EN BANC

[C.T.A. EB CASE NO. 413. June 3, 2009.]

(C.T.A. AC NO. 27)
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC.,
petitioner , vs. CITY OF BALANGA and AMADO P. JIMENEZ, in
his capacity as OIC-City Treasurer of the City of Balanga,
respondents .

This is a Petition For Review filed by Philippine Long Distance

Telephone Company (hereafter "PLDT") under Section 11 of RA 9282
(An Act
Expanding the Jurisdiction of the Court of Tax Appeals), in relation to
Rule 43
of the 1997 Rules of Civil Procedure, as amended, which seeks to
reverse the
Decision dated May 8, 2008 and Resolution dated July 11, 2008
rendered by
the First Division of this Court in C.T.A. AC NO. 27,
THE FACTS
The facts of the case, as culled from the records, follow:
On July 4, 2005, PLDT received a letter dated June 23, 2005 from
respondent Jimenez, requesting petitioner to pay respondent City
business
and franchise taxes, invoking Article 243 of the Implementing Rules
and
Regulations of the Local Government Code and the Revenue Code of
the City
of Balanga.
On July 27, 2005, PLDT replied thereto, copy of which was received by
respondents on July 29, 2005.
Thereafter, there were exchanges of correspondence between PLDT
and respondent Jimenez.
On January 20, 2006, PLDT, through counsel, wrote respondents a
letter, requesting the latter to cancel and withdraw the assessed tax
liabilities imposed upon PLDT.IEAHca

On January 27, 2006, respondent Jimenez denied PLDT's protest and

reiterated that it is subject to both business and franchise taxes.
On February 3, 2006, PLDT received the denial of its protest.
On March 3, 2006, PLDT appealed the said denial to the Regional Trial
Court, Branch 57, Makati City ("RTC").
On May 18, 2006, respondents filed a "Motion To Dismiss" with the RTC
of Makati City.
In an Order dated August 11, 2006, the RTC granted the Motion To
Dismiss and dismissed PLDT's petition,
On January 19, 2007, PLDT appealed the Order dated August 11, 2006
by way of a Petition For Review before the First Division of this Court
On May 8, 2008, the First Division rendered the assailed decision,
dismissing PLDT's petition for lack of merit and affirmed the RTC
Orders

Principal Issue
The issues raised by petitioner boil down to the principal issue of which
Court has competent jurisdiction over an appeal from the denial of a
tax
protest by the Local City Treasurer under Section 195 of the Local
Government Code.

THE COURT EN BANC'S RULING

The petition lacks merit.
To tackle the principal issue, We deem it necessary to first discuss
whether or not the RTC in deciding an appeal taken from a denial of a
tax
protest by a local treasurer under Section 195 of the Local
Government Code
exercises "original jurisdiction" or "appellate jurisdiction". In the case
of
Yamane vs. BA Lepanto Condominium Corporation, 474 SCRA 267-
271, the
Supreme Court ruled that the review taken by the RTC over the denial
of a
tax protest by the local treasurer would fall within the RTC's original
jurisdiction
In short, the
review is the initial judicial cognizance of the matter. Moreover,
labeling the said review as an exercise of appellate jurisdiction is
inappropriate, since the denial of the protest is not the judgment or
order of a lower court, but of a local government official.
cTDECH
The stringent concept of original jurisdiction may seemingly be
neutered by Rule 43 of the 1997 Rules of Civil Procedure, Section 1 of
which lists a slew of administrative agencies and quasi-judicial
tribunals or their officers whose decisions may be reviewed by the
Court of Appeals in the exercise of its appellate jurisdiction. However,
the basic law of jurisdiction, Batas Pambansa Blg. 129 (B.P. 129),
ineluctably confers appellate jurisdiction on the Court of Appeals over
final rulings of quasi-judicial agencies, instrumentalities, boards or
commission, by explicitly using the phrase 'appellate jurisdiction'. The
power to create or characterize jurisdiction of courts belongs to the
legislature. While the traditional notion of appellate jurisdiction
connotes judicial review over lower court decisions, it has to yield to
statutory redefinitions that clearly expand its breadth to encompass
even review of decisions of officers in the executive branches of
government.
Yet significantly, the Local Government Code, or any other
statute for that matter, does not expressly confer appellate jurisdiction
on the part of regional trial courts from the denial of a tax protest by a
local treasurer. On the other hand, Section 22 of B.P. 129 expressly
delineates the appellate jurisdiction of the Regional Trial Courts,
confining as it does said appellate jurisdiction to cases decided by
Metropolitan, Municipal, and Municipal Circuit Trial Courts. Unlike in the
case of the Court of Appeals, B.P. 129 does not confer appellate
jurisdiction on Regional Trial Courts over rulings made by non-
judicial
entities.

From these premises, it is evident that the stance of the City

Treasurer is correct as a matter of law, and that the proper remedy of
the corporation from the RTC judgment is an ordinary appeal under
Rule 41 to the Court of Appeals. However, we make this
pronouncement subject to two important qualifications. First, in this
particular case there are nonetheless significant reasons for the Court
to overlook the procedural error and ultimately uphold the adjudication
of the jurisdiction exercised by the Court of Appeals in this case.
Second, the doctrinal weight of the pronouncement is confined to cases
and controversies that emerged prior to the enactment of Republic Act
No. 9282, the law which expanded the jurisdiction of the Court of Tax
Appeals (CTA).
Republic Act No. 9282 definitively proves in its Section 7(a)(3)
that the CTA exercises exclusive appellate jurisdiction to review on
appeal decisions, orders or resolutions of the Regional Trial Courts in
local tax cases originally decided or resolved by them in the exercise of
their original or appellate jurisdiction. Moreover, the provision also
states that the review is triggered by filing a petition for review under a
procedure analogous to that provided for under Rule 42 of the 1997
Rules of Civil Procedure.
Republic Act of 9282, however, would not apply to this case
simply because it arose prior to the effectivity of that law. To declare
otherwise would be to institute a jurisdictional rule derived not from
express statutory grant, but from implication. The jurisdiction of a
court to take cognizance of a case should be clearly conferred and
should not be deemed to exist on mere implications, and this settled
rule would be needlessly emasculated should we declare that the
corporation's position is correct in law.
Be that as it may, characteristic of all procedural rules is
adherence to the precept that they should not be enforced blindly,
especially if mechanical application would defeat the higher ends that
animates our civil procedure — the just, speedy and inexpensive
disposition of every action and proceeding. Indeed, we have repeatedly
upheld — and utilized ourselves — the discretion of courts to
nonetheless take cognizance of petitions raised on an erroneous mode
of appeal and instead treat these petitions in the manner as they
should have appropriately been filed. The Court of Appeals could very
well have treated the Corporation's petition for review as an ordinary
appeal.
Moreover, we recognize that the Corporation's error in elevating
the RTC decision for review via Rule 42 actually worked to the benefit
of the City Treasurer. There is wider latitude on the part of the Court of
Appeals to refuse cognizance over a petition for review under Rule 42
than it would have over an ordinary appeal under Rule 41. Under
Section 13, Rule 41, the stated grounds for the dismissal of an ordinary
appeal prior to the transmission of the case records are when the
appeal was taken out of time or when the docket fees were not paid.
On the other hand, Section 6, Rule 42 provides that in order that the
Court of Appeals may allow due course to the petition for review, it
must first make a prima facie finding that the lower court has
committed an error that would warrant the reversal or modification of
the decision under review. There is no similar requirement of a prima
facie determination of error in the case of ordinary appeal, which is
perfected upon the filing of the notice of appeal in due time.
Evidently, by employing the Rule 42 mode of review, the
Corporation faced a greater risk of having its petition rejected by the
Court of Appeals as compared to having filed an ordinary appeal under
Rule 41. This was not an error that worked to the prejudice of the City
Treasurer."

Pursuant to the aforequoted decision of the Supreme Court, the review

taken by the RTC over the denial of the protest by the local treasurer
would
fall within the RTC's original jurisdiction. In short, the review is the
initial
judicial cognizance of the matter, as the denial of the protest is not the
judgment or order of a lower court, but of a local government official.

Having determined the nature of the jurisdiction of the RTC over a

denial of a protest by a local treasurer under Section 195 of the LGC,
We
now come to the pivotal issue of which RTC has competent jurisdiction
over
the appeal taken by petitioner PLDT from the denial of its tax protest
by the
local City Treasurer of Balanga City.
Petitioner PLDT contends that the RTC of Makati City is the court of
competent jurisdiction. We do not agree.
Pursuant to the foregoing, where the acts of the public official are the
object of the litigation, meaning, petitioner seeks to control them, then
the
suit must be filed in the RTC whose territorial jurisdiction encompasses
the
place where the respondent public official is found or holding office. For
the
rule is, outside its territorial limits, the court has no power to enforce
its
order.
In the instant case, PLDT was not only seeking for a review of the
denial by the City Treasurer of Balanga City of the tax protest of PLDT,
but
petitioner was also asking the court to order respondents to perform
specific
acts, such as, to order respondents to cancel the assessment, to
amend the
official receipts issued to petitioner, and to enjoin respondents from
imposing
franchise and business taxes against PLDT; in other words, petitioner
PLDT
seeks to control the acts of the City Treasurer of Balanga City. Hence,
the
suit ought to be filed in the RTC of Balanga City which has territorial
jurisdiction over the City Treasurer of Balanga City. For it is the RTC of
Balanga City that has power to enforce its orders over the City
Treasurer of
Balanga City.
Thus, the RTC of Balanga City, and not the RTC of Makati, therefore, is
the court of competent jurisdiction over the appeal from the denial by
the
local City Treasurer of Balanga City of the tax protest of PLDT.

WHEREFORE, premises considered, the instant petition is hereby

DENIED DUE COURSE, and accordingly, DISMISSED for lack of merit.