PROVINCE OF BULACAN vs. COURT OF APPEALS
G.R. No. 126232, November 27, 1998
On June 26, 1992, the Sangguniang Panlalawigan of Bulacan passed Provincial Ordinance No. 3, known as “An Ordinance Enacting the Revenue Code of the Bulacan Province.” which was to take effect on July 1, 1992. Section 21 of the ordinance provides that hereby levied and collected a tax of 10% of the fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth and other quarry resources, such, but not limited to marble, granite, volcanic cinders, basalt, tuff and rock phosphate, extracted from public lands or from beds of seas, lakes, rivers, streams, creeks and other public waters within its territorial jurisdiction.
Pursuant thereto, the Provincial Treasurer of Bulacan, in a letter dated November 11, 1993, assessed private respondent Republic Cement Corporation (hereafter Republic Cement) P2,524,692.13 for extracting limestone, shale and silica from several parcels of private land in the province during the third quarter of 1992 until the second quarter of 1993.
Believing that the province, on the basis of above-said ordinance, had no authority to impose taxes on quarry resources extracted from private lands, Republic Cement formally contested the same on December 23, 1993. The same was, however, denied by the Provincial Treasurer on January 17, 1994. Republic Cement, consequently filed a petition for declaratory relief with the Regional Trial Court of Bulacan on February 14, 1994 and in the Court of Appeals on December 13, 1994.
After due trial, the Court of Appeals, on September 27, 1995, rendered a judgment declaring the Province of Bulacan under its Provincial Ordinance No. 3 entitled “An Ordinance Enacting The Revenue Code of Bulacan Province” to be without legal authority to impose and assess taxes on quarry resources extracted by RCC from private lands, hence the interpretation of Respondent Treasurer of Chapter II, Article D, Section 21 of the Ordinance, and the assessment made by the Province of Bulacan against RCC is null and void.
Petitioners’ motion for reconsideration, as well as their supplemental motion for reconsideration, was denied by the appellate court on August 26, 1996, hence this appeal.
Issue:
WON a province has the authority to impose taxes on stones, sand, gravel, earth and other quarry resources extracted from private lands.
Held:
The pertinent provisions of the Local Government Code, Sec. 158 pertaining to “Tax on Sand, Gravel and Other Quarry Resources” states that the province may levy and collect not more than ten percent (10%) of fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth, and other quarry resources, as defined under the National Internal Revenue Code, as amended, extracted from public lands or from the beds of seas, lakes, rivers, streams, creeks, and other public waters within its territorial jurisdiction.
In the instant case, Republic Cement is extracting limestone, shale and silica from several parcels of private land in the province and under Section 158 of the LGC, a province can collect taxes on sand, gravel and other quarry resources which is extracted from public lands. Thus, they are barred from imposing taxes in private lands.
Hence, the province has no authority to impose taxes on stones, sand, gravel and other quarry resources extracted from private lands.
Real LexEcon 