bat. powercopr vs bat.docx
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Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 152675 April 28, 2004 BATANGAS POWER CORPORATION, petitioner, vs. BATANGAS CITY and NATIONAL POWER CORPORATION, respondents. x - - - - - - - - - - - - - - - - - - - - x G.R. No. 152771 April 28, 2004 NATIONAL POWER CORPORATION, petitioner, vs. HON. RICARDO R. ROSARIO, in his capacity as Presiding Judge, RTC, Br. 66, Makati City; BATANGAS CITY GOVERNMENT; ATTY. TEODULFO DEGUITO, in his capacity as Chief Legal Officer, Batangas City; and BENJAMIN PARGAS, in his capacity as City Treasurer, Batangas City, respondents. DECISION PUNO, J.: Before us are two (2) consolidated petitions for review under Rule 45 of the Rules of Civil Procedure, seeking to set aside the rulings of the Regional Trial Court of Makati in its February 27, 2002 Decision in Civil Case No. 00-205. The facts show that in the early 1990’s, the country suffered from a crippling power crisis. Power outages lasted 8-12 hours daily and power generation was badly needed. Addressing the problem, the government, through the National Power Corporation (NPC), sought to attract investors in power plant operations by providing them with incentives, one of which was through the NPC’s assumption of payment of their taxes in the Build Operate and Transfer (BOT) Agreement. On June 29, 1992, Enron Power Development Corporation (Enron) and petitioner NPC entered into a Fast Track BOT Project. Enron agreed to supply a power station to NPC and transfer its plant to the latter after ten (10) years of operation. Section 11.02 of the BOT Agreement provided that NPC shall be responsible for the payment of all taxes that may be imposed on the power station, except income taxes and permit fees. Subsequently, Enron assigned its obligation under the BOT Agreement to petitioner Batangas Power Corporation (BPC). On September 13, 1992, BPC registered itself with the Board of Investments (BOI) as a pioneer enterprise. On September 23, 1992, the BOI issued a certificate of registration 1 to BPC as a pioneer enterprise entitled to a tax holiday for a period of six (6) years. The construction of the power station in respondent Batangas City was then completed. BPC operated the station. On October 12, 1998, Batangas City (the city, for brevity), thru its legal officer Teodulfo A. Deguito, sent a letter to BPC demanding payment of business taxes and penalties, commencing from the year 1994 as provided under Ordinance XI or the 1992 Batangas City Tax Code. 2 BPC refused to pay, citing its tax-exempt status as a pioneer enterprise for six (6) years under Section 133 (g) of the Local Government Code (LGC). 3 On April 15, 1999, city treasurer Benjamin S. Pargas modified the city’s tax claim 4 and demanded payment of business taxes from BPC only for the years 1998-1999. He acknowledged that BPC enjoyed a 6-year tax holiday as a pioneer industry but its tax exemption period expired on September 22, 1998, six (6) years after its
Transcript of bat. powercopr vs bat.docx
Republic of the PhilippinesSUPREME COURTManilaSECOND DIVISIONG.R. No. 152675 April 28, 2004BATANGAS POWER CORPORATION, petitioner, vs.BATANGAS CIT !"# NATIONA$ POWER CORPORATION, respondents. ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! G.R. No. 152771 April 28, 2004NATIONA$ POWER CORPORATION, petitioner, vs.%ON. RICAR&O R. ROSARIO, i" 'i( )!p!)i*+ !( Pr,(i#i"- ./#-,, RTC, Br. 66, M!0!*i Ci*+1 BATANGAS CIT GO2ERNMENT1 ATT. TEO&U$3O &EGUITO, i" 'i( )!p!)i*+ !( C'i,4 $,-!l O44i),r, B!*!"-!( Ci*+1 !"# BEN.AMIN PARGAS, i" 'i( )!p!)i*+ !( Ci*+ Tr,!(/r,r, B!*!"-!( Ci*+, respondents.DECISIONPUNO, J.:"efore us are t#o $%& consolidated petitions for revie# under Rule '( of the Rules of Civil Procedure, see)in* to set aside the rulin*s of the Re*ional +rial Court of Ma)ati in its ,ebruar- %., %//% Decision in Civil Case No. //!%/(.+he facts sho# that in the earl- 011/2s, the countr- suffered fro3 a cripplin* po#er crisis. Po#er outa*es lasted 4!0% hours dail- and po#er *eneration #as badl- needed. 5ddressin* the proble3, the *overn3ent, throu*h the National Po#er Corporation $NPC&, sou*ht to attract investors in po#er plant operations b- providin* the3 #ith incentives, one of #hich #as throu*h the NPC2s assu3ption of pa-3ent of their taes in the "uild Operate and +ransfer $"O+& 5*ree3ent.On 6une %1, 011%, Enron Po#er Develop3ent Corporation $Enron& and petitioner NPC entered into a ,ast +rac) "O+ Pro7ect. Enron a*reed to suppl- a po#er station to NPC and transfer its plant to the latter after ten $0/& -ears ofoperation. Section 00./% of the "O+ 5*ree3ent provided that NPC shall be responsible for the pa-3ent of all taes that 3a- be i3posed on the po#er station, ecept inco3e taes and per3it fees. Subse8uentl-, Enron assi*ned its obli*ation under the "O+ 5*ree3ent to petitioner "atan*as Po#er Corporation $"PC&.On Septe3ber 09, 011%, "PC re*istered itself #ith the "oard of Invest3ents $"OI& as a pioneer enterprise. On Septe3ber %9, 011%, the "OI issued a certificate of re*istration0 to "PC as a pioneer enterprise entitled to a ta holida- for a period of si $:& -ears. +he construction of the po#er station in respondent "atan*as Cit- #as then co3pleted. "PC operated the station.On October 0%, 0114, "atan*as Cit- $the cit-, for brevit-&, thru its le*al officer +eodulfo 5. De*uito, sent a letter to "PC de3andin* pa-3ent of business taes and penalties, co33encin* fro3 the -ear 011' as provided under Ordinance ;I or the 011% "atan*as Cit- +a Code.% "PC refused to pa-, citin* its ta!ee3pt status as a pioneer enterprise for si $:& -ears under Section 099 $*& of the ERS.IIRESPONDEN+ COBR+ 5C+ED ?I+> =R5VE 5"BSE O, DISCRE+ION 5MOBN+IN= +O EN I+ 5R"I+R5RIIC> E;EMP+S EN5+ION5< =OVERNMEN+, I+S 5=ENCIES 5ND INS+RBMEN+5E IMPOSI+ION O, E+5;ES, ,EES OR C>5R=ES O, 5ND CIND.EIIIRESPONDEN+ COBR+ 5C+ED ?I+> =R5VE 5"BSE O, DISCRE+ION 5MOBN+IN= +O EN I+ ERRONEOBS+ +O "E EN6OINED.In =.R. No. 0(%:.(, "PC also contends that the trial court erred@ 0& in holdin* it liable for pa-3ent of business taeseven if it is undisputed that NPC has alread- assu3ed pa-3ent thereofA and, %& in rulin* that "PC2s :!-ear ta holida- co33enced on the date of its re*istration #ith the "OI as a pioneer enterprise.+he issues for resolution are@0. #hether "PC2s :!-ear ta holida- co33enced on the date of its "OI re*istration as a pioneer enterprise or on the date of its actual co33ercial operation as certified b- the "OIA%. #hether the trial court had 7urisdiction over the petition for in7unction a*ainst "atan*as Cit-A and,9. #hether NPC2s ta ee3ption privile*es under its Charter #ere #ithdra#n b- Section 019 of the
