Thursday, July 03, 2008 SC upholds ruling vs auction of Petron's properties
THE Supreme Court (SC) on Wednesday denied the petition of the Bataan Provincial Government to proceed with the public auction of the machineries and equipment of Petron Corporation for non-payment of real property tax deficiency amounting to P1.7 billion from the years 1994 to 2007.
In a decision penned by Associate Justice Consuelo Ynares-Santiago, the SC Third Division affirmed the Bataan Regional Trial Court's (RTC) issuance of a writ of preliminary injunction enjoining Bataan Provincial Treasurer Emerlinda Talento from confiscating the properties of Petron and giving it up for auction.
The SC gave merit on the arguments of Petron that the sale of its properties will have "far-reaching implications and repercussions" on the operations of one of the biggest oil companies in the country.
"The urgency and paramount necessity for the issuance of a writ of injunction becomes relevant in the instant case considering that what is being enjoined is the sale by public auction of the properties of Petron amounting to at least P1.7 billion and which properties are vital to its business operations," the SC said.
The high court further noted that Petron's appeal to hold in abeyance the payment of the said taxes is based on valid grounds.
Petron argued: That the subject assessment pertained to properties that have been previously declared; that the assessment covered periods of more than 10 years which is not allowed under the Local Government Code.
Petron also said the fair market value or replacement cost used by petitioners included items which should be properly excluded; that prompt payment of discounts were not considered in determining the fair market value; and that the subject assessment should take effect a year after on January 1, 2008.
The SC ruled that the resolution of these issues would have a direct bearing on the assessment made by petitioner, thus it is necessary that the issues must first be passed upon before the properties of respondent is sold in public auction.
The SC further said that the petition should be dismissed due to the failure of the petitioner to file it within the 15-day reglementary period, which started November 6, 2007, to file the petition.
However, it took the petitioner until January 4, 2008 or 43 days to file the petition.
"Jurisprudence mandates that when a decision becomes final and executory, it becomes valid and binding upon the parties and their successors in interest. Such decision or order can no longer be disturbed or reopened no matter how erroneous it may have been," it added.
Court records showed that Petron received from the Bataan Provincial Assessor's Office a notice of revised assessment over its machineries and pieces of equipment in Lamao, Limay, Bataan.
In its assessment, Petron has a delinquency real property tax in the amount of P1,731,025,403.06 covering the period of 1994 to 2007.
On August 22, 2007, Petron received from petitioner a final notice of delinquent real property tax with a warning that the subject properties would be levied and auctioned should Petron fail to pay the tax assessment.
With the issuance of a warrant of levy against its properties, Petron filed on September 4, 2007 an urgent motion to lift the final notice of delinquent real property tax and warrant of levy with the Local Board of Assessment Appeals (LBAA).
It argued that the issuance of the notice and warrant of levy is premature considering that it has a pending appeal before the LBAA.
On October 3, 2007, Petron received a notice of sale of its properties scheduled on October 17, 2007, prompting it to file a petition before the Bataan RTC seeking the issuance of a temporary restraining order (TRO) and preliminary injunction.
On November 5, 2007, the Bataan RTC issued a writ of preliminary injunction indefinitely suspending the public auction of Petron's properties until the final resolution of its case.
The Bataan Provincial Government then elevated the case before the SC through a petition for certiorari. (ECV/Sunnex)
