By Analiza Q. Leyba

Baniqued: Poles, transformers subject of RPT

A protracted legal battle between the Dagupan City government and the Dagupan Electric Corporation looms ahead after the city government filed a counterclaim in response to the civil case recently filed by the electric company.

The issue at hand is whether the city government should collect real property taxes on the hundreds of electric poles erected by Decorp.

City Legal Officer Geraldine Baniqued, who filed the reply before the RTC on Aug. 15, said several jurisprudence support the city’s position that Decorp is liable to pay its RPT for the years 1996 to 2006 for the electric poles.

Decorp earlier filed the petition before the court seeking the declaration of nullity of assessment as well as damages based on the demand letter it received from the city.
 

Aside from asking the court to dismiss Decorp’s complaint, the city government asked that the company be compelled to pay the demanded amount due as RPT and to pay the city by way of exemplary damage an amount of not less than P1 million in order to deter other delinquent taxpayers.  

Baniqued argued that the electric poles and the transformers of Decorp should be considered or classified as machinery as provided for in Section 199 (o), and Article 290 (o) of Republic Act 7160 or the Local Government Code.

“It is undeniable fact that the poles and transformers owned by the Decorp are physical /service facilities and or improvement for electric services regardless whether they are permanently or temporarily attached to the soil,” Baniqued explained.

She contends that electric poles and transformers are machineries actually, directly and exclusively used to meet the needs of Decorp in its business of supplying or distributing electricity, hence are proper subject of real property tax.

The city further argued that Decorp earns from rentals being paid by telephone and cable companies using the electric poles and the latter cannot carry out its business operations without using or installing electric posts and transformers for electric supply distribution.

Maintaining that its electric poles should not be covered RPT, Decorp sent a protest letter to the city government but this was ignored by the latter.

This was the first time the city sent Decorp a notice of assessment and the first time as well for Decorp to question the legality of an assessment.

Baniqued said that section 252 of the local government code requires that payment should be made first before the protest can be entertained, adding that even assuming that the protest can be entertained prior to payment, still, resorting to a court case is not the proper remedy.

She pointed out that the filing of the instant complaint was in defiance of the authority of the Local Board of Assessment Appeals to try, hear and decide the case on the merit.

Baniqued told the city council last Monday that the city also had sent demand letters to cable companies and other businesses that are enjoying franchise within the city and reported that collection efforts are succeeding.

When  asked by Councilors Jose Netu Tamayo and Alex de Venecia if the city has unsettled bills with Decorp, Baniqued quoted City Administrator Rafael Baraan as saying that there are delays in payment of the city’s electric bills but these are caused by the company’s failure to submit proper documents to support billings.

Baniqued said that assuming that the city indeed has some arrears in its electric obligation to Decorp, it cannot offset the company’s tax obligation to the city.   

Councilor De Venecia hinted that the city might now be demanding payment of RPT by Decorp to generate money in the face of the city’s cash deficit position.

But while expressing confidence in   the city’s position, Baniqued said the city is open to an amicable settlement if the company requests for it.

Meanwhile, Randy Castilan, legal associate of Decorp, told the PUNCH that if they lose the case, the electric consumers will have to shoulder the additional costs of taxes.

“We have different positions on the issue, so let’s just wait for the court to decide,” said Castillan, adding that whatever will be the decision of the court “we will comply”. – AQL

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