Feliciano v. Gison

SPECIAL TENTH DIVISION [CA-G.R. SP No. 72412. July 14, 2004.] ENGR. RANULFO C. FELICIANO, In His Capacity As General Manager of the LEYTE METROPOLITAN WATER DISTRICT (LMWD), Tacloban City , petitioner , vs . HON. CORNELIO C. GISON, UNDERSECRETARY, DEPARTMENT OF FINANCE , respondents . D E C I S I O N DEL CASTILLO , M . , J p : This is a Petition for Review from the Resolution dated February 8, 2002 1 of the Court of Tax Appeals in C.T.A. Case No. 6165 entitled " Leyte Metropolitan Water District (LMWD) and Engr. Ranulfo C. Feliciano, General Manager, petitioners v. Hon. Cornelio C. Gison, Undersecretary, Department of Finance, respondent ", dismissing petitioner's petition for lack of jurisdiction and the Resolution dated July 3, 2002, 2 denying petitioner's motion for reconsideration filed thereto. The facts The Leyte Metropolitan Water District (LMWD) filed with the Department of Finance a petition for tax exemption of the water supply equipment and a Toyota Hi-Lux pick-up it received from the Japanese Government under a Grant Aid Project. In an Indorsement dated July 5, 1995, the Department of Finance granted tax exemption on the water supply equipment but assessed the corresponding tax and duty on the Toyota Hi-Lux pick-up. A motion for reconsideration was filed by LMWD where it insisted that the vehicle is tax-exempt. Said motion, however, was also denied. In its Third Indorsement dated March 22, 2000, the Department of Finance, through Assistant Secretary Juan Jose T. Fetiza, reiterated the Department's First Indorsement that the subject vehicle is not tax-exempt, but recommended the lifting of the order abandonment upon payment by LMWD of the taxes and duties assessed. In its Fourth Indorsement dated April 19, 2000, the Department of Finance, through then Acting Commissioner Renato A. Ampil, affirmed the Third Endorsement of Assistant Secretary Juan Jose T. Fetiza. A motion for reconsideration was filed by LMWD which was denied by Undersecretary Cornelio C. Gison in a letter dated July 19, 2000, reiterating that the subject vehicle is not tax exempt. 3 The LMWD thru its General Manager, Engr. Ranulfo C. Feliciano, appealed to the Court of Tax Appeals (CTA). On September 19, 2001, a hearing was held before the CTA where the petitioner presented its evidence on the issue of whether or not LMWD is a government owned or controlled corporation with original charter. On February 8, 2002, the CTA came out with its Resolution, disposing thus: "WHEREFORE in view of the foregoing, Petitioner Leyte Metropolitan Water District is hereby declared a government-owned and controlled corporation with original charter. Thus, this Court does not have jurisdiction to take cognizance of the instant case. This resolution is, however, without prejudice to the right of the Petitioner to refile this case, if he so desires, in the appropriate forum. SO ORDERED." 4 The CTA likewise denied the motion for reconsideration filed thereto in a Resolution dated July 3, 2002. 5 The Issues Before Us, petitioner raises the following issues: "1. WHETHER OR NOT THE COURT OF TAX APPEALS DECIDED PETITIONER'S CASE IN ACCORDANCE WITH THE EVIDENCE PRESENTED BEFORE IT AND THE LAW APPLICABLE. 2. WHETHER OR NOT LMWD IS A GOVERNMENT OWNED AND CONTROLLED CORPORATION WITH ORIGINAL CHARTER AS P.D. 198 WAS DECLARED A SPECIAL LAW AND NOT A GENERAL LAW BY THE SUPREME COURT IN THE CASE OF DAVAO CITY WATER DISTRICT VS. CIVIL SERVICE COMMISSION G.R. NOS. 95237-38, SEPTEMBER 13, 1991 ." 6 Our Ruling The petition is not impressed with merit. The only issue for determination before Us is whether LMWD is not a government owned or controlled corporation with original charter, so that the CTA may correctly assume jurisdiction and entertainment petitioner's appeal, hear and decide the case. It is the contention of the petitioner that it is a private corporation because it was formed and organized pursuant to P.D. 198 (Provincial Water Utilities Act of 1973) which is a general legislation, and the operative act which created the water district is not the said decree but the Province's Sangguniang Panlalawigan Resolution No. 52 dated February 19, 1975. Petitioner further adds that what differentiates LMWD from the other water district is the fact that it was district free from political influence and independent of the local government unit concerned. We disagree. PD 198 is a special law applicable to all the different water districts created pursuant thereto. The decree itself pertains to a special purpose which intended to meet a particular set of conditions and circumstances. The fact that said decree generally applies to all water districts throughout the country does not change the fact that PD 198 is a special law. Consequently, the LMWD having been formed and organized under PD 198 which is a special law and not under the Corporation Code of the Philippines, the same undisputably is a government owned or controlled corporation. 7 Thus, in the case of Davao City Water District v. Civil Service Commission , 8 the Supreme Court categorically ruled that: "After a fair consideration of the parties' arguments coupled with a careful study of the applicable laws as well as the constitutional provisions involved, We rule against the petitioners and reiterate Our ruling in Tanjay case declaring water districts government-owned or controlled corporations with original charter. As early as Baguio Water District v. Trajano, et. al., (G.R. No. 65428, February 20, 1984, 127 SCRA 730), We already ruled that a water district is a corporation created pursuant to a special law P.D. No. 198, as amended, . . ." In sum, We find and so rule that the CTA correctly ruled that LMWD is a government owned or controlled corporation with original charter and not a private corporation/entity as advanced by the petitioner. STIHaE WHEREFORE, finding the instant petition not impressed with merit, the same is hereby DENIED DUE COURSE. Costs against petitioner. SO ORDERED. Cruz * and De Leon, JJ ., concur. Footnotes * In lieu of Justice Romeo A. Brawner per Office Order No. 217-04-CG dated July 12, 2004. 1. Annex B to the Petition, pp. 2428, Rollo . 2. Annex A to the Petition, pp. 2123, Rollo . 3. Annex C to the Petition, p. 29, Rollo . 4. P. 5, Resolution, CTA Case No. 6165, Annex B to the Petition, Supra . 5. Annex A to the Petition, Supra . 6. P. 7, Petition, pp. 221, Rollo . 7. See Zamboanga City Water District v. Buat , G.R. No. 104389, 1994, 232 SCRA 587. 8. G.R. Nos. 95237-38, September 13, 1991, 201 SCRA 593.