People of the Philippines v. Typingco

SECOND DIVISION [C.T.A. CRIM. CASE NO. O-114. July 2, 2012.] For: Violation of Section 255 in relation to Sections 253 (d) and 256 of the 1997 TaxCode PEOPLE OF THE PHILIPPINES , plaintiff, vs . JOSEPH TYPINGCO , accused. RESOLUTION CASTAEDA, JR. , J p : For consideration is the prosecution's "MOTION FOR PARTIAL RECONSIDERATION (of the Civil Aspect of the Case)" filed on May 31, 2012, praying for the reconsideration of the Decision promulgated on May 16, 2012 where this Court finds no civil liability on the part of the accused. The prosecution stresses that the instant case was filed against the accused as responsible officer of Fiestapack for violation of Section 255 of the 1997 Tax Code and also to collect the deficiency Income Tax, Value-Added Tax and Expanded Withholding Tax for taxable year 2000 of Fiestapack, which had long been final, executory, demandable and overdue for payment after the accused and Fiestapack failed to protest and pay the same. The prosecution further asserts that it is of no moment whether or not the PAN was validly served upon the taxpayer claiming that even a void or invalid assessment becomes final and executory if it has not been protested. In support of its contentions, the prosecution cites the cases of Allied Bank Corporation vs. Commissioner of Internal Revenue (CTA EB No. 167, August 23, 2006) and Singer Finance Corporation vs. Commissioner of Internal Revenue (CTA EB No. 10, CTA Case No. 6743) . The accused filed his "OPPOSITION TO MOTION FOR PARTIAL RECONSIDERATION" on June 8, 2012. Accused states that Section 228 of the Tax Code mandates that the taxpayer must be formally notified that he is liable for deficiency taxes through the PAN by giving him a period of 15 days from receipt to contest the assessment. He claims that the records is bereft of proof that plaintiff observed this mandatory obligation. CSTEHI The Court finds the instant motion bereft of merit. Let it be stressed that no other than the Supreme Court had decreed that the sending and eventual receipt of a Preliminary Assessment Notice (PAN) to a taxpayer to inform him of the assessment made is part of the "due process requirement in the issuance of a deficiency tax assessment" and the absence thereof renders nugatory any assessment. 1 Likewise, an effective protest cannot be expected from a taxpayer who is not informed of the assessment issued against him and consequently the assessment can never be considered to have attained finality for failure of the taxpayer to file his protest. It is noteworthy to mention that in this case, Fiestapack was the taxpayer that was assessed for taxable year 2000 while the accused was being charged as the responsible officer (President) of Fiestapack for the said year. In this case, the prosecution failed to prove that the taxpayer Fiestapack or the accused indeed received the PAN. For failure of the Bureau of Internal Revenue to comply with the "due process requirement", there can be no final and valid assessment to consider. Moreover, the prosecution also failed to prove that the accused was the President of Fiestapack for taxable year 2000. On the other hand, the cases cited by the prosecution are not on all fours with the case at bar. It is noteworthy that in the said cases, the sending and the actual receipt of the PAN was never an issue unlike in the case at bar. cCSEaA Based on the foregoing, this Court finds no compelling reason to reverse or modify the civil aspect of the assailed Decision. WHEREFORE , premises considered, the prosecution's "MOTION FOR PARTIAL RECONSIDERATION (of the Civil Aspect of the Case)" filed on May 31, 2012 is hereby DENIED for lack of merit. SO ORDERED . (SGD.) JUANITO C. CASTAEDA, JR. Associate Justice Caesar A. Casanova and Cielito N. Mindaro-Grulla, JJ., concur. Footnotes 1. Commissioner of Internal Revenue vs. Metro Star Superama, Inc. , G.R. No. 185371, December 8, 2010.