G.R. No. 177429 - Valdez-Tallorin vs. Heirs of Tarona

This is a petition for review on certiorari under Rules 64 and 65 of the Rules of Court, challenging the actions taken by the Commission on Audit (COA).
The petition assailed COA Decision No. 2012-139 (dated September 13, 2012) and a subsequent Resolution (dated May 6, 2014).
The case involves allegations of irregularities in the disbursement of public funds by the Armed Forces of the Philippines Retirement and Separation Benefits System (AFP-RSBS).

During the 11th Congress (1998–2001), Senate committees investigated anomalous land acquisition transactions connected with the AFP-RSBS.
Prompted by these investigations and a series of Senate resolutions, the Deputy Ombudsman directed the COA to conduct an audit inciting the formation of a Special Audit Team (SAT) in 2004.
The SAT investigated transactions involving the purchase of four parcels of land in Calamba, Laguna from Concord Resources, Inc.

The properties were meant to serve as a right-of-way for the AFP-RSBS’s 600-hectare Calamba Land Banking project.
Two deeds of sale were involved:

A deed recorded with the Registry of Deeds indicating a purchase price of ₱91,024,800 (bilateral and signed by both parties).

ii. Another unilateral deed executed solely by Concord Resources, Inc. indicating a purchase price of ₱341,343,000, as reflected in AFP-RSBS’s books.

The SAT’s findings established that the recorded deed was the valid one, subsequently showing that the government overpaid by ₱250,318,200.
The SAT also identified an underpayment of ₱16,270,683 in capital gains and documentary stamp taxes due to the execution of the two deeds.

On October 10, 2005, the SAT issued an Audit Observation Memorandum (AOM) addressed to then AFP-RSBS President Cesar Jaime seeking explanations regarding:

The discrepancy in the purchase prices as per the two deeds of sale.
The decision to effect a unilateral deed of sale resulting in inconsistent tax payments.
The deviation of the purchase price from the property’s zonal valuation.

Notice of Disallowance (ND) No. 2010-07-084-(1996) directing the settlement of the excess payment of ₱250,318,200.
Notice of Charge (NC) No. 2010-07-001-(1996) directing the settlement of the tax deficiency amounting to ₱16,270,683.

Petitioner, Jose S. Ramiscal, Jr., appealed these actions before the Commission Proper, but his appeal was denied for lack of merit.
An Urgent Motion for Issuance of a Temporary Restraining Order was subsequently filed by petitioner on March 27, 2017, seeking to enjoin the execution of COA’s Order of Execution No. 2017-012 relating to the NC.

The petitioner contended that the ND and NC should be barred by prescription under Articles 1149 and 1153 of the Civil Code, given that the transactions occurred in 1997 and his resignation in 1998.
He argued that COA had lost jurisdiction over him once a criminal case involving the same facts was filed with the Sandiganbayan and given his cessation of service.
Additionally, petitioner questioned the COA’s authority to issue an NC involving the collection of capital gains and documentary stamp taxes, which are normally under the Bureau of Internal Revenue’s (BIR) purview.

Whether the issuance of the ND and NC by the COA is barred by prescription under Articles 1149 and 1153 of the Civil Code.

Analysis of when the right of action accrues in relation to the discovery of irregular transactions.

Whether COA lost jurisdiction over petitioner on account of his resignation and the pendency of a criminal case before the Sandiganbayan involving the same facts.

Consideration of the “threefold liability rule” and the separation of administrative, civil, and criminal liabilities.

Whether the COA has the authority to issue an NC involving the collection of national internal revenue taxes, specifically capital gains and documentary stamp taxes.

Examination of COA’s mandate under the Constitution and Presidential Decree No. 1445 compared to the powers of the BIR.

Whether the audit proceedings and the resultant administrative actions remain valid against a petitioner who is no longer in service.