Amending Administrative Order No. 243 Entitled "Creating a System for the Bulk and Break Bulk Cargo Clearance Enhancement Program of the Bureau of Customs"

EN BANC [C.T.A. EB CASE NO. 608 . April 18, 2012.] (C.T.A. Case No. 7736) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . INTERNATIONAL PHARMACEUTICALS, INC. , respondent . RESOLUTION ACOSTA , P.J p : This resolves the Motion for Reconsideration filed by petitioner on 22 November 2011, praying for the reversal and the setting aside of the Decision of this Court's Special First Division dated 11 December 2009 and its subsequent Resolution dated 16 March 2010, both of which were affirmed by this Court En Banc in a Decision promulgated on 25 October 2011. Petitioner in her Motion raises the lone issue of whether THE HONORABLE COURT ERRED IN ITS HOLDING THAT THE RESPONDENT'S MOTION FOR RECONSIDERATION FILED ON SEPTEMBER 15, 2005 DID TOLL THE PERIOD FOR THE FILING OF A JUDICIAL APPEAL PURSUANT TO SECTION 3.1.5 OF REVENUE REGULATIONS (RR) NO. 12-99. In response, respondent filed a Manifestation with Opposition (with Prayer for Cancellation of Surety Bond), which the Court received on 20 January 2012. After a careful study of the lone error assigned by petitioner, this Court finds the Motion for Reconsideration bereft of matters which were not taken into consideration in arriving at the 25 October 2011 Decision and/or which would warrant the reversal or modification thereof. Petitioner once again cites the case of Fishwealth Canning Corporation vs. CIR , G.R. No. 179343, 21 January 2010, in maintaining that the filing by respondent of a Motion for Reconsideration of the Final Decision on Disputed Assessment (FDDA) issued by then Deputy Commissioner Kim Henares did not toll the period prescribed by law for the filing of a judicial appeal. Let it be settled that the Fishwealth case is not on all fours with the instant petition since in the former, the FDDA therein was issued by the Commissioner of Internal Revenue (CIR) himself. In such a case, the aggrieved party has no other recourse but to elevate the adverse decision of the Commissioner to this Court in accordance with Section 3.1.5 of Revenue Regulations (RR) 12-99, in relation to Section 228 of the National Internal Revenue Code. Section 3.1.5 states in part 3.1.5 Disputed Assessment. The taxpayer or his duly authorized representative may protest administratively against the aforesaid formal letter of demand and assessment notice within thirty (30) days from date of receipt thereof. . . . If the protest is denied, in whole or in part, by the Commissioner , the taxpayer may appeal to the Court of Tax Appeals within thirty (30) days from date of receipt of the said decision, otherwise, the assessment shall become final, executory and demandable. In general, if the protest is denied, in whole or in part, by the Commissioner or his duly authorized representative, the taxpayer may appeal to the Court of Tax Appeals within thirty (30) days from date of receipt of the said decision, otherwise, the assessment shall become final, executory and demandable: Provided, however, that if the taxpayer elevates his protest to the Commissioner within thirty (30) days from date of receipt of the final decision of the Commissioner's duly authorized representative, the latter's decision shall not be considered final, executory and demandable, in which case, the protest shall be decided by the Commissioner . (Emphasis supplied) CSIHDA Consequently, a letter of reconsideration to the Commissioner, which has no basis in law or in any administrative issuance, will certainly not toll the running of the period for filing the judicial appeal. This Court reiterates that unlike the case in Fishwealth , the FDDA in the instant case was signed by a deputy commissioner, a duly authorized representative of the CIR. The Court cannot likewise give credence to petitioner's assertion that the then Deputy Commissioner Kim Henares, Officer-in-Charge of the BIR Large Taxpayers Service was then acting on behalf of the CIR when she issued and signed the FDDA. Petitioner asserts that the act of issuing an FDDA is a power that may be delegated by the CIR to any subordinate official with the rank equivalent to a division chief or higher but, however, fails to prove that there was in fact delegation at that time from the CIR to Deputy Commissioner Henares of the said power to issue the subject FDDA to respondent. Lastly, this Court admits that it entertains decisions or FDDAs rendered by duly authorized representatives of the CIR as these decisions, albeit still reviewable by the CIR, are properly already within the jurisdiction of this Court. In such instances when an FDDA is issued by a duly authorized representative of the CIR, Section 3.1.5 of RR 12-99 gives the taxpayer the option to either directly elevate the appeal to this Court or seek the reconsideration of the CIR pursuant to his power to review decisions by his subordinates. Opting to seek reconsideration from the CIR though shall not bar judicial appeal. Further, the period within which judicial recourse should be availed of shall only commence to run upon the issuance of a decision by the CIR. Considering the resolution of this Court to affirm the cancellation of the assessment, the surety bond of respondent that was posted for the purpose of suspending the collection of the deficiency excise tax is hereby released and cancelled. In view of the foregoing, the Motion for Reconsideration is hereby DENIED for lack of merit. Consequently, the prayer of respondent for this Court to release and cancel the surety bond is GRANTED . SaAcHE SO ORDERED . (SGD.) ERNESTO D. ACOSTA Presiding Justice Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, JJ., concur . Juanito C. Castaeda, Jr., J., see concurring and dissenting opinion. Separate Opinions CASTAEDA, JR. , J., concurring and dissenting opinion : I concur that the Motion for Reconsideration be denied for lack of merit for reasons stated in the majority opinion. However, with due respect to my esteemed colleagues, I dissent with the opinion that the surety bond that was posted for the purpose of suspending the collection of deficiency excise tax be cancelled. In A.M. No.04-7-02-SC, Re: Proposed Guidelineson Corporate Surety Bonds , it categorically provides that the lifetime or duration of the effectivity of any bond issued in criminal and civil actions/special proceedings, or in any proceeding or incident therein shall be from its approval by the court, until the action or proceeding is finally decided, resolved or terminated. Pertinent portion of which reads, as follows: "VII. LIFETIME OF BONDS IN CRIMINAL AND CIVIL ACTIONS/SPECIAL PROCEEDINGS Unless and until the Supreme Court directs otherwise, the lifetime or duration of the effectivity of any bond issued in criminal and civil actions/special proceedings, or in any proceeding or incident therein shall be from its approval by the court, until the action or proceeding is finally decided, resolved or terminated . This condition must be incorporated in the terms and conditions of the bonding contract and shall bind the parties notwithstanding their failure to expressly state the same in the said contract or agreement. xxx xxx xxx." (Emphasis Supplied) In this case, although the Court en banc affirmed the cancellation of the assessment, the action or proceeding is not yet finally decided, resolved or terminated. For purposes of binding effect or whether it can be subject of execution, an order is "final" or executory after the lapse of the reglementary period to appeal and no appeal has been perfected ( see Perez, et al. vs.Zulueta, 106 Phil. 264; cf. Denso [Phil.], Inc. vs.IAC, et al., G.R. No. 75000, Feb. 27, 1987; Montilla vs.CA, et al., L-47968, May 9, 1988). 1 Pertinent to this is Section 1, Rule 16 of the 2005 RevisedRulesof the Court of Tax Appeals, as amended, which reads, as follows: SIDTCa RULE 16 APPEAL Section 1. Appeal to Supreme Court by petition for review on certiorari . A party adversely affected by a decision or ruling of the Court en banc may appeal therefrom by filing with the Supreme Court a verified petition for review on certiorari within fifteen days from receipt of a copy of the decision or resolution, as provided in Rule 45 of the Rulesof Court. If such party has filed a motion for reconsideration or for new trial, the period herein fixed shall run from the party's receipt of a copy of the resolution denying the motion for reconsideration or for new trial. (n) Based on the foregoing provision, the party adversely affected by our resolution may still appeal to the Supreme Court by petition for review on certiorari under Rule 45 of the Rulesof Court within fifteen (15) days from receipt of the said resolution. In view of the foregoing discussions, I vote to deny petitioner's Motion for Reconsideration for lack of merit. At this stage, however, the surety bond should not be cancelled because our Decision is not yet final and may still be appealed by the aggrieved party. CTHDcS Footnotes CASTAEDA, JR., J., concurring and dissenting opinion: 1. Regalado, F., Remedial Law Compendium, Ninth Revised Edition, Volume I, pp. 438-439.