G.R. No. 211299, June 21, 2022
LIGHT RAIL TRANSIT AUTHORITY, PETITIONER, VS. CITY OF PASAY, REPRESENTED BY THE CITY TREASURER AND THE CITY ASSESSOR, RESPONDENT.

FACTS

Petitioner Light Rail Transit Authority (LRTA) was created in 1980 under Executive Order No. 603 to construct, operate, maintain, and/or lease light rail transit systems in the country. The City of Pasay assessed real property taxes on LRTA’s properties. LRTA challenged the assessment, contending it is a government instrumentality exempt from real property tax. The Regional Trial Court dismissed LRTA’s case. LRTA filed an appeal before the Court of Appeals in 2013. The Court of Appeals issued a Decision and Resolution on the matter.

ISSUE

Whether the Court of Appeals had jurisdiction over LRTA’s appeal from the Regional Trial Court’s decision in a local tax case involving real property tax.

RULING

No. The Court of Appeals’ Decision and Resolution are void for lack of jurisdiction. Under Section 7 of Republic Act No. 1125, as amended by Republic Act No. 9282 (2004), the Court of Tax Appeals exercises exclusive appellate jurisdiction over decisions of the Regional Trial Courts in local tax cases, which include cases involving real property tax. Therefore, LRTA should have filed its appeal before the Court of Tax Appeals, not the Court of Appeals. Generally, filing an appeal before the wrong court does not toll the period to appeal, making the trial court’s decision final. However, the Supreme Court proceeded to resolve the substantive issue in the interest of justice and to correct a grave error.
On the substantive issue, the Supreme Court, concurring with the ponencia, held that LRTA is a government instrumentality with corporate powers, and its properties are of public dominion and exempt from real property tax. LRTA is not a government-owned or controlled corporation as defined under the Administrative Code because it is neither a stock corporation (having no capital stock divided into shares, no stockholders, and no voting shares) nor a non-stock corporation (having no members and not organized for charitable, religious, or similar purposes). While created for the common good, it is not required to meet the test of economic viability as it operates as a public utility, not a profit center. As a government instrumentality, its properties are exempt from real property tax under Section 133(o) of the Local Government Code, which prohibits local government units from imposing taxes on the National Government, its agencies, and instrumentalities. This exemption is consistent with the ruling in Manila International Airport Authority v. Court of Appeals and Light Rail Transit Authority v. Quezon City.