G.R. No. 72477 October 16, 1990
NATIONAL POWER CORPORATION, petitioner, vs. HON. PRESIDING JUDGE, REGIONAL TRIAL COURT, 10TH JUDICIAL REGION BRANCH XXV, CAGAYAN DE ORO CITY, PROVINCE OF MISAMIS ORIENTAL, MUNICIPALITY OF JASAAN, MISAMIS ORIENTAL AND BARANGAY APLAYA, JASAAN, MISAMIS ORIENTAL, respondents.

FACTS

The Province of Misamis Oriental and the Municipality of Jasaan filed a complaint with the Regional Trial Court (RTC) of Cagayan de Oro City against the National Power Corporation (NAPOCOR) for the collection of real property tax and special education fund tax covering the years 1978 to 1984. NAPOCOR moved to dismiss the case, arguing that the RTC lacked jurisdiction. It invoked Presidential Decree No. 242, which mandates that disputes between government agencies, including government-owned or controlled corporations, must be administratively settled or adjudicated by the Secretary of Justice, the Solicitor General, or the Government Corporate Counsel, thereby excluding regular courts. The RTC denied the motion to dismiss.
NAPOCOR subsequently filed a supplemental motion to dismiss, citing a Fiscal Incentive Review Board resolution that purportedly restored its tax exemption privileges. The RTC also denied this motion, treating NAPOCOR’s answer with counterclaim as a second motion to dismiss. Barangay Aplaya later filed a complaint in intervention, asserting its interest in a share of the tax collection. NAPOCOR then elevated the case to the Supreme Court via a special civil action for certiorari, challenging the RTC’s jurisdiction and asserting its tax exemption.

ISSUE

Whether the Regional Trial Court has jurisdiction over the complaint for collection of real property taxes filed by local government units against the National Power Corporation, a government-owned and controlled corporation.

RULING

The Supreme Court ruled that the RTC has jurisdiction. The Court reconciled the conflicting provisions of P.D. No. 242 and P.D. No. 464 (The Real Property Tax Code). P.D. No. 242 is a general law prescribing administrative settlement for disputes between government entities. In contrast, P.D. No. 464, specifically Section 82, is a special law that explicitly authorizes the collection of delinquent real property tax “through the courts” by civil action, constituting a lawful indebtedness of the taxpayer to the local government. Applying the rule of statutory construction that a special law prevails over a general law, the specific grant of judicial remedy under the Real Property Tax Code controls. Therefore, the dispute, being a real property tax collection case, falls under the jurisdiction of the regular courts as provided by the special law.
On the claim of tax exemption, the Court found it unmeritorious for the period 1978 to 1984. The Court referenced its prior ruling in National Power Corporation vs. Province of Albay, which held that NAPOCOR’s tax exemptions were effectively withdrawn by P.D. No. 1177 in 1977. The Fiscal Incentive Review Board resolution cited by NAPOCOR only took effect in 1985 and could not retroactively apply to the tax liabilities accrued from 1978 to 1984. Consequently, the petition was dismissed, and the RTC was directed to proceed with the case to determine NAPOCOR’s exact tax liability.