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10. Napocor vs Province of Lanao

10. Napocor vs Province of Lanao

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Published by Kara Aglibo
Tax Case Digest
Tax Case Digest

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Categories:Types, Research
Published by: Kara Aglibo on Mar 08, 2013
Copyright:Attribution Non-commercial


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[G.R. No. 96700.

November 19, 1996]

NATIONAL POWER CORPORATION, petitioner, vs. PROVINCE OF LANAO DEL SUR, LANAO DEL SUR GOVERNOR SAIDAMEN B. PANGARUNGAN and LANAO DEL SUR PROVINCIAL TREASURER HADJI MACMOD L. DALIDIG, respondents. Facts: Petitioner was assessed real estate taxes on its properties in Lanao del Sur. It filed a protest alleging that it is exempt from tax pursuant to Commonwealth Act 120, Sec 2 of RA 358 and RA 6395. Issue: WON petitioner has ceased to enjoy its tax and duty exemption privileges, including its exemption from payment of real property taxes. HELD: NO. Section 40(a) of the Real Property Tax Code, PD 464, as amended, expressly exempts them from such tax. Said section provides: “Exemptions from Real Property Tax. -- The exemption shall be as follows: (a) Real property owned by the Republic of the Philippines or any of its political subdivisions and any government-owned corporation so exempt by its charter. Provided, however, that this exemption shall not apply to real property of the abovenamed entities the beneficial use of which has been granted, for consideration or otherwise, to a taxable person. xxx xxx x x x.”

The exemption is not only legally defensible, but also logically unassailable. The properties in question comprise the site of the entire Agus II Hydroelectric Power Plant Complex, which generates and supplies relatively cheap electricity to the island of Mindanao. These are government properties, wholly owned by petitioner and devoted directly and solely for public service and utilized in the implementation of the state policy of bringing about the total electrification of the country at the least cost to the public, through the development of power from all sources to meet the needs of industrial development and rural electrification.

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