THE CITY GOVERNMENT OF CAGAYAN DE ORO v. CAGAYAN ELECTRIC POWER & LIGHT CO., INC. (CEPALCO)

l~EPUBLIC OF THE PHILIPPINES Court of Tax Appeals QUEZON CITY Third Division THE CITY GOVERNMENT OF CTA AC NO. 194 CAGAYAN DE ORO, M e mbers : P et ition er, UY, Chairperson, RINGPIS-LIBAN, and -versus- MODESTO-SAN PEDRO, JJ CAGAVAN ELI~ CTRIC POWER & Promulgated: LIGHT CO., INC. (CI~~ PALCO), Respondent. ~~2r X ------------------------------------------- ---------~-~~-~~~--!~-~:________ X DEC IS I() N MODESTO-SAN PEDRO, .1.: The Case Thi s is a Petition fo r Review 1 under Section 4(a), Rule 8 ofthe R evised Rules ofthe Court of Tax Appeals ("RRCTA '')/- asking the Court to render judgment modify ing th e Dec ision ol' the Regional Trial Cout1 ("RTC" ) of Mi samis Oriental, Cagayan de Oro City ("CDO"), Branch 24, to declare its Assessment for We ig hts and Measures va lid , to a llo w it to enforce its Assessment for Pole Renta l Taxes, and to order the payment o[ the Assessment it iss ued for Mayor's Permit Fcc, all against respondent. The Parties Petitioner City CJove rnm ent of" Cagayan de Oro is a local government unit (" LGU") existing by virtue of Republic Act ("Ri\") No. 52 1, as amended by RA No. 7 160. It may be se rved w ith summons, notices, and other processes at the City Lega l Office, I' 1 Floor Lxecutive Bui Idin g, City llall , Capistrano- ] la yes Streets, CDO. f./ I Appeal Hy Wa) or l)etition for RevieVI llllder RA 9281. Records. pp. 11 -62. ' A.M. No. 05- 11-07-C I A. 22 November 2005.

I)[CISIO'I CTA AC No. 1~~J. Respondent Cagayan Electric Power and Light Co., Inc. ("CEPALCO") is a domestic corporation duly organized by virtue of the laws of the Republic of the Philippines with principal office address at 44 Don Toribio Chaves Street, CDO. Respondent is an electric distribution utility and a grantee oflegislative franchise, the latest or which is RA No. 9284, a grantee of a Certificate of Public Convenience and Necessity ("CPCN") issued by the Energy Regulatory Commission ("ERC"). It operates as an electric distribution utility in CDO and Misamis Oriental, except for certain barangays and municipalities therein. The Facts On 16 January 2014, respondent received from the petitioner three (3) Notices of Assessment assessing it for deficiency taxes and fees, inclusive of surcharge and penalties, for the years 2003-2013, as follows: 3 -� ------ -- --------- ------. �--------------. ~ eigJ:lts andl'vleasur~_s P 337,875,QOO.OO Pole Rental Tax ]_2,072 ,3 9~.46 l\il.ayor's Permit Fcc _ 1_2_2,5~0,56_2.50 TOTAL -----~p 529,497,961.96 Aggrieved, respondent filed a Letter on 21 February 2014 protesting the aforementioned assessments pursuant to Section 195 of the Local Government Code ("LGC").~ Claiming inaction on the part of the petitioner,5 respondent filed the original Petition with the RTC of Misamis Oriental, CDO on 22 May 2014.6 Respondent prayed that the Notices or Assessment be declared null and void and for the RTC to order petitioner to pay the amount of P250,000.00 as reasonable attorney's fees with appearance fees of 1'3,000.00 for every hearing, P50,000.00 as and by way of exemplary damages, and P50,000.00 as litigation expcnses.7 In its Petition, the respondent alleged that petitioner's assessment pertaining to Weights and Measures did not state or failed to state the Ordinance from which it is based. Hence it concluded that the assessment utterly lacks factual and legal bases and is thus invalid. It further alleged that, P., Par. 7 of respondent's Petition dated 22 May 2014. RTC Records, pp. 5-6 which was admitted by or petitioner in par. 3 the petitioner's Answer dated 30 June 2014, RTC Records, p. 25. 4 Par. 8 of respondent's Petition dated 22 May 201<\, RTC Records. p. 6 which was admitted by petitioner in par. 4 of the petitioner's Answer dated 30 June 2014. RTC Records, p.25. ' Par. 9 of respondent's Petition dated 22 May 2014, RTC Records, p. 6 which was admitted by petitioner in par. 5 of petitioner's Answer dated 30 June 2014. RTC Records, p. 25. 6 Petition, RTC Records_ pp. tl-23, with annexes. 7 Ibid

llECISIO'\j CTA AC Nn. 19-1. Pc1gv 3 uf 2() assuming that there is an existing Ordinance that applies to its weights and measures, which in the case of respondent is its electric or kilowatt meters, petitioner docs not have the authority to impose such fees since it is not empowered to regulate, license, seal, test, or calibrate the said electric meters. Respondent also posited that the Notice of Assessment is defective because it is being assessed for a period of I I years, which is contrary to Section 194 of the LGC, which limits the assessment of local fees, taxes, or charges for 5 years, counting from the date the amount became due. Lastly, it questioned the basis of petitioner in computing its supposed liability. Respondent explained that petitioner charged it ICes on weights and measures for 150,000 electric meters, which is an inaccurate number since it only had 91,000 customers in 2003 and 124,000 customers in 2013 g As for the assessment pertaining to the Pole Rental Tax, respondent argued that the basis or the assessment, City Ordinance No. 9503-2005, was already declared void by the Supreme Court in the case of CEPALCO v. City o(Cagayan de Oro9 lienee, the assessment is, likewise, void. 10 Lastly, with respect to the assessment pctiaining to the Mayor's Permit Fcc, respondent alleged that the validity of the assessment is still under litigation with the Court of Appeals, in the case docketed as CA-G.R. CV No. 02771. Hence, the assessment against it is still prematurc. 11 Subsequently, petitioner filed its Answer dated 30 June 2014. Petitioner argued that the Notice of Assessment pertaining to Weight and Measures is based on Article I~F of City Council Ordinance No. 8847-2003 (hereinafter referred to as "CDO Revenue Code") and Section 148 of the LGC. It also argued that the inaccuracy in the estimate it used in the assessment does not render the same void. As for the assessment pertaining to the Pole Rental Tax, petitioner explained that the basis of the assessment is Section 58(h) of the CDO Revenue Code and not Ordinance No. 9504-2005. It explained that it only made a wrong citation in the assessment. Lastly, as for the Mayor's Permit Fcc, petitioner explained that although the respondent is still contesting the validity of the assessment in the Court of Appeals, there is no legal impediment under the law for the petitioner to enforce the assessment against the rcspondcnt. 12 Thereafter, petitioner and respondent filed their respective Pre-Trial Briefs, dated 29 August2014 and 1 September 2014, respectively.,... :.; /hid. G.R. No. 191761. 1<1 November 1011. 10 Petition, RTC Records, pp. t1-23. v.,.�ith <-lnnc.xcs. II Ibid 1�' Answer, RTC Records. pp. 2<~-"1!. with anne.\e~.

DECISIO~ CT A AC Ntl. FJ:I. T\1W' �l uf :2h On 4 September 2014, the RTC issued an Order referring the case to the Philippine Mediation Center ("PMC") for possible negotiation and amicable settlement of the casc. 13 Since the parties failed to mediate, the case was set for Judicial Dispute Resolution (".JDR") Conference on I 0 December 2014. 11 Thcreallcr, on 30 January 2015, the llall of Justice of CDO was engulfed by fire, destroying all records of the cases kept thereat, including the records of this case then before it.'�' 1lcncc, the RTC, in a Notice dated 26 February 2015, ordered the pa1iics to submit all pleadings in their possession for the reconstitution or the records or the casc. 1r, On 22 May 2015, the preliminary con!Crcnce f()r the reconstitution and reconstruction of all records pc1iincnt to the case took place. 17 Subsequently, a clarillcatory hearing was held on 5 August 2015, where both parties manifested that they do not have additional documents to submit. 18 Thereafter, the Application for Reconstitution was submitted by the RTC for resolution. 19 On 6 October 2015, the RTC issued an Order granting the Application for Reconstitution. 211 On 29 January 2016, Pre-Trial ensued where both parties agreed that only legal issues arc involved in the case and proposed that it be submitted for dccision 21 Also in the said hearing, the parties admitted the following facts: "'I. The 1'' Assessment. consists of the fees assessed hy the respondents [petitioner] on the kilowatt electric meters/units of the petitioner[ respondent! (Weights and Measures). computed by the former on a per electric meter/unit per vear oasis. at PI 00/meter/unit. totaling to P337.875[.000].00 and retroactive. cmcring the periods 2003 up to 2013. as a regulatory fees for all public utility on energy. This is contirmed by Atty. Delegencia [counscl1(lr petitioner]. 2. The 2"'1 Assessment. also called Pole Rental Tax, imposed retroactively. 1(lr the periods 20 II 0]3-20 13. in the total amount of P39.072.399.46. assessed on a per pole/year basis. set at 2% of the Gross or Revenues per year the petitioner lrespondentj. and that there was a similar assessment done hy the City Government in a prior year but which was nullified by the Supreme ISupreme) Court (SC) in an appropriate case entitled CFPALCO vs. City of Cagayan de Oro City. as G.R. No. 191761, promulgated on November 14. 2012. This is also confirmed bbyythAe tStyC. ~ Delegencia. but qualifying that the Ordinance that was nullified --~ --------~--- n Order dated 4 September 2014. RTC Records. P- 55. 1 ~ Order dated 12 November 20 I''� RTC Records. p. .i(J. 1" Decision dated 10 July 2017. RTC Record:-. pp. 247-:ZM�l. 11' Notice dated 26 February 2015. RTC: Records. p. 59. 17 Minutes of the Reconstitution/Recono..;truction Proceedings. RTC Records, pp. 147-149. tH Minutes. RTC Records. p. 151. tlJ Order dated 5 August 2015. R.TC Recorcb. p. 15.1. '" Order dated 6 October~() IS. RTC Rccor<h. pp. I 56-1.\6-a. �" Order dated 29 January 20 I(,_ RH � Records. pp. 169-170.

DE<'ISIOI\' CTA AC No. "19�1. Pogc 5nf 26 was a different one (City Ordinance No. 9503. Series of2005 ), that imposed a tax of I0% of the gross revenue per year of the petitioner, to which Atty. Khu [Kho] [counsel for respondent] has agreed. but gaining a reply from Atty. Delcgcncia that the subject Second Assessment is based on City Council Ordinance No. XX47. Series of 200l. particularly Section 58(b), Act. N[H]. Chapter II thereof. However. Atty Khu [Kho] has added that petitioner is still questioning the Ordinance that served. as hasis of this particular assessment: 3. The Third Assessment. also identified as the Mayor's Permit Fee, imposing an exaction of P500/pole/per year. covering the periods 2003-201 }, in the amount of 1'152.550.562.50. despite what Atty. Khu [KI10] claimed that Ordinance No. 9)27 relied upon was enacted in 2005 only. but made retroactive to 2003. and despite of the pendency still of the case it instituted earlier. in the Court of Appeals (CA). ti�om a Decision of Regional Trial Court. Branch 17. where it assailed the validity of the subject Resolution. which is admitted by Atty. Delegencia. hut the qualification that there are actually two (2) Ordinances vvith similar features''22 In view or the Joint Motion of' the parties to submit the case for decision, the RTC granted the parties a period of 30 days to submit their respective memoranda and an additional period or I 5 days ror the parties to submit their respective supplemental memoranda, ireach will opt to do so. 23 On 9 February 2016, the petitioner filed an Urgent Motion to Admit the Attached Application/Petition I(Jr Supplemental Reconstitution of Judicial Rccords2'1 and Application/Petition l'or Supplemental Reconstitution of Judicial Records,"' seeking f'or inclusion in the reconstituted records three additional documents. llowcvcr, in a hearing set on XApri I 2016, petitioner rormally withdrew its Application/Petition Cor Supplemental Reconstitution or Judicial Records on the ground that the additional documents were already part of the reconstituted rccords.26 On 4 April 2016, pcttt10ncr filed its Memorandum. 27 Meanwhile, respondent Lilcd its Memorandum on 4 May 20 16-"R f- Thcrcallcr, petitioner lilcd its Reply to Pctitioncr's29 Memorandum on 19 May 2(Jl6. 311 ~-, Ibid :_; Ibid '-l Urgent Motion to Admit the Attached Application'Vctitinn f'or Supplemental Reconstitution of Judicial Records. RTC Records. pp. 178-180. h Application/Petition for Supplemental Rccon-;titution ol .Judicial Records. RTC Records. pp. 181-187. ''' Order dated 8 April2016. RTC Records. p 201 ' 7 Memorandum of petitioner, RTC Records. pp. JSl)-Jl)l). ~~ Memorandum of respondent. R f'C Kecords. pp. :206-215. -'9 Respondent in this case. 0 Reply to Petitioner's Memorandu1n. RTC Records. pp. :216-:2'27. -'

OECISIOI\i CTA AC Nn. -J(J-1. Pdf/' (l nf 2b On 21 April 2017, the RTC issued an Ordcr31 directing the parties to file a Manifestation regarding the following interpretations made by the RTC, after which the case would be submitted for decision, to wit: "I. The records have already been reconstituted, as shown in the Order dated October(>. 20 I5. in re: Application for Reconstitution tiled by the petitioner [respondent]. 2. The subsequent filing by the respondents of an Application/Petition lc>r Supplemental Reconstitution of Judicial Records dated February 9. 20 I(,, seeking h1r the further reconstitution of three (3) more records therein speci tied. but which vvas later withdrawn at said respondents' instance. as contained inthc Order dated April8, 2016. 3. In the Order dated December l 0. 2014. the parties� counsels' joint manifestation that the issues in this case are legaL is recorded. 4. and that Petitioner and the Respondents already submitted their Memorandums dated April l. 2016 and May 4. 2016, respectively, followed by the respondents� Reply to Petitioner's Memorandum dated May 19, 2016." On 29 May 2017, the RTC issued an Ordcr,32 directing the issuance of a Subpoena to petitioner and ror it to submit clear and readable copies of the annexes attached to its Answer. The said Subpoena was issued on 30 May 2017. 33 On 31 May 2017, petitioner tiled its Manifestation to the Order of the RTC dated 21 April2017.' 1 On 8 June 2017, the petitioner filed its Compliance with the Order of the RTC dated 29 May 20 17. 1 ' Thereafter, on I 0 July 2017, the RTC issued the assailed Decision,36 partially granting respondent's Petition, to wit: "WHFRFf'ORE. this Court holds and finds. as fdlows: 1. The respondents� Notice of Assessment on the Petitioner for the payment of lees on electric ki lo\\atl meters is declared invalid, for lack of supporting City Ordinance. 2. The respondents' Notice of Assessment on the Petitioner for the payment of Pole Rental Tax at the rate of two (2%) percent, based on its gross sales or receipts of the previous calendar year. as discussed-above, is~ 1 Order dated 21 April 2017. RTC Records. p. 2:'8. ' '' Order dated 29 May 2017. RTC Records. p. 229. u Subpoena dated 30 Mat 2017, RTC Records. p. 230. ~~ Manifestation. RTC Records, pp. 231-2:13 ~~ Compliance, RTC Records. PP- 2J�I-2�l(J .> 1 Decision dated 10 July 2017. RTC Records, pp. :~.-17-26S. '

I) I�:CISI C).1\ Cl A AC NP. l\J.l. F'c11T 7 of 2h lawful and constitutionaL but subject to further discussions for adjustment(s) of the wnount assessed should the petitioner seek for it. 3. The respondents' Notice of Assessment for the Petitioner to pay Mayor's Permit Fee. is declared premature. due to the pendency of Petitioner's appeal of the Resolution of Branch 17 of this Court. above- stated. to the Court of Appeals. docketed as C/\-G.R. No. 62771. questioning the legality and constitutionality of City Ordinance No. 9527- 2005, the local measure that serves as basis for the subject assessment, and the perceived likely serious repercussions that may ensue should said appeal be sustained. and for non-compliance of the requirements of prior public hearings. appraisal and assessment. mandatorily required by the Local Government Code. 4. Lastly. the claims lc>r Attorney �s fees. exemplary damages and litigated expenses arc ordered dismissed. lcH�iack of merit. Let a copy each of this disposition he furnished to Attys. Armando Kim. and Donald Dclegencia and 1-taymund Villablanca. counsels for the petitioner and respondents. respectively. SO 01-tDERI�J) In its Decision, the RTC found that petitioner based his assessment on respondent's weights and measures, particularly its electric or kilowatt meters, on Article El; orthc CDO Revenue Code. IIowcvcr, after a thorough review of the same, it ruled that the said Ordinance docs not impose fees on electric or kilowatt meters. Further, the RTC explained that electric or kilowatt meters fall under the definition of"machincry" that can be the subject of real property tax after following the twin requirements or "appraisal" and "assessment". As for the Notice of Assessment pc11aining to the Pole Rental Tax, the RTC found that petitioner based the said assessment on Section 58(h) of the CDO Revenue Code. According to the RTC, the imposition of the said tax is legal considering that respondent, as a lessor, is engaged in the business of leasing electric poles to third persons. As for the Notice of Assessment pe11aining to the Mayor's Permit Fee, the RTC declared the assessment premature due to the pendency of a case questioning the legality and constitutionality of the ordinance to which the assessment is based. Lastly, the RTC dismissed respondent's claims for Attorney's Fees and damages, for lack or mcri t. f./ Based on the aforementioned Decision, both parties filed their respective Motions for Partial Reconsideration on 4 September 20 17.37 Motion for Partial Reconsideration_ RTC Hecords. PP- 269-278: Partial Motion for Reconsideration, RTC Records. pp. 279-283.

DECISION CTt\ AC Nu. I(J-1 r\1gc t: llf 2(1 On 19 September 2017, petitioner filed its Comment on CEPALCO's Pmiial Motion lor Reconsideration3 x Subsequently on 30 October 2017, the RTC issued the assailed Order denying both Motions !'or Partial Reconsideration li:1r lack of merit. 39 The petitioner received his copy of the said Order on 23 November 2017.'10 Undaunted, petitioner posted its Motion !'or Extension of Time [To: File Appeal by Way of Petition I(Jr Review under R.A. 9282], on 8 December 2017, asking this Court to grant it an additional period of 15 days from 08 December 2017 or until 26 December 2017, within which to file its appeal.'11 The Cowi granted the same on 9 January 2018, giving petitioner until 27 December 20 I7 to fi lc its Petition l(lr Rcvicw. 12 On 14 February 2018, petitioner posted his Compliance to the letter of the Clerk of Court of the Court or Tax Appeals ("CTA") requiring the same to submit proof' or payment or the docket Ices. In its Compliance, the petitioner submitted a photocopy of the Postal Money Order Checks which it alleged to have been posted with its Motion I(Jr J:xtcnsion of Time [To: File Appeal by Way of' Petition I(Jr Review under R.i\. 92821.'13 On 28 March 2018, this Court issued a Resolution declaring the instant case closed and terminated I(Jr non-filing or the Petition fi:Jr Review despite the extended period granted by the CTA. 11 On 26 April 2018, this Court received petitioner's Omnibus Motion stating that it already complied with the payment of docket fees and, therefore, praying for its Petition I(Jr Review to he given due coursc.'1' Subsequently, on 27 April 2018, pcl!l!oncr posted its Amended Omnibus Motion stating that it filed its Appeal by Way of Petition for Review under R.A. 9282 on 27 December 2017 by registered mail which was acknowledged by the CTA in its Clerk of Court's Letter dated 22 January 2018. It, therefore, prayed I(Jr the Court to give due course to its Petition for Review. 1 ('~ _-;x Comment on CEPALCO's Partial Motion for Reconsideration. RTC Records, pp. 285-295. 1 Order dated 30 October 2017. RTC Records. pp. 100-10 I. '' 111 Return Card attached to the Order dated 10 October 2017. RTC Records, p. 30 I. '11 Motion for Extension ofTimc [To: File Appeal b) Way of Petition for Revicvv under R.A. 9282], Recmds. pp. 8-1�1. ,p Resolution, Records, p. 16. 4' Compliance. Records, pp. 18-:2:2 4~ Resolution. Records. p. 26. 1 ~ Omnibus Motion. Records. pp. 27-_1,1. �lfl Amended Omnibus Motion. Records. pp :L'I-(vl.

f)ECISION CT A !\C No. l lJ.J P<1g~' 9 ~1f :2h On 9 May 2018, this Court issued a Resolution, recalling its Resolution dated 28 Match 2018. The Court, likewise, ordered the respondent to file its comment. On 15 May 20 18, the petitioner filed a Motion for Reconsideration to the Resolution of this Court, dated 28 March 2018. 17 The Court, in two Resolutions, dated 22 May 20 1848and I June 2018,19 respectively, ruled that the Amended Omnibus Motion and the Motion for Reconsideration filed by the petitioner arc deemed moot, considering the Resolution issued by the Court dated 9 May 2018. On 3 December 2018, the Court issued another Resolution, stating that respondent failed to file its comment within the time given. Likewise, it ordered the parties to file their respective memoranda, within 30 days from receipt of said Resolution."' On 18 February 2019, the petitioner filed its Memorandum for Petitioner. 51 Subsequently, this Court issued a Resolution dated 2 May 2019, giving respondent a fresh period of 30 days fl�mn notice to file its memorandum.52 On II .July 2019, the RTC transmitted the entire records of the case53 pursuant to the Resolution or the Court dated 26 June 20 19.5'1 Considering that the respondent failed to file its memorandum despite the extended period granted by the Court, this Court issued a Resolution dated 8 October 2019, submitting the case for decision. 55 Hence this Decision. The Issues The petitioner submitted the l"ollowing issues for this Court's consideration:~ �I.' Motion for Rcconsid~ration. Records. pp. (J8-7(J. 1:-; Resolution, Records, p. 78. l'J Resolution, Records. p. SO. 50 Resolution. Records. p. 95. Sl Memorandum for the Petitioner. Recorcb, pp. 96-1.18. 5-, Resolution, Records. pp. 1411-1 il). 5-' Transmittal tl�om RTC. Records. pp. 1119-151 5"' Resolution, Records, p. 148. 55 Resolution, Records, p. 15(J.

DECISIOi\' CTA AC Nu. 191. F\lt,l' 10 ot 2ll WI II~TIII:R OR NOT Till: RESPONDENT'S ELECTRIC MEI'ERS ARJ: SUBJECT TO FEES FOR SEALING AND LICENSINCI OF WEIGHTS AND MI;ASURI:S; WIIEIIII�R OR NOT TIIF RJ:SPONDENT IS LIABLE FOR POLl; RENTAL TAX IN RIJAIION TO ITS ACT OF Ll;ASING OlJT ITS POLLS/POSTS TO TIIIRD PERSONS, AND WI WillER OR NOT Till ASSESSMI:NT ISSUED BY Till; PETITION! :R AGAINST RESPONDENT IS ENFORCEABIF WIIETIILR OR NOT TilE RI~SPONDENT IS LIABLE FOR MAYOR'S PI:RMIT I�H:S DESPITE A PENDING CASE QUESTIONING TilL V AUDITY OF ITS IMPOSITION AGAINST Rl:SPONDI:NT56 Arguments of the Parties Petitioner insists that its assessment pertaining to respondent's electric and kilowatt meters arc authorized under Article I:1: of the CDO Revenue Code, which is enacted in accordance with Section 148 ofthe LGC It explains that, contrary to the argument or the respondent, the LGC docs not limit the imposition of fees on the scaling and licensing of weights and measures to "ordinary merchants engaged in the sale or products sold by weight" It points out that although respondent is regulated by the ERC, the LGU still has the authority to regulate respondent's electric meters. As for the argument of respondent that the basis or its assessment (number of respondent's electric meter) is incorrect, petitioner claims that it is up to respondent to provide it with the actual number or electric meters installed. It argues that considering that respondent failed to provide it with the said ligures, the assessment should stand. Likewise, petitioner questions the ruling of the RTC stating that the amount due in the Notice or Assessment on the Pole Rental Tax is still for further adjustment It argues that the amount lixcd in the Notice of Assessment should not be contingent upon respondent's submission of financial documents since it is authorized to assess and collect local taxes based on available information it has in cases when a taxpayer is reluctant to provide the necessary information. r I>astly, it argues that the RTC was in error when it ruled that the Notice of Assessment pertaining to the Mayor's Permit Fcc was prematurely issued. 51 Appeal by Way of Petition for Rcvie\\� under RA 92Sl. R..ecords, pp. tll-611, '

DH'ISIO.~ CTA AC Nn. 19�1. Page 11 uf 26 It contends that without an outstanding restraining order or injunctive relief, its Notice of Assessment is cnl(lrccahlc and demandable. The Ruling of the Court Arter going through the arguments raised hy the Petitioner, this Court finds the same partially meritorious. There is no legal basis to impose fees for scaling and licensing of weights and measures on respondent's electric meters. Petitioner contends that the RTC erred in ruling that it has no legal basis to impose fees for scaling and licensing or weights and measures on respondent's electric meters. It insists that Article EE of the CDO Revenue Code empowers it to levy Ices on the electric meters of respondent. The pertinent provisions arc hereby quoted, to wit: "Article EE: Fee for Sealing and Licensing of Weights and Measures Section 12:1. Implementing Agency. The City Treasurer shall strictly enforce the provisions of the Regulation of Practices Relative to Weights and Measures. as provided in Chapter II of the Consumer Act, Republic Act No. 7394. Section 124. Sealing and Testing of Instruments of Weights and Measures.- All instruments for determining weights and measures in all consumer and consumer related transactions shall he tested. calibrated and sealed ever; six (()) nHlllths hv the oi'tlcial scaler who shall he the City Treasurer or his duly authorized representative upon payment of fees required under this Article: Provided. That all instruments of weights and measures shall continuously he inspected for compliance with the provisions of this Article. Trained personnel of the City Economic Enterprises Depa11ment (CEED) are likewise authorized to undertake the calibration and repair of weighing scales used in the public markds of the City and after payment by the vendor-owner thereof of the corresponding sealing and licensing fees levied hereunder. Section 12S. Imposition of Fees. Every person before using instruments or weights and measures within this City shall tirst have them scaled and licensed annually and pay thercl(H to the City Treasurer the following fees: (a) For sealing linear metric measures: Not over one (I) meter ......... . 20.00 61 Measure over one (I ) meter ....................................... . 30.001

DH ISIO~ CT A AC Nn. -IY-1. P<1gl' �12 llf 26 (h) For sealing metric measures of capacity 20.00 Not over ten (I 0) liters. 50.00 Over ten (I 0) liters .... (c) For sealing metric instruments of weights With capacity of not more than 30kg ................................ 30.00 With capacity of more than JO kg. hut not more than 150kg ..... 40.00 With capacity of more than I50 kg. but not more than 300 kg.. 50.00 With capacity of more than 300 kg. but not more than 3,000 kg. 60.00 With capacity of more than 3.000 kg ................................ 100.00 (d) For sealing apothecary balances of precision Over 3.000 kg.. ......... ....... . . ��������� .... 80.00 Over 300 to 3.000 kg ........ . ..... ... ...... 60.00 Over 30 to 300 kg .. ...... . .......... 40.00 Over 30 kg Or less .. . ........ 20.00 (e) For sealing of gasoline/diesel pumps Per Pump.......... ........................................ 100.00 Per Pump (Oil Dispenser).......... ................................. 500.00 Caliberation for Gasoline/Diesel Pump ............................. 200.00 Caliberation for Weight & Measure... ...................... 200.00 (I) For each and every re-testing and re-sealing of weights and measures instruments including gasoline pumps outside the otticc upon request of the owner or operator. an additional service charge of one hundred pesos (P I00.00) for each instrument shall be collected." Aller going through the cited rrovisions, this Court agrees with the RTC that the rctitioncr has no legal hasis to imrosc the said fee against respondent's electric meters. First, the imposition of the fcc for sealing and licensing of weights and measures under Section I 25, Article EE t~l the CDO Revenue Code is only limited to five (5) types of weights and measures, namely: linear metric measures, metric measures of capacity, metric instruments of weights, apothecary balances of precision, and measure for gasoline and diesel pumps. Clearly, none or these weights and measures mentioned pertains to electric meters. l!cncc, the petitioner has no legal hasis to charge or levy fees on the electric meters of respondent. Basic is the rule in statutory construction that where the law enumerates the subject or condition upon which it applies, it is to be construed as excluding from its effects all those not expressly mentioned. J;;xpressio unius est exclusio alterius. Anything that is not included in the enumeration is excluded therefrom, and a meaning that docs not appear nor is intended or rci1cctcd in the very language of the statute cannot be placed therein. The rule proceeds from the premise that the legislature would not have made specific9-'

DECISION CTA AC No. 194. Page 13 of26 enumerations in a statute if it had the intention not to restrict its meaning and confine its terms to those expressly mentioned. 57 Second, Sections 123 and 124 ofArticle EE ofthe CDORevenueCode only refer to sealing and testing of weights and measures relating to consumer and consumer related transactions as those provided under Chapter I1 ofthe Consumer Act ofthe Philippines.58 However, a close reading of the Consumer Act of the Philippines59 even further proves that Article EE of the CDO Revenue Code does not impose fees on electric meters since the said law only covers the regulation of food, drugs, cosmetics, and devices,60 which, likewise, does not include electric meters. Considering the above, this Court rules that the Notice of Assessment pertaining to Weights and Measures issued against respondent is void for lack of legal basis. There is no legal basis to impose Pole Rental Tax on respondent. As narrated by the parties in the Court a quo, the petitioner sent respondent a Notice of Assessment imposing payment for Pole Rental Tax at the rate of 2% citing as basis Ordinance No 9503-2005. However, during the proceedings in the RTC, the petitioner explained that it made a mistake in the citation of the basis of the assessment. It explained that its actual legal basis is Section 58(h), Article N, Chapter 2 of the CDO Revenue Code, which is hereby quoted to wit: "Section 58. Imposition of Tax. There is hereby imposed on the following persons who establish, operate, conduct or maintain their respective business within the City a graduated business tax in the amounts hereafter prescribed: XXX XXX XXX~ 57 San Pablo Manufacturing Corporation v. Commissioner of Internal Revenue, GR No. 147749,22 June 2006. 58 Consumer Act of the Philippines, Republic Act No. 7394, 13 April 1992. 59 Consumer Act of the Philippines, Republic Act No. 7394, 13 April 1992. 60 Devices refers to "an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article, including any component, part or accessory which is (I) recognized in the official United States Pharmacopoeia-National Formulary (USP-NF) or any supplement to them, (2) intended for use in the diagnosis of disease or other condition or in the cure, mitigation, treatment or prevention of disease, in man or other animals; or (3) intended to affect the structure or any function of the body of man or other animals, and which does not achieve any of its principal intended purposes through chemical action within or on the body of man or other animals and which is not dependent upon being metabolized for the achievement of any of its principal intended purposes. See Article 4, Title I of the Consumer Act of the Philippines.

DECISION CTA AC Nn. 1lJ.J. Pagt> l�l of 26 (h) Tax on Real Estate Lessors, Real Estate Dealers and Real Estate Developers: Rate 2�1., of ( iross Sales or Receipts Basis Gross Sales or Receipts of the preceding calendar ycar'�r~l Based on the aforementioned provision, petitioner's basis for imposing local business taxes on respondent is its being a real estate lessor, dealer or developer. lienee, f(Jr the Court to determine the validity of the assessment, it must first be satisfied that respondent is a real estate lessor, dealer, or developer within the purview of the CDO Revenue Code. Tax ordinances arc to be construed strictly against the local government, as provided under Section 5(b) ofthe LGC, to wit: "'SECTION 5. Rules ol� Interpretation- In the interpretation of the provisions of this Code. the t[,Jiowing rules shall apply: XXX XXX XXX (h) [n case of doubt, any tax ordinance or revenue measure shall be construed strictly against the local government unit enacting it, and liberally in favor of the taxpayer. Any tax exemption. incentive or relief granted by any local government unit pursuant to the provisions of this Code shall be construed strictly against the person claiming it. 6' This rule is echoed by this Court in the case of National Power Corp. v. Provincial Government '~f"Bukidnon,r'-' to wit: ��As a corollary, it must be rcmembt�red that in construing a tax provision. We should be guided instead by the principle that tax statutes are strictly construed against the taxing authority. This is because taxation is a destructive power which interferes with the personal and property rights of the people and takes ti�om them a portion of their property for the support of the government. Hence, tax laws may not be extended by implication heyond the clear import of their language, nor their operation enlarged so as to embrace matters not specifically provided." To prove the applicability of"Section 58(h}, Article N, Chapter 2 ofthe CDO Revenue Code to respondent, petitioner argues that electric poles arc real property, citing the case of MERALCO v. Ci~v Assessor and City Treasurer of" Lucena City (hereinafter referred to as "20 I 5 MERALCO f' Case'') ("1 ------�- - -��---- r' 1 J::mphasis supplied. (,_' Emphasis supplied. ''' CTA AC No. 57. IJ December 2010. r,.J (J.R. 166102, 5 August 2015.

DECISIO~ CT A AC No. I (J.J. P<�gc-15uf2h llowcvcr, this Court is not convinced. A close reading of the 2015 MERALCO Case65 reveals that the interpretation that electric poles arc real property is only applicable to real property tax, which is evident in the discussion of the Supreme Court in the Decision, to wit: The Court highlights that under Section 199(o) of the Local Government Code. machinery. to be deemed real property subject to real property tax. need no longer be annexed to the land or building as these "may or may not he attached. perrnanentlv or temporarily to the real property." and in tiKL such machinery may even be "mobile." The same provision though requires that to he machinery subject to real property tax. the physical facilities for prouuction. installations. and appurtenant service facilities. those which are mobile. selt~powcrcd or self~propelled, or not permanently attached to the real property (a) must be actually. directly, and exclusively used to meet the needs of the particular industry. business, or activity: and (2) by their very nature and purpose. are designed for, or necessary for manufacturing. mining. logging, commerciaL industriaL or agricultural purposes. Thus. i\rticle 290(o) of the Rules and Regulations Implementing the Local Government Code of 1991 recognizes the following exemption: Machinery which are of general purpose use including but not limited to ottice equipment. typewriters. telephone equipment. breakable or easily damaged containers (glass or cartons). microcomputers. facsimile machines. telex machines. cash dispensers. furnitures and fixtures. free/ers. refrigerators. display cases or racks. fruit juice or beverage automatic dispensing machines which are not directly and exclusively used to meet the needs of a particular industry. business or activity shall not be considered within the definition of machinery under this Rule. lhe 1964 MERALCO case was decided when The Assessment Law was still in effect and Section 3(1) of said law still required that the machinery he attached to the real property. Moreover. as the Court pointed out earlier. the ruling in the I 964 MERALCO case - that the electric poles (including the steel towers) of� M~:J{ALCO are not subject to real property tax - was primarily based on the c.spress exemption granted to MERALCO under its previous franchise. The reference in said case to the Civil Code detinition of real property was onlv an alternative argument: Granting h>r the purpose of argument that the steel supports or towers in question are not embraced within the term poles. the logical question posited is whether they constitute real properties. so that they can be subject to a real property tax. The tax law does not provide for a definition of real prope��ty; but Article 415 of the Civil Code does, by stating the following arc immovable property:p 65 !hid

llECISION CT A AC Nl). l (H. Page 16uf2l1 (I) Land. buildings. roads. and constructions of all kinds adhered to the soil; xxxx (J) Fvcrythin!! attached to an immo\ able in a Ji.\cd manner. in such a way that it cannot he separated therefrom without breaking the material or deterioration of the object: xxxx (5) Machinery. receptacles, instruments or implements intended by the owner of the tenement h1r an industry or works which may be carried in a building or on a piece of land. and which tends directly to meet the needs of the said industry or works: X X :\ X The steel towers or supports in question, do not come within the objects mentioned in paragraph 1, because they do not constitute buildings or constructions adhered to the soil. They are not constructions analogous to buildings nor adhering to tbe soil. As per description, given by the lower court, they are removable and merely attached to a square metal frame by means of bolts, which when unscrewed could easily be dismantled and moved from place to place. They can not be included under paragraph 3, as thev are not attached to an immovable in a fixed manner, and they can be separated without breaking the material or causing deterioration upon the object to which thev are attached. Each of these steel towers or supports consists of steel bars or metal strips, joined together bv means of bolts, which can be disassembled bv unscrewing the bolts and reassembled by screwing the same. These steel towers or supports do not also fall under paragraph 5, for they are not machineries ot� receptacles, instruments or implements, and even if they were, thev are not intended for industry or works on the land. Petitioner is not engaged in an industry or works on the land in which the steel supports or towers arc consh�uctcd. The aforequoted conclusions of the Court in the 1964 MERALCO case do not hold true anymore under the Local Government Code. While the Local Government Code still does not provide for a specific definition of"real property," Sections 199(o) and 232 of the said Code, respectively, gives an extensive definition of what constitutes "machinery" and unequivocally subjects such machinery to real property tax. The Court rcitcrctlcs Ihell the machinerv subject to real property tax under the Local (;(n�ernment Code "may or may not be f/ attached, permanently or temporarily to the real property;" and the physical facilities for production, installations, and appurtenant service

llECISION CTA AC No. llJ�I. Pagv 17 ot 2b facilities, those which are mobile, self-powered or self-propelled, or are not permanently attached must (a) be actually, directly, and exclusively used to meet the needs of the particular industry, business, or activity; and (2\ by their very nature and purpose, be designed for, or necessary for manufacturing, mining, logging, commercial, industrial, or agricultural purposes. Article 415. paragraph (I) or the ( 'ivil Code declares as immovables or real properties "[ljand. buildings. roads and constructions of all kinds adhered to the soil." The land. buildings. and roads are immovables by nature "which cannot be moved 1i�mn place to place." whereas the constructions adhered to the soil are immovables by incorporation "which are essentially movables. but are attached to an immovable in such manner as to he an integral part thereoL" Article 415. paragraph (3) of the Civil Code. referring to "je.jverything attached to an immovable in a tixed manner. in such a way that it cannot be separated therefrom without breaking the material or deterioration of the object." are likewise immovables by incorporation. In contrast, the Local Government Code considers as real property machinery which "may or may not be attached, permanently or temporarily to the real property," and even those which are "mohile." Article 415, paragraph (5) of the Civil Code considers as immovables or real properties "[machinery. receptacles. instruments or implements intended bv the owner of the tenement for an industry or works which may be carried on in a building or on" piece of land, and which tend directly to meet the needs or the said industry or works." The Civil Code, however. docs not detinc "machinery." The properties under Article 415. paragraph (5) of the Civil Code are immovables by destination. or "those which are essentially movables, hut by the purpose 1(1r which they hme been placed in an immovable, partake or the nature or the latter because of the added utility derived therefi�om." l'lwse properties. including machinery. become immobilized if the following requisites concur: (a) they me plnced in the tenement by the owner of such tenement; (b) they are destined for use in the industry or work in the tenement; and (c) they tend to directly meet the needs of said industry or works. The first two requisites are not found anywhere in the Local Government Code. MERAI.CO insists on harn1onio-ing the aforementioned provisions ofthe Civil Code and the Local Ciovcrnment Code. The Court disagrees, however, for this would necessarily mean imposing additional requirements for classifying machinery as real property for real property tax purposes not provided for, or even in direct conflict with, the provisions of the Local Government Code. As between the CiYil Code, a general law governing property and property relations, and the Local ( ;overnmcnt Code, a special law granting local government units the power to impose real property tax, then the latter shall prevail. XXX XXX f' XXX

llH'ISIO:\ CT A AC Nu. 1Y.J. P<1ge 18 of 2(1 Therefore, for determining whether machinery is real property subject to real property tax, the definition and requirements under the Local Government Code are controlling.""" Based on the above-quoted portion of the Decision, it is clear that the Supreme Court did not make a blanket pronouncement that electric poles arc real propetiy. In ruling as such, it relied on the extended definition of "machinery" found under Section 199(o) of the LGC, which is a provision only applicable to the interpretation ol' real property tax and not local business tax by virtue of Section 197 o{the LGC, to wit: ��SEC. I'J7. Scope. - I his I itk shall govern the administration, appraisal, assessment. levy and collection or real property tax."67 In fact, it did not overturn that part of the Decision in Board of Assessment Appeals, et. a/. v. Manila Electric Company (hereinafter referred to as the "1964 MERALCO Case''),6x where the Supreme Court previously l'ound that an electric pole is not a real property under the Civil Code. I Icncc, since electric poles arc considered real properties for real property tax purposes only, the burden ol'proving that this interpretation holds the same J(Jr Section 58(h), Article N, Chapter 2 of the CDO Revenue Code lies on the petitioner, for in case of doubt, the tax ordinance shall be construed strictly against it Unfortunately, petitioner failed to overcome the said burden. In fact, it is evident in the facts that the argument of the petitioner is a mere allcrthought The Court notes that .S'ection 58(h), Article N, Chapter 2 of the CDO Revenue Code was passed in 2003. Subsequently, on l 0 January 2005 the Sangguniang Panglungsod ol' CDO passed Ordinance No. 9503-2005 which directly imposed tax on the lease or rental of electric and/or telecommunication posts, poles, or towers by pole owners to other pole users 6~ llowcver, on 14 November 2012, this ordinance was struck down by the Supreme Court in the case oi'CEPALCO v. Ci(V o{Cagayan de Oro. 70 Of note is that said ordinance was also the basis indicated in the Notice of Assessment issued against respondent Thereafter, as admitted by the pclilioner in its Memorandum,71 the Sangguniang Panglungsod of CDO rasscd Ordinance No. 12860-2014, also known as the "Cagayan de Oro City Revenue Code of 2015" whieh#f (,(, Emphasis supplied. 67 Book IL Title II of the LGC is composed of Sections 197 to 28.1. c,~ G. R. No. L.-1 5334. 31 January 19(vl (,') Cagayan Electric Pmvcr and l.ight Co .. Inc.\� ('ity nr C<lg<l:an de Oro. Ci.R. No. 191761, 14 November 20 12. "/IJ /hid 71 Memorandum for the Petitioner. Record:). pp. 96-1.18.

IJECISIO~ CTA AC Nu. -19-J. P<:lgl' 19llf26 reimposed taxes on the lease or rental of electric poles for the lower rate of 2.5%. This Court observes that even with the reimposition of the taxes on the lease or rental of electric poles, the business tax on real estate lessors was still retained in the new ordinance, to wit: .. ARTICLE M Graduated Tax on llusiness SECTION 51. Imposition of Business Tax. There is hereby imposed on the following persons who establish. operate. conduct or maintain their respective business within the City a graduated business tax in the amounts hereat\er prescribed: XXX XXX XXX II. Tax on Real Estate Lessors, Real Estate Dealers and Real Estate Developers: Rate- 2'X, of Gruss Sales or Receipts Basis -Gross Sales or Receipts of the preceding calendar year ARTICLE P Tax on the Lease or Rental of Electric and/or Telecommunication Posts, Poles or Towers by Pole Owners to Other Pole Users SECTION 58. Imposition of Tax.- There shall be imposed a tax on the lease or rental of electric and/or telecommunication posts, poles or towers by pole owners to other pole users at the rate of two point five percent (2.5%) of the annual rental income derived therefrom. SECTION 59. Permit Required. Pole owners herein defined engaged in the business of renting their posts. poles and/or towers shall secure a separate business permit therel()r as provided for under this Ordinance." llcncc, based on the aforementioned, it is clear the Section 58(h), Article N, Chapter 2 l?l the CDO Revenue Code did not intend to cover lessors of electric poles within its ambit. The argument of the petitioner is a mere allci1hought, which it admitted in its Mcmorandum,72 to wit: ''On the other hand. it is worthy to note. that when the Supreme Court voided then City Ordinance No. 9503-2005 in the aforementioned case of Cagayan Electric Power & Light Co, Inc. v. Ci(v of Cagayan de Oro, it was done so without prejudice to the enactment of a tax ordinance that complies within the limits prescribed by law. Since the Petitioner CityIL Government has an c:-:isting applicable ordinance. City Council Ordinancer 7~ /hid

DECISIO~ CTAACNn. lY�I. PaglJ 20 of 26 No. 8847-2003. then it is only proper t(Jr the City Treasurer's Office to apply it upon assessment of the necessary taxes. Section 58(h) of the City Council Ordinance No. 8847-2003 provides for the correct tax base for the assessment of pole rental tax. to wit: xxx .. Therefore, since the petitioner failed to prove that respondent is covered by Section 58(h), Article N, Chapter 2 of the CDO Revenue Code, the assessment should be struck down lcJr Jack of legal basis. Furthermore, even assuming that Section 58(h), Article N, Chapter 2 of the CDO Revenue Code is applicable to electric pole lessors and that petitioner merely made a mistake on the legal basis cited in the assessment, this Court finds the said mistake l~1tal. In the case of Ci(v Treasurer of Manila v. Philippine Beverage Partners, Inc., 73 the Supreme Court ruled that the issuance of a Notice of Assessment is a requirement of due process, where a taxpayer is made aware of the nature and amount of tax, Icc, or charge imposed upon him, to wit: '�As regards the second issue. Section 195 of the LGC provides that "When the local treasurer or his duly authorized representative finds that correct taxes, fees. or charges have not been paid. he shall issue a notice of assessment stating the nature of the t'"'� fcc. or charge. the amount of deficiency. the surcharges. interests and penalties." Thus, suftice it to say that the issuance of a notice of assessment is mandatory before the local treasurer may collect dcticicncy taxes ti�om the taxpayer. The notice of assessment is not only a requirement of due process hut it also stands as the first instance the taxpayer is ol'licially made aware of the pending tax liability. The local treasurer cannot simply collect deficiency taxes for a difTerent taxing period by raising it as a defense in an action for refund of erroneously or illegally collected taxes." lienee, considering that the Notice of Assessment is a vital clement of due process, any mistake or infirmity on the assessment as to the nature or basis of the imposition will render the same void. This is explicit in our ruling in the case of The Municipal Ji�easurer of the Municipality of Claver v. Platinum Group Metals Corporation (PGMC), 71 to wit: ��1n this case. howe\ cr. it is undisputed that the Notice of Assessment, assessing respondent tllr deficiency local business taxes for the years 2015 and 20 I(,. issued lw petitioner was based on the 2014 and 2015 shipments of respondent. No further evidence is required to be presented in connection with the manner and bases by which the assessed amounts were computed. The assessments speak for themselves. XXX XXX xxxf '' G.R. No. :?:JJ)56. 11 Seprembcr :?:01'>. '" CTA AC No 18.1. 16 April 2019.

llECISIO~ CTA AC N<J.191. PdgL' 2�1 of 26 Indeed. it is well within the power of this Court to rule on the validity of the Notice of Assessment taking into consideration the patent and undisputed J>rct that the Notice of Assessment assessing respondent for deficiency local business taxes fiJr the years :20 15 and 2016. was based on respondent's shipments and not on its gross receipts for 2014 and 2015. As the Notice of Assessment issued against respondent for 2015 and 2016 was not based on its 2014 and 2015 gross receipts, the same is void ab initio. The Notice of Assessment could not be a valid source of obligation to pay deficiency local business taxes for the years 2015 and 2016 on the part of respondent. Being a void assessment, the Notice of Assessment bears no fruit and should be slain at sight."'7; In the aforementioned case, the Cl/\ voided an assessment that was based on an incorrect tax base. In so ruling, the CT/\ did not consider any other evidence but the assessment itself. It fmthcr ruled that a Notice of Assessment could not be a valid source of obligation for being a void assessment. Therefore, based on the grounds discussed, the Notice of Assessment assessing rcspondcntl'olc Rental Tax is, likewise, void for lack oflegai basis. Petitioner's assessment for Mayor's Permit Fee is enforceable. Coming now to the third issue, petitioner issued a Notice of Assessment against respondent for Mayor's Permit Fcc amounting to 1'500.00 per pole per year based on Ordinance No. 9527-2005, enacted on 24 January 2005, for the total amount of P 152,5 50,562.50 I(Jr years 2003-20 13. During the proceedings in the RTC, respondent contended that the said Notice of Assessment is not cni(Jrccahlc since a case questioning the validity of the said ordinance is still pending with the C'mnt of Appeals, and it was able to obtain a writ of preliminary injunction to enjoin the petitioner from enforcing the said ordinance. The RTC decided in favor of the respondent. In this case, petitioner questions the Decision of the RTC. It argues that although the case questioning the validity of Ordinance No. 9527-2005 is still pending (currently in the Supreme Court), the assessment is enforceable since there is no outstanding restraining order against the said ordinance. It opines that the writ of preliminary injunction was deemed automatically lifted when the Trial Cmni issued its Resolution upholding the constitutionality of Ordinance No. 9527-2005. f" We find the argument of the petitioner meritorious. 7 ~ Emphasis suppl iect.

DECISIOI\' CTA AC No. l tJ.J. Pagl' 12 ot 2h Section 187 l~{the L(;C provides that a case questioning the validity or constitutionality of an ordinance will not affect the effectivity of the said ordinance, nor will it suspend the accrual or payment of the tax, fee, or charge imposed by it, to wit: Section I X7. Procedure l(>r Approval and Effectivity of Tax Ordinances and Revenue Measures: Mandatory Public Hearings. The procedure lor approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted i(>r 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 ti�om the etlectiv�ity thereof to the Secretary of Justice who shall render a decision within sixty ((>()) days from the date of receipt of the appeal: Provided, however, That such appeal shall 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, tinally, That within thirty {30) days atier 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 lile appropriate proceedings with a court of competent .i urisd iction. An exception to this rule is when the taxpayer applies for a preliminary injunction to enjoin the collection oftaxcs76 I lowcvcr, the availment of a preliminary injunction does not perpetually enjoin the collection of taxes. The Supreme Court explained in the case of Buyco l'. Baraquia77 that the objective of a preliminary injunction is to preserve the status quo until the merits of the case has been heard. Hence, once the case has already been heard, the preliminary injunction is considered lifted, notwithstanding whether the case is appealed by any of the parties, to wit: "A writ of preliminary injunction is an order granted at any stage of an action or proceeding prior to the judgment or final order, requiring a party or a court. agency or a person to reti�ain ti�01n a particular act or acts. It is merely a provisional remedy, adjunct to the main case subject to the latter's outcome. It is not a cause or action in itself. Being an ancillary or auxiliary remedy, it is available during the pendency of the action which may be resorted to by a litigant to preserve and protect certain rights and interests therein pending rendition. and lor purposes of the ultimate effects, of a tina! judgment in the case. The writ is provisional because it constitutes a temporary measure availed of during the pendencv of the action and it is ancillary because it is a mere incident in and is dependent uron the result of the main action. It is well-settled that the sole object of a preliminary injunction, f- whether prohibitory or mandaton�, is to preseo�ve the status guo until the merits of the case can be heard. It is usually granted when it is made 711 Angeles City v. Angeles City Electric Corporation. et. a!., Ci.R.. No. I(J6]3ik 29 June 2010. 77 G.R. No. t77486, 21 December 2009.

lli:CISIO'\ CT A AC No. FJ.L Pagl' T\ of :Zb to appear that there is a substantial controversy between the parties and one of them is committing an act or threatening the immediate comn1ission of an act that will cause irreparable injury or destroy the status quo of the controversy before a full hearing can be had on the merits of the case. Indubitably. in the case at bar. the writ of preliminary injunction was granted by the lower court upon respondent's showing that he and his poultry business would he injured by the closure of the subject road. After trial, however. the lower court I(Hmd that respondent was not entitled to the casement of right of way prayed t(n. having failed to prove the essential requisites for such entitlement. hence. the writ was lifted. The present case having been heard and found dismissible as it was in fact dismissed, the writ of preliminary injunction is deemed lifted, its purpose as a provisional remedv having been served, the appeal therefrom notwithstanding. Union bank v. Court of Appeals enlightens: "x x x a dismissal, discontinuance or non-suit of an action in which a restraining order or temporary injunction has been granted operates as a dissolution of the restraining order or temporary injunction," regardless of whether the period for filing a motion for reconsideration of the order dismissing the case or appeal therefrom has expired. The rationale therefor is that even in cases where an appeal is taken from a judgment dismissing an action on the merits, the appeal does not suspend the judgment, hence the general rule applies that a temporary mrunction terminates automaticallv on the dismissal of the action. " 7R I Icncc, based on the al'orcmcntioncd case, this Court finds the observation ol'thc petitioner correct that the preliminary injunction issued by the trial court is already deemed lifted. Considering that there is no outstanding preliminary injunction issued against the enforcement ol' the Mayor's Permit Fcc, this Court rules that the Notice of Assessment pertaining to said Icc is already enforceable and demandable, albeit only for years 2009-2013. As observed by this Court, Ordinance No. 9527-2005 was enacted into law on 24 January 2005. llcnce, petitioner has no legal basis to impose the Mayor's Permit Fcc against respondent prior to the enactment of the said ordinance. To allow the petitioner to impose the Mayor's Permit Fee against respondent fix years prior to 2005 constitutes a direct violation of the rule against non-retroactivity orlaws 79 I Icncc, the assessment for Mayor's Permit fee for the years 2003-2004 is invalid.~ 78 Emphasis supplied. 7') Article tl_ Civil Code of the Philippines

DECISION CTA AC Nn. 19�1 Page 2,l of 26 Likewise, petitiOner is prohibited ti�mn assessing respondent for Mayor's Permit Fcc starting 2005 up to 2008, since under Section 194 ofthe LGC, petitioner only has live years counting from the date the tax or fee became due to assess respondent, to wit: "SECTION 194. Periods of Assessment and Collection. - (a) Local taxes, fees, or charges shall be assessed within five (5) years from the date they became due. No action for the collection of such taxes, fees, or charges, whether administrative or judicial, shall be instituted after the expiration of such period: Provided. That. taxes. fees or charges which have accrued before the eiTecti\ it' of this Code mav be assessed within a period of three (J) years from the ~late they became due. xxx'"80 In this case, Section 4 of Ordinance No. 9527-2005x 1 provides that the administration and implementation of the Mayor's Permit Fcc is governed by the CDO Revenue Code, which in turn requires the payment of the said fee within the first twenty (20) days of January of each ycar.X2 Given this, the petitioner can only assess the respondent for the following periods: Therci(Jrc, based on the foregoing, it is clear that for years 2005-2008, petitioner's right to assess respondent for the Mayor's Permit Fee has already prescribed. At this point, the Court llnds that the Notice of Assessment issued against respondent for Mayor's Permit Fcc is enforceable and demandable only for years 2009 to 20 13. ~ w Emrhasis supplied. ~ 1 SECTION :1. fhe pertinent provisions ol' Ordinance No. 88,17-200.1. otherwise known as the 2003 Revenue Code, covering the i111poc.;ition of Mayor\ Per111it Fee and other appropriate administrative provisions thereof shall apply in the i111position ol"th!.:' fee under this Ordinance. x~ CDO Revenue Code, as a111ended by ("DO Ordi11<lnce No. l ~860-! '1. x.> Ordinance No. 95~7~~00.5 \\"JS enacted on ],1 .JmuJ<.lr) 200) and took ef!~ct !5 days after its publication in a local newspaper of genera! circu!~Hion.

I>ECISION CTA AC Nu. N�l. f',lgl.' 25 nt 26 WHERI<:FORE, premises considered, the instant Petition for Review is PARTIALLY GRANTED. The assailed Decision dated I0 July 2017, and Order dated 30 October 2017 of the Regional Trial Court ofMisamis Oriental, Cagayan de Oro, Branch 24 is hereby PARTIALLY REVERSED AND SET ASIDE, insofar as it finds I) the Notice of Assessment on petitioner for the payment of Pole Rental Tax as lawful and constitutional; instead, the same is hereby CANCI<:LLE]) for being without basis; and 2) the Notice of Assessment pertaining to the Mayor's Permit Fcc to be premature; instead, the same is found to be ENFOI{CEABLE AND DEMAN])ABLE against respondent, but only for years 20()() to 2013. The rest of the Decision is hereby AFFIRMED. SO ORDERED. MARIA R( Justice WE CONCUR: ERl~P.lJY Associate Justice ~- -4<.f�- ..4 ~ MA. BELEN M. RINGPIS-LIBAN Associate Justice ATTI�~STATION I attest that the conclusions in the above Decision were reached in consultation bcCorc the case was assigned to the writer of the opinion of the Court's Division ER~1.UY Associate Justice Chairperson

I>ECISIOI\' CTA AC NP. 19-!. F'dgl' :::!6 llf 26 CJ<:RTIFICATION Pursuant to J\rticlc VIII, Section 13 ofthc Constitution and the Division Chairperson's Attestation, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. ROMAN G. DEL~OSARIO Presiding Justicefv