G.R. No. 185420 . August 29, 2017.
LANAO DEL NORTE ELECTRIC COOPERATIVE, INC., AS REPRESENTED BY ITS GENERAL MANAGER ENGR. RESNOL C. TORRES, PETITIONER, VS. PROVINCIAL GOVERNMENT OF LANAO DEL NORTE, AS REPRESENTED BY ITS GOVERNOR HON. MOHAMAD KHALID Q. DIMAPORO AND ITS PROVINCIAL TREASURER, MILDRED J. HINGCO, PROVINCIAL ASSESSOR, NATIONAL ELECTRIFICATION ADMINISTRATION (NEA), AS REPRESENTED BY ITS ADMINISTRATOR HON. EDITA S. BUENO, POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT (PSALM), AS REPRESENTED BY ITS PRESIDENT AND CEO HON. JOSE C. IBAZETA, DEPARTMENT OF ENERGY (DOE), AS REPRESENTED BY ITS SECRETARY HON. ANGELO T. REYES, THE COMMISSION ON AUDIT (COA), AS REPRESENTED BY ITS CHAIRMAN HON. REYNALDO A. VILLAR, RESPONDENTS.

FACTS

Petitioner Lanao del Norte Electric Cooperative, Inc. (LANECO) is a cooperative granted a franchise to distribute electricity. The Provincial Government of Lanao del Norte (PGLN) assessed LANECO for unpaid real property taxes from 1995 to 2005, totaling over P31 million. After demands, the PGLN threatened to levy and auction LANECO’s properties to satisfy the delinquency. LANECO did not dispute its tax liability but argued it needed a certified copy of the Provincial Revenue Code to seek ERC approval to pass on the cost to consumers. It claimed the PGLN failed to provide this copy, citing a fire that destroyed legislative records.
LANECO filed a Petition for Prohibition and Mandamus directly with the Supreme Court. It contended the PGLN acted with grave abuse of discretion by pursuing administrative levy instead of a judicial collection suit. LANECO theorized that Section 60 of the Electric Power Industry Reform Act (EPIRA) and related issuances required the PGLN to file a court case for collection, thereby prohibiting administrative levy on its assets.

ISSUE

Whether the Provincial Government of Lanao del Norte committed grave abuse of discretion by enforcing the collection of real property taxes through administrative levy and auction, instead of judicial action.

RULING

No. The Supreme Court dismissed the petition. The Court held that the PGLN acted within its clear statutory authority. The Local Government Code (LGC) expressly provides dual remedies for collecting real property taxes: administrative action (levy) or judicial action. Section 256 of the LGC states local government units “may avail of the remedies by administrative action thru levy on real property or by judicial action.” The choice between these concurrent remedies is discretionary on the part of the LGU. The Court found no law, including EPIRA, that strips LGUs of this administrative remedy or makes judicial action the exclusive mode for electric cooperatives.
LANECO’s reliance on EPIRA Section 60 was misplaced. The provision mandates that savings from debt condonation be applied to reduce electricity rates, but it does not prohibit tax collection or prescribe the method thereof. The Court ruled that EPIRA does not repeal, expressly or impliedly, the LGC’s grant of administrative levy powers. Since the PGLN’s action was grounded in the LGC, it cannot be considered arbitrary, capricious, or despotic. Absent a clear showing of a whimsical exercise of power, which LANECO failed to demonstrate, the act of levying properties does not constitute grave abuse of discretion warranting the extraordinary writs of prohibition or mandamus.