G.R. No. 114231 ; June 29, 2004
MANILA ELECTRIC COMPANY, petitioner, vs. NELIA A. BARLIS, in her capacity as Officer-in-Charge/Acting Municipal Treasurer of Muntinlupa, substituting EDUARDO A. ALON, former Municipal Treasurer of Muntinlupa, Metro Manila, respondent.

FACTS

Petitioner Manila Electric Company (MERALCO) owned and operated power plants in Sucat, Muntinlupa, from 1968 until their sale to the National Power Corporation (NAPOCOR) on December 29, 1978. MERALCO paid real property taxes on the plants, including machinery, based on its own declared values from 1975 to 1978. In 1985, the Municipal Assessor of Muntinlupa, reviewing records, concluded MERALCO had misdeclared the true value of the machinery. The Assessor issued new tax declarations with significantly higher assessed values for the years 1976-1978. The Municipal Treasurer subsequently demanded payment of deficiency taxes, which MERALCO refused to pay. After further demands, the Treasurer issued warrants of garnishment against MERALCO’s bank accounts in 1990.
MERALCO filed a Petition for Prohibition with the Regional Trial Court (RTC), arguing the deficiency assessment was arbitrary and illegal. The RTC dismissed the petition, a decision affirmed by the Court of Appeals. MERALCO elevated the case to the Supreme Court via a petition for review on certiorari. The Supreme Court initially denied the petition. MERALCO filed motions for reconsideration, leading to this Resolution addressing its “Motion for Leave to File Motion for Reconsideration” of the Court’s order denying its second motion for reconsideration.

ISSUE

Whether the Municipal Treasurer of Muntinlupa acted without jurisdiction or with grave abuse of discretion in issuing the warrants of garnishment for the collection of alleged deficiency real property taxes from MERALCO.

RULING

The Supreme Court DENIED MERALCO’s motion and AFFIRMED the actions of the Municipal Treasurer. The Court held that the Treasurer’s acts were a valid exercise of the government’s inherent power of taxation and its authority to collect revenues. The legal logic is anchored on the nature of tax collection and the remedies available to a taxpayer. The Court ruled that MERALCO availed itself of the wrong remedy. A petition for prohibition is not the proper recourse to challenge an assessment or a warrant of garnishment issued for tax collection. Prohibition lies only against a tribunal, board, or officer exercising judicial or quasi-judicial functions. The act of the Municipal Treasurer in issuing the warrants was a ministerial duty in the enforcement of a tax lien, not a judicial or quasi-judicial function. The correct remedy for MERALCO was to appeal the new assessment to the Local Board of Assessment Appeals (LBAA) within the statutory period, as provided under the then-governing Real Property Tax Code (P.D. No. 464). By failing to exhaust this administrative remedy and instead filing a judicial action, MERALCO’s petition was fundamentally infirm. The Court emphasized that the garnishment was a legitimate enforcement action following MERALCO’s persistent refusal to pay the lawfully assessed deficiencies.