Title
Commissioner of Internal Revenue vs. Court of Tax Appeals, 3rd Division
Case
G.R. No. 203403
Decision Date
Nov 14, 2018
CIR assessed Wintelecom for tax deficiencies; CTA declared CIR in default due to procedural lapses, upheld partial tax cancellation; SC dismissed CIR's certiorari petition, citing improper remedy and no grave abuse of discretion.
tax case
motion for reconsideration
procedural rules
A

Case Digest (G.R. No. 203403)

Facts:

  • Parties and Nature of the Case
    • Petitioner: Commissioner of Internal Revenue – a duly appointed official charged with the assessment and collection of national and internal revenue taxes.
    • Respondent: Wintelecom, Inc. – a domestic corporation engaged in the sale and repair of mobile phones.
  • Initial Tax Assessment and Dispute
    • Following an investigation and a pre-assessment notice for taxable years 2000 and 2001, Wintelecom was issued a Final Assessment Notice (FAN) on March 10, 2004, for a deficiency amounting to discrepancies totaling Php 553,344,468.98.
    • Wintelecom filed a protest on April 6, 2004, which was subsequently denied by the petitioner on August 20, 2004.
    • In response to the denial, Wintelecom initiated a Petition for Review against the petitioner on September 22, 2004, in CTA Case No. 7056.
  • Procedural Movements and Extensions by the Petitioner
    • After Wintelecom’s filing, the petitioner submitted a series of motions for an extension of time to file an answer on various dates in October and November 2004.
    • The CTA Division granted the first few motions with orders that included warnings regarding further extensions.
    • A subsequent (fifth) motion for extension was eventually filed and denied by the CTA Resolution dated December 17, 2004, despite the petitioner filing an answer on December 20, 2004, even before receipt of the said resolution.
  • Reconsideration, Remand, and Presentation of Evidence
    • The petitioner moved for reconsideration of the December 17, 2004, denial on January 13, 2005; however, this motion was denied on May 20, 2005.
    • The petitioner further contested the resolution by filing a petition before the Court of Appeals – which was dismissed – and later an appeal before the Supreme Court, which was also denied.
    • After an ex parte presentation of evidence for Wintelecom by the CTA and the issuance of a Decision on February 20, 2008, the petitioner sought a motion for reconsideration with a motion to admit her answer; this too was denied on August 5, 2008.
    • On appeal, the CTA en banc in its Decision dated May 21, 2009 annulled certain CTA resolutions and remanded the case back to the CTA Division where the petitioner’s answer was admitted.
  • Contentions in the Petitioner’s Answer and Subsequent Proceedings
    • In her answer on remand, the petitioner asserted that under the provisions of the National Internal Revenue Code (NIRC) of 1997, she possessed the power to assess taxes based on the best evidence, which is prima facie correct.
    • She alleged that Wintelecom had under-declared its sales for taxable years 2000 and 2001 and, based on various evidentiary sources—including third-party information—had incurred tax deficiencies.
    • Wintelecom, on its side, presented testimonial and documentary evidence, all of which were admitted by the CTA.
  • Further Motions to Reset Hearing and Failure to Present Evidence
    • The petitioner repeatedly moved for the resetting of the scheduled initial presentation of her evidence, including motions filed on April 4, 2011, May 2, 2011, and an urgent motion on June 1, 2011, citing heavy workload and difficulties in contacting witnesses.
    • Despite the CTA granting some resets with stern warnings, the petitioner failed to attend the scheduled hearing on June 6, 2011.
    • Consequently, a Resolution dated June 17, 2011 declared that the petitioner had waived her right to present evidence; her subsequent motion for reconsideration of this ruling was denied on August 23, 2011.
  • The Petition for Certiorari and the Motion for Partial Reconsideration
    • On June 7, 2012, the CTA, Third Division rendered its Decision on the merits, partially granting Wintelecom’s claims and setting aside assessments for deficiency income tax while affirming deficiency VAT and withholding tax assessments.
    • The petitioner, disagreeing with the ruling—particularly regarding the denial of her right to present evidence and her motion for partial reconsideration—filed the motion on June 26, 2012, seeking re-opening of the case.
    • This motion was denied by the CTA in its Resolution dated July 30, 2012, thereby prompting the petitioner to elevate the issue before the Supreme Court through a petition for certiorari under Rule 65.
  • Allegations and Contentions Raised
    • The petitioner contended that her inability to present evidence was due to the heavy volume of work and constraints in communicating with witnesses, arguing that a liberal view of procedural technicalities should allow re-opening the case in the interest of substantive justice.
    • Wintelecom, meanwhile, argued against the petition on the grounds of improper remedy, alleging forum shopping and asserting that the issues had been previously decided with finality.

Issues:

  • Whether the CTA, Third Division gravely abused its discretion in denying the petitioner’s Motion for Partial Reconsideration and for Leave to Re-Open the Case.
    • Did the CTA err in concluding that the petitioner’s justifications (heavy workload and unavailability of witnesses) were insufficient to justify the re-opening of the case?
    • Was the petitioner’s failure to present evidence on the scheduled date a sufficient ground to deem it a waiver of her right to present such evidence?
  • Whether the petitioner improperly resorted to a petition for certiorari under Rule 65 as a substitute for an available remedy of appeal.
    • Was the proper remedy available to the petitioner an appeal (petition for review) under Rule 43 and the RRCTA rather than a petition for certiorari?
    • Does the existence of a timely appeal preclude the use of the special civil action of certiorari under Rule 65?
  • Whether there was any meeting of the minds regarding forum shopping given that the petitioner had filed earlier actions on similar issues.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)
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