Injunctions Protecting Rights Upholding Due Process and Ensuring Fair Legal Proceedings

The Supreme Court recently dismissed a petition challenging Tax Ordinance No. 2023-226 of Iloilo City, which substantially increased real property assessment values. In Pisón v. City of Iloilo (G.R. No. 272170, January 28, 2026), the Court En Banc reaffirmed two fundamental doctrines in Philippine remedial law: the doctrine of exhaustion of administrative remedies and the doctrine of hierarchy of courts. The ruling serves as an important reminder to taxpayers and property owners that direct resort to the Supreme Court is not a substitute for the remedies provided by law.

The Facts of the Case

The Sangguniang Panlungsod of Iloilo City passed Tax Ordinance No. 2023-226 on June 27, 2023, which Mayor Jerry P. Treñas approved on July 5, 2023. The ordinance prescribed a new schedule of land values for real property tax assessment, superseding the previous schedule from 2005. The new schedule increased base values for residential land by 750% and commercial land by 1,933%, resulting in corresponding increases in realty tax liabilities.

The petitioners, who owned 35 parcels of land in Iloilo City, argued that the ordinance was invalid and unconstitutional. They claimed the assessment values were oppressive, confiscatory, and arbitrary. They also alleged violations of procedural due process, asserting that the city failed to comply with regulations requiring public consultations and hearings. The petitioners asked the Court to revisit City of Batangas v. Tolentino, which held that notice and hearing requirements for tax ordinances do not apply to ordinances setting property values.

The Issue Presented

The central question was whether the petitioners could directly invoke the Supreme Court's power of judicial review to challenge the validity of the tax ordinance, or whether they were required to first exhaust administrative remedies under the Local Government Code.

The Ruling

The Supreme Court dismissed the petition. The Court held that almost all of the petitioners' arguments involved factual issues, not pure questions of law. Whether the city complied with the prescribed assessment revision procedure, whether the hearings conducted were genuine, and whether the increased values were oppressive or confiscatory all require the presentation and evaluation of evidence.

The Court cited Gios-Samar, Inc. v. Department of Transportation and Communications, which instructs that when a question involves factual issues indispensable to resolving the legal issue, the Court will refuse to resolve it regardless of claims of transcendental importance. Such questions must first be brought before trial courts or the Court of Appeals, which are equipped to try and resolve factual questions.

The Court also applied the doctrine of hierarchy of courts. While the Supreme Court, Court of Appeals, and Regional Trial Courts have concurrent original jurisdiction over petitions for certiorari, prohibition, and mandamus, parties are directed to file their petitions before the lower-ranked courts. Failure to comply is sufficient cause for dismissal.

The Court noted that the Local Government Code provides taxpayers with specific administrative remedies: the right to appeal the constitutionality or legality of tax ordinances before the Secretary of Justice under Section 187; the right to appeal property assessments before the Local Board of Assessment Appeals under Section 226; and the right to protest tax assessments before the local treasurer under Section 252.

The petitioners failed to avail themselves of these remedies. They received their new assessments on December 18, 2023, but did not appeal within the 60-day period prescribed under Section 226. They also did not file a Section 187 appeal when the ordinance took effect in January 2024. Instead, they filed the petition directly before the Supreme Court on March 11, 2024.

The Real Property Valuation and Assessment Reform Act

The Court also took note of Republic Act No. 12001, the Real Property Valuation and Assessment Reform Act (RPVARA), which took effect on July 6, 2024. The RPVARA designates the Bureau of Local Government Finance as the lead implementor of a national system for real property valuation based on the Philippine Valuation Standards. It requires all local government assessment offices to update their schedules of market values within two years from effectivity and codifies the three-year cycle for general revision of property assessments.

The RPVARA also provides mitigating measures for taxpayers, including a 6% cap on all real property tax increases for the first year of its effectivity and a real property tax amnesty covering penalties, surcharges, and interests from unpaid real property taxes prior to the law's effectivity.

Practical Takeaways

• Exhaust administrative remedies first. Taxpayers challenging real property assessments must appeal to the Local Board of Assessment Appeals within 60 days from receipt of the assessment notice, or protest the tax payment under Section 252 of the Local Government Code.

• Observe the hierarchy of courts. Petitions for certiorari, prohibition, and mandamus should be filed before the Regional Trial Court or Court of Appeals, not directly with the Supreme Court, unless the case involves pure questions of law.

• Factual disputes require trial courts. Claims that tax assessments are oppressive, confiscatory, or arbitrary involve questions of fact that require presentation of evidence before courts equipped to receive and evaluate such evidence.

• Pay under protest when necessary. A taxpayer who questions the reasonableness of an assessment increase must first pay the tax under protest before the protest can be entertained.

• Be aware of new valuation rules. The Real Property Valuation and Assessment Reform Act introduces a national valuation system and provides relief measures, including a 6% cap on tax increases and a tax amnesty program.

This article is general information and not legal advice. For your specific situation, consult a lawyer or ask ASG Legal AI.