Sunday, March 02, 2008 Court junks Cepalco case vs. gov't
A REGIONAL court dismissed the civil case filed by the Cagayan Electric Power and Light Company, Inc. (Cepalco) against the Cagayan de Oro City Government for an ordinance levying taxes on electric poles.
Lawyer Jose Edgardo Uy, Cepalco vice president, said they already appealed the court's decision Thursday.
The case stemmed from a 2005 ordinance imposing a mayor's permit fee of P500 per electric post annually, which Cepalco wants the court to declare null and void for being "illegal."
In a decision issued last Wednesday, Regional Trial Court (RTC) Branch 17 Judge Florencia D. Sealana-Abbu ruled that the issue of whether or not the tax is excessive, oppressive or confiscatory is a factual issue that is best addressed to the sound discretion of the government agency concerned.
The court held that it behooves upon the agency concerned under the principle of primary jurisdiction to determine the factual issue. In the case at hand, it is the local government unit (LGU) that can determine through public hearing and can make corrective measures such as amending the ordinance.
City Ordinance No. 9527-2005 imposes fees on "electric and/or telecommunication poles/post owned by public utility companies erected on government and/or private lots, along government streets, roads, highways and/or alleys."
Cepalco, in its petition, said the ordinance is "unlawful and illegal for being violative of the fundamental principle that fees, charges and other impositions shall not be unjust, excessive, oppressive or confiscatory."
With over 17,000 poles within the city, the electric utility firm said the imposition can readily translate to an annual payment of P8,500,000, which the company describes as "unconscionable to any standard and therefore confiscatory in nature."
However, the court upheld the power of the LGUs to create their own sources of revenue being Constitutional and therefore, it cannot interfere in the decision making of the LGU concerned by dictating upon them to have the ordinance amended, modified or annulled as the case maybe. (DVAIII/With Press release)
