GR 163072; (April, 2009) (Digest)
G.R. No. 163072; April 2, 2009
Manila International Airport Authority, Petitioner, vs. City of Pasay, Sangguniang Panlungsod ng Pasay, City Mayor of Pasay, City Treasurer of Pasay, and City Assessor of Pasay, Respondents.
FACTS
Petitioner Manila International Airport Authority (MIAA) operates and administers the Ninoy Aquino International Airport (NAIA) Complex under Executive Order No. 903. On August 28, 2001, MIAA received Final Notices of Real Property Tax Delinquency from the City of Pasay for the taxable years 1992 to 2001 for its real properties located in the NAIA Complex in Pasay City (NAIA Pasay properties), with a total delinquency of over One Billion Pesos. On August 24, 2001, the City of Pasay issued notices of levy and warrants of levy for these properties, and the City Mayor threatened to sell them at public auction if the taxes remained unpaid. On October 29, 2001, MIAA filed a petition for prohibition and injunction with the Court of Appeals to enjoin the City of Pasay from imposing real property taxes, levying against, and auctioning the NAIA Pasay properties. The Court of Appeals dismissed the petition on October 30, 2002, upholding the City of Pasay’s power to impose and collect the taxes, ruling that MIAA’s tax exemption under its charter had been withdrawn by the Local Government Code. MIAA’s motion for reconsideration was denied, prompting this petition.
ISSUE
Whether the NAIA Pasay properties of MIAA are exempt from real property tax.
RULING
The petition is meritorious. The Supreme Court ruled that the NAIA Pasay properties are exempt from real property tax. The Court held that MIAA is not a government-owned or controlled corporation but a government instrumentality vested with corporate powers under Section 2(10) of the Introductory Provisions of the Administrative Code of 1987. As such, it is not subject to any kind of tax by local governments under Section 133(o) of the Local Government Code. Furthermore, the Airport Lands and Buildings of MIAA are properties of public dominion intended for public use or public service under Article 420 of the Civil Code and are thus owned by the Republic of the Philippines. Consequently, they are exempt from real estate tax under Section 234(a) of the Local Government Code, which exempts real property owned by the Republic, unless its beneficial use is granted to a taxable person—a condition not present here as MIAA itself is not a taxable entity. The Court applied its prior ruling in Manila International Airport Authority v. Court of Appeals (2006), which involved the same legal issue concerning MIAA properties in Parañaque City.