By Benjamin Pulta/Philippine News Agency
MANILA — The Supreme Court (SC) stopped the Quezon City government from selling the University of the Philippines (UP)-Ayala Land TechnoHub property as a way to settle the university’s unpaid real estate taxes amounting to PHP117.18 million.
In an 18-page decision penned by Associate Justice Antonio Carpio, the Court’s First Division stressed that UP is exempt from real property tax imposed by the city treasurer of Quezon City on the parcel of land currently leased to Ayala Land Inc. (ALI).
The Court’s ruling voided the statement of delinquency issued by the Quezon City government on May 27, 2014 as well as the final notice of delinquency issued on July 11, 2014 covering the said property.
“Considering that the subject land and the revenue derived from the lease thereof are used by UP for educational purposes and in support of its educational purposes, UP should not be assessed, and should not be made liable for real property tax on the land subject of this case,” the SC ruled.
The Court, however, explained that under the contract of lease between UP and ALI, all improvement on the leased land shall be owned by, and shall be for the account of the ALI during the term of the lease.
The SC added that the improvements are not “assets” owned by UP, thus, the tax exemption under Republic Act 9500 does not extend to these improvements during the term of the lease.
It can be recalled that the Quezon City government through its treasurer earlier notified the UP administration that the property will be auctioned off to answer for the unpaid real estate taxes.
On July 22, 2014, UP received the final notice of delinquency dated July 11, 2014 from the Office of City Treasurer demanding the payment of the amount.
The Office of the Solicitor General insisted that UP is exempt from taxes based on Republic Act 9500 or the UP Charter, thus, the issuance of a temporary restraining order (TRO) and/or a writ of preliminary injunction is warranted to enjoin the QC government from disposing the property.
Under Section 25 (a) of the law, revenues and assets of the university are exempts from “all taxes and duties”.
The OSG said the exemption applies to UP’s properties whether used for educational purposes “or in support thereof”.
The UP-Ayala Land Technohub was developed as an information technology hub and a part of the larger science and technology park located along Commonwealth Avenue.
The Technohub is a PEZA-approved Information Technology Park. UP’s share in the revenues of the property, as well as the lease paid by Ayala Land, supplement the university’s budget.
The QC government insisted that the subject property became taxable when it was leased to Ayala Land, since the beneficial use of the property was granted to a taxable entity.
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