GR 189999; (June, 2012) (Digest)
G.R. No. 189999 ; June 27, 2012
ANGELES UNIVERSITY FOUNDATION, Petitioner, vs. CITY OF ANGELES, JULIET G. QUINSAAT, in her capacity as Treasurer of Angeles City and ENGR. DONATO N. DIZON, in his capacity as Acting Angeles City Building Official, Respondents.
FACTS
Petitioner Angeles University Foundation (AUF), a non-stock, non-profit educational institution, applied for a building permit to construct a medical center. The City Building Official assessed building permit, locational clearance, and other fees. AUF claimed exemption from these payments, citing its charter ( Republic Act No. 6055 ) and prior Department of Justice (DOJ) opinions affirming its exempt status. Despite these claims and a subsequent DOJ letter reiterating the exemption, the city officials refused to issue the permits without payment. Consequently, AUF paid the total amount of P826,662.99 under protest to secure the necessary permits. After its formal request for a refund was denied by the City Treasurer, AUF filed a complaint before the Regional Trial Court (RTC).
The RTC ruled in favor of AUF, ordering the refund. It held that the fees were taxes from which AUF was exempt under its charter. On appeal, the Court of Appeals (CA) reversed the RTC decision. The CA ruled that the building permit and associated fees are regulatory in nature, not taxes, and are imposed by the National Building Code. It held that the regulatory power under the Building Code is distinct from the taxing power of local governments, and exemptions from taxes do not extend to these regulatory fees.
ISSUE
Whether Angeles University Foundation is exempt from paying building permit, locational clearance, and other related fees assessed by the City of Angeles.
RULING
The Supreme Court DENIED the petition and AFFIRMED the Court of Appeals decision. The Court held that AUF is not exempt from paying the contested fees. The legal logic rests on the distinction between a tax and a regulatory fee. A tax is imposed primarily for revenue, while a regulatory fee is levied for the purpose of regulation, with the incidental purpose of covering the cost of supervision or inspection. The building permit, locational clearance, and associated fees are imposed pursuant to the National Building Code (Presidential Decree No. 1096), a police power measure designed to regulate construction and ensure public safety. These are regulatory fees, not revenue-generating taxes.
The exemption granted to AUF under its charter ( R.A. No. 6055 ) pertains to taxes, not to regulatory fees. The Court emphasized that the power to regulate under the Building Code is distinct from the power to tax. Since the fees are a valid exercise of police power for regulation, the tax exemption privilege does not apply. The Court further noted that the National Building Code does not list educational institutions among the entities exempt from securing permits and paying the corresponding fees. Therefore, compliance with the Building Code, including payment of prescribed fees, is mandatory for all, regardless of tax exemption status.