Smart Communications Inc.

vs.

Municipality of Malvar

G.R. 204429

(Penned by: J. Carpio)

2014

Cecille Carmela T. de los Reyes

Philippine Christian University

Professor: Atty. Antonio Bonilla

FACTS

Petitioner Smart is a domestic

corporation engaged in the

business of providing

telecommunications services

to the general public.

THE PARTIES

Municipality of Malvar

is a local government

unit created by law.

1. Smart constructed a

telecommunications

tower within the

jurisdiction of Malvar.

2. Malvar passed

Ordinance 18 s. 2003

entitled: An Ordinance Regulating

Establishment of

Special Projects

3. SMART received

from the Malvar Mayors Office an assessment

letter with scheduled

payment of P398k for

SMARTs telecom tower.

4. Due to the arrears

(balance due to failure

of payment) in the

payment of assessment,

Municipality of Malvar

caused the posting of

the closure notice of the

telecom tower against

Smart.

5. Smart filed a protest

for lack of due process

in the issuance of

assessment and closure

notice.

It also challenged the

validity of Ordinance 18

s. 2003.

LOWER

COURTS

DECISION

RTC Batangas

Partly granted SMARTs appeal/ decision.

Did not rule on the

validity of the

Ordinance / but

declared the

assessment of Malvar

valid.

Dismissed the petition

for lack of jurisdiction.

because it is not given

the powers to resolve

cases where

constitutionality of a law

is challenged. CTA En Banc

ISSUES AND

COURT

RULING

Petition is denied.

CTA has the appellate

jurisdiction to resolve

cases over decisions,

resolutions or orders of

the RTC regarding local

tax cases.

Does the CTA

have

jurisdiction?

Is Ordinance 18 s. 2003

tax or police power?

(Since SMART contends

that these are taxes)

NO. The fees imposed are not

taxes, since it regulates the

[placing, stringing, attaching,

installing, repair and

construction of gas mains,

electric, telegraph and

telephone wires, conduits,

meters and other apparatus et

al.] which included the Smarts telecommunication tower.

The fees imposed are regulatory

in nature, and not revenue-

raising.

Is it an encroachment of

the powers of NTC?

(National

Telecommunications

Commission)

NTC = regulates the administrative,

technical, financial or marketing

operations of telecommunication

entities

while Ordinance 18 s. 2003 =

regulates the placing, stringing, attaching, installing, repair and

construction of all gas mains, electric,

telegraph and telephone wires et al

On the

constitutionality of

Ordinance?

It is presumed constitutional,

because Smart failed to

challenge in the pleadings its

unconstitutionality.

PETITION

DENIED!

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