63 Bar Ops Pilipinas 2015 Philippine Association of Law Schools
Failure to print the word zero-rated on the invoices or receipts is
fatal to a claim for credit of
refundofinputVATonzero-ratedsales(J.R.A.Philippines,Inc.v.CIR,G.R.No.177127,
October 11, 2010) If the claim for refund/ tax credit certificate
is based on the existence of zero-rated sales by the taxpayer but
it fails to comply with the invoicing requirements in the issuance
of sales invoices (e.g. failure to indicate the TIN), its claim for
tax credit/refund of VAT on its purchases shall be denied
considering that the invoice it is issuing to its customers does
not depict its being a VAT-registered taxpayer whose sales are
classified as zero-rated sales. Nonetheless, this treatment
iswithoutprejudicetotherightofthetaxpayertochargetheinputtaxestotheappropriate
expenseaccountorassetaccountsubjecttodepreciation,whicheverisapplicable(Panasonic
Comm. Imaging Corp. of the Phil. v. CIR, G.R. No. 178090, February
8, 2010) b) Invoicing and recording deemed sale transactionsc)
Consequences of issuing erroneous VAT invoice or VAT official
receipt23. Filing of return and payment24. Withholding of final VAT
on sales to government TAX REMEDIES UNDER THE NIRC a)AssessmentAn
assessment contains not only a computation of tax liabilities, but
also a demand for payment within a prescribed period. It also
signals the time when penalties and protests begin to accrue
against the taxpayer. To enable the taxpayer to determine his
remedies thereon, due process requires that it must be served on
and received by the taxpayer.
Accordingly,anaffidavit,whichwasexecutedbyrevenueofficersstatingthetax
liabilities of a taxpayer and attached to a criminal complaint for
tax evasion, cannot be deemed an assessment that can be questioned
before the Court of Tax Appeals. (CIR vs Pascor Realty and
Development Corp., GR no. 128315, June 29, 1999) (i) Concept of
assessment(a) Requisites for valid assessment(b) Constructive
methods of income
determinationTheruleisthatintheabsenceoftheaccountingrecordsofataxpayer,
histaxliabilitymaybedeterminedbyestimation.Thepetitionerisnot
requiredtocomputesuchtaxliabilitieswithmathematicalexactness.
Approximationinthecalculationofthetaxesdueisjustified.Tohold
otherwise would be tantamount to holding that skillful concealment
is an invinciblebarriertoproof. However,theruledoesnotapplywherethe
estimationisarrivedatarbitrarilyandcapriciously.Infine,then,the
petitioner acted arbitrarily and capriciously in relying on and
giving weight
tothemachinecopiesoftheConsumptionEntriesinfixingthetax
deficiencyassessmentsagainsttherespondent.(CIRvsHantexTrading Co.,
GR no. 136975, March 31, 2005) The "best evidence" envisaged in
Section 16 of the 1977 NIRC [now Sec.
6,1997NIRC],asamended,includesthecorporateandaccounting 64 Bar Ops
Pilipinas 2015 Philippine Association of Law Schools records of the
taxpayer who is the subject of the assessment process, the
accountingrecordsofothertaxpayersengagedinthesamelineof business,
including their gross profit and net profit sales. The law allows
the BIR access to all relevant or material records and data in the
person of the taxpayer. It places no limit or condition on the type
or form of the medium by which the record subject to the order of
the BIR is kept. The purpose of the law is to enable the BIR to get
at the taxpayers records in whatever form they may be kept. Such
records include computer tapes of the said records prepared by the
taxpayer in the course of business.68 In
thiseraofdevelopinginformation-storagetechnology,thereisnovalid
reasontoimmunizecompanieswithcomputer-based,record-keeping
capabilities from BIR scrutiny. The standard is not the form of the
record butwhereitmightshedlightontheaccuracyofthetaxpayersreturn.
However,thebestevidenceobtainableunderSection16ofthe1977
NIRC[nowSec.6,1997NIRC],asamended,doesnotincludemere
photocopiesofrecords/documents.Thepetitioner,inmakinga
preliminaryandfinaltaxdeficiencyassessmentagainstataxpayer,
cannotanchorthesaidassessmentonmeremachinecopiesof
records/documents.MerephotocopiesoftheConsumptionEntrieshave
noprobativeweightifofferedasproofofthecontentsthereof. (CIRvs
Hantex Trading Co., GR no. 136975, March 31, 2005) (c) Inventory
method for income determination(d) Jeopardy assessment(e) Tax
delinquency and tax deficiency (ii) Power of the Commissioner to
make assessments and prescribe additional requirements for tax
administration and enforcement(a)
PoweroftheCommissionertoobtaininformation,andto summon/examine, and
take testimony of persons
Forthepurposeofsafeguardingtaxpayersfromanyunreasonable
examination,investigationorassessment,ourtaxlawprovidesastatuteof
limitationsinthecollectionoftaxes.Thus,thelawonprescription,beinga
remedialmeasure,shouldbeliberallyconstruedinordertoaffordsuch
protection. Asacorollary,theexceptionstothelawonprescriptionshould
perforcebestrictlyconstrued.Sec.15oftheNIRC,ontheotherhand,
provides that "[w]hen a report required by law as a basis for the
assessment of any national internal revenue tax shall not be
forthcoming within the time fixed by law or regulation, or when
there is reason to believe that any such
reportisfalse,incomplete,orerroneous,theCommissionerofInternal
Revenueshallassessthepropertaxonthebestevidenceobtainable."
Clearly, Section 15 does not provide an exception to the statute of
limitations
ontheissuanceofanassessment,byallowingtheinitialassessmenttobe
madeonthebasisofthebestevidenceavailable.Havingmadeitsinitial
assessment in the manner prescribed, the commissioner could not
have been authorized to issue, beyond the five-year prescriptive
period, the second and
thethirdassessmentsunderconsiderationbeforeus.(CIRvsBFGoodrich
Phils., Inc., GR no. 104171, February 24, 1999) (iii) When
assessment is made65 Bar Ops Pilipinas 2015 Philippine Association
of Law Schools
Anassessmentisdeemedmadeonlywhenthecollectorofinternalrevenue
releases, mails or sends such notice to the taxpayer. (CIR vs
Pascor Realty and Development Corp., GR no. 128315, June 29, 1999)
(a) Prescriptive period for
assessmentThestatuteoflimitationsonassessmentandcollectionoftaxesisforthe
protection of the taxpayer and, thus, shall be construed liberally
in his favor.
Thoughthestatuteoflimitationsonassessmentandcollectionofnational
internalrevenuetaxesbenefitsboththeGovernmentandthetaxpayer,it
principally intends to afford protection to the taxpayer against
unreasonable investigation.
Theindefiniteextensionoftheperiodforassessmentis unreasonable
because it deprives the said taxpayer of the assurance that he
willnolongerbesubjectedtofurtherinvestigationfortaxesafterthe
expiration of a reasonable period of time. (BPI vs CIR, GR 139736,
October 17, 2005) Both Article 13 of the Civil Code andSection 31,
Chapter VIII, Book I of the
AdministrativeCodeof1987dealwiththesamesubjectmatterthe
computationoflegalperiods.UndertheCivilCode,ayearisequivalent to
365dayswhetheritbearegularyearoraleapyear.Underthe
AdministrativeCodeof1987,however,ayeariscomposedof12calendar
months.Needlesstostate,undertheAdministrativeCodeof1987,the number
of days is irrelevant. There obviously exists a manifest
incompatibility
inthemannerofcomputinglegalperiodsundertheCivilCodeandthe
AdministrativeCodeof1987.Forthisreason,weholdthatSection31,
ChapterVIII,BookIoftheAdministrativeCodeof1987,beingthemore
recentlaw,governsthecomputationoflegalperiods.(CIRvsPrimetown
Property Group Inc., GR 162155, August 28, 2007)
Consideringthatthedeficiencyassessmentwasbasedontheamended
returnwhich,asaforestated,issubstantiallydifferentfromtheoriginal
return,theperiodoflimitationoftherighttoissuethesameshouldbe
counted from the filing of the amended income tax return. We
believe that to
holdotherwise,wewouldbepavingthewayfortaxpayerstoevadethe payment
of taxes by simply reporting in their original return heavy losses
and amendingthesamemorethanfiveyearslaterwhentheCommissionerof
Internal Revenue has lost his authority to assess the proper tax
thereunder. TheobjectoftheTaxCodeistoimposetaxesfortheneedsofthe
Government, not to enhance tax avoidance to its prejudice. (CIR vs
Phoenix Assurance Co., L-19127, May 20, 1965) A waiver of the
statute of limitations under the NIRC, to a certain extent, is a
derogationofthetaxpayersrighttosecurityagainstprolongedand
unscrupulousinvestigationsandmustthereforebecarefullyandstrictly
construed. The waiver of the statute of limitations is not a waiver
of the right
toinvokethedefenseofprescriptionaserroneouslyheldbytheCourtof
Appeals.ItisanagreementbetweenthetaxpayerandtheBIRthatthe period to
issue an assessment and collect the taxes due is extended to a date
certain. The waiver does not mean that the taxpayer relinquishes
the right to 66 Bar Ops Pilipinas 2015 Philippine Association of
Law Schools
invokeprescriptionunequivocallyparticularlywherethelanguageofthe
documentisequivocal.TheWaiverofStatuteofLimitations,signedby
petitionerscomptrolleronSeptember22,1997isnotvalidandbinding
because it does not conform with the provisions of RMO No. 20-90.
It did not specify a definite agreed date between the BIRand
petitioner, within which
theformermayassessandcollectrevenuetaxes.Thus,petitionerswaiver
becameunlimitedintime,violatingSection222(b)oftheNIRC.(Philippine
Journalists, Inc vs CIR, GR 162852, December 16, 2004)
ThewaiverrequiredundertheTaxCodeisonewhichisnotunilateralnor
canitbesaidthatconcurrencetosuchagreementisamereformality because
it is the very signatures of both the Commissioner and the taxpayer
which give birth to such valid agreement. (CIR v. CA, G.R. 115712,
Feb. 25, 1999)
Awaiverofthestatuteoflimitationsbeingaderogationofthetaxpayers
righttosecurityagainst prolongedandunscrupulousinvestigationsmust
be carefully and strictly construed. (CIR v. FMF Devt Corp., 556
SCRA 698) The requirement to furnish the taxpayer a copy of the
waiver of the Statute of Limitations is not only to give notice of
the existence of the document but
oftheacceptancebytheBIRandtheperfectionoftheagreement.(Phil.
Journalists, Inc. v. CIR, GR 162852, Dec. 16, 2004) (1) False,
fraudulent, and non-filing of returnsPetitioner insists that
private respondent committed "falsity" when it sold
thepropertyforapricelesserthanitsdeclaredfairmarketvalue.This
factalonedidnotconstituteafalsereturnwhichcontainswrong
informationduetomistake,carelessnessorignorance. 13 Itispossible
thatrealpropertymaybesoldforlessthanadequateconsiderationfor a bona
fide business purpose; in such event, the sale remains an "arm's
length"transaction.Inthepresentcase,theprivaterespondentwas
compelled to sell the property even at a price less than its market
value, because it would have lost all ownership rights over it upon
the expiration
oftheparityamendment.(CIRvsBFGoodrichPhils.,Inc.,GRno. 104171,
February 24, 1999)
Fraudcannotbepresumedbutmustbeproven.Asacorollarythereto,
wecanalsostatethatfraudulentintentcouldnotbededucedfrom
mistakeshoweverfrequenttheymaybe,especiallyifsuchmistakes
emanatefromerroneousentriesorerroneousclassificationofitemsin
accounting methods utilized for determination of tax liabilities.
The lower
court'sconclusionregardingtheexistenceoffraudulentintenttoevade
paymentoftaxeswasbasedmerelyonapresumptionandnoton evidence
establishing a willful filing of false and fraudulent returns so as
to warrant the imposition of the fraud penalty. The fraud
contemplated by law is actual and not constructive. It must be
intentional fraud, consisting
ofdeceptionwillfullyanddeliberatelydoneorresortedtoinorderto 67 Bar
Ops Pilipinas 2015 Philippine Association of Law Schools induce
another to give up some legal right. Negligence, whether slight or
gross,isnotequivalenttothefraudwithintenttoevadethetax contemplated
by the law. (Aznar vs CTA, GR L-20569, August 23, 1974) (b)
Suspension of running of statute of limitations
Petitionersalsoarguethatthegovernmentsrighttoassessandcollectthe
subjecttaxhadprescribed.PetitionersadmittedintheirMotionfor
ReconsiderationbeforetheCourtofAppealsthatthepoolchangedits
address, fortheystatedthatthepoolsinformationreturnfiledin1980
indicated therein its present address. The Court finds that this
falls short of
therequirementofSection333[nowsection223]oftheNIRCforthe
suspensionoftheprescriptiveperiod.Thelawclearlystatesthatthesaid
periodwillbesuspendedonlyifthetaxpayerinformstheCommissionerof
Internal Revenue of any change in the address. (Afisco Insurance vs
CA, GR 112675, January 25, 1999) Sec. 271 [1977 NIRC] (now Sec. 223
of 1997 NIRC) limits the suspension of the running of prescription
to instances when reinvestigation is requested by a taxpayer and is
granted by the CIR. Only a request for reinvestigation can
tolltherunningoftheperiodofthestatuteoflimitationsbecauseitwould
entail reception and evaluation of additional evidence and will
take more time
thanarequestforreconsiderationwheretheevaluationoftheevidenceis
limitedonlytotheevidencealreadyathand.(CIRv.Phil.Global
Communications, 506 SCRA 427) (iv) General provisions on additions
to the tax(a) Civil penalties(b) Interest(c) Compromise
penaltiesItdoesnotappearthatpetitioneracceptedtheimpositionofthecompromise
amounts.Itisnowa wellsettleddoctrinethatcompromisepenaltycannotbe
imposedorcollectedwithouttheagreementorconformityofthetaxpayer.
(WonderMechanicalEngineeringvsCTA,GRL-22805&L-27858,June30,
1975) (v) Assessment process(a) Tax audit(b) Notice of informal
conferenceUnderRev.Reg.12-99, anoticeof
informalconferenceissenttothetaxpayer informinghimof thefindingsof
theauditconductedonhis booksand records indicating that there is a
discrepancy in his tax payments which has to be paid. However under
Rev. Reg. 18-2013 dated Nov. 28, 2013 the requirement for the
issuance of a letter of informal conference has been removed.(c)
Issuance of preliminary assessment
noticeSec.228oftheTaxCodeclearlyrequiresthatthetaxpayermustbeinformed
thatheisliablefordeficiencytaxesthroughthesendingofaPreliminary 68
Bar Ops Pilipinas 2015 Philippine Association of Law Schools
Assessment Notice. The sending of a PAN to the taxpayer is to
inform him of the
assessmentmadeisbutpartofdueprocessrequirementintheissuanceofa
deficiencytaxassessment,theabsenceofwhichrendersnugatoryany
assessment made by the tax authorities. (CIR v. Metro Star
Superama, Inc. 637 SCRA 633) (d) Notice of informal conference[ is
this same as (b) above?] (e) Issuance of preliminary assessment
notice [ is this same as (c)?] (f) Exceptions to issuance of
preliminary assessment notice(g) Reply to preliminary assessment
notice (h)Issuanceofformalletterofdemandandassessmentnotice/final
assessment noticeTax assessments by tax examiners are presumed
correct and made in good faith.
Thetaxpayerhasthedutytoproveotherwise. Intheabsenceofproofofany
irregularities in the performance of duties, an assessment duly
made by a Bureau
ofInternalRevenueexaminerandapprovedbyhissuperiorofficerswillnotbe
disturbed.
Allpresumptionsareinfavorofthecorrectnessoftaxassessments. (Sy Po
vs CTA, GR 81446, August 18, 1988) An assessment fixes and
determines the tax liability of a taxpayer. As soon as it is
served, an obligation arises on the part of the taxpayer concerned
to pay the
amountassessedanddemanded.Hence,assessmentsshouldnotbebasedon mere
presumptions no matter how reasonable or logical said presumptions
may be. In order to stand the test of judicial scrutiny, the
assessment must be based
onactualfacts.(CIRvsIslandGarmentManufacturingCo.,GRL-46644,
September 11, 1987)
Taxpayersshallbeinformedinwritingofthelawandthefactsonwhichthe
assessmentismade,otherwise,theassessmentshallbevoid.Theold
requirement of merely notifying the taxpayer of the CIRs findings
was changed in 1998 to inform the taxpayer of not only the law but
also the facts on which an
assessmentwouldbemade.FailuretocomplywithSec.228oftheTaxCode
doesnotonlyrendertheassessmentvoid,butalsofindsnovalidationinany
provision in the Tax Code.(CIR vs. Reyes, 480 SCRA 382) A taxpayer
must be informed in writing of the legal and factual bases of the
tax assessment made against him. This is a mandatory requirement.
The advice of a
taxdeficiencygivenbytheCIRtoanemployeeofEnronaswellasthe
preliminary5-dayletternotice,werenotvalidsubstitutesforthemandatory
notice in writing of the legal and factual bases of the assessment.
Sec. 228 of the
NIRCrequiresthatthelegalandfactualbasesbestatedintheformalletterof
demandandassessmentnotice.OtherwisethelawandRR12-99wouldbe rendered
nugatory. In view of the absence of a fair opportunity for Enron to
be informedofthebasesoftheassessment,theassessmentwasvoid.Thisisa
requirement of due process. (CIR v. Enron Subic Power Corp. 575
SCRA 212) (i) Disputed assessment(j) Administrative decision on a
disputed assessment 69 Bar Ops Pilipinas 2015 Philippine
Association of Law Schools
Theauthoritytomaketaxassessmentsmaybedelegatedtosubordinate
officers.Saidassessmenthasthesameforceandeffectasthatissuedbythe
Commissioner himself, if not reviewed or revised by the latter.
(Oceanic Network Wireless Inc., GR 148380, December 9, 2005)(vi)
Protesting assessment (a) Protest of assessment by taxpayer (1)
Protested assessment (2) When to file a protest (3) Forms of
protest This Court had consistently ruled in a number of cases that
a request for reconsideration or reinvestigation by the taxpayer,
without a valid waiver
oftheprescriptiveperiodsfortheassessmentandcollectionoftax,as
requiredbytheTaxCodeandimplementingrules,willnotsuspendthe running
thereof. (BPI vs CIR, GR 139736, October 17, 2005) It bears to
emphasize that under Section 224 of the Tax Code of 1977, as
amended,therunningoftheprescriptiveperiodforcollectionoftaxes can
only be suspended by a request for reinvestigation, not a request
for reconsideration. Undoubtedly,areinvestigation,whichentailsthe
reception and evaluation of additional evidence, will take more
time than areconsiderationofataxassessment,whichwillbelimitedtothe
evidencealreadyathand; thisjustifieswhythe formercansuspendthe
runningofthestatuteoflimitationsoncollectionoftheassessedtax, while
the latter can not. (BPI vs CIR, GR 139736, October 17, 2005) (4)
Content and validity of protest (b) Submission of documents within
60 days from filing of protest Petitioner cannot insist on the
submission of proof of DST payment because such document does not
exist as respondent claims that it is not liable to pay, and has
not paid, the DST on the deposit on subscription. The term relevant
supporting documents should be understood as those documents
necessary to support the legal basis in disputing a tax assessment
as determined by the taxpayer. The BIR
canonlyinformthetaxpayertosubmitadditionaldocuments.TheBIRcannot
demand what type of supporting documents should be
submitted.Otherwise, a
taxpayerwillbeatthemercyoftheBIR,whichmayrequiretheproductionof
documentsthatataxpayercannotsubmit.(CIRvsFirstExpressPawnshop
Company, GR 172045-46, June 16, 2009) (c) Effect of failure to
protest
TheruleisthatfortheCourtofTaxAppealstoacquirejurisdiction,an
assessmentmustfirstbedisputedbythetaxpayerandruleduponbythe
CommissionerofInternalRevenuetowarrantadecisionfromwhichapetition
forreviewmaybetakento theCourt ofTaxAppeals.Whereanadverseruling
has been rendered by the Commissioner of Internal Revenue with
reference to a disputed assessment or a claim for refund or credit,
the taxpayer may appeal the same within thirty (30) days after
receipt thereof. A request for reconsideration 70 Bar Ops Pilipinas
2015 Philippine Association of Law Schools
mustbemadewithinthirty(30)daysfromthetaxpayersreceiptofthetax
deficiency assessment, otherwise, the decision becomes final,
unappealable and therefore, demandable.A tax assessment that has
become final,executory and enforceable for failure of the taxpayer
to assail the same as provided in Section
228cannolongerbecontested.(OceanicNetworkWirelessInc.,GR 148380,
December 9, 2005) (d) Period provided for the protest to be acted
upon (vii) Rendition of decision by Commissioner(a)Denial of
protest Records show that petitioner disputed the PAN but not the
Formal Letter of Demand
withAssessmentNotices.Nevertheless,wecannotblamepetitionerfornotfilinga
protestagainsttheFormalLetterofDemandwithAssessmentNoticessincethe
language used and the tenor of the demand letter indicate that it
is the final decision of the respondent on the matter.We have time
and again reminded the CIR to indicate,
inaclearandunequivocallanguage,whetherhisactiononadisputedassessment
constituteshisfinaldeterminationthereoninorderforthetaxpayerconcernedto
determine when his or her right to appeal to the tax court accrues.
Viewed in the light of
theforegoing,respondentisnowestoppedfromclaimingthathedidnotintendthe
Formal Letter of Demand with Assessment Notices to be a final
decision. (Allied Banking Corporation vs CIR, G.R. No. 175097,
February 5, 2010)(1)Commissioners actions equivalent to denial of
protest Therequestforreinvestigationandreconsiderationwasineffect
considered denied by petitioner when the latter filed a civil suit
for collectionofdeficiencyincome. Underthecircumstances,the
Commissioner of Internal Revenue, not having clearly signified his
finalactiononthedisputedassessment,legallytheperiodto appeal has
not commenced to run. Thus, it was only when private respondent
received the summons on the civil suit for collection of
deficiencyincomeonDecember28,1978thattheperiodto
appealcommencedtorun.(CIRvsUnionShippingCorporation, GR L-66160,
May 21, 1990) TheletterofFebruary18,1963,intheviewoftheCourt,is
tantamounttoadenialofthereconsiderationorprotestofthe
respondentcorporationontheassessmentmadebythe
petitioner,consideringthatthesaidletterisinitselfareiteration
ofthedemandbytheBureauofInternalRevenueforthe
settlementoftheassessmentalreadymade,andforthe
immediatepaymentofthesumofP758,687.04inspiteofthe
vehementprotestoftherespondentcorporationonApril21,
1961.Thiscertainlyisaclearindicationofthefirmstandof
petitioneragainstthereconsiderationofthe disputed assessment
inviewofthecontinuedrefusaloftherespondent corporation to execute
the waiver of the period of limitation upon the assessment in
question. (CIR vs Ayala Securities Corp., GR L-29485, March 31,
1976) 71 Bar Ops Pilipinas 2015 Philippine Association of Law
Schools (a) Filing of criminal action against taxpayer(b) Issuing a
warrant of distraint and levy(2) Inaction by Commissioner(viii)
Remedies of taxpayer to action by Commissioner(a)In case of denial
of protest (b)IncaseofinactionbyCommissionerwithin180daysfrom
submission of documents In case the Commissioner failed to act on
the disputed assessment within
the180-dayperiodfromdateofsubmissionofdocuments,ataxpayer
caneither:(1)fileapetitionforreviewwiththeCourtofTaxAppeals within
30 days after the expiration of the 180-day period; or (2) await
the finaldecisionoftheCommissioneronthedisputedassessmentsand
appealsuchfinaldecisiontotheCourtofTaxAppealswithin30days
afterreceiptofacopyofsuchdecision.(RCBCvsCIR,G.R.No. 168498, April
24, 2007)(c) Effect of failure to appeal b) Collection(i)
Requisites(ii) Prescriptive periods The BIR has three years,
counted from the date of actual filing of the return or
fromthelastdateprescribedbylawforthefilingofsuchreturn,whichever
comeslater,toassessanationalinternalrevenuetaxortobeginacourt
proceeding for the collection thereof without an assessment.In case
of a false
orfraudulentreturnwithintenttoevadetaxorthefailuretofileanyreturnat
all, the prescriptive period for assessment of the tax due shall be
10 years from discoverybytheBIRofthefalsity,fraud,oromission.
WhentheBIRvalidly issues an assessment, within either the
three-year or ten-year period, whichever
isappropriate,thentheBIRhasanotherthreeyears[now5yearsunderSec.
222,1997NIRC] aftertheassessmentwithinwhichtocollectthenational
internal revenue tax due thereon by distraint, levy, and/or court
proceeding. (BPI vs CIR, GR 139736, October 17, 2005)
UnderSection223(c)oftheTaxCodeof1977,asamended,itisnotessential
that the Warrant of Distraint and/or Levy be fully executed so that
it can suspend the running of the statute of limitations on the
collection of the tax.It is enough that the proceedings have
validly began or commenced and that their execution has not been
suspended by reason of the voluntary desistance of the respondent
BIRCommissioner.
Existingjurisprudenceestablishesthatdistraintandlevy
proceedingsarevalidlybegunorcommencedbytheissuanceofthe Warrant and
service thereof on the taxpayer.It is only logical to require that
the Warrant of Distraint and/or Levy be, at the very least, served
upon the taxpayer
inordertosuspendtherunningoftheprescriptiveperiodforcollectionofan
assessedtax,becauseitmayonlybeuponthe serviceoftheWarrantthatthe
taxpayer is informed of the denial by the BIR of any pending
protest of the said taxpayer, and the resolute intention of the BIR
to collect the tax assessed. (BPI vs CIR, GR 139736, October 17,
2005) 72 Bar Ops Pilipinas 2015 Philippine Association of Law
Schools WhilewemayagreewiththeCourtofTaxAppealsthatamererequestfor
reexamination or reinvestigation may not have the effect of
suspending the running of the period of limitation for in such case
there is need of a written agreement to extend the period between
the Collector and the taxpayer, there are cases however where a
taxpayer may be prevented from setting up the defense of
prescription even if he has not previously waived it in writing as
when by his repeated requests or positive acts the Government has
been, for good reasons, persuaded to postpone collection to make
him feel that the demand was not unreasonable or that no harassment
or injustice is meant by the Government. (CIR vs Kudos Metal Corp.,
GR 178087, May 5, 2010)
Therunningoftheprescriptionperiodwheretheactsofthetaxpayerdidnot
preventthegovernmentfromcollectingthetax. Partialpaymentwouldnot
preventthegovernmentfromsuingthetaxpayer.Because,bysuchactof
payment,thegovernmentisnottherebypersuadedtopostponecollectionto
make him feel that the demand was not unreasonable or that no
harassment or
injusticeismeant.(CIRvsPhilippineGlobalCommunication,GR167146,
October 31, 2006) The act of requesting a reinvestigation alone
does not suspend the period.The
requestshouldfirstbegranted,inordertoeffectsuspension.Theburdenof
proofthatthetaxpayersrequestforreinvestigationhadbeenactuallygranted
shallbeonrespondentBIRCommissioner. Thegrantmaybeexpressedin
communications with the taxpayer or implied from the actions of the
respondent
BIRCommissionerorhisauthorizedBIRrepresentativesinresponsetothe
request for reinvestigation. (BPI vs CIR, GR 139736, October 17,
2005)
(iii) Distraint of personal property including garnishment
Theprohibitionagainstexaminationoforinquiryintoabankdepositunder
Republic Act 1405 does not preclude its being garnished to insure
satisfaction of a judgment. Indeed there is no real inquiry in such
a case, and if existence of the deposit is disclosed the disclosure
is purely incidental to the execution process. It
ishardtoconceivethatitwaseverwithintheintentionofCongresstoenable
debtorstoevadepaymentoftheirjustdebts,eveniforderedbytheCourt,
throughtheexpedientofconvertingtheirassetsintocashanddepositingthe
same in a bank. (PCIB vs CA, GR 84526, January 28, 1991)(a) Summary
remedy of distraint of personal property(1) Purchase by the
government at sale upon distraint(2) Report of sale to the Bureau
of Internal Revenue
(BIR)(3)Constructivedistrainttoprotecttheinterestofthe
government(iv) Summary remedy of levy on real property(a)
Advertisement and sale(b) Redemption of property sold(c) Final deed
of purchaser (v) Forfeiture to government for want of bidder(a)
Remedy of enforcement of forfeitures(1) Action to contest
forfeiture of chattel(b) Resale of real estate taken for taxes 73
Bar Ops Pilipinas 2015 Philippine Association of Law Schools (c)
When property to be sold or
destroyed(d)Dispositionoffundsrecoveredinlegalproceedingsor
obtained from forfeiture(vi) Further distraint or levy(vii) Tax
lien It is settled that the claim of the government predicated on a
tax lien is superior to the claim of a private litigant predicated
on a judgment. The tax lien attaches
notonlyfromtheserviceofthewarrantofdistraintofpersonalpropertybut
fromthetimethetaxbecamedueandpayable. Besides,thedistraintonthe
subject properties of Maritime Company of the Philippines as well
as the notice of
theirseizureweremadebypetitioner,throughtheCommissionerofInternal
Revenue,longbeforethewritofexecutionwasissuedbytheRegionalTrial
Court. (Republic vs Enriquez, GR 78391, October 21, 1988) (viii)
Compromise(a)AuthorityoftheCommissionertocompromiseandabate
taxes(ix) Civil and criminal actions(a) Suit to recover tax based
on false or fraudulent returns The contention is made, and is here
rejected, that an assessment of the
deficiencytaxdueisnecessarybeforethetaxpayercanbeprosecuted
criminallyforthechargespreferred.Thecrimeiscompletewhenthe
violatorhas,asinthiscase,knowinglyandwillfullyfiledfraudulent
returnswithintenttoevadeanddefeatapartorallofthetax.While
therecanbenocivilactiontoenforcecollectionbeforetheassessment
proceduresprovidedintheCodehavebeenfollowed,thereisno
requirementfortheprecisecomputationandassessmentofthetax
beforetherecanbeacriminalprosecutionundertheCode.(Ungabvs Cusi Jr.,
GR L-41919-24, May 30, 1980) Sec. 269 [now Sec. 222 of the 1997
NIRC] provides that when fraudulent tax returns are involved, a
proceeding in court after the collection of such
taxmaybebegunwithoutassessment.Thegrossdisparityinthetaxes
dueandtheamountsactuallydeclaredconstitutesbadgesoffraud.
ApplyingUngabv.Cusi,97SCRA877[1980],assessmentisnot necessary in
filing criminal complaints for tax violations. Assessment of a
deficiency is not necessary to a criminal prosecution for tax
evasion. The
crimeiscompletewhentheviolatorknowinglyandwillfullyfiled
fraudulentreturnwithintentiontoevadethetax.(Adamsonv.Courtof
Appeals, 588 SCRA 27) c) Refund A corporation entitled to a tax
credit or refund of the excess estimated quarterly income
taxespaidhastwooptions:(1)tocarryovertheexcesscreditor(2)toapplyforthe
issuance of a tax credit certificate or to claim a cash refund. If
the option to carry over the excess credit is exercised, the same
shall be irrevocable for that taxable period. This is known as the
irrevocability rule and is embodied in the last sentence of Section
76 of the Tax Code. (Systra Philippines vs CIR, GR 176290,
September 21, 2007) 74 Bar Ops Pilipinas 2015 Philippine
Association of Law Schools
Norefundfordocumentarystamptaxes:documentarystamptaxesareleviedonthe
exercisebypersonsofcertainprivilegesconferredbylawforthecreation,revision,or
termination of specific legal relationships through the execution
of specific instruments. Documentary stamp taxes are thus levied on
the exercise of these privileges through the
executionofspecificinstruments,independentlyofthelegalstatusofthetransactions
giving rise thereto. The documentary stamp taxes must be paid upon
the issuance of the said instruments, without regard to whether the
contracts which gave rise to them are
rescissible,void,voidable,orunenforceable.(PhilippineHomeAssuranceCorp.vsCA,
GR 119446, January 21, 1999)
Sec.79ofthe1997NIRClaiddowntheirrevocabilityrule.Thetaxpayerwithexcess
income tax credits is given the option to either (1) to credit the
same to its tax liability
forthesucceedingtaxableperiods;or(2)refundtheamountorissuetaxcredit
certificate.Oncethecarry-overoptionistaken,actuallyorconstructively,itbecomes
irrevocable.Itcanneverberefunded.Thecontrollingfactorfortheoperationofthe
irrevocability rule is that the taxpayer chose an option; and once
it had already done so, it could no longer make another one. No
application for refund or tax credit certificate
shallbeallowed.TheoptionoftheBPItocarry-overthe1998excesscreditsis
irrevocable. BPI cannot anymore apply for the refund in the event
it is unable to credit
thesaidexcess.Thecreditingoftheexcesscreditsinthesucceedingtaxableperiods
has no prescription unlike the claim for refund which prescribes
after two years from the filing of the ITR. In the event the
taxpayer fails to make an appropriate marking of its option in the
ITR, does not mean that the taxpayer is barred from choosing his
option later on. The reason for requiring that a choice be made
upon the filing of the ITR is to
easetaxadministration.Failuretomakeachoicemeansthatthetaxpayerisstill
uncertainandwouldshowsimplenegligenceor plainoversight.
Thetaxpayermaystill make his choice later but once the choice is
made, irrevocability of the said choice sets in. (CIR vs. BPI, 592
SCRA 219) (i) Grounds and requisites for refund (ii) Requirements
for refund as laid down by cases
Incasesbeforetaxcourts,RulesofCourtappliesonlybyanalogyorina
suppletorycharacterandwheneverpracticableandconvenientshallbeliberally
construedinordertopromoteitsobjectiveofsecuringajust,speedyand
inexpensivedispositionofeveryactionandproceeding.Sinceitisnotdisputed
thatpetitionerisentitledtotaxexemption,itshouldnotbeprecludedfrom
presenting evidence to substantiate the amount of refund it is
claiming on mere
technicalityespeciallyinthiscase,wherethefailuretopresentinvoicesatthe
firstinstancewasadequatelyexplainedbypetitioner.(PhilippinePhosphate
Fertilizer Corp. vs CIR, GR 141973, June 28, 2005)(a) Necessity of
written claim for
refundAclaimantmustfirstfileawrittenclaimforrefund,categorically
demandingrecoveryofoverpaidtaxeswiththeCIR,beforeresortingto
anactionincourt. This obviouslyisintended,first,toafford theCIRan
opportunitytocorrecttheactionofsubordinateofficers;andsecond,to
notifythegovernmentthatsuchtaxeshavebeenquestioned,andthe 75 Bar
Ops Pilipinas 2015 Philippine Association of Law Schools notice
should then be borne in mind in estimating the revenue available
for expenditure. (CIR vs Acosta, GR 154068, August 3, 2007)(b)
Claim containing a categorical demand for reimbursement
(c)Filingofadministrativeclaimforrefundandthe
suit/proceedingbeforetheCTAwithin2yearsfromdateof payment
regardless of any supervening cause
Thistwo-yearprescriptiveperiodisintendedtoapplytosuitsor
proceedingsfortherecoveryoftaxes,penaltiesorsumserroneously,
excessively, illegally or wrongfully collected. Accordingly, an
availment of
ataxcreditgrantedbylawmayhaveadifferentprescriptiveperiod. Absent
any specific provision in the Tax Code or special laws, that period
wouldbetenyearsunderArticle1144oftheCivilCode.(Concurring opinion
of Justice Vitug in CIR vs The Philippine American Life Insurance
Co., G.R. No. 105208, May 29, 1995)
Section230[nowSec.229,1997NIRC]oftheTaxCode,ascouched, particularly
its statute of limitations component, is, in context, intended to
applytosuitsfortherecoveryofinternalrevenuetaxesorsums
erroneously,excessively,illegallyorwrongfullycollected.Blackdefines
theterm erroneousorillegaltax asoneleviedwithoutstatutory
authority.Inthestrictlegalviewpoint,therefore,PNBsclaimfortax
creditdidnotproceedfrom,orisaconsequenceofoverpayment oftax
erroneouslyorillegallycollected.ItisbeyondcavilthatrespondentPNB
issuedtotheBIRthecheckforP180Millionintheconceptoftax
paymentinadvance,thuseschewingthenotionthattherewaserroror
illegality in the payment. (CIR vs PNB, GR 161997, October 25,
2005) Wheneverapplicable,thetwo-yearprescriptiveperiodstartsfrom
the full and final payment of the tax sought to be recovered.
(Concurring opinion of Justice Vitug in CIR vs The Philippine
American Life Insurance Co., G.R. No. 105208, May 29, 1995) For
corporations, the two-year prescriptive period within which to
claim a refund commences to run, at the earliest, on the date of
the filing of the
adjustedfinaltaxreturn.Therationaleincomputingthetwo-year
prescriptiveperiodwithrespecttothepetitionercorporation'sclaimfor
refund from the time it filed its final adjustment return is the
fact that it
wasonlythenthatACCRAINcouldascertainwhetheritmadeprofitsor
incurredlossesinitsbusinessoperations.(ACCRAInvestmentsvsCA, G.R.
No. 96322, December 20, 1991)
Evenifthetwo(2)-yearprescriptiveperiod,ifapplicable,hadalready
lapsed, the same is not jurisdictional and may be suspended for
reasons ofequityandotherspecialcircumstances.RecordsshowthattheBIRs
very own conduct led PNB to believe all along that its original
intention to applytheadvancepaymenttoits
futureincometaxobligationswillbe respected by the BIR. (CIR vs PNB,
GR 161997, October 25, 2005) 76 Bar Ops Pilipinas 2015 Philippine
Association of Law Schools
The claim for refund with the Commissioner of Internal Revenue
and the subsequent action before the Court of Tax Appeals regarding
the refund should all be done within the said period of two years.
(CIR vs NPC, G.R. No. L-18874 January 30, 1970)(iii) Legal basis of
tax refunds(iv) Statutory basis for tax refund under the tax
code(a) Scope of claims for refund(b) Necessity of proof for claim
or refund(c) Burden of proof for claim of refund
Taxrefunds,liketaxexemptions,areconstruedstrictlyagainstthe
taxpayer. The claimants have the burden of proof to establish the
factual
basisoftheirclaimforrefundortaxcredit.(HitachiGlobalvsCIR,G.R. No.
174212, October 20, 2010) The Commissioners contention that a tax
refund partakes the nature of a tax exemption does not apply to the
tax refund to which Fortune Tobacco
isentitled.Thereisparitybetweentaxrefundandtaxexemptiononly
whentheformerisbasedeitheronataxexemptionstatuteoratax
refundstatute.Obviously,thatisnotthesituationhere. Quitethe
contrary, Fortune Tobaccos claim for refund is premised on its
erroneous paymentofthetax,orbetterstillthegovernmentsexactioninthe
absenceofalaw.(CIRvsFortuneTobaccoCorp., GR167274-75,July 21, 2008)
(d) Nature of erroneously-paid tax/illegally assessed collected(e)
Tax refund vis--vis tax credit Formally, a tax refund requires a
physical return of the sum erroneously
paidbythetaxpayer,whileataxcreditinvolvestheapplicationofthe
reimbursableamountagainstanysumthatmaybedueandcollectible from the
taxpayer. On the practical side, the taxpayer to whom the tax is
refundedwouldhavetheoption,amongothers,toinvestforprofitthe
returned sum, an option not proximately available if the taxpayer
chooses
insteadtoreceiveataxcredit.(CIRvsPhilippinePhosphateFertilizer
Corporation, G.R. No. 144440, September 1, 2004)(f) Essential
requisites for claim of refund(v) Who may claim/apply for tax
refund/tax credit(a)Taxpayer/withholdingagentsofnon-residentforeign
corporation
Theproperpartytoquestion,orseekarefundofanindirecttaxisthe
statutorytaxpayer,thepersononwhomthetaxisimposedbylawand who paid
the same even if he shifts the burden thereof to another. Even
ifPetronCorporationpassedontoSilkairtheburdenofthetax,the
additional amount billed to Silkair for jet fuel is not a tax
butpart of the
pricewhichSilkairhadtopayasapurchaser.(SilkairvsCIR,G.R.Nos. 171383
& 172379, November 14, 2008) A withholding agent is a proper
party to claim tax refund. He is liable to
paythetaxandsubjecttotax.Thewithholdingagentisconstituted 77 Bar
Ops Pilipinas 2015 Philippine Association of Law Schools the agent
of both the Government and the taxpayer. With respect to the
collection and/or withholding of the tax, he is the Government's
agent. In regard to the filing of the necessary income tax return
and the payment
ofthetaxtotheGovernment,heistheagentofthetaxpayer.(CIRvs Procter
& Gamble, GR L-66838, December 2, 1991)
(vi)Prescriptiveperiodforrecoveryoftaxerroneouslyorillegally
collected(vii) Other consideration affecting tax refunds 2.
Government remediesa) Administrative remedies(i) Tax lien(ii) Levy
and sale of real property(iii) Forfeiture of real property to the
government for want of bidder(iv) Further distraint and levy(v)
Suspension of business operation(vi) Non-availability of injunction
to restrain collection of tax
TheNationalInternalRevenueCodeof1997(NIRC)expresslyprovides thatno
court shall have the authority to grant an injunction to restrain
the collection of
anynationalinternalrevenuetax,feeorchargeimposedbythecode.The
situation, however, is different in the case of the collection of
local taxes as there is no express provision in the LGC prohibiting
courts from issuing an injunction to
restrainlocalgovernmentsfromcollectingtaxes. Suchstatutorylapse
orintent, however it may be viewed, may have allowed preliminary
injunction where local
taxesareinvolvedbutcannotnegatetheproceduralrulesandrequirements
under Rule 58. (Angeles City vs. Angeles City Electric Corp., GR
166134, June 29, 2010) b) Judicial remedies 3. Statutory offenses
and penaltiesa) Civil penalties It is mandatory to collect penalty
and interest at the stated rate in case of delinquency.
Theintentionofthelawistodiscouragedelayinthepaymentoftaxesduethe
Government and, in this sense, the penalty and interest are not
penal but compensatory
fortheconcomitantuseofthefundsbythetaxpayerbeyondthedatewhenheis
supposedtohavepaidthemtotheGovernment.
Ifpenaltiescouldbecondonedfor
flimsyreasons,thelawimposingpenaltiesfordelinquencieswouldberendered
nugatory, and the maintenance of the Government and its
multifarious activities will be adversely affected. (Philippine
Refining Company vs. CA, GR 118794, May 8, 1996)
Thetaxpayershouldbe liableonlyfor tax proper
andshouldnotbeheldliableforthe surcharge and interest when it
appears that the assessment is highly controversial. The
Commissionerattheoutsetwasnotcertainastopetitioner'sincometaxliability.
(Cagayan Electric Power Light vs CIR, G.R. No. L-60126, September
25, 1985)
(i) Surcharge(ii) Interest78 Bar Ops Pilipinas 2015 Philippine
Association of Law Schools (a) In general(b) Deficiency interest(c)
Delinquency interest(d) Interest on extended payment 4. Compromise
and abatement of taxesa) CompromiseCompromise may be the favored
method to settle disputes, but when it involves taxes, it
maybesubjecttocloserscrutinybythecourts.
Acompromiseagreementinvolving
taxeswouldaffectnotjustthetaxpayerandtheBIR,butalsothewholenation,the
ultimate beneficiary of the tax revenues collected. (PNOC vs CA,
G.R. No. 109976, April 26, 2005)
ThediscretionaryauthoritytocompromisegrantedtotheBIRCommissionerisnever
meant to be absolute, uncontrolled and unrestrained.No such
unlimited power may be
validlygrantedtoanyofficerofthegovernment,exceptperhapsincasesofnational
emergency.TheBIRCommissionerwouldhavetoexercisehisdiscretionwithinthe
parameterssetbythelaw,andincaseheabuseshisdiscretion,theCTAmaycorrect
such abuse if the matter is appealed to them. (PNOC vs CA, G.R. No.
109976, April 26, 2005)
RMONo.39-86expresslyallowsawithholdingagent,whofailedtowithholdthe
requiredtaxbecauseofneglect,ignoranceofthelaw,orhisbeliefthathewasnot
required by law to withhold tax, to apply for a compromise
settlement of his withholding taxliabilityunderE.O.No.44.
Awithholdingagent,insuchasituation,may
compromisethewithholdingtaxassessmentagainsthimpreciselybecauseheisbeing
helddirectlyaccountableforthetax.RMONo.39-86distinguishesbetweenthe
withholdingagentintheforegoingsituationfromthewithholdingagentwhowithheld
the tax but failed to remit the amount to the Government.A
withholding agent in the
lattersituationistheonedisqualifiedfromapplyingforacompromisesettlement
becauseheisbeingmadeaccountableasanagent,whoheldfundsintrustforthe
Government. (PNOC vs CA, G.R. No. 109976, April 26, 2005) b)
Abatement The BIR may therefore abate or cancel the whole or any
unpaid portion of a tax liability,
inclusiveofincrements,ifitsassessmentisexcessiveorerroneous;
orifthe administration costs involved do not justify the collection
of the amount due. No mutual concessions need be made, because an
excessive or erroneous tax is not compromised; it is abated or
canceled.Only correct taxes should be paid. (People vs
Sandiganbayan, GR 152532, August 16, 2005) F. Organization and
Function of the Bureau of Internal Revenue1. Rule-making authority
of the Secretary of FinanceThe authority of the Minister of Finance
(now the Secretary of Finance), in conjunction
withtheCommissionerofInternalRevenue,topromulgateallneedfulrulesand
regulationsfortheeffectiveenforcementofinternalrevenuelawscannotbe
controverted.Neithercanitbedisputedthatsuchrulesandregulations,aswellas
administrative opinions and rulings, ordinarily should deserve
weight and respect by the
courts.Muchmorefundamentalthaneitheroftheabove,however,isthatallsuch
issuances must not override, but must remain consistent and in
harmony with, the law they seek to apply and implement.
Administrative rules and regulations are intended to 79 Bar Ops
Pilipinas 2015 Philippine Association of Law Schools
carryout,neithertosupplantnortomodify,thelaw.(CIRvsCA,G.R.No.108358,
January 20, 1995)
a)AuthorityofSecretaryofFinancetopromulgaterulesand regulationsb)
Specific provisions to be contained in rules and regulationsc)
Non-retroactivity of
rulings2.PoweroftheCommissionertosuspendthebusinessoperationofa
taxpayer III. Local Government Code of 1991, as amendedA.Local
government taxation 1.Fundamental principles The fundamental law
did not intend the delegation to be absolute and unconditional; the
constitutional objective obviously is to ensure that, while the
local government units are being
strengthenedandmademoreautonomous,thelegislaturemuststillseetoitthat(a)the
taxpayer will not be over-burdened or saddled with multiple and
unreasonable impositions; (b)
eachlocalgovernmentunitwillhaveitsfairshareofavailableresources,(c)theresourcesof
thenationalgovernmentwillnotbeundulydisturbed;and(d)localtaxationwillbefair,
uniform, and just.(Manila Electric Co. v. Province of Laguna, G.R.
No. 131359, May 05, 1999) 2.Nature and source of taxing power
UnderthenowprevailingConstitution,wherethereisneitheragrantnorprohibitionby
statute, the taxing power of local governments must be deemed to
exist although Congress may provide statutory limitations and
guidelines in order to safeguard the viability and self-sufficiency
oflocalgovernment
unitsbydirectlygrantingthemgeneralandbroadtaxpowers.(City
Government of San Pablo, Laguna, et al., v. Reyes, et al., G.R. No.
127708, March 25, 1999) a)Grant of local taxing power under the
local government code Local governments do not have the inherent
power to tax except to the extent that such powermightbe delegated
tothemeitherbythebasiclaworbystatute.Presently,under Article X of
the 1987 Constitution, a general delegation of that power has been
given in favor of local government units. (Manila Electric Company
vs Province of Laguna, G.R. No. 131359, May 5, 1999) b)Authority to
prescribe penalties for tax violationsc)Authority to grant local
tax exemptionsd)Withdrawal of exemptionse)Authority to adjust local
tax ratesf)Residual taxing power of local governmentsg)Authority to
issue local tax ordinances An ordinance carries with it the
presumption of validity. The question of reasonableness though is
open to judicial inquiry.(Victorias Milling Co., Inc. v.
Municipality of Victorias, G.R. No. L-21183, September 27, 1968) 92
Bar Ops Pilipinas 2015 Philippine Association of Law Schools
underSection3601oftheTariffandCustomsCode.(Peoplev.Desiderio,G.R.No.L-20805,
November 29, 1965) The requisites for the forfeiture of goods under
Section 2530(f), in relation to (1) (3-5), of the Tariff and
Customs Code are: (a) the wrongful making by the owner, importer,
exporter
orconsigneeofanydeclarationoraffidavit,orthewrongfulmakingordeliverybythesame
personofanyinvoice,letterorpaperalltouchingontheimportationorexportationof
merchandise;(b)thefalsityofsuchdeclaration,affidavit,invoice,letterorpaper;and(c)an
intentiononthepartoftheimporter/consigneetoevadethepaymentoftheduties
due. (Republic v. CTA, G.R. No. 139050, October 02, 2001)
Onceprobablecausehasbeenshownfortheinstitutionofforfeitureproceedings,the
burden of proof is upon claimant to establish that he fell within
the purview of the exception. The legal presumption in Section
5(j), Rule 131 of the Rules of Court and Article 541 of the Civil
Code are of a general character and cannot prevail over the
specific provisions of the Tariff and Customs Code. (Acting Commr.
of Customs v. CTA, G.R. No. 62636, April 27, 1984)
b)Judicial(i)Rules on appeal including jurisdiction
2.Taxpayera)Protestb)Abandonment
BoththeImportEntryDeclaration(IED)andImportEntryandInternalRevenue
Declaration(IEIRD)shouldbefiledwithin30daysfromthedateofdischargeofthelast
packagefromthevesseloraircraft.
(ChevronPhilippines,Inc.v.Commr.,G.R.No.178759, August 11, 2008)
c)Abatement and refund
V.JudicialRemedies(R.A.No.1125,asamended,andtheRevisedRulesofthe
Court of Tax Appeals) A.Jurisdiction of the Court of Tax Appeals
1.Exclusive appellate jurisdiction over civil tax casesa)Cases
within the jurisdiction of the court en banc
TheappellatejurisdictionoftheCTAisnotlimitedtocaseswhichinvolvedecisionsof
theCIRonmattersrelatingtoassessmentsorrefunds.Section7of
RepublicActNo. 1125|||
coversothercasesthatariseoutoftheNationalInternalRevenueCode(NIRC)or
relatedlawsadministeredbytheBureauofInternalRevenue(BIR).(Commr.v.Hambretch
& Quist Philippines, Inc., G.R. No. 169225, November 17, 2010)
93 Bar Ops Pilipinas 2015 Philippine Association of Law Schools
Inlinewiththelifeblooddoctrine,
theNationalInternalRevenueCodeof1997(NIRC) expressly provides that
no court shall have the authority to grant an injunction to
restrain the collection of any national internal revenue tax, fee
or charge imposed by the code. An exception
tothisruleobtainsonlywhenintheopinion of theCourtofTaxAppeals(CTA)
thecollection
thereofmayjeopardizetheinterestofthegovernmentand/orthetaxpayer.
(AngelesCityv. Angeles Electric Corporation, G.R. No. 166134, June
29, 2010) b)Cases within the jurisdiction of the court in divisions
WithouttheautomaticreviewbytheCommissionerofCustomsandtheSecretaryof
Finance, a collector in any of our country's far-flung ports, would
have absolute and unbridled discretion to determine whether goods
seized by him are locally produced, hence, not dutiable, or of
foreign origin, and therefore subject to payment of customs duties
and taxes. His decision, unless appealed by the aggrieved party
(the owner of the goods), would become final with no
onethewiserexcepthimselfandtheownerofthegoods.
(Yaokasinv.Commissionerof Customs, G.R. No. 84111, December 22,
1989) Section 7 of Republic Act No. 1125, creating the Court of Tax
Appeals, in providing for appeals from '(1) Decisions of the
Collector of Internal Revenue in cases involving disputed
assessments,refundsofinternalrevenuetaxes,feesorothercharges,penaltiesimposedin
relation thereto, or other matters arising under the National
Internal Revenue Code or other law or part of the law administered
by the Bureau of Internal Revenue allows an appeal from a decision
of the Collector in cases involving 'disputed assessments' as
distinguished from cases
involving'refundsofinternalrevenuetaxes,feesorothercharges,...';
Toholdthatthe taxpayer has now lost the right to appeal from the
ruling on the disputed assessment but must
prosecutehisappealunderSection306oftheTaxCode,whichrequiresataxpayertofilea
claim for refund of the taxes paid as a condition precedent to his
right to appeal, would in effect
requireofhimtogothroughauselessandneedlessceremonythatwouldonlydelaythe
disposition of the case, for the Collector (now Commissioner) would
certainly disallow the claim for refund in the same way as he
disallowed the protest against the assessment. (Vda. de San Agustin
v. Commr., G.R. No. 138485, September 10, 2001)
WhilethelawconfersontheCTAjurisdictiontoresolvetaxdisputesingeneral,this
does not include cases where the constitutionality of a law or rule
is challenged. Where what is
assailedisthevalidityorconstitutionalityofalaw,oraruleorregulationissuedbythe
administrativeagencyintheperformanceofitsquasi-legislativefunction,theregularcourts
havejurisdictiontopassuponthesame.
(BritishAmericanTobaccov.Camacho,G.R.No. 163583, August 20, 2008)
The reviewable decision of the Bureau of Internal Revenue is that
contained in the letter
ofitsCommissioner,thatsuchconstitutesthefinaldecisiononthematterwhichmaybe
appealed to the Court of Tax Appeals and not the warrants of
distraint. It was likewise stressed
thattheprocedureenunciatedisdemandedbythepressingneedforfairplay,regularityand
orderliness in administrative action. (Commr. v. Union Shipping
Corp., G.R. No. 66160, May 21, 1990) A final demand letter from the
Bureau of Internal Revenue, reiterating to the taxpayer
theimmediatepaymentofataxdeficiencyassessmentpreviouslymade,istantamounttoa
94 Bar Ops Pilipinas 2015 Philippine Association of Law Schools
denial of the taxpayer's request for reconsideration. Such letter
amounts to a final decision on a
disputedassessmentandisthusappealabletotheCourtofTaxAppeals(CTA).
(Commr.v. Isabela Cultural Corp., G.R. No. 135210, July 11, 2001)
Iftheprotestisdeniedinwholeorinpart,orisnotacteduponwithinonehundred
eighty(180)daysfromsubmissionofdocuments,thetaxpayeradverselyaffectedbythe
decision or inaction may appeal to the Court of Tax Appeals within
(30) days from receipt of the
saiddecision,orfromthelapseoftheonehundredeighty(180)-dayperiod;otherwisethe
decision shall become final, executory and demandable.||| (Rizal
Commercial Banking Corp. v. Commr., G.R. No. 168498, June 16, 2006)
TheperiodtoappealfromadecisionoftheCommissionerofInternalRevenuetothe
CourtofTaxAppealsunder RepublicActNo.1125
isjurisdictionalandnon-extendibleanda
taxpayermaynotdelayindefinitelyataxassessmentbyreiteratinghisoriginaldefensesover
and over again, without substantial variation. (Filipinas
Investment & Finance Corp. v. Commr., G.R. No. L-23501, May 16,
1967) Toallowalitigant
toassumeadifferentposturewhenhecomesbeforethecourtand
challengethepositionhehadacceptedattheadministrativelevel,wouldbetosanctiona
procedure whereby the Court which is supposed to review
administrative determinations
wouldnotreview,butdetermineanddecideforthefirsttime,aquestionnotraisedatthe
administrativeforum.
Thus,itiswellsettledthatunderthesameunderlyingprincipleofprior
exhaustion of administrative remedies, on the judicial level,
issues not raised in the lower court cannot be raised for the first
time on appeal. (Commr. v. Wander Phils., Inc., G.R. No. 68375,
April 15, 1988)
Bywithdrawingtheappeal,petitionerisdeemedtohaveacceptedthedecisionofthe
CTA.
Petitionercannotbeallowedtocircumventthedenialofitsrequestforataxcreditby
abandoningitsappealandfilinganewclaim.
(CentralLuzonDrugCorp.v.Commr.,G.R.No. 181371, March 02, 2011) Sec.
7 of RA 1125 provides that the CTA has exclusive appellate
jurisdiction to review by
appealdecisionsoftheCIRincasesinvolvingdisputedassessments.LikewiseSec.4ofthe
1997NIRC[RA8424]providesthattheCIRhasthepowertodecidedisputedassessments
subjecttotheexclusiveappellatejurisdictionoftheCTA.Thelatestlawonthejurisdictionof
the CTA under Sec. 7 of RA 9282 provides that the CTA exercises
exclusive appellate jurisdiction
toreviewbyappealdecisionsoftheCIRincasesinvolvingdisputedassessments.Thusthe
CTAs jurisdiction is to entertain an appeal only from a final
decision or assessment of the CIR or in cases where the CIR has not
acted within the period prescribed by the NIRC. So when the
CIRhasnotissuedanassessment,thenthereisnothingtoprotestordispute.(Adamsonvs.
Court of Appeals, 588 SCRA 27)
TheperiodtoappealthedecisionorrulingoftheRTCinlocaltaxcasestoCTAvia
petitionforreviewisgovernedbySec.11ofRA9282andSec.3(a),Rule8oftheRevised
Rules of CTA, which is 30 days from receipt of decision or ruling.
To appeal an adverse ruling of
theRTCtotheCTAthetaxpayermustfileapetitionforreviewwiththeCTAwithin30days
from receipt of the adverse decision or ruling. An extension may be
granted for 15 days. With
theseveralextensionsaskedtheCTAcandismissthepetition.Failuretocomplywith
95 Bar Ops Pilipinas 2015 Philippine Association of Law Schools
requirementswouldalsobeagroundtodismissthepetition.(CityofManilavs.CocaCola
Bottlers Phils., 595 SCRA 299) 2.Criminal casesa)Exclusive original
jurisdictionb)Exclusive appellate jurisdiction in criminal cases
B.Judicial procedures1.Judicial action for collection of
taxesa)Internal revenue taxes Nowhere in the Tax Code is the
Collector of Internal Revenue required to rule first on a
taxpayer's request for reinvestigation before he can go to court
for the purpose of collecting the tax assessed. On the contrary,
Section 305 of the same Code withholds from all courts, except
theCourtofTaxAppealsunderSection11of Republic
Act1125,theauthoritytorestrainthe collection of any national
internal-revenue tax, fee or charge, thereby indicating the
legislative
policytoallowtheCollectorofInternalRevenuemuchlatitudeinthespeedyandprompt
collectionoftaxes. (Republicv.Lim Tian
TengSons&Co.,Inc.,G.R.No.L-21731, March31, 1966)
Forthepurposeofsafeguardingtaxpayersfromanyunreasonableexamination,
investigation or assessment, our tax law provides a statute of
limitations in the collection of taxes.
(CommissionerofInternalRevenuev.B.F.GoodrichPhils,Inc.,
(nowSimeDarbyInternational Tire Co., Inc.), et al., G.R. No.
104171, February 24, 1999, 303 SCRA 546; Philippine Journalists,
Inc.v.CommissionerofInternalRevenue,
G.R.No.162852,December16,2004), aswellas their assessments.
Thelawprescribingalimitationofactionsforthecollectionoftheincometaxis
beneficialbothtotheGovernmentandtoitscitizens;totheGovernmentbecausetaxofficers
would be obliged to act promptly in the making of assessment, and
to citizens because after the lapse of the period of prescription
citizens would have a feeling of security against unscrupulous tax
agents who will always find an excuse to inspect the books of
taxpayers, not to determine
thelattersrealliability,buttotakeadvantageofeveryopportunitytomolestpeaceful,law-abiding
citizens. Without such a legal defense taxpayers would furthermore
be under obligation
toalwayskeeptheirbooksandkeepthemopenforinspectionsubjecttoharassmentby
unscrupuloustaxagents.(BankofPhilippineIslands(FormerlyFarEastBankandTrust
Company) v. Commissioner of Internal Revenue, G. R. No. 174942,
March 7, 2008) Unreasonable investigation contemplates cases where
the period for assessment extends indefinitely because this
deprives the taxpayer of the assurance that it will no longer be
subjected to further investigationfor taxes after the expiration of
a reasonable period of time.(Philippine Journalists, Inc. v.
Commissioner of Internal Revenue, G. R. No. 162852, December 16,
2004)
Forthepurposeofsafeguardingtaxpayersfromanyunreasonableexamination,
investigationorassessment,ourtaxlawprovidesastatuteoflimitationsinthecollectionof
taxes. Thus, the law on prescription, being a remedial measure,
should be liberally construed in order to afford such protection
and the exceptions to the law on prescription should perforce be
strictly construed. (Philippine Journalists Inc. v. Commr., G.R.
No. 162852, December 16, 2004) 96 Bar Ops Pilipinas 2015 Philippine
Association of Law Schools The signatures of both the Commissioner
and the taxpayer, are required for a waiver of the prescriptive
period, thus a unilateral waiver on the part of the taxpayer does
not suspend the
prescriptiveperiod.(CommissionerofInternalRevenuev.CourtofAppeals,etal.,G.R.No.
115712, February 25, 1999)
Theactofrequestingareinvestigationalonedoesnotsuspendtherunningofthe
prescriptiveperiod.TherequestforreinvestigationmustbegrantedbytheCIR.(Bankof
PhilippineIslands(FormerlyFarEastBankandTrustCompany)v.CommissionerofInternal
Revenue, G. R. No. 174942, March 7, 2008) b)Local
taxes(i)Prescriptive period 2.Civil casesa)Who may appeal, mode of
appeal, effect of appeal(i)Suspension of collection of
taxa)Injunction not available to restrain collection(ii)Taking of
evidence(iii)Motion for reconsideration or new trial It is true
that petitioner could not move for new trial on the basis of newly
discovered
evidencebecauseinordertohaveanewtrialonthebasisofnewlydiscoveredevidence,it
must be proved that: (a) the evidence was discovered after the
trial; (b) such evidencecould not have been discovered and produced
at the trial with reasonable diligence; (c) it is material,
notmerelycumulative,corroborativeorimpeaching;and(d)itisofsuchweightthat,if
admitted,willprobablychangethejudgment.
Thisdoesnotmeanhowever,thatpetitioneris altogether barred from
having a new trial if the reasons put forth by petitioner could
fall under mistakeorexcusablenegligence.
(PhilippinePhosphateFertilizerCorp.v.Commr.,G.R.No. 141973, June
28, 2005)
BeforetheCTAEnBanccouldtakecognizanceofthepetitionforreviewconcerninga
casefallingunderitsexclusiveappellatejurisdiction,thelitigantmustsufficientlyshowthatit
soughtpriorreconsiderationormovedforanewtrialwiththeconcernedCTAdivision.
Procedural rules are not to be trifled with or be excused simply
because their non-compliance
mayhaveresultedinprejudicingaparty'ssubstantiverights.
(CommisionerofCustomsv. Marina Sales, Inc., G.R. No. 183868,
November 22, 2010)
TheCommissionerofInternalRevenue,nothavingclearlysignifiedhisfinalactionon
the disputed assessment, legally the period to appeal has not
commenced to run. The request for reinvestigation and
reconsideration was in effect considered denied by CIR when the
latter filed a civil suit for collection of deficiency income.
(Commissioner of Internal Revenue vs Union Shipping Corporation and
the Court of Tax Appeals, G.R. No. L-66160, May 21, 1990) A letter
of the BIR Commissioner reiterating to a taxpayer his previous
demand to pay an assessment is considered a denial of the request
for reconsideration or protest and is appealable
totheCourtofTaxAppeals.(Commr.v.AyalaSecuritiesCorp.,G.R.No.L-29485,March31,
1976) 97 Bar Ops Pilipinas 2015 Philippine Association of Law
Schools b)Appeal to the CTA, en banc
ThepetitionforreviewtobefiledwiththeCTA
enbancasthemodeforappealinga decision, resolution, or order of the
CTA Division, under Section 18 of Republic Act No. 1125, as
amended,isnotatotallynewremedy,uniquetotheCTA,withaspecialapplicationoruse
therein.Accordingly, doctrines, principles, rules, and precedents
laid down in jurisprudence by
thisCourtasregardspetitionsforreviewandappealsincourtsofgeneraljurisdictionshould
likewisebindtheCTA,anditcannotdeparttherefrom.(Santosv.People,etal,
G.R.No. 173176, August 26, 2008) c)Petition for review on
certiorari to the Supreme Court
BOCcommittedproceduralmisstepsandthedecisionoftheCTAdivisionhasbecome
final. The Supreme Court is without jurisdiction to review
decisions rendered by a division of the
CTAbutthedecisionoftheCTAenbanc.UnderSec.9ofRA9282,apartyaffectedbythe
ruling or decision of a division of the CTA may file an MR within
15 days. Sec. 11 of RA 9282 provides that if the MR is denied, a
petition for review is filed with the CTA en banc. From an adverse
ruling or decision from the CTA en banc, the appeal by way of
petition for review on
certiorariunderRule45isfiledwiththeSupremeCourt.ThustheSupremeCourthasno
jurisdictiontoreviewthedecisionofadivisionoftheCTA.(Com.ofCustomsv.Gelmart
Industries, 579 SCRA 272) 3.Criminal casesa)Institution and
prosecution of criminal actions
Anysubsequentsatisfactionofthetaxliability,bypaymentorprescription,
willnot operatetoextinguishcriminalliability,
sincethedutytopaythetaxisimposedbystatute independent of any
attempt on the part of the taxpayer to evade payment. The failure
of the government, therefore, to enforce by appropriate civil
remedies the collection of the taxes, does not detract from its
right criminally to prosecute violations of the Code. (People v.
Tierra, G.R. Nos. L-17177-80, December 28, 1964) (i)Institution of
civil action in criminal action
Section222oftheNIRCspecificallystatesthatincaseswhereafalseorfraudulent
return is submitted or in cases of failure to file a return such as
this case, proceedings in court may be commenced without an
assessment. Furthermore, Section 205 of the same Code clearly
mandatesthatthecivilandcriminalaspectsofthecasemaybepursued
simultaneously.
(Commr.v.PascorRealty&DevelopmentCorp.,G.R.No.128315,June29,
1999)
Sincethecivilliabilityisnotdeemedincludedinthecriminalaction,acquittalofthe
taxpayer in the criminal proceeding does not necessarily entail
exoneration from his liability to pay the taxes. The acquittal in a
criminal case cannot operate to discharge defendant from the
dutyofpayingthetaxeswhichthelawrequirestobepaid,sincethatdutyisimposedby
98 Bar Ops Pilipinas 2015 Philippine Association of Law Schools
statutepriortoandindependentlyofanyattemptsbythetaxpayertoevade
payment. (Republic v. Patanao, G.R. No. L-22356, July 21, 1967)
With regard to the tax proper, the state correctly points out in
its brief that the acquittal in the criminal case could not operate
to discharge petitioner from the duty to pay the tax, since
thatdutyisimposed
bystatuepriortoandindependentlyofanyattemptsonthepart ofthe
taxpayertoevadepayment.Theobligationtopaythetaxisnotamereconsequenceofthe
felonious acts charged in the information, nor is it a mere civil
liability derived from crime that
wouldbewipedoutbythejudicialdeclarationthatthecriminalactschargeddidnot
exist. (Castro v. Collector of Internal Revenue, G.R. No. L-12174,
April 26, 1962) b)Appeal and period to appeal(i)Solicitor General
as counsel for the people and government officials sued in their
official capacityc)Petition for review on certiorari to the Supreme
Court C.Taxpayers suit impugning the validity of tax measures or
acts of taxing authorities1.Taxpayers suit, defined
Itishornbookprinciplethata taxpayer
isallowedtosuewherethereisaclaimthat
publicfundsareillegallydisbursed,orthatpublicmoneyisbeingdeflectedtoanyimproper
purpose,orthatthereiswastageofpublicfundsthroughtheenforcementofaninvalidor
unconstitutionallaw. Fora taxpayer's suit
toprosper,tworequisitesmustbemetnamely,(1) public funds derived
from taxation are disbursed by a political subdivision or
instrumentality and in doing so, a law is violated or some
irregularity is committed; and (2) the petitioner is directly
affected by the alleged act. (LBP v. Cacayuran, G.R. No. 191667,
April 17, 2013) What is a taxpayers suit? In the case of a
taxpayer, he is allowed to sue where there is a claim that public
funds are illegally disbursed, or that public money is being
deflected to any
improperpurpose,orthatthereisawastageofpublicfundsthroughtheenforcementofan
invalid or unconstitutional law. Before he can invoke the power of
judicial review, however, he
mustspecificallyprovethathehassufficientinterestinpreventingtheillegalexpenditureof
moneyraisedbytaxationandthathewouldsustainadirectinjuryasaresultofthe
enforcementofthequestionedstatuteorcontract.Itisnotsufficientthathehasmerelya
generalinterestcommontoallmembersofthepublic.Atallevents,courtsarevestedwith
discretion as to whether or not a taxpayer's suit should be
entertained. This Court opts to grant standing to most of the
petitioners, given their allegation that any impending transmittal
to the Senate of the Articles of Impeachment and the ensuing trial
of the Chief Justice will necessarily
involvetheexpenditureofpublicfunds.(Francisco,Jr.vs.Nagmamalasakitnamga
Manananggol ng mga Manggagawang Pilipino, 415 SCRA 44)
2.Distinguished from citizens suit Taxpayers have been allowed to
sue where there is a claim that public funds are illegally
disbursed or that public money is being deflected to any improper
purpose, or that public funds are wasted through the enforcement of
an invalid or unconstitutional law. On the other hand, as
citizens,petitionershavemustfulfillthestandingrequirementgiventhattheissuesthey
99 Bar Ops Pilipinas 2015 Philippine Association of Law Schools
haveraisedmaybeclassifiedasmatters"oftranscendentalimportance,ofoverreaching
significancetosociety,orofparamountpublicinterest."(Belgicav.Ochoa,G.R.No.208566,
208493, 209251, L-20768, November 19, 2013) What is a citizens
suit? When suing as a citizen, the interest of the petitioner
assailing the constitutionality of a statute must be direct and
personal. He must be able to show, not only
thatthelaworanygovernmentactisinvalid,butalsothathesustainedorisinimminent
danger of sustaining some direct injury as a result of its
enforcement, and not merely that he suffers thereby in some
indefinite way. It must appear that the person complaining has been
or is about to be denied some right or privilege to which he is
lawfully entitled or that he is about to be subjected to some
burdens or penalties by reason of the statute or act complained of.
In
fine,whentheproceedinginvolvestheassertionofapublicright,themerefactthatheisa
citizen satisfies the requirement of personal interest. (Francisco,
Jr. vs. Nagmamalasakit na mga Manananggol ng mga Manggagawang
Pilipino, 415 SCRA 44)
3.Requisitesforchallengingtheconstitutionalityofataxmeasureoractoftaxing
authoritya)Concept of locus standi as applied in taxationLegal
standing or locus standi has been defined as a personal and
substantial interest in the case such that the party has sustained
or will sustain direct injury
asaresultofthegovernmentalasthatisbeingchallenged.Thegistofthe
questionofstandingiswhetherapartyallegessuchpersonalstakeinthe
outcomeofthecontroversyastoassuretheconcreteadversenesswhich
sharpensthepresentationofissuesuponwhichthecourtdependsfor
illumination of difficult constitutional questions. To invest him
with locus standi, the plaintiff has to adequately show that he is
entitled to judicial protection and has a sufficient interest in
the vindication of the
assertedpublicright.Incaseoftaxpayerssuits,thepartysuingasataxpayer
must prove that he has sufficient interest in preventing the
illegal expenditure of money raised by taxation. (Public Interest
Center vs. Roxas, 513 SCRA 457)
Locusstandi,however,ismerelyamatterofprocedureandithasbeen
recognized that in some cases, suits are not brought by parties who
have been personally injured by the operation of a law or any other
government act but by
concernedcitizens,taxpayersorvoterswhoactuallysueinthepublicinterest.
Consequently,theCourt,inacatenaofcases,hasinvariablyadoptedaliberal
stance on locus standi, including those cases involving taxpayers.
The prevailing
doctrineintaxpayerssuitsistoallowtaxpayerstoquestioncontractsentered
into by the national government or government-owned or controlled
corporations allegedly in contravention of law. A taxpayer is
allowed to sue where there is a claim that public funds are
illegally disbursed, or that money is being deflected to
anyimproperpurpose,orthatthereiswastageofpublicfundsthroughthe
enforcement of an invalid or unconstitutional law. Significantly, a
taxpayer need not be a party to the contract to challenge its
validity. (Abaya vs. Ebdane, Jr. 515 SCRA 720) 100 Bar Ops
Pilipinas 2015 Philippine Association of Law Schools b)Doctrine of
transcendental
importanceWhatistranscendentalimportance?Therebeingnodoctrinaldefinitionof
transcendental importance, the following instructive determinants
are instructive:
(1)thecharacterofthefundsorotherassetsinvolvedinthecase,(2)the
presence of a clearcase of disregard of a constitutional or
statutory prohibition by the public respondent agency or
instrumentality of the government, and the (3) the lack of any
other party with a more direct and specific interest in raising
thequestionsbeingraised.TheCourthasadoptedaliberalattitudeonlocus
standi where the petitioner is able to craft an issue of
transcendental significance
tothepeople,aswhentheissuesraisedareofparamountimportancetothe
public.(Francisco,Jr.vs.NagmamalasakitnamgaManananggolngmga
Manggagawang Pilipino, 415 SCRA 44) Only a person who stands to be
benefited or injured by the judgment in the suit or entitled to the
avails of the suit can file a complaint or petition. Respondents
claim that petitioner is not a proper party-in-interest as he was
unable to show that he has sustained or is in immediate or imminent
danger of sustaining some
directandpersonalinjuryasaresultoftheexecutionandenforcementofthe
assailed contracts or agreements. Moreover, they assert that not
all government
contractscanjustifyataxpayerssuitespeciallywhennopublicfundswere
utilized in contravention of the Constitution or a law. We
explicated in Chavez v. PCGG, 299 SCRA 744 (1998), that in cases
where issues of transcendental public
importancearepresented,thereisnonecessitytoshowthatpetitionerhas
experienced or is in actual danger of suffering direct and personal
injury as the requisite injury is assumed. We find our ruling in
Chavez v. PEA, 384 SCRA 152 (2002), as conclusive authority on
locus standi in the case at bar since the issues
raisedinthispetitionareaverredtobeinbreachofthefairdiffusionofthe
countrys natural resources and the constitutional right of a
citizen to information
whichhavebeendeclaredtobemattersoftranscendentalpublicimportance.
Moreover, the pleadings especially those of respondents readily
reveal that public funds have been indirectly utilized in the
Project by means of Smokey Mountain
ProjectParticipationCertificates(SMPPCs)boughtbysomegovernment
agencies.Hence,petitioner,asataxpayer,isaproperpartytotheinstant
petition before the court. (Chavez vs. NHA, 530 SCRA 235)
c)Ripeness for judicial determination PREPARED BY: UNIVERSITY OF
SAN CARLOS PLAZA, ATHENA PLAZA, LADY LOVE JACILDO, JECCA