Case Digest (G.R. No. 210238)
Facts:
Imelda Sze, Sze Kou For, & Teresita Ng v. Bureau of Internal Revenue, G.R. No. 210238, January 06, 2020, First Division, Reyes, J., Jr., writing for the Court.The Bureau of Internal Revenue (BIR) issued Revenue Regulation No. 8-2001 establishing the Voluntary Assessment Program (VAP). Chiat Sing Cardboard Corporation (Chiat Corp.) availed itself of the VAP and received a certificate of qualification for taxable years 1999 and 2000. Despite that privilege, the BIR emphasized that VAP did not shield taxpayers from liability for fraud or illegal acts.
On March 25, 2003 the BIR issued a Letter of Authority (LOA) directing examination of Chiat Corp.’s books for 1999–2000. Chiat Corp.’s master payroll officer, Beth Tugade, received the LOA but failed to produce the documents after repeated notices. The BIR’s subsequent investigation concluded that Chiat Corp. had materially underdeclared sales and income, undeclared importations, failure to withhold taxes, and understated tax liabilities by more than 30%.
The BIR issued a Notice of Informal Conference (NIC), Preliminary Assessment Notice (PAN), Formal Letter of Demand (FLD), and Final Assessment Notice (FAN). Chiat Corp. did not file a protest, and the BIR’s assessment of deficiency taxes for 1999 and 2000 (P33,847,574.18) became final, executory, and demandable. On May 19, 2005 the BIR charged Chiat Corp.’s officers — petitioners Sze, For, and Ng — with tax evasion and related offenses under the National Internal Revenue Code (NIRC).
The State Prosecutor dismissed the complaint on July 12, 2006; the BIR’s motion for reconsideration was denied. The BIR sought review in the Department of Justice (DOJ), which denied the petition for review and its motion for reconsideration in resolutions dated April 27, 2007 and June 17, 2010, respectively. The BIR then filed a petition for certiorari before the Court of Appeals (CA).
In a May 31, 2012 Decision, the CA (penned by J. Gacutan) found sufficient evidence of probable cause for tax evasion and faulted the DOJ for failing to consider documents from the Bureau of Import Services, BIR audit divisions, and the Bureau of Customs; the CA ordered the DOJ to file the corresponding Information. The CA denied reconsideration in a November 26, 2013 resolution. Pursuant to the CA decision, the DOJ filed an Amended Information in Criminal Case Nos. O-385 to O-392 at the Court of Tax Appeals (CTA).
The CTA, however, dismissed all cases on July 8, 2015 on the ground of prescription under Section 281 of Republic Act No. 8424 (Tax Reform Act of 1997); the CTA reasoned discovery of the violation occurred upon finality of the FLD and FAN (served February 7, 2005 and deemed discovered March 9, 2005), and the Information filed in court on Apr...(Pro-only)
Issues:
- In view of the CTA's dismissal of the criminal cases for prescription, is this petition for review on certiorari moot and academic?
- If not moot, did the Court of Appeals err in finding probable cause for violations...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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