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NTC Vs CA

The National Telecommunications Commission (NTC) assessed fees against Philippine Long Distance Telephone Company (PLDT) under Section 40 of the Public Service Act. PLDT challenged the assessments in court. The Court of Appeals ordered NTC to recompute the assessments. NTC appealed, arguing the assessments should be based on the par value of subscribed capital stock. The Supreme Court ruled that, according to prior case law, the proper basis for computing the fees is the capital stock subscribed or paid, not the par value or property and equipment. The Court set aside the Court of Appeals decision and ordered NTC to recompute the fees owed by PLDT based on its subscribed capital stock.

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244 views1 page

NTC Vs CA

The National Telecommunications Commission (NTC) assessed fees against Philippine Long Distance Telephone Company (PLDT) under Section 40 of the Public Service Act. PLDT challenged the assessments in court. The Court of Appeals ordered NTC to recompute the assessments. NTC appealed, arguing the assessments should be based on the par value of subscribed capital stock. The Supreme Court ruled that, according to prior case law, the proper basis for computing the fees is the capital stock subscribed or paid, not the par value or property and equipment. The Court set aside the Court of Appeals decision and ordered NTC to recompute the fees owed by PLDT based on its subscribed capital stock.

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NATIONAL TELECOMMUNICATIONS COMMISSION, petitioner, vs.

HONORABLE COURT OF APPEALS and


PHILIPPINE LONG DISTANCETELEPHONE COMPANY, respondents.

Facts: Sometime in 1988, the NTC served on PLDT assessment notices and demands for payment under
Section 40 (e) (f) and (g)of the Public Service Act (PSA). PLDT challenged the aforesaid assessments. On
September 29, 1993, the NTC rendered a Decision in NTC Case No. 90-223, denying the protest of PLDT
due to lack of merit. On October 1993, PLDT interposed a Motion for Reconsideration which was denied
by NTC in an Order issued on May1994. PLDT then appealed the aforesaid Decision to the Court of
Appeals. The Court of Appeals ordered the NTC to compute the assessments and demands for payment
again. On November 20, 1996, NTC moved for partial reconsideration of the abovementioned decision,
with respect to the basis of the assessment under Section40(e) i.e. the par value of the subscribed capital
stock. It also sought a partial reconsideration of the fee of fifty (P0.50) centavos for the issuance or
increasing of the capital stock under Section 40 (f). However, the CA denied the motions. With the denial
of its motions for reconsideration by the Resolution of the Court of Appeals, petitioner found its way to
this Court.

Issue:
Whether the CA erred in holding that the computation of supervision and regulation fees under
section 40 (f) of the PSA should be based on the par value of the subscribed capital stock.

Held:
Yes. The ruling is clear in the case of PLDT vs PSC, 66 SCRA 341, that the basis for computation of
the fee to be charged by NTC on PLDT, is “the capital stock subscribed or paid and not, alternatively, the
property and equipment.” The fee in question is based on the capital stock subscribed or paid, nothing
less nothing more. It should be reiterated that the proper basis for the computation of subject fee under
Section 40(e) of the Public Service Act, as amended by Republic Act No. 3792, is “the capital stock
subscribed or paid and not, alternatively, the property and equipment. “It bears stressing that it is not the
NTC that imposed such a fee. It is the legislature itself. Since Congress has the power to exercise the State
inherent powers of Police Power, Eminent Domain and Taxation, the distinction between police power
and the power to tax, which could be significant if the exercising authority were mere political
subdivisions, would not be of any moment when, as in the case under consideration, Congress itself
exercises the power. All that is to be done would be to apply and enforce the law when sufficiently
definitive and not constitutional infirm.
WHEREFORE, the decision is SETASIDE and the NTC is hereby ordered to make a re-computation
of the fee imposed on PLDT on the basis of the latter’s capital stock subscribed or paid. SO ORDERED.

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