CITY OF MANILA vs. HON. CARIDAD H. GRECIA-CUERDO G.R. No. 175723, February 04, 2014 (Peralta, J.) (CASE DIGEST)

Facts

The City of Manila (Petitioners) assessed local business taxes for 2002 against various businesses, including SM Mart, Inc. (Private Respondents), pursuant to provisions of the Revised Revenue Code of Manila (RRCM). Private Respondents paid the P19,316,458.77 assessment under protest as a precondition for the issuance of their business permits. They subsequently filed a complaint for refund/recovery of the taxes and prohibition with prayer for injunction with the Regional Trial Court (RTC) of Pasay City, arguing that the RRCM provisions violated the limitations on double taxation under Section 143(h) of Republic Act No. 7160 (Local Government Code).

The RTC granted the injunction against the City. The City filed a special civil action for certiorari (Rule 65) with the Court of Appeals (CA) to nullify the RTC’s injunction orders. The CA dismissed the City’s petition, holding it lacked jurisdiction, as appellate jurisdiction over the main tax refund case resided with the Court of Tax Appeals (CTA) pursuant to Republic Act No. 9282 (RA 9282); thus, the certiorari petition against the interlocutory order should also be filed with the CTA. The City then filed a petition for certiorari with the Supreme Court.

Issues

1. Whether the CTA has jurisdiction over a special civil action for certiorari assailing an interlocutory order issued by the Regional Trial Court (RTC) in a local tax case.
2. (Procedural) Whether the special civil action for certiorari under Rule 65 was the correct remedy to assail the final resolutions of the CA.

Ruling

“This Court rules in the affirmative.”

(Final Disposition) “WHEREFORE, the petition is DENIED.”

Essential Elements of Jurisprudence

Controlling Doctrine: The Court of Tax Appeals (CTA) is vested with jurisdiction to issue writs of certiorari against interlocutory orders issued by the Regional Trial Courts (RTCs) in local tax cases falling within the CTA’s exclusive appellate jurisdiction.

Legal Principles Established:

1. Implied Power of Certiorari in Appellate Courts: While the authority to issue writs of certiorari (original jurisdiction) must generally be expressly conferred by law, the power of the CTA to determine whether the RTC acted with grave abuse of discretion in interlocutory orders is inherent in its constitutional mandate and the effective exercise of its exclusive appellate jurisdiction.
2. Statutory Basis for Appellate Jurisdiction: RA 9282 expanded the CTA’s jurisdiction, granting it exclusive appellate jurisdiction to review by appeal “Decisions, orders or resolutions of the Regional Trial Courts in local tax cases originally decided or resolved by them”.
3. Principle Against Split Jurisdiction: The law transferring exclusive appellate jurisdiction over appealed tax cases to the CTA is assumed to have also transferred the power to issue auxiliary writs necessary to aid that jurisdiction. To rule otherwise would create an absurd “split-jurisdiction situation” where the CTA hears the appeal on the merits, but another court (like the CA) rules on incidents (certiorari), which is “anathema to the orderly administration of justice”.
4. Distinction from Quasi-Judicial Bodies: The prevailing doctrine that certiorari jurisdiction must be expressly conferred (not implied) applies only to quasi-judicial tribunals, not to regularly constituted courts like the CTA, which, by virtue of RA 9282, is elevated to the same level as the CA and possesses all the inherent powers of a court of justice.
5. Procedural Relaxation (Rule 65 to Rule 45): Although the City of Manila erred by filing a special civil action for certiorari (Rule 65) to challenge a final CA resolution (when appeal under Rule 45 was proper), the SC opted to relax the rules and treat the petition as a petition for review on certiorari (Rule 45) due to the significance of the jurisdictional issue and the fact that the petition was timely filed.

Sample Q&A

Question: SM Corp. filed a local tax refund case against City X in the Regional Trial Court (RTC), which subsequently issued an interlocutory order that SM Corp. believes constitutes grave abuse of discretion. SM Corp. wishes to challenge this order via a special civil action for certiorari. Where must SM Corp. file this petition, and what legal principle justifies that court’s jurisdiction, given that Republic Act No. 9282 (RA 9282) Section 7(a)(3) only grants the Court of Tax Appeals (CTA) appellate jurisdiction over RTC decisions in local tax cases?

Answer: SM Corp. must file the special civil action for certiorari exclusively with the Court of Tax Appeals (CTA). The jurisdiction is justified by the principle that the power to issue auxiliary writs like certiorari is deemed inherent in and necessary to the aid of a court’s appellate jurisdiction. Since RA 9282, Section 7(a)(3), explicitly grants the CTA exclusive appellate jurisdiction over final RTC decisions and orders in local tax cases, the supervisory power to review RTC interlocutory orders via certiorari is impliedly included. This prevents an “absurd situation” and adheres to the judicial policy against split jurisdiction, where the main case appeal is handled by the specialized CTA while an incident is handled by the Court of Appeals or Supreme Court.

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