Smart Communications v. Municipality Of Malvar

CARPIO, J.:

The Case This petition for review1 challenges the 26 June 2012 Decision2 and 13 November 2012 Resolution3 of the Court of Tax. Appeals (CTA) En Banc. Th e CTA En Banc affirmed the 17 December 2010 Decision4 and 7 April 2011 Resolution5 of the CTA First Division, which in turn affirmed the 2 December 2008 Decision6 and 21 May 2009 Order7 of the Regional Trial Court of Tanauan City, Batangas, Branch 6.

The trial court declared void the assessment imposed by respondent Municipality of Malvar, Batangas against petitioner Smart Communications, Inc. for its telecommunications tower for 2001 to July 2003 and directed respondent to assess petitioner only for the period starting 1 October 2003. The Facts Petitioner Smart Communications, Inc. (Smart) is a domestic corporation engaged in the business of providing telecommunications services to the general public while respondent Municipality of Malvar, Batangas (Municipality) is a local government unit created by law. In the course of its business, Smart constructed a telecommunications tower within the territorial jurisdiction of the Municipality.

The construction of the tower was for the purpose of receiving and transmitting cellular communications within the covered area. On 30 July 2003, the Municipality passed Ordinance No. 18, series of 2003, entitled "An Ordinance Regulating the Establishment of Special Projects." On 24 August 2004, Smart received from the Permit and Licensing Division of the Office of the Mayor of the Municipality an assessment letter with a schedule of payment for the total amount of ₱389,950.00 for Smart's telecommunications tower.

The letter reads as follows: This is to formally submit to your good office your schedule of payments in the Municipal Treasury of the Local Government Unit of Malvar, province of Batangas which corresponds to the tower of your company built in the premises of the municipality, to wit: TOTAL PROJECT COST: PHP 11,000,000.00 For the Year 2001-2003 50% of 1% of the total project cost Php55,000.00 Add: 45% surcharge 24,750.00