G.R. No. 172509 - China Banking Corp. vs. Commissioner of Internal Revenue

Petitioner China Banking Corporation (CBC) is a universal bank organized under Philippine law.
CBC engaged in SWAP transactions (sales of foreign exchange to the Central Bank of the Philippines) for taxable years 1982–1986 and did not file returns or pay documentary stamp tax (DST) on those transactions.

On 19 April 1989, the Bureau of Internal Revenue (BIR) issued Assessment Nos. FAS-5-82/85-89-000586 and FAS-5-86-89-00587, finding CBC liable for deficiency DST of ₱11,383,165.50 plus increments.
On 8 May 1989, CBC filed a letter of protest raising defenses of double taxation, absence of liability, due-process violation, invalidity of the assessment, and claimed exemption. CBC also requested a reinvestigation.

On 6 December 2001, the Commissioner of Internal Revenue (CIR) denied CBC’s protest and reiterated the assessment.
CBC filed a petition with the Court of Tax Appeals (CTA) on 18 January 2002. The CTA Second Division denied relief on 23 February 2005; its motion for reconsideration was denied on 14 July 2005.
On 1 December 2005, the CTA En Banc dismissed CBC’s appeal; its subsequent motion for reconsideration was denied on 20 March 2006.
CBC filed a Rule 45 petition with the Supreme Court, invoking prescription for the first time.

Whether the BIR’s right to collect the assessed DST from CBC is barred by prescription under Section 319(c) of the National Internal Revenue Code of 1977, as amended.