G.R. No. 228489 , May 05, 2021
City of Batangas, The Sangguniang Panlungsod, and the City Assessor, Petitioner, vs. Jose Virgilio Y. Tolentino and the Secretary of Justice, Respondent.

FACTS

In 2010, the DILG and DOF issued Joint Memorandum Circular No. 2010-01 directing local government units to revise real property assessments every three years pursuant to Section 219 of the Local Government Code. On November 25, 2013, the Sangguniang Panlungsod of Batangas enacted City Ordinance No. 20, series of 2013, which updated the real property values based on a new schedule of fair market values. It was approved by the City Mayor on December 9, 2013. Prior to enactment, the Committee on Ways and Means conducted public hearings on specified dates in September, October, and November 2013, with notices sent to various stakeholders. Respondent Jose Virgilio Y. Tolentino, a resident and taxpayer, attended the November 11, 2013 meeting and opposed the Ordinance. Others, including the Batangas Chamber of Commerce President, also objected, claiming the new values were excessive and that they did not receive written notices. The Ordinance was published in a newspaper in December 2013. On January 28, 2014, Tolentino appealed to the Department of Justice, assailing the Ordinance as violating due process for being excessive and for non-compliance with notice requirements. The Secretary of Justice declared the Ordinance void on June 6, 2014, for failing to comply with the prior written notice requirement under Article 276(b) of the Implementing Rules of the Local Government Code, citing affidavits from residents who attested to not receiving notices. The City of Batangas appealed to the Court of Appeals, which denied the appeal and affirmed the Secretary of Justice’s resolution. The City then filed a Petition for Review before the Supreme Court.

ISSUE

1. Whether City Ordinance No. 20, series of 2013, is a tax ordinance subject to the Secretary of Justice’s review and governed by the notice requirements of Sections 186 and 223 of the Local Government Code and Article 276 of its Implementing Rules and Regulations.
2. Whether the presumption of regularity in the enactment of the Ordinance finds application in this case.

RULING

1. Yes, the Ordinance is a tax ordinance. The Supreme Court ruled that an ordinance containing a general revision of real property values for the purpose of real property taxation is deemed a tax ordinance. Its subject being real property taxation, the statutory procedure to be applied in its enactment must pertain to provisions on real property taxation and not on general local taxation. The Court cited Section 219 of the Local Government Code, which mandates a general revision of real property assessments, and Joint Memorandum Circular No. 2010-01, which enjoins local governments to prepare schedules of market values. Since the Ordinance updates the market values used as the basis for computing real property taxes under the Batangas City Revenue Code, it is integral to the tax imposition process. Therefore, it is subject to the procedural requirements for tax ordinances, including the mandatory public hearing and prior written notice to affected parties as provided under Section 186 of the Local Government Code and Article 276 of its Implementing Rules. Consequently, the appeal to the Secretary of Justice under Section 187 of the Local Government Code was proper.
2. The presumption of regularity does not apply to override clear proof of invalidity. The Court held that while an ordinance carries a presumption of validity, a party challenging it must show clear proof of invalidity. In this case, the presumption was overcome by substantial evidence, including affidavits and a letter from stakeholders, attesting that they did not receive the required prior written notices specifying the dates of the public hearings. The Court emphasized that the written notice requirement is mandatory to ensure due process. The fact that Tolentino and others attended and opposed the hearings does not cure the lack of prior written notice. The City’s failure to comply with this statutory requirement rendered the public hearing null and void, which in turn invalidated the tax ordinance. Thus, the Ordinance was correctly declared void by the Secretary of Justice and the Court of Appeals.