National Development Company v. Cebu City

Summary

NDC challenged Cebu City's collection of real property taxes on reserved public land and warehouse, seeking refund of P100,316.31 paid from 1948-1970. The Supreme Court distinguished between the reserved land and improvements thereon, holding that while the land reserved by Presidential Proclamation No. 430 remains government property exempt from taxation under the Assessment Law, the warehouse constructed by private expense is taxable. The Court applied the solutio indebiti principle allowing refund of erroneously collected taxes without requiring prior protest, subject to six-year prescription. The decision clarifies that government-owned corporations are distinct legal entities from the Republic, and tax exemption depends on actual ownership by the government, not mere government control of the corporation. This ruling establishes important precedent on real property tax exemptions for government reservations and improvements thereon.