Proper remedy in contesting LBT assessment

Under Section 195 of the Local Government Code (LGC), if a taxpayer is dissatisfied with a local treasurer’s denial of his protest or if there is no action regarding his protest over an assessment, the taxpayer has 30 days within which to appeal to the court of competent jurisdiction.

The CTA held that the wordings of Section 195 of the LGC is plain, unequivocal and mandatory that the taxpayer “shall” have 30 days, reckoned from the taxpayer’s receipt of the denial of his protest, within which to appeal the denial with the court of competent jurisdiction.  Otherwise, the assessment shall become final and unappealable.

Instead of filing an appeal with the court of competent jurisdiction (i.e., Regional Trial Court) within the 30-day period after receiving the LGU’s denial of its protest with finality, the taxpayer wrote a letter to the office of the treasurer reiterating its stand that it is not subject to local business tax (LBT). It was after receiving the notices of seizure, garnishment and warrant of levy that the taxpayer filed a petition with the court for the issuance of temporary restraining order against the notices for the collection of its unpaid LBT.

The CTA ruled that since no appeal was filed by the taxpayer to the court within the 30-day period provided under Section 195 of the LGC, the assessment for LBT had become conclusive and appealable.

Considering that the taxpayer failed to assail the validity of its LBT assessment by filing a timely appeal with the court, the taxpayer lost its right to question the validity of the assessment, and consequently, it could not seek judicial action to enjoin the concerned LGU in enforcing the collection of its unpaid LBT through the civil remedies provided under the LGC.

(Benguet Electric Cooperative v. Municipality of La Trinidad, Benguet and Municipal Treasurer, CTA AC No. 85, June 7, 2013)

Tax Brief – July 2013

Punongbayan and Araullo