G.R. No. 226716, July 10, 2023
National Power Corporation, Petitioner, vs. Philippine National Bank and Municipality of Sual, Pangasinan, Respondents.

FACTS

On September 23, 2010, the National Power Corporation (NPC) received a Notice of Assessment for local business taxes for the year 2010 from the Municipality of Sual, Pangasinan. The Municipality, citing Supreme Court rulings and a municipal ordinance, demanded payment. Subsequently, the Municipality filed a collection case for taxes from 2006 to 2009 against NPC in the Regional Trial Court (RTC) of Lingayen, Pangasinan (Civil Case No. 19070). NPC, in turn, filed an appeal contesting its liability for business taxes from 2006 to 2009 in another branch of the same RTC (Civil Case No. 19076). On January 3, 2011, NPC received a Notice of Seizure or Confiscation of its properties for unpaid 2010 taxes. The Philippine National Bank (PNB) informed NPC of a Warrant of Distraint issued by the Municipality and threatened to deliver garnished funds. NPC then filed a Petition for Injunction in the RTC of Quezon City (Civil Case No. Q-11-68711) to restrain the collection of the 2010 tax. This petition was dismissed on grounds of forum shopping and the doctrine of non-interference. NPC appealed to the Court of Tax Appeals (CTA). The CTA Second Division dismissed the petition, ruling the 2010 assessment had become final and collectible because NPC failed to file a written protest within 60 days of receipt as required by Section 195 of the Local Government Code. The CTA En Banc affirmed this decision. NPC filed the present Petition for Review on Certiorari, arguing the assessment was illegal and void, and thus could not attain finality.

ISSUE

Whether the Notice of Assessment for local business tax for the year 2010 issued by the Municipality of Sual against the National Power Corporation became final and collectible due to NPC’s failure to file a timely protest under Section 195 of the Local Government Code.

RULING

Yes. The Supreme Court denied the petition and affirmed the CTA En Banc’s decision. The Court held that the Notice of Assessment for 2010 became final, executory, and unappealable because NPC did not file a written protest with the municipal treasurer within the 60-day period prescribed by Section 195 of the Local Government Code. The Court emphasized that the taxpayer’s failure to avail of this administrative remedy renders the assessment conclusive. NPC’s arguments regarding the legality of the assessment, its tax exemption, or the transfer of its operations under the EPIRA law were deemed irrelevant because the assessment had already attained finality. The Court ruled that the proper recourse for a taxpayer who receives an assessment is to first file a protest with the local treasurer; judicial intervention is premature without exhausting this remedy. Consequently, the Municipality’s collection efforts for the 2010 tax were upheld.