G.R. No. 179343 - Fishwealth Canning Corp. vs. Commissioner of Internal Revenue

The Commissioner of Internal Revenue (respondent) issued a Letter of Authority dated May 16, 2000, to examine Fishwealth Canning Corporation’s (petitioner’s) internal revenue taxes for the taxable year 1999.
The initial investigation revealed deficiencies amounting to P2,395,826.88, covering income tax, value-added tax (VAT), withholding tax, and other miscellaneous obligations, which the petitioner settled on August 30, 2000.

On August 25, 2000, respondent reinvestigated the taxpayer’s records by issuing a subpoena duces tecum to secure the same documents previously examined, prompting the petitioner to request its cancellation due to duplication.
The petitioner’s non-compliance with the subpoena led to a criminal complaint filed against it for violating Sections 5 (c) and 266 of the 1997 Internal Revenue Code; however, the complaint was later dismissed for insufficiency of evidence.

On August 6, 2003, the respondent sent a Final Assessment Notice for income tax and VAT deficiencies totaling P67,597,336.75 for the taxable year 1999.
The petitioner contested this assessment by submitting a protest letter on September 23, 2003, and thereafter received a Final Decision on Disputed Assessment dated August 2, 2005, which was communicated to the petitioner on August 4, 2005, confirming tax liabilities (with figures of P15,396,905.24 for income tax and P63,688,434.40 for VAT) and imposing penalties incident to delinquency.

Instead of appealing to the Court of Tax Appeals (CTA) within the designated 30-day period provided in the Final Decision, the petitioner filed a Letter of Reconsideration on August 31, 2005, and submitted it on September 1, 2005.
A Preliminary Collection Letter was later issued on September 6, 2005, prompting the petitioner to file a Petition for Review before the CTA on October 20, 2005.
The First Division of the CTA dismissed the petition on the ground that it was filed out of time, a decision that was subsequently maintained by the CTA En Banc when the petitioner refiled the petition on November 21, 2006.

Section 228 of the 1997 Tax Code explicitly allows an administrative protest by filing a request for reconsideration or reinvestigation within 30 days from receipt of the assessment.
Failure to act within 60 days in submitting all relevant supporting documents, as required, leads to the assessment becoming final.
If the administrative protest is denied, or no action is taken within 180 days, the taxpayer must appeal to the CTA within an additional 30 days from the denial or lapse of the 180-day period.

The petitioner received the Final Decision on August 4, 2005, thereby establishing a deadline of September 3, 2005, for filing an appeal with the CTA.
The petition for review filed on October 20, 2005, was clearly untimely, and the petitioner’s subsequent motion for reconsideration did not extend or toll the 30-day appeal period.
Finally, the petitioner argued that the dismissal of a related criminal case should merit reconsideration, but this argument was rejected on the ground that the criminal proceedings were aimed at penalizing, not at recovering tax deficiencies.

Whether the petition filed on October 20, 2005, falls within the prescribed 30-day period after the receipt of the Final Decision on Disputed Assessment.
Whether the filing of a Letter of Reconsideration or a motion for reconsideration could toll or extend the statutory 30-day period for appeal under Section 228 of the 1997 Tax Code.

Whether the dismissal of the criminal case concerning alleged violations of the 1997 Internal Revenue Code holds any bearing on the taxpayer’s administrative appeal for tax deficiencies.
Whether a criminal proceeding that is aimed at penalizing tax non-compliance can alter or negate the finality of the tax deficiency assessments.

How strictly the statutory time limits provided in Section 228 of the 1997 Tax Code should be enforced in the context of administrative and judicial appeals.
Whether any exceptions or procedural tolling mechanisms exist that might allow an otherwise untimely filed petition for review.