CTA Has Exclusive Power Over Certiorari in Local Tax Cases, SC Rules

The Supreme Court has settled a recurring question in Philippine tax litigation: which court has the power to review an interlocutory order issued by a Regional Trial Court (RTC) in a local tax case? In CE Casecnan Water and Energy Company, Inc. v. The Province of Nueva Ecija (G.R. No. 196278, June 17, 2015), the Court ruled that the Court of Tax Appeals (CTA) holds exclusive jurisdiction over a special civil action for certiorari assailing such orders—not the Court of Appeals (CA). The ruling clarifies an important procedural point for taxpayers and practitioners alike, as filing the wrong petition in the wrong court can mean dismissal and delay.

The Dispute: A Real Property Tax Assessment

The case arose from a build-operate-transfer contract between CE Casecnan Water and Energy Company, Inc. (petitioner) and the National Irrigation Administration for the Casecnan Multi-Purpose Irrigation and Power Project in Nueva Ecija. In 2005, the Office of the Provincial Assessor issued a Notice of Assessment for real property tax (RPT) due for 2002 to 2005, amounting to over P248 million. The petitioner challenged the assessment before the Nueva Ecija Local Board of Assessment Appeals (LBAA), which dismissed the appeal. The petitioner then appealed to the Central Board of Assessment Appeals (CBAA).

While these administrative appeals were pending, the provincial government continued collecting RPT and later issued a reassessment covering 2002 to the second quarter of 2008, totaling over P1.27 billion. The petitioner paid under protest and filed a complaint for injunction with the RTC of San Jose City, Nueva Ecija, seeking to restrain collection of the reassessed amounts.

The RTC Orders and the Wrong Forum

The RTC denied the petitioner's application for a writ of preliminary injunction, and later denied its motion for reconsideration. Instead of appealing to the CTA, the petitioner filed a Petition for Certiorari under Rule 65 with the Court of Appeals, arguing that the RTC committed grave abuse of discretion.

The CA dismissed the petition for lack of jurisdiction, holding that the case was essentially a local tax case, and that jurisdiction over it belonged to the CTA. The petitioner elevated the matter to the Supreme Court, insisting that its action was an ordinary civil case for injunction, not a tax case.

The Supreme Court's Ruling: CTA Jurisdiction is Exclusive

The Supreme Court affirmed the CA's dismissal. The Court held that the CTA has exclusive jurisdiction over a special civil action for certiorari assailing an interlocutory order of the RTC in a local tax case.

The Court relied on Republic Act No. 9282, which expanded the CTA's jurisdiction to include exclusive appellate review of RTC decisions in local tax cases. Citing City of Manila v. Grecia-Cuerdo, the Court explained that the power to issue writs of certiorari is inherent in the CTA's appellate jurisdiction. As the Court noted, "if a case may be appealed to a particular court or judicial tribunal or body, then said court or judicial tribunal or body has jurisdiction to issue the extraordinary writ of certiorari, in aid of its appellate jurisdiction."

The Court also rejected the petitioner's argument that its injunction case was not a local tax case. The Court observed that in seeking to restrain the collection of RPT, the petitioner implicitly questioned the validity of the assessment itself. "The subject matter and the issues, not the name or designation of the remedy, should control," the Court stated. Since local tax cases include real property tax matters, the RTC injunction case was properly classified as a local tax case.

Why This Matters: Avoiding Split Jurisdiction

The Court emphasized a practical reason for this rule: allowing the CA to hear certiorari petitions in local tax cases would create a "split-jurisdiction situation" where two courts could exercise authority over the same case. This would be "anathema to the orderly administration of justice." The CTA, being the specialized tax tribunal, is the proper forum for all incidents arising from local tax cases, including interlocutory orders issued by the RTC.

Practical Takeaways

• File certiorari petitions in the CTA for local tax cases. If an RTC issues an interlocutory order in a local tax case—such as denying a preliminary injunction—any Rule 65 petition questioning that order must be filed with the CTA, not the CA.
• The nature of the action controls, not its label. An action for injunction to restrain tax collection is still a local tax case if it necessarily involves the validity of a tax assessment.
• Exhaust administrative remedies first. The Court noted the petitioner's failure to exhaust administrative remedies, a recurring pitfall in tax disputes.
• Check the CTA's expanded jurisdiction. Republic Act No. 9282 significantly broadened the CTA's powers; taxpayers should consider the CTA as the default forum for tax controversies, including those that begin in the RTC.
• Avoid costly procedural mistakes. Filing in the wrong court results in dismissal, forcing the taxpayer to start anew, often after the prescriptive period has run.

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