GR 147192; (June, 2006) (Digest)
G.R. No. 147192 ; June 27, 2006
GOVERNMENT SERVICE INSURANCE SYSTEM, Petitioner, vs. THE CITY ASSESSOR OF ILOILO CITY, THE REGISTER OF DEEDS OF ILOILO CITY and ROSALINA FRANCISCO, represented by her attorney-in-fact, SALVADOR PAJA I, Respondents.
FACTS
Respondent Rosalina Francisco purchased two parcels of land owned by petitioner GSIS at public auctions for delinquent real property taxes. After the redemption period lapsed without redemption, the City Treasurer issued final bills of sale. To register the titles in her name, Francisco filed separate petitions with the Regional Trial Courts (RTC) of Iloilo City, which granted her petitions and ordered the issuance of new certificates of title. These RTC orders became final and executory.
Subsequently, GSIS filed a petition for annulment of judgment with the Court of Appeals, arguing that its properties were exempt from real property taxes under its charter ( R.A. No. 8291 ) and that the tax assessment and auction proceedings violated its right to due process for lack of notice. The CA dismissed the petition, prompting GSIS to elevate the case to the Supreme Court via a petition for review on certiorari.
ISSUE
Whether the CA erred in dismissing GSIS’s petition and upholding the validity of the tax sale, despite GSIS’s claim of tax exemption under its charter and alleged denial of due process.
RULING
The Supreme Court denied the petition and affirmed the CA’s decision. The Court held that GSIS’s tax exemption under Section 39 of R.A. No. 8291 is not absolute. Applying Section 234(a) of the Local Government Code ( R.A. No. 7160 ), the exemption does not apply when the beneficial use of the property has been granted to a taxable entity. The records showed that the properties were titled in the names of specific individuals (Baldomero Dagdag and Rodolfo Ceres), indicating beneficial ownership had been conveyed to private, taxable persons. Therefore, the properties were rightfully subject to real property tax.
Regarding due process, the Court ruled that GSIS failed to prove the alleged lack of notice. The tax delinquency and auction proceedings are presumed regular, and GSIS did not present clear evidence to rebut this presumption. Moreover, GSIS’s remedy was a timely appeal from the RTC orders, not a belated petition for annulment of judgment. The RTC orders directing the issuance of new titles had long become final and executory, and a petition for annulment cannot substitute for a lost appeal. The Court emphasized that the stability of judicial decisions and the doctrine of finality of judgment must prevail.