Continental Operating Corp. v. Province of Bulacan

[CBAA CASE NO. L-65. October 3, 2006.] [LBAA Case No. 05-01 Appeal Pursuant to Sec. 226 of the Local Government Code of 1991 from the Notice of Assessment for Realty Back Taxes Issued by the Provincial Assessor of Bulacan] CONTINENTAL OPERATING CORPORATION (now Fortune Cement Corporation) , petitioner-appellant , vs. THE LOCAL BOARD OF ASSESSMENT APPEALS OF THE PROVINCE OF BULACAN , appellee , PROVINCE OF BULACAN, MUNICIPALITY OF NORZAGARAY, PROVINCIAL TREASURER OF BULACAN, PROVINCIAL ASSESSOR OF BULACAN, MUNICIPAL TREASURER OF NORZAGARAY, and MUNICIPAL ASSESSOR OF NORZAGARAY , respondents-appellees . DECISION At the hearing of the above-entitled appeal conducted by this Board on September 27, 2006, the petitioner-appellant and the respondents-appellees, thru and by their respective counsels, submitted a Joint Stipulation of Facts and jointly prayed that a decision be rendered by this Board on the basis of the stipulated facts, together with the pleadings and other documents submitted. The stipulated facts are as follows: 1. The Notice of Assessment dated December 20, 2004 (the "2005 Notice of Assessment") covers mechanical and electrical equipment in Line 2 of Petitioner-Appellant's cement production facilities (the "Subject Line 2 MEE") located at Barangay Bigte, Norzagaray, Bulacan. 2. On January 31, 2006, the Honorable Board, accompanied by representatives of the Petitioner-Appellant, Respondents-Appellees and the Mines and Geosciences Bureau ("MGB"), conducted an ocular inspection of the Subject Line 2 MEE. 3. Following the January 31, 2006 ocular inspection, the Provincial Assessor manifested that as a result of the said ocular inspection, and as confirmed by the MGB, it has been determined that certain Subject Line 2 MEE are either non-existent, are covered by existing tax declarations, or are exempt pollution control devices. 4. During the ocular inspection of January 31, 2006, Petitioner-Appellant manifested that the 2005 Notice of Assessment failed to consider the 5% annual depreciation on machineries and equipment subject of the appeal. 5. Based on finding of the January 31, 2006 ocular inspection, Respondents-Appellees re-computed Petitioner-Appellant's real property tax liabilities, as set forth and more particular described in the document attached herein as "Annex A". These are the factual stipulations submitted by the opposing counsels at their own initiative and volition, with the manifestation that both parties agreed to these stipulated facts, willingly, voluntarily and without reservation. Formulating a decision on the basis of factual stipulations of the parties is common practice both in the courts of law and equity. Much more so in administrative agencies, like this Board, exercising quasi-judicial functions whose main objectives are to ascertain the facts in assessment appeals and to assist the parties in obtaining a just, expeditious, and inexpensive determination of the issues brought before it. This practice is anchored on the strong presumption that the parties are in a much better position to appreciate and evaluate the facts by reason of its proximity to the properties involved and the facility with which it can conduct regular physical surveys and ocular inspections. This is particularly true in the case of the Provincial and Municipal Assessors whose training and expertise cannot be doubted more so that they are under oath to appraise all real property at their current market value and conduct regular inspection to determine if the real properties are assessed correctly, justly and equitably. The same thing may be said of big property owners, like the petitioner-appellant, a corporate taxpayer who has under its employ brilliant and astute lawyers, aside from being represented by the best legal minds coming from respective law firms. It is safe to assume that these legal counsels will not agree on stipulations adverse to the best interest of their principal unless these stipulations are indeed the facts, the truth, and nothing but. These are among the reasons why courts and quasi-judicial bodies give great weight and credibility to stipulated facts. A leading authority has this to say on the matter, "Findings of the Board of Hearing Commissioners during an ocular inspection of the properties under appeal, and agreed by the respective parties of the case, provided said agreement was not vitiated by fraud, mistake, or duress, will be controlling, and the same may be approved as the bases of a modified decision ." (Baugbog, Real Property Taxation in the Philippines, p. 232, citing Gaudencio Garcia vs. LBAA of Quezon City and Quezon City Assessor, CBAA Case No. 50) WHEREFORE, premises considered, the decision appealed from is hereby set aside to give way to a modified decision, the bases of which are the Joint Stipulation of Facts submitted by the parties as well as the findings resulting from the ocular inspection conducted by this Board on January 31, 2006, on Petitioner-Appellant's Line 2 mechanical and electrical equipment (subject line 2 MEE). In view of the foregoing, the Provincial Assessor of Bulacan together with the Municipal Assessor of Norzagaray, are directed by way of judgment to revise the assessments subject of this appeal in accordance with the re-computation in "Annex A" as prepared and certified correct by them. In consonance with accepted and official assessment practices and procedures, they are likewise ordered to drop from the assessment rolls tax declarations covering non-existent properties, cancel duplicitous and/or double assessments and consolidate them into a singe revised assessment, transfer from the taxable rolls to the exempt rolls those assessments on tax exempt machineries and equipment for being anti-pollution devices and grant an annual depreciation rate of 5% for all machineries and equipment of the appellant. In the same vein, the petitioner-appellant is admonished to pay their taxes correctly and religiously, and to declare for taxation and/or record purposes all real properties to be acquired, built, or installed in its name in the future. SO ORDERED. Manila, Philippines, October 3, 2006. (SGD.) CESAR S. GUTIERREZ Chairman (SGD.) ANGEL P. PALOMARES Member (SGD.) RAFAEL O. CORTES Member