Case Summary (G.R. No. 179115)
Key Dates
– July 9, 2004: Formal Letter of Demand issued by CIR.
– August 25, 2004: AIA’s receipt of the demand.
– August 29, 2004: Date of AIA’s protest letter (mailed August 30).
– September 24 & November 22, 2004: Submission of supporting documents.
– June 20, 2005: Petition for review filed with CTA.
– November 20, 2006 & February 22, 2007: CTA First Division resolutions dismissing AIA’s appeal.
– August 3, 2007: CTA En Banc Decision affirming dismissal.
– February 5, 2008: BIR Certification of Qualification for tax amnesty.
– September 26, 2012: Supreme Court Resolution.
Applicable Law
– 1987 Philippine Constitution.
– National Internal Revenue Code of 1997, §228 (protest of assessment).
– Republic Act No. 9480 (Tax Amnesty Act of 2007).
– Republic Act No. 9399 (Special Economic Zone amnesty).
– Jurisprudence on tax amnesty and indirect vs. withholding taxes.
Formal Demand and Protest Filing
CIR assessed AIA for P102.5 M VAT and P4.3 M excise tax (total P106.87 M) for February 2004 auctions. AIA protested on August 29, 2004, filing via registered mail within 30 days of receipt and later provided additional documents. CIR’s inaction led AIA to seek CTA review.
Dispute Over Timeliness and Receipt
CIR moved to dismiss, alleging AIA missed the 30-day deadline and that only the September 24 submission was received post-deadline. AIA offered postal receipts, certifications from post offices and BIR Records Division, and witness affidavits to demonstrate timely receipt of its August 29 protest.
CTA First Division Resolutions
On November 20, 2006, the CTA First Division granted the motion to dismiss, holding that the presumption of mail receipt is rebuttable and AIA failed to present the registry return card. It noted inconsistencies in AIA’s protest references and dismissed AIA’s motion for reconsideration on February 22, 2007.
CTA En Banc Decision
On August 3, 2007, the CTA En Banc affirmed dismissal, finding AIA’s evidence insufficient to establish timely receipt of the August 29 protest, thus rendering the assessment final and executory.
Availment of Tax Amnesty under RA 9480
AIA filed a motion to defer proceedings, disclosing its participation in the Tax Amnesty Program under RA 9480. On February 5, 2008, the BIR issued a Certification of Qualification confirming AIA’s eligibility for amnesty on unpaid internal revenue taxes for 2005 and prior years.
Nature and Construction of Tax Amnesty
The Court reiterated that tax amnesty is a State pardon of penalties, strictly construed against taxpayers and liberally in favor of the government. RA 9480 covers all national internal revenue taxes for 2005 and earlier, irrespective of existing assessments.
Disqualification Argument Rejection
CIR’s claim that AIA was disqualified under RA 9480’s §8(a) as a “withholding agent” was rejected. The Court distinguished indirect taxes (VAT, excise) from withholding taxes and confirmed AIA was directly liable for the assessed deficiencies, not in a w
...continue readingCase Syllabus (G.R. No. 179115)
Factual Antecedents
- Asia International Auctioneers, Inc. (AIA) is a corporation duly organized and operating in the Subic Special Economic Zone, engaged in importing used motor vehicles and heavy equipment for public auction.
- On July 9, 2004, the Commissioner of Internal Revenue (CIR) issued a Formal Letter of Demand assessing AIA for deficiency value-added tax (VAT) of ₱102,535,520.00 and excise tax of ₱4,334,715.00—totaling ₱106,870,235.00 with penalties and interest—covering auction sales on February 5–8, 2004.
- AIA alleges it filed a written protest dated August 29, 2004, dispatched by registered mail on August 30, 2004, and supplemented its protest with additional documents on September 24 and November 22, 2004.
- Having received no action from the CIR, AIA filed a petition for review with the Court of Tax Appeals (CTA) on June 20, 2005; the CIR answered on July 26, 2005.
Procedural History
- March 8, 2006: CIR moved to dismiss AIA’s petition for lack of jurisdiction, contending that AIA’s protest was filed and received beyond the 30-day period under Section 228 of the Tax Code, thus rendering the assessment final and executory.
- CIR denied receipt of the August 29, 2004 protest, claiming only to have received the September 24, 2004 letter on September 27, 2004—three days past the protest deadline.
- November 20, 2006: CTA First Division granted CIR’s motion, faulting AIA for (a) failure to present the registry return card, (b) date discrepancy in the protest letter referencing a June 9 demand instead of July 9, and (c) lack of any reference to a prior protest in the September 24 correspondence.
- February 22, 2007: CTA First Division denied AIA’s motion for reconsideration.
- August 3, 2007: CTA En Banc affirmed the Firs