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Barlis-Municipal Treasurer of Muntinlupa (February 2002)


Nelia A. Barlis, in her capacity as Officer-in-Charge/Acting Municipal Treasurer of Muntinlupa

garnished petitioner MERALCOs bank deposits to the extent of its unpaid real estate taxes. MERALCO
filed a petition for prohibition with the RTC to enjoin respondent Municipal Treasurer
of Muntinlupa from garnishing its bank deposits. On the other hand, respondent Municipal Treasurer of
Muntinlupa filed a motion to dismiss the petitioners petition for prohibition. The RTC denied the
Municipal Treasurers motion to dismiss. The Court of Appeals reversed the decision of the RTC which
was affirmed by the Supreme Court. The Supreme Court said: The Regional Trial Court has no
jurisdiction to entertain the petition for prohibition filed by MERALCO because the latter failed to do the
following first:

1. Petitioner did not comply with the legal requirement of paying under protest the taxes
assessed against it as provided for in Section 64 of the Real Property Tax Code.
Sec. 64. Restriction upon power of court to impeach tax. No court shall entertain any
suit assailing the validity of tax assessed under this Code until the taxpayer shall have paid,
under protest, the tax assessed against him nor shall any court declare any tax invalid by
reason of irregularities or informalities in the proceedings of the officers charged with the
assessment or collection of taxes, or of failure to perform their duties within this time herein
specified for their performance unless such irregularities, informalities or failure shall have
impaired the substantial rights of the taxpayer; nor shall any court declare any portion of the
tax assessed under the provisions of Code invalid except upon condition that the taxpayer
shall pay the just amount of the tax, as determined by the court in the pending proceeding.
2. Petitioner had no cause of action since its failure to question the notice of assessment before
the Local Board of Assessment Appeals (LBAA) prior to the filing of the suit in the RTC
was tantamount to a failure to exhaust administrative remedies.

(1) Whether or not the notices served to MERALCO were actually tax collection notices and not tax
assessment notices?
(2) Whether or not petitioner MERALCOs petition for prohibition before the RTC is pre-mature for
not availing of the proper administrative remedies in protesting an erroneous tax assessment
before the LBAA (Local Board of Assessment Appeals).

1. It is apparent why the foregoing cannot qualify as a notice of tax assessment. A notice of
assessment as provided for in the Real Property Tax Code should effectively inform the taxpayer of the
value of a specific property, or proportion thereof subject to tax, including the discovery, listing,
classification, and appraisal of properties. The September 3, 1986 and October 31, 1989 notices do not
contain the essential information that a notice of assessment must specify, namely, the value of a specific
property or proportion thereof which is being taxed, nor does it state the discovery, listing, classification
and appraisal of the property subject to taxation. In fact, the tenor of the notices bespeaks an intention to
collect unpaid taxes, thus the reminder to the taxpayer that the failure to pay the taxes shall authorize the
government to auction off the properties subject to taxes or, in the words of the
notice, Ipinaaalaala polamang, ang sino mang magpabaya o magkautang ng buwis ng maluwat ay isusub
asta (Auction Sale) ng pamahalaan ang inyong ari-arian ng naaayon sa batas.
2. By the parties own doing, all the issues that bear upon the propriety of the issuance of the warrants
of garnishment against petitioners bank deposits for the collection of back taxes have been raised before
this Court in its Petition for Review on Certiorari and properly resolved in favor of respondent Municipal
Treasurer. In resolving all those issues presented before us by petitioner, we have, in effect, resolved
petitioners amended petition for prohibition filed before the trial court. In other words, we have already
decided that said respondent did not act arbitrarily and despotically in garnishing petitioners funds.

Hence, should the trial court find that there has indeed been a prior assessment, petitioners petition
for prohibition would be dismissed for failure to pay under protest and to exhaust administrative
remedies. However, a finding by the trial court that there was no tax assessment made prior to the
collection of taxes would render inapplicable the requirement of paying under protest and exhausting
administrative remedies by first appealing to the LBAA before the trial court takes cognizance of
petitioners petition for prohibition. Unfortunately therefore, even if the trial court can assume jurisdiction
over the said petition for prohibition, there is nothing substantial left for it to do.