G.R. No. 108135-36 - Evangelista vs. People

Tanduay Distillery Inc., a manufacturer and seller of alcoholic beverages, filed an application with the Bureau of Internal Revenue (BIR) on September 17, 1987.
The application sought a tax credit of P180,701,682.00 based on what was alleged as erroneous ad valorem tax payments made from January 1, 1986 to August 31, 1987.
Tanduay contended that as a rectifier (and compounder incidentally) of its products, it was liable for specific taxes and not ad valorem taxes, relying on a BIR ruling involving Distilleria Limtuaco and Co. Inc.

The BIR’s Specific Tax Office, headed by Aquilino T. Larin, received Tanduay’s application with a schedule of ad valorem tax payments and confirmation receipts.
A verification process was initiated to verify whether Tanduay’s products were distilled spirits (subject to specific tax) or compounded liquors (subject to ad valorem tax) through technical analysis by Justino Galban and confirmation by the Tax and Alcohol Division under Teodoro D. PareAo.
The Revenue Accounting Division (RAD), headed by petitioner Potenciana M. Evangelista, was tasked with authenticating the confirmation receipts which listed 237 receipts under two categories (TNC 3011-0011 and TNC 0000-0000) with the respective amounts of P102,519,100.00 and P78,182,582.00.

On September 23, 1987, a handwritten directive by Larin requested that the RAD verify the tax credits by authenticating the confirmation receipts.
RAD, through its Records and Administrative Section (RAS), prepared a verification document (the 1st indorsement) on September 25, 1987, which was signed by petitioner Evangelista without clarifying the meaning of the tax numeric codes (TNC).
After memoranda from the Alcohol Division and Specific Tax Office, Deputy Commissioner Eufracio D. Santos approved Tax Credit Memo No. 5177 on October 13, 1987, effectively granting the tax credit to Tanduay.

A complaint was raised on June 22, 1988 by Ruperto Lim alleging that Tanduay had paid only P73,614,287.20 in ad valorem taxes—not the claimed P180,701,682.00—highlighting the improper inclusion of receipts under unclassified tax codes.
Deputy Commissioner Santos admitted a lack of familiarity with the specific TNC meanings, contending reliance on subordinates’ certification.
The ambiguity in the certification (1st indorsement) became the focal point of later criminal charges against Evangelista and her co-employees.

On January 3, 1990, informations were filed with the Sandiganbayan against key BIR officials including petitioner Evangelista for:

Violation of Section 268, Paragraph 4 of the National Internal Revenue Code (NIRC) concerning conspiracy or collusion to defraud the government.
Violation of Section 3(e) of R.A. No. 3019 (Anti-Graft and Corrupt Practices Act) for causing undue injury through manifest partiality or negligence.

During the trial, all accused pleaded not guilty, with petitioner's defense emphasizing that her role was primarily ministerial in reporting data from RAD records.

Despite admitting to issuing the indorsement, petitioner claimed she did not understand the TNC meaning at the time and argued her action conformed to standard procedures.
Evidence presented by co-accused, internal memoranda, and testimonial discrepancies revealed that not all BIR employees, including high-ranking ones, were well acquainted with the TNC system.
The Sandiganbayan found petitioner’s ambiguous certification to be a “studied non-response,” inadequate in clearly addressing the query on the actual amount remitted, leading to the improper grant of tax credits to Tanduay.

Whether petitioner Evangelista, as head of the Revenue Accounting Division with a duty to verify and certify tax payments through the use of TNCs, was grossly negligent in issuing the 1st indorsement without proper knowledge of the tax numeric codes.
Whether her failure to determine the exact nature of the tax payments (specific versus ad valorem) constituted a neglect of duty that materially contributed to the erroneous grant of tax credits.

Whether there was sufficient evidence to prove that petitioner and her co-accused conspired or colluded to defraud the government by granting unwarranted tax credits to Tanduay.
Whether the act of issuing the certification, in conjunction with the actions of her superior and colleagues, evidences a common design to commit fraud under Section 268, Paragraph 4 of the NIRC.