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THE
Metropolitan Waterworks and Sewerage System (MWSS) has
warned of higher water rates as well as disruption in
Metro Manila’s water supply if the Court of Appeals does
not enjoin the Quezon City government from auctioning
off its real properties and facilities for failure to
pay tax dues of P230 million that have accumulated since
1993.
Government Corporate Counsel Alberto Agra, in last
week’s oral arguments at the Court of Appeals, asked the
justices of the Special Fifteenth Division to issue a
writ of preliminary injunction to indefinitely restrain
the Quezon City government from subjecting its
properties to a warrant of distraint and levy for the
alleged nonpayment of real-property taxes.
MWSS has
jurisdiction, supervision, and control over all
waterworks and sewerage systems within Metropolitan
Manila, the entire province of Rizal, and a portion of
the province of Cavite.
The
properties of MWSS, including its pipelines, reservoirs
and aqueducts were supposed to be auctioned off by the
Quezon City government on September 27, 2007, but the
auction did not push through after the CA issued a
60-day TRO on the same day.
The TRO
will expire on November 26; thus, the MWSS is seeking a
writ of preliminary injunction in lieu of the TRO.
Agra argued the MWSS is a government instrumentality since
its real properties and facilities are exclusively
devoted for public use and service.
He said
the Quezon City government “arbitrarily and whimsically”
classified the MWSS properties comprising of land,
machineries and facilities as taxable real properties.
Agra explained these MWSS properties are being held in
trust by MWSS on behalf of or for the benefit of the
Republic of the
Philippines in accordance with its mandate to generate
and provide water supply for Metro Manila and its
environs.
“These
MWSS properties were specifically reserved by the State
for said purpose. As such, these properties form part of
the public domain and consequently exempt from
taxation,” he said.
Under
421 of the Civil Code of the Philippines, the MWSS
noted, properties intended for public use such as roads,
canals, rivers, torrents, ports and bridges constructed
by the State, banks, shores, roadsteads, and others of
similar character are considered properties of public
dominion.
The MWSS
cited the recent rulings of the Supreme Court in the
case of Board of Assessment Appeals, Province of Laguna
v. Court of Tax Appeals which held that the water pipes,
reservoir, intake and buildings of National Waterworks
and Sewerage Authority (Nawasa) (the predecessor of MWSS)
being used in the operation of its waterworks system in
the municipalities of Cabuyao, Sta. Rosa and Biñan,
Province of Laguna are part of public dominion and
hence, exempt from real-property taxation.
Agra said the properties in the Laguna case are similar to
the MWSS properties that are subject of the assessment
by
Quezon
City.
The MWSS
also cited the 2007 case of Philippine Fisheries
Development Authority v. Court of Appeals, where the
Supreme Court ruled the Philippine Fisheries Development
Authority is an instrumentality of the national
government—thus generally exempt from payment of
real-property tax.
“Thus,
the imposition of real-estate taxes on the petitioner
is effectively a tax on the National Government which
shall not only cause irreparable injury to the latter
but will also work injustice to the public because such
burden will be unduly passed on to the water-consuming
public by way of exorbitant and unaffordable water rate
increase,” said the MWSS.
Associate Justice Amelita Tolentino, chairman of the
Special Fifteenth Division, ordered the parties in the
case to submit their respective memoranda within five
days, after which the case is deemed submitted for
resolution. |
