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G.R. No.

127383, August 18, 2005

tax exemption rules governing GSIS and exceptions the plenary powers of Congress cannot be limited by passage of un-repealable laws


GSIS Davao City branch office received a Notice of Public Auction, scheduling public bidding of its properties for non-payment of realty taxes from 1992-1994, amounting to the sum total of Php 295, 721.61. The auction was, however, subsequently reset by virtue of a deadline extension given by Davao City.

On July 28, 1994, GSIS received Warrants of Levy and Notices of Levy on three parcels of land it owned and another Notice of Public Auction. In September of that same year, GSIS filed a petition for Certiorari, Prohibition, Mandamus and/or Declaratory Relief with the Davao City RTC.

During pre-trial, the only issue raised was whether sec. 234 and 534 of the Local Government Code, which have withdrawn real property tax from GOCCs, have also withdrawn from the GSIS its right to be exempted from payment of realty tax.

RTC rendered decision in favor of GSIS. Hence this petition.


Whether the GSIS tax exemptions can be deemed as withdrawn by the LGC

under sec. Only the Constitution may operate to preclude or place restrictions on the amendment or repeal laws. 1146 which laid down requisites for repeal on the laws granting exemption. except as provided in said section. 133.D. then it necessarily follows that its exemption has been withdrawn. 33. are withdrawn upon effectivity of LGC. the two conditions under sec. fees. if honored. particularly the amendatory second paragraph. have the precise effect of limiting the powers of Congress. 1146.” However. 33 of P. for by doing so. This places an undue restraint on the plenary power of the legislature to amend or repeal laws. and LGUs. 234.W/N sec. exemptions from payment of real property taxes granted to natural or juridical persons. and 234 of the LGC. its agencies and instrumentalities. 1146 has been repealed by the LGC HELD: Reading together sec. they would be giving sanction to a disingenuous means employed through legislative power to bind subsequent legislators to a subsequent mode of repeal. Regarding P. 33. including GOCCs. Thus. Supreme Court found a fundamental flaw in Sec.D. GSIS being a GOCC. 232. and charges of any kind on the National Government. Supreme Court held that they cannot render effective the amendatory second paragraph of sec. . 33 cannot bear relevance whether the LGC removed the tax-exempt status of GSIS. as a general rule: the taxing powers of LGUs cannot extend to the levy of “taxes.D. Said paragraph effectively imposes restrictions on the competency of the Congress to enact future legislation on the taxability of GSIS. These conditions imposed under P.

The subject real property taxes for the years 1992-1994 were assessed against GSIS while the LGC provisions prevailed and thus may be collected by the City of Davao. sec. sec. was withdrawn in 1992 by the LGC but restored by the GSIS Act of 1997.Furthermore. 39. in sum. .” The GSIS tax-exempt stats. 5 on the rules of interpretation of LGC states that “any tax exemption. incentive or relief granted by any LGU pursuant to the provision of this Code shall be construed strictly against the person claiming it.