TEAM ENERGY CORPORATION v. THE MUNICIPALITY OF PAGBILAO, SHIERRE ANN PORTES-PALICPIC, in her capacity as Municipal Mayor of Pagbilao, CORAZON H. ENCENAREZ, in her capacity as Acting Municipal Treasurer of the Municipality of Pagbilao, and/or RIZALINO P. TI?A, in his capacity as Assistant Municipal Treasurer of the Municipality of Pagbilao

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION TEAM ENERGY CTAACN0.255 CORPORATION, Petitioner, Mem b ers : -versus- RINGPIS-LIBAN, Chairperson, MODESTO-SAN PEDRO, and FERRER-FLORES,JJ. THE MUNICIPALITY OF PAGBILAO, SHIERRE ANN PORTES-PALICPIC, in her capacity as Municipal Mayor of the Municipality of Pagbilao, CORAZON H. ENCENAREZ, in her capacity as Acting Municipal Treasurer of the Municipality of Pagbilao, and/or RIZALINO P. TINA, in his capacity as Assistant Municipal Treasurer of the Municipality of P romulgated: Pagbilao, x-------------------------------R---e-sp-o--n-d-e-n--ts-.---------M--~ AV 3 1--~ ~ -~~-:------------x RESOLUTION RJNGPIS-LIBAN, J.: For resolution is the Motion for Reconsideration filed by respondents on April 21, 2024 through registered mail, with petitioner's Comment/ Opposition (on Respondents' Motionfor Reconsideration). Respondents' motion assails the Court's decision, which partiai!J granted the petition, reverJed and Jet aside the order of the co urt a quo and remanded the case for further proceedings on the merits. Specifically, respondents state that the 2019 and 2020 Statements ofAccounts (SOAs) followed by subsequent letters ,#

RESOLUTION CTA AC No. 255 of communication between the parties substantiallY apprised petitioner of the factual and legal basis of its Local Business T ax (LBT) assessments. Hence, the 2019 and 2020 SOAs are the notices of assessments contemplated in Section 195 of the Local Government Code (LGC) which triggered the application of the same provision in this case. Furthermore, considering the respondents' substantial compliance in issuing the SOAs as notices of assessments, Section 195 and 196 are operative in this case. Finally, respondents claim that petitioner failed to comply with the twin requirements under Section 195 rendering its claim for refund baseless. Petitioner, on the other hand, states that the 2019 and 2020 SOAs and respondent Treasurer's reply letters did not substantially apprise it of the factual and legal basis for the LBT assessments and, thus, cannot be considered " notices o f assess ment" contemplated in Section 195. In short, a taxpayer seeking to refund erroneously or illegally collected taxes from Local Government Units (LGUs) under Section 196 is required to comply with the periods prescribed in Section 195 only if the LGU issued a "notice of assessment". If no " notice of assessment" was issued, then only Section 196 will apply. The motion lacks merit. First, the language of Section 195 of the LGC is clear enough to be understood. It specifies the details that must be contained in the notice of assessment in order to sufficiently apprise a taxpayer of what is still due to the LGU: SECTION 195. Protest ofAssessment. - When the local treasurer or his duly authorized representative ftnds that correct taxes fees or charges h ave not been paid. he shall issue a no tice of assessment stating the nature o f the tax. fee. or charge. the amount of deficienry. the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may ftle a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become ftnal and executory. T h e local treasurer shall decide the protest within sixty (60) days from the time of its filing. If the lo cal treasurer ftnds the protest to be wholly or partly meritorious, he shall issue a n otice cancelling wh olly or partially the assessment. However, if the local treasurer flnds the assessmen t to be wholly or partly correct, he shall deny the protest wholly or partly with no tice to the taxpayer. T he taxpayer shall have thirty (30) days from the receip t o f the denial of the protest or from the lapse o f the sixty (60)-day period prescribed herein within which to appeal with the court o f competen t jurisdiction otherwise the assessmen t becomes conclusive and unappealable. (Emphasis supplied) The 20191 and 20202 SOAs, when compared against this Section 195 requirement, clearly falls short of the same. Both SOAs do not demand paym/ 1 Annex P-4 of the Petition for Review, Docket, p. 73. 2 Annex P-9 of the Petition for Review, Docket, p. 91.

RESOLUTION CTA AC No. 255 o f any deficiency LBT, surcharges, interests and penalties that were found due from the petitioner as a result of an assessment by respondents: .ANNEX P-1/ Republic of the Philippines MUNICIPALITY OF PAGBILAO Province of Quezon OFFICE OF THE MUNICIPAL TREASURER !>IATf: MEN T Of ACCOUNT OF BUSINESS TAX OF TEAM ENF.RGY CORI'ORATION I'OR T ilE YI(AR 10 19 GROSS RECEIPTS 8,982,813,635.90 Mayors Pennit 5 0,000.00 Swom Statement 200.00 Sanitary Perm~ 2SO.OO Modicalfee 50.00 Inspection Fee 50.00 Police Clearance Fee 50.00 Sticke r 20.00 Garbaae Foe Busint!ss Tax (CDF\trad.or) 1st Quarter 1, 000.00 Sanitary Inspection Fee 13,474,&70.45 500.00 p _ _.1;;3;:.;5;;2;:6�:;.;'90-.45- 2nd Quart�r 13,47-1,670.45 3rd Quorter 13,474,670.45 4th Quarler U.474.570.45

RESOLUTION CTA AC No. 255 Republic of the l'hoii11ph~ ~~NEX f .. q Province ofQuezon MUN ICIPALITY OF I'AGlHLAo OFFlCE OF 'l'l�il:: MUNl Cil'Al.TlUiASURER STATEMENT.OJ<' A<.:<;OUNTO I' IllJSINESS TAX ofl cnt\1 Enrqzy Corp. (TEC) For the Ytnr 2020 GROSS n r;CF.IPr~ p 9,392,332,617 72 M ayor'~ Pt."Tmit Q uorter lv S10.0m StKt.,menl Sanitary Pennit p 50,000.00 M~dicul Ftc lnspeclion Fee 20000 l'olicc Cl�aru~ Fee ~tockcr/Bus Plnte 150.00 ('ruzbage Fcc Business Tax- contractor 50.00 Add S:utitntion Inspection Fu~ SO.OO TOTAl. 50.00 2000 ~0000 p 14,088,948.92 W .QQ p ~ ~ I ~Q �~~.n T he Treasurer's reply letters dated January 23, 20193 and March 13, 20204 also do not provide details o f the deficiency LBT, surcharges, interests and penalties or a'!Y explanation on how the amounts in the SOAs were computed and the legal basis of the computations, if a'!)'. These letters merely acknowledge the payments made by petitioner for the particular year and quarter and state that the LGC "does not provide for payments under protest of local business taxes." Accordingly, the SOAs and reply letters cannot be considered " notices of assessment" or even substantial compliance thereof in order to trigger the application of the other provision s of Section 1/ 3 Annex P-6-A of the Petition for Review, Docket, p. 78. 4 Annex P-11-A of the Petition f or Review, Docket, p. 96.

RESOLUTION CTA AC No. 255 Second, in order to aid a taxpayer in making a reasonable protest, due process dictates that it must be informed of the facts and the law on which the assessment is based. This is in keeping with the constitutional mandate that no person shall be deprived of his or her property without due process of law. Between the power of the State to tax and an individual's right to due process, the scale favors the right of the taxpayer to due process.5 Notices of assessments should be sufficiently informative to apprise the taxpayer of the legal basis of the tax. Specifically, reference to the local tax ordinance is vital, for the power of LGU to impose local taxes is exercised through the appropriate ordinance enacted by the sanggunian, and not by the Local Government Code alone. What determines tax liability is the tax ordinance, the Local Government Code being the enabling law for the local legislative body.6 These SOAs that only contain a table of taxes with no other details is deficient in carrying out the function of informing the taxpayer of the factual and statutory basis of the tax.7 WHEREFORE, premises considered, respondents' Motion for Reconsideration is DENIED for lack of merit. SO ORDERED. 9L.~ - ? ' - MA. BELEN M. RINGPIS-LIBAN Associate Justice WE CONCUR: s Commissioner of Internal Revenue v. Fitness By Design, Inc., G.R. No. 215957, November 9, 2016. 6 Yamane v. BA Lepanto Condominium Corporation, G.R. No. 154993, October 25, 2005. 7 Commissioner of Internal Revenue v. United Salvage and Towage (Phils.J_ Inc., G.R. No. 197515, July 2, 2014.