Case Digest (A.C. No. 6876)
Facts:
Butuan Sawmill, Inc. v. Court of Tax Appeals, G.R. No. L-20601, February 28, 1966, Supreme Court En Banc, Reyes, J.B.L., J., writing for the Court. Petitioner Butuan Sawmill, Inc. sold logs to Japanese buyers between January 31, 1951 and June 8, 1953. The Bureau of Internal Revenue investigated and found no sales tax returns filed and no sales tax paid on those transactions; it determined that the sales were subject to the 5% sales tax. Based on an agent’s report dated September 17, 1957, the Commissioner first assessed P40,004.01 on August 27, 1958 (sales tax, surcharge and compromise penalty), later amending the assessment on November 11, 1958 to P38,917.74; the compromise penalty was thereafter dropped for lack of agreement with the taxpayer.The case was brought to the Court of Tax Appeals as CTA Case No. 965. The CTA reviewed the evidence and upheld the amended assessment but deleted the compromise penalty, holding that the sales of logs were domestic or “local” sales subject to sales tax under Section 186 of the National Internal Revenue Code, as amended by RAs 588 and 594. The CTA also found the assessment timely under Section 332(a) because petitioner omitted to file sales tax returns and the omission was discovered on September 17, 1957. Petitioner’s motion for reconsideration in the CTA was denied.
Petitioner then appealed to the Supreme Court. The appeal raised two principal questions: (1) whether the log sales to Japanese buyers were taxable sales in the Philippine...(Subscriber-Only)
Issues:
- Were petitioner’s sales of logs to Japanese buyers taxable under Section 186 of the Tax Code (i.e., were they domestic or "local" sales)?
- Was the Commissioner’s assessment of the sales tax barred by prescription or was it timely under Section 332(a)...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
- (Subscriber-Only)