Facts:

The case involves Asia International Auctioneers, Inc. (AIA) as the petitioner and the Commissioner of Internal Revenue (CIR) as the respondent, with the Supreme Court deciding on the matter on September 26, 2012. AIA is a corporation based in the Subic Special Economic Zone, engaged in the auctioning of used motor vehicles and heavy equipment. On August 25, 2004, AIA received a Formal Letter of Demand dated July 9, 2004, from the CIR, which assessed AIA for deficiency value-added tax (VAT) amounting to P102,535,520.00 and excise tax of P4,334,715.00, totaling P106,870,235.00, including penalties and interest for auction sales held from February 5 to 8, 2004. AIA contended that it filed a protest letter on August 29, 2004, sent via registered mail the following day. It later submitted additional documents on September 24 and November 22, 2004. The CIR did not act on the protest, prompting AIA to seek a petition for review from the Court of Tax Appeals (CTA) on June 20, 2005. In

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Facts:

Background of the Parties

• Asia International Auctioneers, Inc. (AIA) is a duly organized corporation operating within the Subic Special Economic Zone.
• AIA is engaged in the importation of used motor vehicles and heavy equipment, which it sells to the public through auction.

Tax Assessment and Initial Correspondence

• On August 25, 2004, AIA received a Formal Letter of Demand from the Commissioner of Internal Revenue (CIR), dated July 9, 2004.
• The assessment detailed a deficiency in value added tax (VAT) of ₱102,535,520.00 and excise tax of ₱4,334,715.00, amounting to a total of ₱106,870,235.00, inclusive of penalties and interest.
• The assessed taxes were attributed to auction sales conducted on February 5, 6, 7, and 8, 2004.

Protest and Submission of Supporting Documents

• AIA claimed to have filed a protest letter dated August 29, 2004, which was sent via registered mail on August 30, 2004.
• Additional supporting documents were submitted on September 24, 2004, and November 22, 2004, respectively, to reinforce the protest.
• Despite these submissions, the CIR purportedly did not act on the protest.

Dispute on Timeliness and Receipt of the Protest Letter

• The CIR filed a motion to dismiss AIA’s petition for review on March 8, 2006, arguing lack of jurisdiction on the ground that AIA failed to timely protest the tax assessment.
• The CIR contended that it had only received the protest letter on September 27, 2004, via a letter dated September 24, 2004—three days after the lapse of the 30-day period stipulated in Section 228 of the Tax Code.
• In support of its protest, AIA introduced:
• The protest letter with Registry Receipt No. 3824.
• A certification by a postal employee (Postman III, Wilfredo R. De Guzman) verifying that the registered letter was dispatched from Olongapo City.
• A subsequent certification by Acting Postmaster Josefina M. Hora of the Philippine Postal Corporation-NCR confirming delivery to the CIR’s BIR Records Section.
• A certified photocopy of an acknowledgment receipt from the BIR Chief of Records Division.
• Witnesses, including Josefina M. Hora and Felisa U. Arrojado, corroborated the due execution and contents of the submitted documents.

Proceedings before the Court of Tax Appeals (CTA)

• AIA filed a petition for review with the CTA on June 20, 2005, after the CIR’s inaction.
• The CIR filed its answer on July 26, 2005, and later moved to dismiss the petition on the basis of the untimely protest.
• The CTA First Division, in its Resolution dated November 20, 2006, granted the motion to dismiss due to:
• AIA’s failure to produce the registry return card of the protest letter.
• Inconsistencies in the protest letter’s reference (mentioning a Formal Demand Letter dated June 9, 2004, instead of the one dated July 9, 2004).
• AIA’s inability to demonstrate that a separate protest letter had been transmitted prior to the September 24, 2004 submission.
• AIA’s subsequent motion for reconsideration was denied in the Resolution dated February 22, 2007.
• The CTA En Banc, in its Decision dated August 3, 2007, affirmed the ruling of the CTA First Division, holding that AIA's evidence was insufficient to prove the timely receipt of its protest letter.

Availment of the Tax Amnesty Program

• On January 30, 2008, AIA filed a Manifestation and Motion to defer or suspend further proceedings on the basis that it had availed itself of the Tax Amnesty Program under Republic Act (RA) 9480.
• On February 5, 2008, AIA secured a Certification of Qualification from the Bureau of Internal Revenue (BIR), confirming its eligibility for the Tax Amnesty for the Taxable Year 2005 and prior years.
• The acquisition of the tax amnesty certification was pivotal because it provided a clean slate regarding the outstanding deficiency taxes.

Issue:

Timeliness and Validity of the Filing

• Whether AIA filed its protest against the tax assessment within the prescribed 30-day period.
• Whether the evidence provided, including postal receipts and certifications, was sufficient to establish the timely filing and receipt of the protest letter by the CIR.

Sufficiency and Reliability of Evidence

• Whether AIA’s failure to present the registry return card of the original protest letter undermined its claim.
• The implications of inconsistencies in the dates and references mentioned within the protest letter.

Impact of the Tax Amnesty Program

• Whether AIA’s availment of the Tax Amnesty Program under RA 9480 renders the dispute over the protest moot and academic.
• The legal effect of tax amnesty on previously assessed deficiency taxes, specifically relating to indirect taxes (VAT and excise tax).

Classification of Taxes

• Whether the deficiency VAT and excise taxes could be construed as withholding taxes, thereby affecting AIA’s eligibility for tax amnesty under Section 8(a) of RA 9480.
• The proper distinction between indirect taxes and withholding taxes for the purposes of the law and tax amnesty qualification.

Jurisdictional and Procedural Considerations

• Whether the CTA had jurisdiction over AIA’s protest given the procedural errors and alleged failure to meet statutory requirements.
• The effect of administrative certainties and the judicial notice taken by the Court regarding the Certification of Qualification issued by the BIR.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)