Case Digest (G.R. No. 215950)
Facts:
Tridharma Marketing Corporation v. Court of Tax Appeals, Second Division, and the Commissioner of Internal Revenue, G.R. No. 215950, June 20, 2016, Supreme Court First Division, Bersamin, J., writing for the Court.
The petitioner is Tridharma Marketing Corporation; the respondents are the Court of Tax Appeals, Second Division (hereafter CTA in Division) and the Commissioner of Internal Revenue (CIR). The petition was filed as a special civil action for certiorari under Rule 65 of the Rules of Court.
On August 16, 2013 the BIR issued a Preliminary Assessment Notice (PAN) assessing petitioner with various deficiency taxes (income tax, VAT, withholding on compensation, expanded withholding tax and documentary stamp tax) totaling P4,640,394,039.97, largely from the BIR's complete disallowance of petitioner’s 2010 purchases from Etheria Trading (P4,942,937,053.82). Petitioner replied to the PAN on August 30, 2013. On September 23, 2013 the BIR issued a Formal Letter of Demand assessing deficiency taxes of P4,697,696,275.25 for 2010; petitioner protested and submitted additional documents at the CIR’s request.
On February 28, 2014 the CIR issued a Final Decision on Disputed Assessment for P4,473,228,667.87. Petitioner filed a Request for Reconsideration, which the CIR denied by decision dated May 26, 2014. Prior to that denial petitioner paid the WHT, DST and EWT components (P5,836,786.10) and reiterated offers to compromise the IT and VAT portions. On June 13, 2014 petitioner appealed to the CTA by filing a Petition for Review with Motion to Suspend Collection of Tax, docketed as CTA Case No. 8833, and raffled to the CTA Second Division.
On July 8, 2014 the CTA in Division granted petitioner’s Motion to Suspend Collection but required the deposit of an acceptable surety bond equivalent to 150% of the assessment — P6,701,087,822.64 — within 15 days, and listed documentary prerequisites in accordance with Supreme Court Circular A.M. No. 04-7-02-SC. The resolution was penned by Associate Justice Juanito C. Castaneda, Jr., with Associate Justice Caesar A. Casanova concurring. Petitioner moved for partial reconsideration seeking reduction of the bond to an amount it could procure.
On December 22, 2014 the CTA in Division issued a second resolution reducing the bond to P4,467,391,881.76 (equal to the BIR’s deficiency assessment for income tax and VAT). Petitioner thereafter filed the present petition for certiorari (Rule 65), alleging grave abuse of discretion in imposing an enormous bond...(Subscriber-Only)
Issues:
- Did the CTA in Division commit grave abuse of discretion in requiring the petitioner to post a surety bond (amounting to the assessed deficiency and far exceeding petitioner’s net worth) as a condition to suspend collection, despite petitioner’s claim of patent illegality...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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