cta_decision CTA Case No. SCA-0008SCA-0008 2024-01-30

SAN ROQUE POWER CORPORATION v. REGIONAL TRIAL COURT, BRANCH 46 URDANETA CITY, PANGASINAN, OFFICE OF THE SECRETARY OF JUSTICE and MUNICIPALITY OF SAN MIGUEL, PANGASINAN

CTA Form No. 8 llllllllllllllll lllllllllllllll lllllllllllll lllllllllllllllllllll 23-000208 -0020 REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION CTA CASE NO. SCA-0008 SAN ROQUE POWER CORPORATION, Petitioner, - versus- REGIONAL TRIAL COURT, NOTICE OF DECISION BRANCH 46 URDANETA CITY, PANGASINAN, OFFICE OF THE SECRETARY OF JUSTICE and MUNICIPALITY OF SAN MIGUEL, PANGASINAN, Respondents. To: SENIOR STATE SOLIC ITOR C HERYL ANGELIN E M. ROQUE-JAVIER OFFICE OF THE SOLICITOR GENERAL 134 Amorsolo Street, Lcgazp i Village, Makati City OFFICE OF THE SECRETARY OF J USTIC E Department of Justice Padre Faura St., Ermita, Manila MU NICIPALITY OF SAN MANUEL, PANGASINAN Municipa l Mayor's Office Poblacion, San Manuel. Pangasinan SYClP SALAZAR HERNANDEZ & GATMAITAN 7th Floor, SyCiplaw Center 105 Pasco de Roxas, Makati City REGIONAL TRIAL CO URT BRANCH 46, URDANETA CITY, PANGASINAN Provincial Capitol Compound Lingayen, Pangasi nan GREETINGS: You are hereby notified by these presents that on January 30, 2024, a Decision was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, January 31, 2024. ~~ Atty. Mar:earette Y. G man Executi e Clerk of Court II

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION SAN ROQUE POWER CTA SCA Case No. 0008 CORPORATION, Petitioner, Members: -versus- DEL ROSARIO, P.J., Chairperson, BACORRO-VILLENA, and REGIONAL TRIAL COURT, BRANCH 46, URDANETA CUI-DAVID, JJ. CITY, PANGASINAN, OFFICE OF THE Promulga ted: SECRETARY OF JUSTICE, and MUNICIPALITY OF SAN MANUEL, PANGASINAN, Respondents. J{- - - - - - - - - - - - - - - - - - - - - - - - - - - DECISION CUI-DAVID, J.: Before this Court is a Petition for Certiorari1 filed by petitioner San Roque Power Corporation praying that the Court (i) set aside the Orders dated October 29, 20212 (first assailed Order) and February 14, 20233 (second assailed Order) of the Regional Trial Court (RTC) Urdaneta, Panga sinan - Branch 46 and (ii) issue an Order declaring that respondent Secretary of Justice is a proper r espondent in RTC Case No. U-11239 . THE PARTIES Petitioner is a power generation company with principal office located in the Municipality of San Manu el, Pangasinan.4 1 Docket, pp. 5-29. 2 /d. ' pp. 30-32. 3 /d. , pp. 33-36. 4 Par. 19, The Parties, Petition for Certiorari, Docket. p. 9.

DECISION CTA SCA Case No. 0008 San Roque Power Corporation v. Regional Trial Court, Branch 46, Urdaneta City, Pangasina n, Office of the Secretary of Justice, and Municipality of San Manuel, Pangasina n x--------------- ---- ------------ -------------- ---------------- -- --------------- ------------x Respondent Municipality of San Manuel, Pangasinan, is the local government unit (LGU) that hosts petitioner's principal office .5 Respondent Office of the Secretary of Justice (OSJ) is the head of the Department of Justice (DOJ) with the lawful and mandated authority to review the constitutionality or legality of local tax ordinances under Section 187 of the Local Government Code (LGC).6 It is represented by the Office of the Solicitor General (OSG) .7 THE FACTS AND THE PROCEEDINGS On December 4, 2018 , petitioner filed a Petitions with the DOJ pursuant to Section 187 of the LGC to question the constitutionality or legality of Municipal Ordinance No. 2017- 129 (assailed ordinance) enacted by respondent municipality (DOJ Petition). Due to respondent OSJ's inaction to resolve the DOJ Petition within 60 days from filing thereof, or until February 2, 2019, petitioner filed with the RTC Urdaneta, Pangasinan a Petition (with Application for the Is suance ofa Writ ofPreliminary Injunction) on March 4, 2019 (RTC Petition) .10 The RTC Petition was raffled to the court a quo and docketed as Civil Case No. U- 11239 entitled "San Roque Power Corporation v. Office of the Secretary of Justice and Municipality of San Manuel, Pangasinan." Thereafter, respondent OSJ filed a Motion for Exclusion as Party, 11 arguing that it is not a real-party-in-interest in this case because it has no material inter est and will not be affected in any degree by the judgment that may be issued. Neither can it be considered as a nominal party because it was not able to issue a resolution to determine the validity of the assailed ordinance after it lost its jurisdiction because of the filing of the RTC Petition, and it is not an indisp ensable nor n ecessary party to the action b ecause a final det ermina tion and a complete r elief 5 Par. 20, id. , Docket, pp. 9- 10. \1 6 Par. 21, id. , Docket, p. I0. 7 Par. 22, id. , Docket, p. 10. 8 Docket. pp. 37-60. 9 An Ordinance Providing for the Enactment ofthe 2018 Revised Local Revenue Code ofthe Municipality ofSan Manuel. Pangasinan 10 /d. , pp. 220-252. II /d., pp. 202-209.

DECISION CTA SCA Case No. 0008 San Roque Power Corporation v. Regional Trial Court, Branch 46, Urdaneta City , Pangasinan, Office of the Secretary of Justice, and Municipality of San Manuel, Pangasinan x------------------------------------------------------------------------- -------------- -- -x Even on the assumption that the RTC erred in issuing the assailed interlocutory orders excluding respondent OSJ as a party in the RTC Petition, the said error would be, at most, one of judgment or procedure and not of jurisdiction that may be reviewed in certiorari proceedings. A Petition for Certiorari under Rule 65 1s intended for the correction of errors of jurisdiction only or grave abuse of discretion amounting to lack or excess of jurisdiction.33 In the case of Leonis Navigation Co., Inc. v. Villamater, 34 the Supreme Court clearly distinguished reversible errors ofjudgment, which may be the subject of an ordinary appeal and ajudgment that borders on grave abuse of discretion amounting to lack or excess ofjurisdiction, and We quote: A petition for certiorari does not normally include an inquiry into the correctn ess of its evaluation of evidence. Errors of judgment, as distinguished from errors of jurisdiction, are not within the province of a special civil action for certiorari, which is merely confined to issues of jurisdiction or grave abuse of discretion . ... By grave abuse of discretion is meant such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, a nd it must be shown that the discretion was exercised arbitrarily or despotically. [Emphasis supplied] Errors ofjudgment or procedure, where the issue involved affects the wisdom or soundness of the decision and not relating to the court's jurisdiction to render said decision or its validity, are not reviewable on certiorari. 35 Where a court has jurisdiction over the person and subject matter, the decision on all other questions arising in the case is an exercise of that jurisdiction.36 Thus, all errors committed in the exercise of such jurisdiction are m erely errors of judgment.37 Petitioner raises arguments anchored on perceived errors made by the court a quo in its appreciation of procedural rules. Thus, certiorari will not lie "to review the intrinsic correctness of a judgment of the lower court - on the basis either of the law 33 People ofthe Philippines v. Court ofAppeals. G.R. No. 14205 1, February 24, 2004. 34 G.R. No. 179 169, March 3, 20 10. 35 Fernando v. Vasquez. G. R. No. I,-264 17 .lllnuflry 30. 1970 : Maritime Company ofthe Philippines v. Paredes. G.R. No. L-248 11 , March 3, 1967, citing Bimeda v. Perez. et a!., G.R. No. L-5588, August 26, 1953; Philippine Surety and Insurance Co. v. Jacala, et a/.. G.R. No. L-1 2766, May 25, 1960. 36 Microsoft Corporation v. Best Deal Computer Center Corp eta/., G.R. No. 148029, September 24, 2002. 37 /d.

DECISION CTA SCA Case No. 0008 San Roque Power Corporation v. Regional Trial Court, Branch 46, Urdaneta City, Pangasinan, Office of the Secretary of Justice, and Municipality of San Manuel, Pangasinan x--------------------------------------------------------------- ------------------ ---------x or the facts of the case, or of the wisdom or legal soundness of the decision."38 Just because the court a quo allegedly misinterpreted the rules, no grave abuse of discretion may be attributed to it.39 The court a quo did not act with grave abuse of discretion amounting to lack or excess of jurisdiction in excluding respondent OSJ as a party in the RTC Petition. It bears reiterating that even if the court a quo committed an error of jurisdiction, the petition is still unmeritorious. The court a quo did not act with grave abuse of discretion amounting to lack or excess ofjurisdiction in excluding respondent OSJ as a party in the RTC Petition. Section 7, Rule 3 of the Revised Rules of Court defines indispensable parties as "parties in interest without whom no final determination can be had of an action."40 They are those parties who possess such an interest in the controversy that a final decree would necessarily affect their rights so that the courts cannot proceed without their presence.41 A party is indispensable if its interest in the subject matter of the suit and the relief sought is inextricably intertwined with the other parties' interest.42 Petitioner claims that respondent OSJ must be kept impleaded in the RTC Petition as a real party-in-interest as it determines respondent OSJ's future rulings involving the assailed ordinance43 and leaves respondent OSJ free to unlawfully refuse to act on similar cases involving the assailed \�"' ordinance, including future assessments against petitioner under the assailed ordinance.44 38 People v. Honorable Sandiganbayan (Fourth Division). eta/.. G. R. No. 22828 1, June 14, 202 1. citing Yushi Kondo v. Toyota Boshoku (?hils.) Corporation, G.R. No. 201396, September II , 20 19. 39 See Agfha, Inc. v. Court ofTax Appeals and Commissioner ofCustoms, G.R. Nos. 17205 1 & 1738 13, July 27, 2007. 40 REVIS ED RULES OF COURT, Rule 3, Sec. 7 provides: SEC. 7. Compulsory joinder ofindispensable parties. -Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. 41 Macahahbad. Jr. v. Masimg. G.R. No. 16 1237. .lcmuary 14. 2009. citing Seno v. Mangubat. G.R. No. L-44339, December 2, 1987. 42 /d., citing Uy v. Court ofAppeals. G. R. No. 157065. July II , 2006. 43 Par. 48, Petition for Certiorari, Docket, p. 17. 44 Par. 52, Petition fo r Certiorari, Docket, p. 18.

DECISION CTA SCA Case No. 0008 San Roque Power Corporation v. Regional Trial Court, Branch 46, Urdaneta City, Pangasinan, Office of the Secretary of Justice, and Municipality of San Manuel, Pangasinan X------------------------------------------------------------------------------------------X Petitioner's stance is unfounded. In Regner v. Logarta) et al. (Regner), 45 the Supreme Court established the parameters before a person can be declared as an indispensable party: An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without injuring or affecting that interest, a party who has not only an interest in the subject matter of the controversy, but also has an interest of such nature that a final decree cannot be made with out affecting his interest or leaving the controversy in su ch a condition that its final determination may be wholly inconsistent with equity and good conscience. It has also been considered that an indispensable party is a person in whose absence there cannot be a determination between the parties already before th e court which is effective, complete, or equitable. Further, an indispensable party is one who must be included in an action before it m ay properly go forward . A person is not an indispensable party, however, if his interest in the controversy or subject matter is separable from the interest of the other parties, so that it will not necessarily be directly or injuriously affected by a decree which does complete justice between them. Also, a person is not an indispensable party if his presence would merely permit complete relief between him and those already parties to the action, or if he has no interest in the subject matter of the action. It is not a sufficient reason to declare a person to be an indispensable party that his presence will avoid multiple litigation. [Emphasis supplied] As discussed in Regner, it is not enou gh to declare a p erson an indispensable p arty simply because its presence will avoid multiple litigation. Instead, it is a person's material interest in the case, such th at the Court cannot make a definitive ruling without the said person, that matters. Again, the issue in the RTC Petition is whether the assailed ordinance is constitutional and valid. Applying the foregoing rules and jurisprudence, whatever outcome or whoever prevails in the RTC Petition would not bring any benefit or injury to respondent OSJ since its only participation is to review the constitutionality or legality of the tax ordinance, which it was not able to act upon within the prescribed period. 45 G.R. No. 168747, October 19, 2007.

DECISION CTA SCA Case No. 0008 San Roque Power Corporation v. Regional Trial Court, Branch 46, Urdaneta City, Pangasinan, Office of the Secretary of Justice, and Municipality of San Man u el, Pangasinan JC------------------------------------------------------------------------------------------X Respondent OSJ cannot be considered an indispensable party because it has no interest in the controversy. As such, the court a quo can proceed without respondent OSJ's presence, and a final decree would not affect respondent OSJ's rights.46 In other words, respondent OSJ's non-inclusion would not render the RTC Petition defective because even without respondent OSJ, any decision promulgated by the court a quo can attain finality. Petitioner asserts that even if respondent OSJ is not a real party-in-interest, it should be considered a nominal party that must also be impleaded in the RTC Petition. The Court finds no merit in petitioner's contention. In Samaniego v. Aguila (Samaniego),47 the Supreme Court differentiated between an indispensable and a nominal party and declared that the Office of the President-to whom the decisions of the Department of Agrarian Reform (DAR) were appealed to-need not be impleaded in the court action based on the prevailing procedure and rules, to wit: First. At the time petitioners brought th eir case to the Court of Appeals, the procedure governing appeals to said court from quasi-judicial agencies was embodied in Revised Administrative Circular No. 1-95 [.] ... Thus, it is clear that petitioners' failure to implead the Office of the President does not warrant the dismissal of the case as it is in accordance with this circular. ... Second. The Court of Appeals held that in appeals from ~ decisions of the Office of the President, the latter is an indispensable party. This is error. Under Rule 7 , �3 of the Rules of Civil Procedure, an indispensable party is a party in interest without whom no final determination can be had of an action without that party being impleaded. Indispensable parties are those with such an interest in the controversy that a final decree would n ecessarily affect their rights, so that the court cannot proceed without their presence. "Interest", within the meaning of this rule, should be material, directly in issue and to be affected by the decree, as distinguished from a mere incidental interest 46 See Pascual v. Robles, G. R. No. 182645, December 15, 20 I0 (Resolution), citing Tay Chun Suy v. Court ofAppeals, G.R. Nos. 9 1004-05, August 20, 1992. 47 G. R. No. 125567, June 27, 2000.

DECISION CTA SCA Case No. 0008 San Roque Power Corporation v. Regional Trial Court, Branch 46, Urdaneta City, Pangasinan, Office of the Secretary of Justice, and Municipality of San Manuel, Pangasinan X------------------------------------------------------------------------------------------X in the question involved. On the other hand, a nominal or pro forma party is one who is joined as a plaintiff or defendant, not because such party has any real interest in the subject matter or because any relief is demanded, but merely because the technical rules of pleadings require the presence of such party on the record. In the case at bar, even assuming that the Office of the President should have been impleaded by petitioner, it is clear that the Office of the President is merely a pro forma party, in the same way that a respondent court is a pro forma party in special civil actions for certiorari. The issue in the petition before the Court of Appeals is whether a private land should be exempted from the coverage of P.D. No. 27. Whatever happens to that case and whoever wins would not bring any prejudice or gain to the government. The only participation of the Office of the President in this case is its role as the office which entertains appeals from decisions of the DAR. Indeed, the very reason that the appellate court excused the Office of the Solicitor General from filing a comment is that it deemed that the case involved "purely private interests." [Emphasis supplied] Following Samaniego, We first examine the procedure governing appeals to determine whether respondent OSJ must be impleaded as a nominal or pro forma party in the RTC Petition. The governing procedure that must be followed in assailing tax ordinances is outlined in Section 187 of the LGC: SEC . 187- Procedure for Approval and Effectivity ofTax Ordinances and Revenue Measures; Mandatory Public Hearings. - The procedure for a pproval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided} however, That such appeal not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided} finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriat~

DECISION CTA SCA Case No. 0008 Sa n Roqu e Power Corporation v. Regional Trial Court, Branch 46 , Urdaneta City, Pangasinan, Office of the Secretary of J ustic e, and Municipa lity of Sa n Ma nuel, Pa n gasinan Pa ge 13 of 15 x------------------------------------------------------------------------------------------x proceedings with a court of competent jurisdiction. [Emphasis supplied] Section 187 of the LGC is silent as to whether respondent OSJ must be impleaded as a party in the case filed with the courts. It only provides that a party could already proceed and seek relief in court when respondent OSJ fails to act on the appeal after the lapse of 60 days .48 Since there are no technical rules that require the presence of respondent OSJ in a court case pursuant to Section 187 of the LGC, unlike in a petition for certiorari under Rule 65,49 wherein the respondent court is included as a nominal party, respondent OSJ need not be impleaded. Even if respondent OSJ could be considered a nominal party, its exclusion from the RTC Petition is not fatal to the case since a nominal party does not need to participate in the proceedings to adjudicate the rights of petitioner and respondent. so As a final note, We see no error in the court a quo's assailed Order excluding respondent OSJ as a party in the RTC Petition. This is without prejudice, however, to the court a quo's discretion requiring the appearance of the Solicitor General pursuant to Section 22, Rule 351 of the Revised Rules of Court. WHEREFORE, premises considered, the Petition for Certiorari is DENIED for lack of merit. 48 De Lima, in her capacity as Secretary ofJustice v. City ofManila, G.R. No. 222886. October 17, 20 18. 49 RULES OF COURT, Rule 65, Sec. 5 provides: SEC. 5. Respondents and costs in certain cases. - When the petition filed relates to the acts or omissions of a judge, court, quasi-judicial agency, tribunal , corporation, board, officer or person, the petiti oner shall join, as pri vate respondent or respondents with such public respondent or respondents, the person or persons interested in sustaining the proceedings in the court; and it shall be the duty of such private respondents to appear and defend, both in his or their own behalf and in behalf of the public respondent or respondents affected by the proceedings, and the costs awarded in such proceedings in favo r of the petitioner shall be against the private respondents only, and not against the judge, court, quasi-judicial agency, tribunal, corporation, board, officer or person impleaded as public respondent or respondents. Unless otherwise specifically directed by the court where the petition is pending, the public respondents shall not appear in or file an answer or comment to the petition or any pleading therein. If the case is elevated to a higher court by either party, the public respondents shall be included therein as nominal parties. However, unless otherwise specifically directed hy the court. they sh11ll not llppeM or p11rt icip111e in the proceeding~ therein. 50 De Leon v. Chu, G.R. No. 186522, September 2, 20 15. 51 SEC. 22. Notice to the Solicitor General. - In any action involving the validity ofany treaty, law, ord inance, executive order. presidential decree, rules or regulations, the court. in its discretion, may requi re the appearance of the Solicitor General who may be heard in person or through a representative duly designated by him.

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