G.R. No. 146382 ; August 7, 2003
Systems Plus Computer College of Caloocan City, Petitioner, vs. Local Government of Caloocan City, et al., Respondents.

FACTS

Petitioner Systems Plus Computer College, a non-stock, non-profit educational institution, sought a property tax exemption from the Caloocan City government for parcels of land it was leasing from its sister corporations. The initial request was denied because the land was owned by for-profit entities deriving rental income, thus not meeting the constitutional requirement of being “actually, directly and exclusively” used for educational purposes. Subsequently, the lease contracts were novated into donations of the beneficial use of the land, and petitioner reapplied for exemption, submitting certifications that the owners no longer received rental income.
The respondent City Government denied the second application, asserting that the donation appeared to be a scheme to evade real property taxes and that the property’s use did not satisfy the strict constitutional test for exemption. Petitioner then filed a petition for mandamus with the Regional Trial Court (RTC) to compel the grant of tax exemption. The RTC dismissed the petition for being premature, citing petitioner’s failure to exhaust administrative remedies.

ISSUE

Whether the RTC committed grave abuse of discretion in dismissing the petition for mandamus on the grounds of non-exhaustion of administrative remedies and the impropriety of the writ.

RULING

The Supreme Court dismissed the petition, upholding the RTC’s ruling. The legal logic is anchored on the doctrine of exhaustion of administrative remedies and the nature of a mandamus proceeding. Under Section 226 of the Local Government Code (RA 7160), an owner or person with legal interest in a property who is dissatisfied with the action of the city assessor—which includes the determination of taxability or exemption—must appeal to the Local Board of Assessment Appeals (LBAA) within sixty days.
Petitioner’s argument that it was not contesting an “assessment” but merely seeking to compel a ministerial duty was erroneous. The Court clarified that “assessment” under the law encompasses the entire process of determining property value and taxability, including classification. The City Assessor’s denial of the exemption application constituted an assessorial action subject to the appellate jurisdiction of the LBAA. By directly resorting to judicial relief via mandamus, petitioner impermissibly bypassed this prescribed administrative hierarchy.
Furthermore, mandamus is a remedy to compel the performance of a ministerial duty, not to control discretion. While the duty to assess is ministerial, the actual exercise involving evaluation and classification is discretionary. Mandamus cannot be used to direct how that discretion should be exercised or to reverse a discretionary action already taken. Since an adequate administrative remedy was expressly provided by law, the petition for mandamus was correctly dismissed as premature.