GR 214260; (May, 2021) (Digest)
G.R. No. 214260 , May 03, 2021
Municipality of Villanueva, Misamis Oriental represented by Municipal Mayor Julio T. Uy, Petitioner, vs. Steag State Power, Inc. and Municipality of Tagoloan, Misamis Oriental, Respondents.
FACTS
Steag State Power, Inc. (SPI) operates a coal-fired power plant. Its principal structure for electricity production is located in the Municipality of Villanueva, while its water intake facility is in the Municipality of Tagoloan. A dispute arose over the imposition of local business tax under Section 150(b) of the Local Government Code, which provides that 70% of sales recorded in the principal office is taxable by the municipality where the factory, plant, or plantation is located. Villanueva claimed the entire 70% sales allocation as the tax base, arguing electricity is wholly produced in its territory. Tagoloan contended the 70% should be divided equally, as its water intake facility is integral to production. SPI paid assessments from both municipalities under protest and filed a complaint for refund and consignation in the Regional Trial Court (RTC). The RTC ruled the 70% sales allocation should be divided equally between the two municipalities. Villanueva appealed to the Court of Appeals (CA), which modified the RTC decision, applying Section 150(c) of the LGC and allocating 60% of the 70% to Villanueva (where the “factory” is) and 40% to Tagoloan (where the “plantation” or water facility is). Villanueva filed a Petition for Review on Certiorari before the Supreme Court.
ISSUE
Whether the Court of Appeals had jurisdiction over the appeal from the Regional Trial Court’s decision involving local business taxes.
RULING
The Supreme Court denied the petition. It held that the Court of Appeals had no jurisdiction over the appeal. Under Section 7(a)(3) of Republic Act No. 9282 (The Court of Tax Appeals Act), jurisdiction over appeals from the RTC in cases involving local taxes lies with the Court of Tax Appeals (CTA), not the Court of Appeals. Since the complaint filed by SPI was for a refund of local business taxes and the determination of the correct tax base, the subject matter involved local taxes. Therefore, the proper venue for appeal from the RTC decision was the CTA. The appeal lodged by the Municipality of Villanueva to the CA was erroneous. Consequently, the CA Decision and Resolution were declared null and void for lack of jurisdiction. The RTC decision, not having been properly appealed, became final and executory.