Bureau of Local Government Finance Opinion

August 15, 2013 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Atty. Rester John L. Nonato Legal Counsel for Velez College, Inc. 4th Floor, Tulips center A.S. Fortuna St. Mandaue City, Cebu Sir : This refers to your letter dated June 23, 2013 and supplemental letter of even date requesting in behalf of your client, Velez College Incorporated (VCI) a ruling and confirmation of your opinion that: 1. Section 187 of the 1991 Local Government Code grants exclusive jurisdiction to the Department of Justice to rule on the validity of Tax Ordinances; 2. The decision of the Department of Justice per Section 187 of the Local Government Code is a definitive ruling on the validity of the Tax Ordinance and not just a mere opinion; 3. Failure to file an appeal to a "court of competent jurisdiction" per Section 187 of the Local Government Code within 30 days from the receipt of the decision of the Department of Justice or lapse of 60 days from the inaction of the Department of Justice would render said Ruling by the Department of Justice Final and Executory; DIESaC 4. Filing a Motion for Reconsideration before the Department of Justice is an improper remedy under Section 187 of the Local Government code as the same is not an appeal to a "court of competent jurisdiction;" 5. Enforcing a Tax Ordinance declared as null and void by the Department of Justice after failing to appeal in a "court of competent jurisdiction" exposes the administrative officials enforcing the same to administrative sanctions per Section 190 of the Local Government Code. The above request was made in view of the claim that despite the declaration of nullity of Tax Ordinance CTO CXIII due to its procedural infirmity by the Department of Justice in MTO OSJ Case No. 13-2006, dated January 22, 2007, the City of Cebu still sought the enforcement of said void tax ordinance and issued a Notice of Assessment to VCI dated October 20, 2010. Said Notice includes the summary of alleged taxes and fees payable for calendar year ended 2000-2010 in the amount of P20,503,618.20 claiming further that prior to the enactment of Tax Ordinance No. CTO CXIII, there was no Ordinance by the City of Cebu specifically taxing educational institutions. HDAaIc Said letter was referred to the City Treasurer of Cebu for comment under a 1st Indorsement dated July 1, 2013 which was forwarded to the City Attorney for comments and opinion. Under a letter dated July 18, 2013, copy enclosed, the City Attorney informed that the matters raised before this Bureau are among the issues raised in at least three (3) cases before the Regional Trial Court in Cebu City, and one (1) case before the 20th Division of the Court of Appeals, also in Cebu City. In this connection, this Bureau regrets to decline to issue comments thereon, the same being "sub-judice". Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director