Case Digest (G.R. No. L-44004)
Facts:
Crispin Penid, Vicente Rapada, Catalino Tumangquil and Rufino Agcaoili v. Hon. Cesar Virata, G.R. No. L-44004, March 25, 1983, Supreme Court Second Division, Escolin, J., writing for the Court.
Petitioners (informers) filed Confidential Information No. 28 with the Bureau of Internal Revenue (BIR) on March 8, 1962, accusing 27 shipping companies and agents of underpaying the 2% common carriers percentage tax by converting gross dollar receipts at the parity rate of P2.00 to US$1.00 instead of the Central Bank’s prescribed conversion, thereby defrauding the government of taxes. The sworn statement was referred to BIR Examiner Guillermo Cadutan, who interviewed petitioners; during the interview petitioners disclosed that the erroneous conversion was a general practice also followed by other shipping companies not specifically listed in Confidential Information No. 28.
Acting on this broader disclosure, beginning March 30, 1962 the BIR inspected and audited the books and records of all shipping companies and agents operating in the Philippines. In December 1962 the BIR assessed deficiency taxes against certain carriers computed at P3.10 to US$1.00 pursuant to applicable Central Bank circulars; among those assessed was Pan Fil Co. Inc., a company not named in Confidential Information No. 28. Collection of the assessed deficiencies was held in abeyance because Royal Inter-ocean Lines filed a protest with the Court of Tax Appeals (CTA) on February 11, 1963. The CTA ruled for Royal Inter-ocean Lines on September 24, 1966, but this Court later reversed in Commissioner of Internal Revenue v. Royal Inter-ocean Lines, Inc. (34 SCRA 9). After the reversal, the BIR collected P4,178,167.54 in deficiency taxes, which included P216,846.00 paid by Pan Fil Co. Inc.
Petitioners then filed with the Commissioner of Internal Revenue a claim for 25% of the total revenue collected as reward under Republic Act No. 2338. Commissioner Vera endorsed the claim to the Secretary of Finance. In his third indorsement dated October 29, 1971, however, respondent Secretary Cesar Virata limited petitioners’ reward to 25% of collections corresponding only to the period covered by Confidential Information No. 28 (1960 to March 8, 1962) and excluded the P216,846.04 paid by Pan Fil Co. Inc. on the ground that Pan Fil was not mentioned in the confidential information and because, in his view, the information lost its exclusive effectiveness after BIR took possession of it. After an unsuccessful reque...(Subscriber-Only)
Issues:
- Whether the deficiency taxes collected from Pan Fil Co. Inc., a firm not named in Confidential Information No. 28 but discovered as a result of petitioners’ interview, should be included in computing petitioners’ 25% reward under RA No. 2338?
- Whether petitioners are entitled to a share of deficiency collections that accrued after 1962 (i.e., collections for periods pri...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
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Doctrine:
- (Subscriber-Only)