Court of Appeals rejects NGCP case vs Pangasinan town tax of P221.7-M

The National Grid Corporation of the Philippines (NGCP) failed to convince the Fourth Division of the Court of Appeals that it should not pay P221.73 million in local taxes the municipal government of Labrador, Pangasinan has asked the court to enforce.   On March 18, 2010 NGCP received from Labrador’s municipal treasurer an order meant to enforce the town’s tax of two percent on the gross receipts of the National Transmission Corp. (Transco) in 2007 and 2008. NGCP took over the operations of Transco on January 15, 2009. .  The CA Fourth Division, in the ruling penned by Associate Justice Rebecca Guia-Salvador, dismissed the petition of NGCP against Labrador town’s tax claim and warrant against the deposits of NGCP with the Land Bank of the Philippines.   NGCP’s contention that it cannot be held liable for Transco’s tax obligations was rejected by the appellate court.   The CA also said Labrador municipal treasurer Edualino Casipit did not commit grave abuse of discretion when it issued the tax claim order against NGCP.   “The acts of respondents Casipit and the municipality, as public officer and a government instrumentality, respectively, enjoy the presumption of regularity, especially as they are merely  in the exercise of powers expressly granted by the Local Government Code,” the CA said in its decision.   “The takeover raised the presumption that petitioner has assumed possession of Transco's assets, cash and receivables, including charges for local taxes for the periods concerned. Such property may be distrained under the authority granted to the public respondents  by Section 175 of the Local Government Code,” the CA ruled.   The NGCP was awarded by the Power Sector Assets and Liabilities Management Corporation (Psalm) the “concession to assume the power transmission functions” of Transco,” according to court records. — ELR, GMA News