Cordova facing power problem?

CEBU, Philippines - A major power problem looms in the town of Cordova. This as the Provincial Government is set to auction the assets of Mactan Electric Company (MECO) Inc. for its alleged failure to pay real property taxes.

Based on reports, the auction is scheduled this July 2. The auction covers the electrical poles and distribution transformers of MECO.

MECO also serves Lapu-Lapu City, but its assets in the highly-urbanized city are not included in the auction.

MECO has unpaid taxes from 1992 to 2011 in Cordova amounting to P2,842,430.35 representing taxes due and penalties.

MECO action

In order to stop the auction, MECO through Makati-based lawyers Remigio Ancheta and Dana Paula Mendiola filed a civil case for nullification of notice of assessment and tax declarations and injunction with prayer for writ of preliminary injunction.

In their complaint, MECO stated it would be a serious damage not just for them, but for the residents and businesses in Cordova if the auction will push through.

The counsels said that without the electric poles and transformers, MECO cannot be able to distribute electric power to the residents and business establishments in Cordova.

“Without electric po-wer, the local economy would definitely collapse,” complaint of MECO reads.

The defendants of the case are the Municipality of Cordova, municipal assessor of Cordova, Province of Cebu and the provincial treasurer.

The counsels said on June 12, 2008, MECO received a notice of assessment with attached tax declarations from the Municipality of Cordova prepared by the municipal assessor.

Tax declarations covered the electrical poles and distribution transformers.

On October 13, 2011, they added their client received a letter from the provincial treasurer informing them of the unpaid taxes amounting to P2.8 million.

Six months later, counsels said again their client received a letter from the provincial treasurer inviting them to a meeting with Governor Gwendolyn Garcia on March 21, 2012 to discuss the “franchise and real property tax delinquency.”

In the said meeting, MECO and other companies were told to settle their unpaid real property taxes.

However, on March 30, MECO said Garcia averred the provincial government would auction the assets of those “who have unpaid real property taxes.”

MECO however, opposed cited section 232 of the Local Government Code of 1991 -- a municipality has no power to levy real property tax except Metropolitan Manila.

“The municipality of Cordova is not within the Metropolitan Manila Area, and thus it has no power to levy real property tax,” complaint reads.

MECO added the defendants have no legal basis to levy their properties.

Under the same code, counsels asked the court to declare the levying of real property tax, the properties covered by the notice of assessment and tax declaration null and void having no power to do so.

However, if assumed that Cordova has the power to levy the property tax, the counsels said the electrical poles and transformers were not subject to real property tax.

“The only classes of real property that are subject to real property tax under the local government code are residential, agricultural, commercial, industrial, mineral, timberland or special,” complaints reads.

They argued the electrical poles are not buildings and not immovable as they have to transfer it from time to time.

Counsels cited jurisprudence that say electrical poles are not real property under Article 415 of the Civil Code of the Philippines same with the transformers.

“Indeed, the Local Government Code specifies and defines the only real properties subject to real property tax and electrical poles and distribution transformers are not among them,” complaint reads.

Unlawful

The notice of assessment, tax declaration and levying MECO’s properties, counsels said it must be declared null and void as it violates their client’s right against unlawful tax assessment.

“The unlawful levy of real property tax on the subject electrical poles and distribution transformers and the scheduled auction of these properties violate the right of MECO against unlawful tax levy and collection as well as MECO’s right to trade,” complaint reads.

They likewise said the actuations of the Province of Cebu and its treasurer for “advertising for sale and putting for auction” the MECO’s assets, should be declared null and void as it violates their rights.

Counsels said with the foregoing facts, their client is entitled to a preliminary injunction. They added MECO supplied 50,000 clients in Cordova.—/NLQ (THE FREEMAN)