G.R. No. 199480 - People vs. Valeriano

On February 9, 2006, the Regional Director (RD) of the Bureau of Internal Revenue (BIR) Revenue Region No. 6 sent a letter to the City Prosecutor of Manila recommending the criminal prosecution of Tess S. Valeriano in her capacity as president/authorized officer of the Capital Insurance & Surety Co., Inc.
The letter detailed alleged failures of the Corporation to pay various internal revenue tax obligations for the year 2000, including deficiency assessments for income tax, VAT, expanded withholding tax (EWT), and donor’s stamp tax (DST) as per the 1997 National Internal Revenue Code (NIRC).

Based on the RD’s recommendation and other pertinent documents, an Information was filed on July 9, 2009 by Assistant City Prosecutor Suwerte L. Ofrecio-Gonzales against Valeriano for violations of Section 255 in relation to Sections 253(d) and 256 of the NIRC.
On August 4, 2009, the CTA First Division issued a resolution requiring proof that the filing of the case had the requisite written approval of the BIR Commissioner, in compliance with Section 220 of the NIRC, rather than merely relying on the RD’s recommendation.

Subsequent resolutions on September 28, 2009, again directed the Assistant City Prosecutor to submit the required approval within a final five-day period.
Failure to comply with these orders led the CTA First Division to dismiss the case on November 23, 2009 for non-prosecution.
In January 2010, a Special Attorney from the BIR Legal Division filed a motion for reconsideration, attaching a photocopy of an alleged Commissioner’s approval signed in July 2006.
The CTA Special First Division, however, required Valeriano to comment on the motion, but she had already vacated her address of record, hindering service of documents.

On June 1, 2010, the CTA Special First Division denied the motion for reconsideration, finding that the requirements were not met.
The petitioner then filed a Petition for Review on July 1, 2010 with the CTA en banc, arguing that its inaction was due to the noncompliance of its agent and that the government should not bear for such lapses.
The CTA en banc, after attempting service on Valeriano and receiving no comment from her, allowed the petitioner to file a memorandum of argument.
On November 18, 2011, the CTA en banc rendered its decision denying the petition, upholding the dismissals rendered earlier despite the petitioner’s submission of the photocopied Commissioner’s approval, which was deemed insufficient due to its faded, hardly legible print.

Whether the petitioner’s submission of a faded photocopy of the alleged Commissioner’s approval satisfies the requisites under Section 220 of the 1997 NIRC for filing a criminal tax case.

The issue concerns the adequacy of compliance with the procedural requirement mandating the written approval of the BIR Commissioner for instituting criminal or civil tax proceedings.

Whether the delegation of authority under Section 7 of the 1997 NIRC permits reliance on the RD’s letter recommending prosecution, thereby fulfilling the Commissioner's approval requirement.

The issue examines if the requirement under Section 220 is flexible in light of the delegation provision which allows subordinate officials to exercise certain powers of the Commissioner.

Whether errors committed by government agents (specifically, the failure to secure the proper or clearly legible approval) should bar the prosecution of criminal tax cases.

This issue addresses the extent of the government’s liability for procedural lapses committed by its agents in the initiation and prosecution of criminal cases under tax laws.