Case Digest (G.R. No. 185371)
Facts:
In G.R. No. 185371 decided on December 8, 2010 under the 1987 Constitution, the Commissioner of Internal Revenue (CIR) filed a Petition for Review on Certiorari under Rule 45 against Metro Star Superama, Inc. over alleged deficiency value-added tax (VAT) and withholding taxes for the year 1999 amounting to ₱292,874.16. On January 26, 2001, the BIR issued a Letter of Authority to audit Metro Star’s books, revalidated on August 10, 2001. Following Metro Star’s alleged non-compliance with subpoenas, the BIR issued a Preliminary Assessment Notice (PAN) dated January 16, 2002, which Metro Star denied receiving, and thereafter a Formal Letter of Demand and Assessment Notice dated April 3, 2002. Unpaid liabilities prompted the issuance of a Final Notice of Seizure on May 12, 2003 and a Warrant of Distraint and/or Levy the same day. Metro Star filed a Motion for Reconsideration on July 30, 2004, which the CIR denied on February 8, 2005. Metro Star then appealed to the Court of Tax Appea...Case Digest (G.R. No. 185371)
Facts:
- Examination and Audit
- Metro Star Superama, Inc. (Metro Star) is a domestic corporation.
- On January 26, 2001, BIR Region 10 issued Letter of Authority (LOA) No. 00006561 to examine Metro Star’s 1999 tax records, revalidated August 10, 2001.
- Assessment Proceedings
- Metro Star failed to comply with records requests and a Subpoena Duces Tecum; Legal Division endorsed to Revenue District Office (RDO) No. 67 for assessment based on best evidence.
- RDO No. 67 issued a Preliminary 15-day Letter on November 8, 2001; Formal Letter of Demand and Assessment Notice on April 3, 2002, assessing P292,874.16 deficiency VAT and withholding tax.
- Collection Efforts and Administrative Remedies
- Final Notice of Seizure dated May 12, 2003; Warrant of Distraint and/or Levy No. 67-0029-23 issued and received February 6, 2004.
- Metro Star filed Motion for Reconsideration (July 30, 2004); Commissioner of Internal Revenue (CIR) denied it on February 8, 2005. Metro Star then petitioned the Court of Tax Appeals (CTA).
- CTA Proceedings
- CTA-Second Division, March 21, 2007: granted Metro Star’s petition, voided assessment for denial of due process (no proof of PAN receipt).
- CTA-En Banc, September 16, 2008: affirmed Second Division decision; denial of CIR’s motion for reconsideration on November 18, 2008. CIR elevated case to the Supreme Court.
Issues:
- Due Process in Issuance of Deficiency Assessment
- Whether CIR complied with due process under NIRC and Revenue Regulations No. 12-99 in issuing the assessment.
- Whether Metro Star is liable for P291,069.09 (VAT) and P1,805.07 (withholding tax), and whether the assessment became final and demandable for failure to protest within 30 days.
- Additional Contentions
- Whether the assessment notices stated the law and facts upon which they are based (Section 228, NIRC).
- Whether Metro Star’s cinema operations are subject to VAT under Section 108(A), NIRC.
- Whether the assessment was based on the best evidence obtainable (Section 6(b), NIRC).
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)