Units pursuant to Section 232 in relation to Sections 193 and 234 of the Local Government Code.

ISSUES:
(1) Whether the Philippine Fisheries Development Authority (PFDA) is a government instrumentality or a government-owned or controlled corporation.
(2) Whether PFDA is liable for the real property tax assessed on the Lucena Fishing Port Complex (LFPC).

SUPREME COURT’S RULING:


PFDA is a government instrumentality and not a government-owned or controlled corporation which is generally exempt from payment of real property tax.
It has a capital stock but it is not divided into shares of stocks. Also, it has no stockholders or voting shares, hence it is not a stock corporation. The Authority is actually a national government instrumentality which is defined as an agency of the national government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. When the law vests in a government instrumentality corporate powers, the instrumentality does not become a corporation. Unless the government instrumentality is organized as a stock or non-stock corporation, it remains a government instrumentality
exercising not only governmental but also corporate powers.
PFDA is not liable for the real property tax. Under Sec. 133 of the Local Government Code, local government units have no power to tax instrumentalities of the national government. The LFPC is a property of public dominion intended for public use, and is therefore exempt from real property tax under Sec. 234 of the Local Government Code, thus rendered the said tax assessments void.