CA turns down Heart Center’s bid for exemption from real estate tax

The Court of Appeals has turned down a plea from the Philippine Heart Center seeking exemption from real and other taxes being imposed by the Quezon City local government.

In a 14-page decision penned by Associate Justice Ma. Luisa Quijano-Padilla, the CA Thirteenth Division affirmed an earlier decision denying the petition of the PHC after failing to exhaust all administrative remedies and failing to pay the required two-percent deposit.

In its original ruling on September 25, 2012, the CA dismissed the PHC's petition for its failure to observe the rule on exhaustion of administrative remedies, saying the hospital has available remedies under the Local Government Code.

This remedy involves first the filing of a written protest,  then a petition before the Local Board of Assessment Appeals of Quezon City, then elevate the case to the Central Board of Assessment Appeals.

Only after going through the CBAA can the PHC seek relief from the appeals court, the CA said.

In its motion for reconsideration, the PHC insisted their case was an exception to the rule, that their plea involved pure question of law, and that intervention by the CA was urgent because public health and welfare was at stake.

On March 18, 2013, the CA granted the MR and reinstated the hospital's petition, prompting the QC government to seek the decision's reversal anew.

In its latest ruling, the CA affirmed its original ruling to deny PHC's petition. The CA also said the PHC also committed a "procedural lapse" because it filed a petition that was actually a petition for certiorari to contest an act by the QC government that was not a quasi-judicial function in the first place.

In its ruling, the CA said it was no longer necessary to resolve matters in the case since any discussion would not serve any useful purpose at this time.

The CA said it was the "more prudent action" to take in order to prevent any future conflict with the ruling of the competent court should the PHC decide to pursue the proper remedy for the protection of its rights.

"This court is not insensitive to the petitioner's obvious desire to champion its cause by securing a definitive ruling on its claim for tax exemption," said the CA.

"Regrettably, this vehemence was not complemented with circumspection to make sure that the correct remedy under the rules was availed of," it added.

In 2004, the PHC received warrants of levy from the Quezon City local government for alleged unpaid real property taxes amounting to P36,530,545.00, despite the 10-year tax exemption expressly granted in its Charter, which was later extended by then President Ferdinand Marcos through Letter of Instruction No. 1455.

Instead of paying the assessed taxes, the PHC entered into an amicable settlement with the QC LGU, in which the former agreed to extend hospitalization, surgical and medical services to qualified Quezon City residents.

In 2006, the PHC suspended tax payments for its properties after received a memorandum from the Office of the Government Corporate Counsel, informing them that the Supreme Court had already ruled that the Manila International Airport Authority was exempted from real property taxes being imposed by the Paranaque government.

The OGCC reiterated its position that PHC should be exempted from taxes too in another memorandum dated April 14, 2011. The PHC then wrote a letter to the QC LGU insisting it was exempt from real property taxes, but the office of the city mayor refused to acknowledge the tax exemption.

The QC government then issued a final notice of delinquency with the corresponding warrants of levy against the PHC and set a public auction on July 7, 2011, prompting the PHC to seek relief from the appeals court. —NB, GMA News