G.R. No. 229706 - NATIONAL POWER CORPORATION, VS. POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT CORPORATION.D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, Our discussion of the propriety of the Municipal Treasurer's assessment of local business taxes against NPC is limited to the CA's dismissal of the third-party complaint against PSALM. The Municipal Treasurer assessed local business taxes against NPC for the alleged performance of its power generation function. A third-party complaint was then filed against PSALM because it had assumed NPC's assets and liabilities. We emphasize that there is nothing in the records that state that PSALM was made liable because it continued to perform NPC's power generation function. The tax assessment was made upon the conduct of an activity, and the lien was made on the assets. It has been argued that the resolution of NPC's protest of the Municipal Treasurer's assessment involves the determination of facts which should be properly raised before the lower courts, such as the determination of whether NPC is a contractor liable for business tax during the period covered by the assessments, and of which among NPC, PSALM, and TeaM Energy own, or is the contractor of, the Sual Power Plant. We do not settle those facts here as those pertain to NPC's supposed liability. Instead, We first ascertain whether, during the assessment period, NPC may perform the function for which the local business taxes were assessed. We then proceed to determine whether the assets owned by PSALM should be made liable for the local business taxes assessed on NPC. Resolution of these issues may be done through a careful reading of law and of jurisprudence and without resorting to a determination of facts. The EPIRA, NPC, and PSALM RA 9136, or EPIRA, was enacted on 08 June 2001 and took effect on 26 June 2001. The EPIRA organized the electric power industry into four sectors: generation, transmission, distribution, and supply. [30] The law mandated that generation assets, real estate, and other disposable assets as well as Independent Power Producer (IPP) contracts of NPC, except for the assets of the Small Power Utilities Group (SPUG), shall be privatized in accordance with its provisions. [31] Sec. 49 of the EPIRA designated PSALM to take ownership of NPC's existing assets and to be the transferee of its outstanding obligations. The EPIRA described the purpose and powers of PSALM in Secs. 50 and 51 previously quoted. The EPIRA also enumerated the property of PSALM: SECTION 55. Property of PSALM The following funds, assets, contributions and other property shall constitute the property of PSALM: (a) The generation assets, real estate, IPP contracts, other disposable assets of NPC, proceeds from the sale or disposition of such assets and the residual assets from B-O-T, R-O-T, and other variations thereof; (b) Transfers from the National Government; (c) Proceeds from loans incurred to restructure or refinance NPC's transferred liabilities: Provided, however , That all borrowings shall be fully paid for by the end of the life of PSALM; (d) Proceeds from the universal charge alloca