FIRST DIVISION
G.R. No. 197945, July 09, 2018
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. PILIPINAS SHELL PETROLEUM CORPORATION, Respondent
[G.R. Nos. 204119-20]
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. PILIPINAS SHELL PETROLEUM CORPORATION AND PETRON CORPORATION, Respondents.
D E C I S I O N
LEONARDO-DE CASTRO,*J.:
Before the Court are consolidated petitions for review on certiorari under Rule 45 of the Rules of Court, as
amended, filed by petitioner Commissioner of Internal Revenue (CIR):
Said incidents and petitions are discussed in detail below.
Significant Incidents Resultant Petition/s before the Court (a) 1998 Collection Letters issued by the BIR against respondents G.R. Nos. 204119-20 (one of the pr sent petitions) (b) 1999 Assessments issued by the BIR against respondents Pilipinas Shell Petroleum Corporation v. Commissioner of Internal Revenue, G.R. No. 172598, December 21, 2007 (2007 Shell Case)
Petron Corporation v. Commissioner of Internal Revenue, G.R. No. 180385, July 28, 2010 (2010 Petron Case) (c) 2002 Collection Letter issued by the BIR against respondent Shell G.R. No. 197945 (one of the present petitions)
Our records show that for the years x x x, you have been paying part of your excise tax liabilities in the form of Tax Credit Certificate (TCC) which bear the name of a company other than yours in violation of Rule IX of the Rules and Regulations issued by the Board of Investments to implement P.D. No. 1789 and B.P. 391. Accordingly, your payment through the aforesaid TCC's are considered invalid and therefore, you are hereby requested to pay the amount of x x x inclusive of delinquency for late payments as of even date, covering the years heretofore mentioned within thirty days (30) from receipt hereof, lest we will be constrained to resort to administrative and legal remedies available in accordance with law. (Emphasis supplied.)Respondents separately filed their administrative protests14 against the 1998 Collection Letters, but the BIR denied15 said protests. The BIR maintained that the transfers of the TCCs from the BOI-registered export entities to respondents and the use of the same TCCs by respondents to pay for their self-assessed specific tax liabilities were invalid, and reiterated its demand that respondents pay their delinquent taxes.
In both Decisions, the CTA upheld the validity of the TCC transfers from the BOI-registered export entities to respondents, the latter having complied with the requirements of transferability. The CTA further ruled that the BIR's attempt to collect taxes without an assessment was a denial of due process and a violation of Section 22822 of the National Internal Revenue Code of the Philippines of 1997 (Tax Code). The CTA also noted that the BIR might have purposely avoided the issuance of a for;mal assessment because its right to assess majority of respondents' alleged delinquent taxes had already prescribed.CTA Case No. 5657
WHEREFORE, in view of the foregoing, the instant Petition for Review is hereby GRANTED. The collection of the alleged delinquent excise taxes in the amount of P1,107,542,547.08 is hereby CANCELLED AND SET ASIDE for being contrary to law. Accordingly, [herein petitioner and BIR Regional Director of Makati, Region No. 8] are ENJOINED from collecting the said amount of taxes against [herein respondent Petron].20CTA Case No. 5728
IN LIGHT OF ALL THE FOREGOING, the instant petition for review is GRANTED. The collection letter issued by [herein petitioner] dated April 22, 1998 is considered withdrawn and he is ENJOINED from any attempts to collect from [herein respondent Shell] the specific tax, surcharge and interest subject of this petition.21
WHEREFORE, the petition is GRANTED. The April 28, 2006 CTA En Banc Decision in CTA EB No. 64 is hereby REVERSED and SET ASIDE, and the August 2, 2004 CTA Decision in CTA Case No. 6003 disallowing the assessment is hereby REINSTATED. The assessment of respondent for deficiency excise taxes against petitioner for 1992 and 1994 to 1997 inclusive contained in the April 22, 1998 letter of respondent is cancelled and declared without force and effect for lack of legal basis. No pronouncement as to costs.28In nullifying petitioner's assessments, the Court upheld the TCCs' validity, respondent Shell's qualifications as transferees of said TCCs, respondent Shell's status as a transferee in good faith and for value, and respondent Shell's right to due process.
WHEREFORE, premises considered, the petition is GRANTED and the October 30, 2007 CTA En Banc Decision in CTA EB No. 238 is, accordingly, REVERSED and SET ASIDE. In lieu thereof, another is entered invalidating respondent's Assessment of petitioner's deficiency excise taxes for the years 1995 to 1997 for lack of legal bases. No pronouncement as to costs.31Entry of Judgment32 was made in the 2010 Petron Case on November 2, 2010.
DOF Executive Committee Resolution No. 03-05-99 referred to in the aforequoted Collection Letter prescribed the guidelines and procedures for the cancellation, recall, and recovery of fraudulently-issued TCCs.Collection Letter
x x x x
Our records show that a letter dated January 30, 2002 was served to you by our Collection Service, for the collection of cancelled Tax Credit Certificates and Tax Debit Memos which were used to pay your 1995 to 1998 excise tax liabilities. Said cancellation was embodied in EXCOM Resolution No. 03-05-99 of the Tax & Duty Drawback Center of the Department of Finance. Upon verification by this Office, however, some of these TCCs/TDMs were already included in the tax case previously filed in [the] Court of Tax Appeals. Accordingly, the collectible amount has been reduced from P691,508,005.82 to P234,555,275.48, the summary of which is hereto attached for your ready reference.In view thereof, you are hereby requested to pay the aforesaid tax liability/ties within ten (10) days from receipt hereof thru any authorized agent bank x x x Should you fail to do so, this Office, much to our regret, will be constrained to enforce the collection of the said amount thru the summary administrative remedies provided by law, without any further notice. (Emphasis supplied.)
Basic P 87,893,876.00Surcharge 21,973,469.00Interest 124,687,930.48TOTAL P 234,555,275.48
WHEREAS, THERE IS DUE FROM:Aggrieved, respondent Shell filed a petition for review37 before the CTA docketed as CTA Case No. 6547, arguing that: (a) the issuance of the 2002 Collection Letter and Warrant of Distraint and/or Levy and enforcement of DOF Center's Executive Committee Resolution No. 03-05-99 violated its right to due process; (b) The DOF Center did not have authority to cancel the TCCs; (c) The TCCs' transfers and utilizations were valid and legal; (d) It was an innocent purchaser for value; (e) The HIR was estopped from invalidating the transfer and utilization of the TCCs; and (f) The HIR's right to collect had already prescribed.
PILIPINAS SHELL PETROLEUM CORP. x x x x
The sum of TWO HUNDRED THIRTY[-]FOUR MILLION FIVE HUNDRED FIFTY[-]FIVE THOUSAND TWO HUNDRED TWENTY[-]FIVE PESOS AND 48 CENTAVOS as Internal Revenue Taxes shown hereunder, plus all increments incident to delinquency.WHEREAS, the said taxpayer failed and refused and still fails and refuses to pay the same notwithstanding demands made by this Office.36
Assessment Notice No. :Unnumbered Date Issued :January 30, 2002 Tax Type :Excise Tax Period Covered :Various Dates (December 18, 1995 to July 03, 1997) Amount :P234,555,275.48
WHEREFORE, premises considered, the instant Petition for Review is hereby GRANTED. The Collection Letters and Warrant of Distraint and/or Levy are CANCELLED and declared without force and effect for lack of legal basis.39After the CTA Division denied40 his motion for reconsideration, petitioner elevated the case to the CTA En Banc via a petition for review41 docketed as CTA EB No. 535.
I.
IN NOT HOLDING THAT RESPONDENTS SHELL AND PETRON WERE NOT QUALIFIED TRANSFEREES OF THE TAX CREDIT CERTIFICATES (TCCs) SINCE THEY WERE NOT SUPPLIERS OF DOMESTIC CAPITAL EQUIPMENT OR OF RAW MATERIAL AND/OR COMPONENTS TO THEIR TRANSFERORS.II.
IN NOT HOLDING THAT SINCE RESPONDENTS WERE NOT QUALIFIED TRANSFEREES OF THE TCCs, THE SAME COULD NOT BE VALIDLY USED IN PAYING THEIR EXCISE TAX LIABILITIES.III.
IN NOT HOLDING THAT GOVERNMENT IS NOT ESTOPPED FROM COLLECTING TAXES DUE TO THE MISTAKES OF ITS AGENTS.IV.
IN NOT HOLDING THAT SHELL WAS ACCORDED DUE PROCESS IN PETITIONER'S ATTEMPT TO COLLECT ITS EXCISE TAX LIABILITIES.42G.R. No. 197945
I. The CTA EN BANC COMMITTED GRIEVOUS ERROR IN NOT RULING ON THE VALIDITY OF THE TCCs AND ITS CONSEQUENT EFFECTS ON THE RIGHTS AND OBLIGATIONS ASSUMED BY RESPONDENT.
II. THE CTA EN BANC COMMITTED GRIEVOUS ERROR IN HOLDING THAT RESPONDENT IS AN INNOCENT TRANSFEREE OF THE DISPUTED TCCs IN GOOD FAITH.
III. THE CTA EN BANC COMMITTED GRIEVOUS ERROR IN RULING THAT RESPONDENT IS NOT LIABLE TO PAY EXCISE TAXES.
IV. THE CTA EN BANC COMMITTED GRIEVOUS ERROR IN HOLDING THAT THE GOVERNMENT IS ESTOPPED FROM NULLIFYING THE TCCs, AND DECLARING THEIR USE, TRANSFER AND UTILIZATION AS FRAUDULENT.
V. THE CTA EN BANC COMMITTED GRIEVOUS ERROR IN RULING THAT RESPONDENT WAS DENIED DUE PROCESS.
VI. THE CTA EN BANC COMMITTED A GRIEVOUS ERROR IN DECLARING THAT THE PERIOD TO COLLECT RESPONDENT'S UNPAID EXCISE TAXES HAS ALREADY PRESCRIBED.
VII. THE CTA EN BANC COMMITTED A GRIEVOUS ERROR IN RULING THAT,RESPONDENT IS NOT LIABLE TO PAY SURCHARGES AND INTERESTS.43
The doctrine of res judicata as embodied in Section 47, Rule 39 of the Rules of Court states:In the 2007 Shell Case, the Court affirmed the validity of the TCCs, the transfer of the TCCs to respondent Shell, and the use of the transfe ed TCCs by respondent Shell to partly pay for its excise tax liabilities for the Covered Years. The Court ratiocinated as follows: First, the results of postaudit procedures conducted in connection with the TCCs should not operate as a suspensive condition to the TCCs' validity. Second, while it was one of the conditions appearing on the face of the TCCs, the post-audit contemplated therein did not pertain to the TCCs' genuineness or validity, but to computational discrepancies that might have resulted from their utilization and transfer. Third, the DOF Center or DOF could not compel respondent Shell to submit sales documents for the purported post-audit. As a BOI-registered enterprise, respondent Shell was a qualified transferee of the subject TCCs, pursuant to existing rules and regulations.45Fourth, respondent Shell was a transferee in good faith and for value as it secured the necessary approvals from various government agencies before it used and applied the transferred TCCs against its tax liabilities and it did not participate in the perpetuation of fraudulent acts in the procurement of the said TCCs. As a transferee in good faith, respondent Shell could not be prejudiced with a re-assessment of excise tax liabilities it had already settled when due using the subject TCCs nor by any fraud attending the procurement of the subject TCCs. Fifth, while the DOF Center was authorized to cancel TCCs it might have erroneously issued, it could no longer exercise such authority after the subject TCCs have already been utilized and accepted as payment for respondent Shell's excise tax liabilities. What had been used up, debited, and cancelled could no longer be voided and cancelled anew. While the State was not estopped by the neglect or omission of its agents, this principle could not be applied to the prejudice of an innocent transferee in good faith and for value.SECTION 47. Effect of judgments or final orders. - The effect of a judgment or final order rendered by a court of the Philippines, having jurisdiction to pronom:tce the judgment or final order, may be as follows:It must be pointed out at this point that, contrary to the insistence of the Caloses, the doctrine of res judicata applies to both judicial and quasi-judiCial proceedings. The doctrine actually embraces two (2) concepts: the first is "bar by prior judgment" under paragraph (b) of Rule 39, Section 47, and the second is "conclusiveness of judgment" under paragraph (c) thereof. In the present case, the second concept - conclusiveness of judgment- applies. The said concept is explained in this manner:
x x x x
(b) In other cases, the judgment or final order is, with respect to the matter directly adjudged or as to any other matter that could have been raised in relation thereto, conclusive between the parties and their successors-in interest by title subsequent to the commencement of the action or special proceeding, litigating for the same thing and under the same title and in the same capacity; and
(c) In any other litigation between the same parties or their successors-in-interest, that only is deemed. to have been adjudged in a former judgment or final order which appears upon its face to have been so adjudged, or which was actually and necessarily included therein or necessary thereto.[A] fact or question which was in issue in a former suit and was there judicially passed upon and determined by a court of competent jurisdiction, is conclusively settled by the judgment therein as far as the parties to that action and persons in privity with them are concerned and cannot be again litigated in any future action between such parties or their privies, in the same court or any other court of concurrent jurisdiction on either the same or different cause of action, while the judgment remains unreversed by proper authority. It has been held that in order. that a judgment in one action can be conclusive as to a particular matter in another action between the same parties or their privies, it is essential that the issue be identical. If a particular point or question is in issue in the second action, and the judgment will depend on the determination of that particular point or question, a former judgment between the same parties or their privies will be final and conclusive in the second if that same point or question was in issue and adjudicated in the first suit. x x x.Although the action instituted by the Caloses in Adm. Case No. 006-90 (Anomalies/Irregularities in OLT Transfer Action and Other Related Activities) is different from the action in Adm. Case No. (X)-014 (Annulment of Deeds of Assignment, Emancipation Patents and Transfer Certificate of Titles, Retention and Recovery of Possession and Ownership), the concept of conclusiveness of judgment still applies because under this principle "the identity of causes of action is not required but merely identity of issues."
[Simply] put, conclusiveness of judgment bars the relitigation of particular facts or issues in another litigation between the same parties on a different claim or cause of action. In Lopez vs. Reyes, we expounded on the concept of conclusiveness of judgment as follows:The general rule precluding the relitigation of material facts or questions which were in issue and adjudicated in former action are commonly applied to all matters essentially connected with the subject matter of litigation. Thus it extends to questions necessarily involved in an issue, and necessarily adjudicated, or necessarily implied in the final judgment, although no specific finding may have been made in reference thereto, and although such matters were directly referred to in the pleadings and were not actually or formally presented. Under this rule, if the record of the former trial shows that the judgment could not have been rendered without deciding the particular matter, it will be considered as having settled that matter as to all future actions between the parties, and if a judgment necessarily presupposes certain premises, they are as conclusive as the judgment itself. Reasons for the rule are that a judgment is an adjudication on all the matters which are essential to support it, and that every proposition assumed or decided by the court leading up to the final conclusion upon which such conclusion is based is as effectually passed upon as the ultimate question which is solved.As held in Legarda vs. Savellano:
x x x xx x x It is a general rule common to all civilized system of jurisprudence, that the solemn and deliberate sentence of the law, pronounced by its appointed organs, upon a disputed fact or a state of facts, should be regarded as a final and conclusive determination of the question litigated, and should forever set the controversy at rest. Indeed, it has been well said that this maxim is more than a mere rule of law; more even than an important principle of public policy; and that it is not too much to say that it is a fundamental concept in the organization of every jural system. Public policy and sound practice demand that, at the risk of occasional errors, judgments of courts should become final at some definite date fixed by law. The very object for which courts were constituted was to put an end to controversies.The findings of the Hearing Officer in Adm. Case No. 006-90, which had long attained finality, that petitioner is not the owner of other agricultural lands foreclosed any inquiry on the same issue involving the same parties and property. The CA thus erred in still making a finding that petitioner is not qualified to be a farmer-beneficiary because he owns other agricultural lands. (Emphases supplied, citations omitted.)
x x x [P]etitioner violated the cardinal rule in administrative law that the taxpayer be accorded due process. Not only was the law here disregarded, but no valid notice was sent, either. A void assessment bears no valid fruit.The Court similarly found that there was no valid assessment in Commissioner of Internal Revenue v. BASF Coating + Inks Phils., Inc.63 (BASF Coating Case) as the assessment notice therein was sent to the taxpayer company's former address. Without a valid assessment, the Court pronounced that petitioner's issuance of a First Notice Before Issuance of Warrant of Distraint and Levy to be in violation of the taxpayer company's right to due process and effectively blocked any further efforts by petitioner to collect by virtue thereof. The Court ratiocinated that:
The law imposes a substantive, not merely a formal, requirement. To proceed heedlessly with tax collection without first establishing a valid assessment is evidently violative of the cardinal principle in administrative investigations: that taxpayers should be able to present their case and adduce supporting evidence. In the instant case, respondent has not been informed of the basis of the estate tax liability. Without complying with the unequivocal mandate of first informing the taxpayer of the government's claim, there can be no deprivation of property, because no effective protest can be made. The haphazard shot at slapping an assessment, supposedly based on estate taxation's general provisions that are expected to be known by the taxpayer, is utter chicanery.
Even a cursory review of the preliminary assessment notice, as well as the demand letter sent, reveals the lack of basis for - not to mention the insufficiency of - the gross figures and details of the itemized deductions indicated in the notice and the letter. This Court cannot countenance an assessment based on estimates that appear to have been arbitrarily or capriciously arrived at. Although taxes are the lifeblood of the government, their assessment and collection "should be made in accordance with law as any arbitrariness will negate the very reason for government itself."62 (Emphasis supplied.)
It might not also be amiss to point out that petitioner's issuance of the First Notice Before Issuance of Warrant of Distraint and Levy violated respondent's right to due process because no valid notice of assessment was sent to it. An invalid assessment bears no valid fruit. The law imposes a substantive, not merely a formal, requirement. To proceed heedlessly with tax collection without first establishing a valid assessment is evidently violative of the cardinal principle in administrative investigations: that taxpayers should be able to present their case and adduce supporting evidence. In the instant case, respondent has not properly been informed of the basis of its tax liabilities. Without complying with the unequivocal mandate of first informing the taxpayer of the government's claim, there can be no deprivation of property, because no effective protest can be made.It is worthy to note that in the Reyes Case and BASF Coating Case, there were assessments actually issued against the taxpayers therein, except that said assessments were adjudged invalid for different reasons (i.e., for failing to state the factual and legal bases for the assessment in the Reyes Case and for sending the assessment to the wrong address in the BASF Coating Case). In the instant cases, petitioner did not issue at all an assessment against respondents prior to his issuance of the 1998 and 2002 Collection Letters. Thus, there is even more reason for the Court to bar petitioner's attempts to collect the alleged deficiency excise taxes through any summary administrative remedy.
x x x x
It is an elementary rule enshrined in the 1987 Constitution that no person shall be deprived of property without due process of law. In balancing the scales between the power of the State to tax and its inherent right to prosecute perceived transgressors of the law on one side, and the constitutional rights of a citizen to due process of law and the equal protection of the laws on the other, the scales must tilt in favor of the individual, for a citizen's right is amply protected by the Bill of Rights under the Constitution.64
Sec. 318. Period of Limitation Upon Assessment and Collection. - Except as provided in the succeeding section, internal-revenue taxes shall be assessed within five years after the return was filed, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period. For the purposes of this section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day: Provided, That this limitation shall not apply to cases already investigated prior to the approval of this Code. (Emphasis Supplied)Under Section 318 of the 1977 NIRC, petitioner had five years67 from the time respondents filed their excise tax returns in question to: (a) issue an assessment; and/or (b) file a court action for collection without an assessment. In the petitions at bar, respondents filed their returns for the Covered Years from 1992 to 1997, and the five-year prescriptive period under Section 319 of the 1977 NIRC would have prescribed accordingly from 1997 to 2002.
Sec. 319. Exceptions as to period of limitation of assessment and collection of taxes. - (a) In the case of a false or fraudulent return with intent to evade tax or of a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time within ten years after the discovery of the falsity, fraud, or omission: Provided, That in a fraud assessment which has become final and executory, the fact of fraud shall be judicially taken cognizance of in the civil or criminal action for the collection thereof.
(b) Where before the expiration of the time prescribed in the preceding section for the assessment of the tax, both the Commissioner and the taxpayer have consented in writing to its assessment after such time, the tax may be assessed at any time prior to the expiration of the period agreed upon. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
(c) Where the assessment of any internal revenue tax has been made within the period of limitation above-prescribed, such tax may be collected by distraint or levy or by a proceeding in court, but only if began (1) within five years after assessment of the tax, or (2) prior to the expiration of any period for collection agreed upon in writing by the Commissioner and the taxpayer before the expiration of such five-year period. The period so agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
Endnotes:
* Per Special Order No. 2559 dated May 11, 2018.
** Per Raffle dated February 26, 2018.
*** Per Special Order No. 2560 dated May 11, 2018.
1Rollo (G.R. No. 197945), pp. 62-109; penned by Associate Justice Cielito N. Mindaro-Grulla with Presiding Justice Ernesto D. Acosta and Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez, Esperanza R. Fabon-Victorino and Amelia R. Cotangco-Manalastas concurring.
2 Id. at 110-117.
3Rollo (G.R. Nos. 204119-20), pp. 52-68; penned by Associate Justice Ramon A. Cruz with Associate Justices Rosalinda Asuncion-Vicente and Antonio L. Villamor concurring.
4 Id. at 70-71.
5 Executive Order No. 226 dated July 16, 1987.
6Rollo (G.R.. Nos. 204119-20), p. 213.
7 The DOF Center was created pursuant to Administrative Order No. 266 dated February 7, 1992, in relation to EO 226, to centralize tax credit availment processing. It is composed of representatives from the DOF, the BOI, the Bureau of Customs, and the Bureau of Internal Revenue.
8See Joint Stipulation of Facts and Issues in CTA Case No. 5728; rollo (G.R. Nos. 204119-20), pp. 579-580.
9 Inclusive of the years 1992, 1994 to 1997 for respondent Shell and 1993 to 1997 for respondent Petron.
10See Joint Stipulation of Facts and Issues in CTA Case No. 5728; rollo (G.R. Nos. 204119-20), p. 579, and Amended Joint Stipulation of Facts and Issues in CTA Case No. 6547; rollo (G.R. No. 197945), p. 882. See also petitioner's Memorandum dated April 27, 2015; rollo (G.R. No. 197945), pp. 931, 934.
11See Amended Joint Stipulation of Facts and Issues in CTA Case No. 6547; rollo (G.R. No. 197945), p. 883.
12Rollo (G.R. Nos. 204119-20), pp. 141, 269.
13 Through its Revenue District Officer Ruperto P. Somera.
14Rollo (G.R. Nos. 2041 19-20), pp. 152-156, 289-301, and 302-307.
15 Id. at 161, 308-318.
16 Id. at 247-266.
17 Id. at 161-165.
18 Signed by BIR Regional Director Antonio I. Ortega and received by Shell on July 17, 1998. (Id. at 166.)
19 Id. at 113-140.
20 Id. at 477.
21 Id. at 109.
22 As amended by the Tax Reform Act of 1997, Republic Act No. 8424 (December 11, 1997).
23 In Resolutions dated September 7, 1999. Rollo (G.R. Nos. 204119-20), p. 112 and 246.
24 Prior to the effectivity of Republic Act No. 9282, a CTA decision is appealable to the Court of Appeals. After its enactment, the CTA became an appellate court of equal rank to the Court of Appeals. Thus, a decision of a CTA Division is appealable to the CTA En Banc.
25Pilipinas Shell Petroleum Corp. v. Commissioner of Internal Revenue, 565 Phil. 613 (2007).
26 In letters dated August 31, 1999 and September 1, 1999 [Rollo (G.R. No. 197945), pp. 732-734].
27 In a letter addressed to respondent Shell dated November 3, 1999 [Rollo (G.R. No. 197945), pp. 736-742] and a letter addressed to respondent Petron dated October 24, 1999.
28Pilipinas Shell Petroleum Corp. v. Commissioner of Internal Revenue, supra note 25 at 657.
29 As per Entry of Judgment, Supreme Court of the Philippines Second Division.
30Petron Corporation v. Commissioner of Internal Revenue, 640 Phil. 163 (2010).
31 Id. at 188.
32 Supreme Court of the Philippines, First Division.
33Rollo (G.R. No. 197945), p. 765.
34 Id. at 767-773.
35 Through BIR Assistant Commissioner Edwin R. Abella.
36Rollo (G.R. No. 197945), p. 731.
37 Id. at 681-730.
38 Id. at 174-216.
39 Id. at 215.
40 In a Resolution dated August 18, 2009. (Id. at 239-242.)
41 Id. at 243-301.
42Rollo (G.R. Nos. 204119-20), pp. 24-25.
43Rollo (G.R. No. 197945), pp. 25-26.
44 399 Phil. 205, 215-218 (2000).
45 October 5, 1982 Memorandum of Agreement between DOF and BOI, and the rules implementing the Omnibus Investments Code of 1987.
46 Dated September 6, 1999. Subject: Implementing the Provisions of the National Internal Revenue Code of 1997 Governing the Rules on Assessment of National Internal Revenue Taxes, Civil Penalties and Interest and the Extra-judicial Settlement of a Taxpayer's Criminal Violation of the Code Through Payment of a Suggested Compromise Penalty.
47See Philippine Bank of Communications v. Commissioner of Internal Revenue, 361 Phil. 916, 927 (1999); Commissioner of Internal Revenue v. Bank of the Philippine Islands, 549 Phil. 886, 903 (2007).
48Commissioner of Internal Revenue v. Algue, Inc., 241 Phil. 829, 830 (1988).
49 De Leon, Hector S., Fundamentals of Taxation (2004 Ed.), p. 7.
50 Section 2 of the Tax Code provides, "Powers and Duties of the Bureau of Internal Revenue. - The Bureau of Internal Revenue shall be under the supervision and control of the Department of Finance and its powers and duties shall comprehend the assessment and collection of all national internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and fines connected therewith, including the execution of judgments in all cases decided in its favor by the Court of Tax Appeals and the ordinary courts. The Bureau shall give effect to and administer the supervisory and police powers conferred to it by this Code or other laws." This section amended Section 3 of the National Internal Revenue Code of the Philippines of 1977.
51 Section 6, Tax Code.
52See Section 207, Tax Code. Formerly Sections 304 and 310 of the National Internal Revenue Code of the Philippines of 1977.
53See Sections 203 and 220, Tax Code. Formerly Sections 318 and 319 of the National Internal Revenue Code of the Philippines of 1977.
54Commissioner of Internal Revenue v. Pineda, 128 Phil. 146, 150 (1967).
55Philippine Bank of Communications v. Commissioner of Internal Revenue, supra note 47 at 927.
56See Commissioner of Internal Revenue v. Metro Star Superama, Inc., 652 Phil. 172, 188 (2010), Commissioner of Internal Revenue v. Algue, Inc., supra note 48 at 836; Commissioner of Internal Revenue v. Reyes, 516 Phil. 176, 190 (2006); Commissioner of Internal Revenue v. BASF Coating + INKS Phils., Inc., 748 Phil. 760, 772 (2014).
57See Article III, Section 1, 1987 Constitution. Also see Commissioner of Internal Revenue v. Metro Star Superama, Inc., id. at 187.
58See Commissioner of Internal Revenue v. BASF Coating + INKS Phils., Inc., supra note 56 at 772 citing Commissioner of Internal Revenue v. Algue, Inc., supra note 48 at 836.
59Alhambra Cigar & Cigarette Manufacturing Co. v. Collector of Internal Revenue, 105 Phil. 1337 (1959), as quoted in Republic v. De Yu, 119 Phil. 1013, 1017 (1964).
60Commissioner of Internal Revenue v. BASF Coating + INKS Phils., Inc., supra note 56. Also see Remedies of the Bureau in the Audit Process and Collection of Delinquent Accounts, https://www.bir.gov.ph/index.php/taxpayer-bill-of-rights.html#remedies-of-the-bureau-in-theaudit-process-and-collection-of-delinquent-accounts. (Last visited January 11, 2018.)
61 Supra note 56.
62 Id. at 189-190.
63 Supra note 56.
64 Id. at 771-772.
65Rollo (G.R. Nos. 204119-20), p. 580.
66 Section 318 of the National Internal Revenue Code of 1977 (Presidential Decree No. 1158, [June 3, 1977]) was previously Section 331 of the National Internal Revenue Code of 1939 (Commonwealth Act No. 466, [June 15, 1939]).
67 Section 318 was amended by Republic Act No. 8424, shortening the prescriptive period to assess and collect national internal revenue taxes from five to three years, to quote: "SECTION 203. Period of Limitation Upon Assessment and Collection. - Except as provided in Section 222, internal revenue taxes shall be assessed within three (3) years after the last day prescribed by law for the filing of the return, and no proceeding in court without assessment for the collection of such taxes shall be begun after the expiration of such period: Provided, That in a case where a return is filed beyond the period prescribed by law, the three (3)-year period shall be counted from the day the return was filed. For purposes of this Section, a return filed before the last day prescribed by law for the filing thereof shall be considered as filed on such last day." (Emphasis supplied.)
68 In case an assessment had been timely issued, Section 319(c) of the 1977 NIRC provided: "Where the assessment of any internal revenue tax has been made within the period of limitation aboveprescribed, such tax may be collected by distraint or levy or by a proceeding in court, but only if began (1) within five years after assessment of the tax, or (2) prior to the expiration of any period for collection agreed upon in writing by the Commissioner and the taxpayer before the expiration of such five-year period. x x x"
69Palanca v. Commissioner of Internal Revenue, 114 Phil. 203, 207 (1962).
70Rollo (G.R. Nos. 204119-20), p. 199.
71 Id. at 72.
72Rollo (G.R. No. 197945), p. 181.
73See Philippine National Oil Company v. Court of Appeals, 496 Phil. 506 (2005); Fernandez Hermanos, Inc. v. Commissioner of Internal Revenue, 140 Phil. 31, 47 (1969); Palanca v. Commissioner of Internal Revenue, supra note 69.
74Bank of the Philippine Islands v. Commissioner of Internal Revenue, 510 Phil. 1 (2005).
75China Banking Corporation v. Commissioner of Internal Revenue, 753 Phil. 58 (2015).
76Bank of the Philippine Islands v. Commissioner of internal Revenue, supra note 74.
77 In which the principal amount involved is one million pesos or more.
78 Entitled, "An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating Its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging Its Membership, Amending for the Purpose Certain Sections of Republic Act No. 1125, as Amended, Otherwise Known as the Law Creating the Court of Tax Appeals, and for Other Purposes."
79Philippine Journalists, Inc. v. Commissioner of Internal Revenue, 488 Phil. 218, 229-230 (2004).