NPC v.

Province of Pangasinan (2019)

FACTS:
• NPC is a GOCC mandated to undertake
production of electricity from nuclear,
geothermal, other sources, and
transmission of electric power nationwide.
• NPC entered into Energy Conversion
Agreement (ECA) with CEPA Pangasinan
(private crop) for construction, operation
and maintenance of Sual Coal-Fired
thermal Power Plant on a BOT basis
• NPC was obliged to assume all real property
taxes
⁃ religiously paid from 98 up to 1st quarter
of 2003
⁃ 2nd quarter, stopped paying claiming
exemption pursuant to RA 7160
• Muni Treasurer sent notice of assessment
• NPC filed a petition for exemption with LBAA
• LBAA: dismissed for lack of merit
• CBAA: NPC no personality to claim exemption;
PPE ADE used by Mirant, not NPC
• CTA: ownership with Mirant until transfer of
project to NPC

ISSUE:
W/N NPC has legal personality & interest to
claim for such exemptions & privilegs

RULING: No.
The tax exemptions and privileges claimed by
NPC cannot be recognized since it is not the
actual, direct, and exclusive user of the
facilities, machinery and equipment subject of
the cases.

Real property tax liability rests on the owner of

the property or on the person with the
beneficial use thereof such as taxes on
government property leased to private persons
or when tax assessment is made on the basis
of the actual use of the property. In either
case, the unpaid realty tax attaches to the
property but is directly chargeable against the
taxable person who has actual and beneficial
use and possession of the property regardless
of whether or not that person is the owner.

In this case, however, NPC is neither the owner

nor the possessor or beneficial user of the
subject facilities. Hence, it cannot be
considered to have any legal interest in the
subject property to clothe it with the
personality to question the assessment and
claim for exemptions and privileges.