Liberality in administrative agencies

In resolving this issue, Respondent CBAA was duty-bound to review the factual antecedents of the case and to apply thereon the pertinent provisions of the law

On 7 November 2022, the Court of Tax Appeals En Banc issued a decision involving the computation of real property tax on the properties of Luzon Hydro Corporation or LHC (See Macanes, et al. v.
Luzon Hydro Corporation, (CTA EB No. 2407). The case is a Petition for Review questioning the ruling of the Central Board of Assessment Appeals which ordered the re-computation of the real property taxes on the properties of the Luzon Hydro Corporation pursuant to Executive Order 88, Series of 2019.

This issuance sought to reduce and condone real property taxes and interest/penalties assessed on power generation facilities of independent power producers under build-operate-transfer contact with government-owned or controlled corporations. This matter, however, was never raised as an issue before the proceeding in both the Local Board of Assessment Appeals and the CBAA.

In denying the Petition, the CTA En Banc held that this issue has already been addressed by the Supreme Court in Sesbreño v. CBAA, et al., thus:

“As a rule, no issue may be raised on appeal unless it has been brought before the lower tribunal for its consideration. The Court held in several cases, however, that an appellate court has an inherent authority to review unassigned errors (1) which are closely related to an error properly raised, or (2) upon which the determination of the error properly assigned is dependent, or (3) where the Court finds that consideration of them is necessary in arriving at a just decision of the case.”

“Although the foregoing citations specifically referred to “appellate courts,” there appears no reason why these should not apply to appellate administrative agencies, where rules of procedure are liberally construed.

“In the present case, we hold that Respondent CBAA did not err in considering the issue of back taxes, the same being closely related to an error properly raised. Petitioner himself assailed the subject assessment before the Respondent CBAA for being ‘excessive and unconscionable.’ In resolving this issue, Respondent CBAA was duty-bound to review the factual antecedents of the case and to apply thereon the pertinent provisions of the law.”

In line with the Sesbreño ruling, the CTA reiterated that it is not precluded from ruling on the applicability of EO 88 even if it was not raised as an issue by the parties before the LBAA and the CBAA. The CTA En banc further held that under Section 1, Rule 14 of the Revised Rules of the Court of Tax Appeals, in deciding the case, the Court of Tax Appeals may not limit itself to the issues stipulated by the parties but may also rule upon related issues necessary to achieve an orderly disposition of the case.

This is an important reminder that rules of procedure in administrative agencies should be liberally construed for the furtherance of justice.


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