G.R. No. 76778, June 6, 1990
Francisco I. Chavez, petitioner, vs. Jaime B. Ongpin, in his capacity as Minister of Finance and Fidelina Cruz, in her capacity as Acting Municipal Treasurer of the Municipality of Las Piñas, respondents, Realty Owners Association of the Philippines, Inc., petitioner-intervenor.

FACTS

The petitioner, Francisco I. Chavez, a taxpayer and landowner, sought to declare Executive Order No. 73 unconstitutional. Issued on November 25, 1986, EO 73 mandated that the general revision of real property assessments completed in 1984 would take effect for tax collection purposes on January 1, 1987. This order repealed EO 1019, which had deferred the implementation of the 1984 revised values to January 1, 1988. Chavez alleged that EO 73 accelerated the tax increase, resulting in excessive tax hikes of 100% to 400% on improvements and up to 100% on land. He argued this constituted sheer oppression, especially during a period of harsh economic conditions, contending the increased property values were merely due to inflation.
The intervenor, Realty Owners Association of the Philippines (ROAP), joined the petition and raised additional constitutional challenges. ROAP questioned the validity of Presidential Decree No. 464 (the Real Property Tax Code) itself, particularly its provision for an additional 1% tax for education. It also alleged that the general revision process violated due process requirements regarding notice and hearing, and that it improperly authorized the use of “replacement cost” for assessing improvements, a method not found in PD 464 but only in an administrative regulation.

ISSUE

Whether Executive Order No. 73 is unconstitutional for mandating the implementation of the 1984 general revision of real property assessments and the consequent tax increase effective January 1, 1987.

RULING

The Supreme Court DISMISSED the petition and the petition-in-intervention, upholding the constitutionality of Executive Order No. 73. The Court clarified that EO 73 did not itself order a new revision of assessments; it merely set the effectivity date for the implementation of the 1984 general revision already completed under the authority of Section 21 of PD 464. The general revision is a continuing process mandated by law every five years. Therefore, the legal attack should properly be directed at PD 464, not EO 73. Chavez failed to challenge PD 464’s constitutionality, and ROAP’s challenge to the decree was deemed improper in this proceeding, as intervention is ancillary and must be subordinate to the main issue—the constitutionality of EO 73.
The Court found ample justification for EO 73 in its whereas clauses, which cited the urgent need for local governments to augment financial resources to meet the rising cost of public services. The deferral of the revised values had deprived local units of revenue. The Court agreed with the Solicitor General that collecting taxes based on obsolete 1978 valuations disregarded increases in property values and was inconsistent with the principle of fiscal adequacy, a cornerstone of a sound tax system which requires revenue sources to be adequate to meet government expenditures. The proper remedy for an aggrieved taxpayer questioning an assessment is not a constitutional challenge but to appeal through the administrative procedures explicitly provided under Sections 30 and 34 of PD 464 before the Local Board of Assessment Appeals.