c. Court Action

Court Action in Local Taxation

A local government unit may enforce the collection of delinquent taxes, fees, charges, or other revenues by civil action in any court of competent jurisdiction, to be filed by the local treasurer within the period prescribed in Section 194 of Republic Act No. 7160¹. Similarly, the local government unit may collect the basic real property tax or other related taxes through a civil action instituted by the local treasurer in a court of competent jurisdiction within the period prescribed in Section 270².

Where a taxpayer seeks to prosecute a court action for a tax refund after receiving an assessment, two conditions must be complied with: (1) pay the tax and administratively assail the assessment before the local treasurer within sixty (60) days; and (2) bring an action in court within thirty (30) days from the local treasurer's decision or inaction (City Treasurer of Manila v. Philippine Beverage Partners, Inc., G.R. No. 233556, 7 December 2020)³. In defending against a refund suit, the local treasurer cannot seek to collect deficiency taxes pertaining to a different period merely by interposing an offset defense, because the issuance of a notice of assessment is mandatory and an indispensable requirement of due process (City Treasurer of Manila)³.

In court actions assailing the validity of a public auction sale of real property, the court cannot entertain the suit until the taxpayer deposits the amount for which the property was sold, along with interest of two percent (2%) per month from the date of the sale to the time the action is instituted⁴. In addition, courts are prohibited from invalidating such auction sales due to mere irregularities or informalities in the proceedings unless the substantive rights of the delinquent owner or interested party have been impaired⁴.