G.R. No. L-46881 - People vs. Castaneda, Jr.

Case Summary (G.R. No. L-46881)

Procedural and Factual Background

In or about 1971 two informants submitted sworn information under R.A. No. 2338 to the Bureau of Internal Revenue (BIR) alleging violations of the Internal Revenue Code by the private respondents; an affidavit by William Chan dated 27 December 1971 is in the record. Following BIR investigations and search warrants issued by an Executive Judge, the BIR examined seized materials and criminal informations were filed in the Court of First Instance of Pampanga.

Criminal Informations and Charges

Criminal Case No. 439 (filed July 1973) charged Francisco Valencia, Apolonio Erespe y Comia, and Priscilla Quiazon/Quiano (alias Mary Jo) under Section 170(2) for possession of false and counterfeit internal revenue labels. Criminal Case No. 440 (filed July 1973) charged the same persons under Section 174(3) for possession of locally manufactured articles subject to specific tax without payment of the tax, listing specific quantities and types of alcoholic products. On 14 March 1974 six additional informations (Criminal Cases Nos. 538–543) were filed against Vicente Lee Teng and Francisco Valencia for violations of Section 178 in relation to Sections 182(A)(1)(3c) and 208, alleging failure to pay annual privilege taxes for each year from 1966 to 1972.

Motions to Quash and Orders of the Trial Court

After arraignment, Valencia moved to quash Criminal Cases Nos. 538–543 (22 April 1974), asserting lack of preliminary investigation and entitlement to tax amnesty under P.D. No. 370. The State Prosecutor opposed, arguing requisite preliminary investigations were conducted and that cases excluded from P.D. No. 370 coverage if they were the subject of a valid information under R.A. No. 2338 as of 31 December 1973. The respondent Judge granted Valencia’s motion and on 15 July 1974 dismissed Criminal Cases Nos. 538–543 and also dismissed Criminal Cases Nos. 439 and 440 insofar as Valencia was concerned. Motions for reconsideration by the People were denied (order dated 18 November 1974). Thereafter, co-accused Lee Teng and Priscilla Castillo filed motions to quash (14 December 1975) asserting that Valencia’s dismissal inured to their benefit; the trial judge granted their motions (31 March 1976) and denied the prosecution’s motion for reconsideration (17 February 1977).

Petition for Certiorari and Mandamus; Preliminary Procedural Issues

The People filed a petition for certiorari and mandamus challenging the trial court’s dismissals on 12 September 1977. Two preliminary issues raised by respondents were considered by the Supreme Court: (1) whether the People were guilty of laches for bringing the petition; and (2) whether double jeopardy barred further prosecution. The Court declined to apply laches to bar the petition, noting vigorous and timely prosecutorial opposition to the dismissals and the extraordinary public interest and substantive importance of the legal issues; applying laches would have perpetuated an inequitable state of affairs created by the trial court’s orders. The double jeopardy defense was held premature in the certiorari proceeding because the central question was the validity and legal effect of the dismissals; if dismissals were invalidated, the question of double jeopardy would not arise for those prosecutions.

Legal Framework and Scope of P.D. No. 370

P.D. No. 370 granted a conditional tax amnesty that, upon voluntary disclosure of previously untaxed income/wealth earned or realized prior to 1973 and payment of a special 15% tax, would condone internal revenue taxes, increments/penalties, and associated civil, criminal or administrative liabilities under enumerated laws. P.D. No. 370 expressly excluded several categories from amnesty, including “tax cases which are the subject of a valid information under R.A. No. 2338 as of December 31, 1973.” The implementing Revenue Regulations (Revenue Regulations No. 2-74, Sec. 4) clarified those exclusions.

Meaning of “Valid Information” under R.A. No. 2338

The Court interpreted the statutory exclusion to refer not to a criminal information already filed in court but to the sworn informations or complaints submitted by informers to the BIR under R.A. No. 2338. A “valid” informer’s information under R.A. No. 2338 requires: (1) submission by a person who is not an internal revenue/customs official or certain relatives; (2) a definite sworn statement of facts constituting the grounds; and (3) information not already in possession of BIR/Bureau of Customs or not concerning a case already pending or investigated by named officials.

Application of the Statute to the Case Facts

The Court found that two sworn affidavit-complaints under R.A. No. 2338 concerning the private respondents had been filed with the BIR as of 31 December 1973, and those complaints had matured into two criminal informations in court (Criminal Cases Nos. 439 and 440) by that date. The six later-filed informations (Nos. 538–543), though docketed in March 1974, were based on the same sworn informations submitted before 31 December 1973. Consequently, the accused were precluded by P.D. No. 370’s express exclusion from obtaining amnesty for the tax cases that were the subject of valid R.A. No. 2338 informations as of the cut-off date.

Rejection of Estoppel and BIR Acceptance Argument

Valencia argued estoppel because BIR agents allegedly accepted his application for amnesty and payment of the 15% special tax. The Court rejected estoppel: acceptance by BIR agents was ministerial and did not constitute a valid determination of entitlement to amnesty; moreover, the government is not estopped by the error or mistake of its agents in the administration of the law. The Court also emphasized that amnesty provisions must be strictly construed in favor of the government and not presumed in favor of taxpayers; therefore Valencia’s payment of the 15% tax was legally ineffective to confer amnesty when the s

Case Syllabus (G.R. No. L-46881)

Case Citation and Court

Reported at 247-A Phil. 420, Third Division; G.R. No. L-46881; decision dated September 15, 1988.
Decision penned by Justice Feliciano; Chief Justice Fernan (Chairman), and Justices Gutierrez, Jr., Bidin, and Cortes concurred.
Nature of petition: Petition for Certiorari and Mandamus filed by the People of the Philippines seeking annulment of respondent Judge’s orders quashing criminal informations and denying the People’s motions for reconsideration.

Parties and Roles

Petitioner: People of the Philippines (prosecution).
Respondent Judge: Hon. Mariano Castaneda, Jr., Judge of the Court of First Instance of Pampanga, Branch III.
Private respondents / accused: Vicente Lee Teng (alias Vicente Lee, alias Lee Teng), Priscilla Castillo (Vda. de Cura) (alias Priscilla Quiazon or Quiano alias Mary Jo), and Francisco Valencia.
Other actors: Bureau of Internal Revenue (BIR) investigators; two informants (one identified as William Chan); State Prosecutor Estanislao L. Granados, Department of Justice.

Factual Background

In 1971 two informants submitted sworn information under Republic Act No. 2338 to the BIR alleging violations of the National Internal Revenue Code by the private respondents; record contains William Chan’s affidavit dated 27 December 1971.
BIR conducted investigation, obtained search warrants from Executive Judge Malcolm Sarmiento, executed searches, and examined seized materials and documents.
Criminal informations were later filed in court against the private respondents following the BIR’s examination of the seized materials and documents.

Specific Criminal Informations Filed (Nature of Charges and Allegations)

Criminal Case No. 439 (filed July 1973): Violation of Sec. 170(2) of the National Internal Revenue Code against Francisco Valencia, Apolonio G. Erespe y Comia, and Priscilla Quiazon/Quiano (alias Mary Jo) for possession, custody and control of false and counterfeit or fake internal revenue labels, described in detail with serial numbers and sheet/label counts; alleged wilful, unlawful and felonious possession of fake internal revenue labels.
Criminal Case No. 440 (filed July 1973): Violation of Sec. 174(3) of the National Internal Revenue Code against same accused for possession, custody and control of locally manufactured articles subject to specific tax on which taxes had not been paid — detailed inventory of boxes and bottles (Anejo Rum, Tanduay Rum, Ginebra San Miguel Gin), other items (wine improver, Rum Jamaica) and a stated total specific tax due of P160.01.
Criminal Cases Nos. 538-543 (filed 14 March 1974): Six informations charging Vicente Lee Teng and Francisco Valencia with violations of Sec. 178 in relation to Secs. 182(A)(1)(3c) and 208 of the National Internal Revenue Code for failure to pay annual privilege taxes for each of six years (1966–1972), alleging distillation, rectification, reparting, compounding or manufacture of alcoholic products subject to specific tax without payment of privilege tax.

Procedural History (Chronology of Motions, Orders and Petitions)

22 April 1974: After arraignment, Valencia filed Motion to Quash Criminal Cases Nos. 538-543 on grounds that preliminary investigation was not conducted and that he was entitled to tax amnesty under P.D. No. 370.
State Prosecutor opposed, contending investigations had been conducted and that failure to hold preliminary investigation is not a ground to quash; also argued Valencia ineligible for P.D. No. 370 because the tax cases were the subject of valid information under R.A. No. 2338 as of Dec. 31, 1973.
15 July 1974: Respondent Judge granted Valencia’s Motion to Quash and dismissed Criminal Cases Nos. 538-543 and also dismissed Criminal Cases Nos. 439 and 440 insofar as Valencia was concerned.
People’s Motion for Reconsideration denied by respondent Judge (Order dated 18 November 1974).
14 December 1975: Co-accused Vicente Lee Teng and Priscilla Castillo de Cura, after arraignment, filed Motions to Quash Criminal Cases Nos. 538-543 and 439 and 440, contending the dismissal as to Valencia inured to their benefit.
People opposed, arguing amnesty did not apply to them and that any immunity was personal to Valencia.
31 March 1976: Respondent Judge granted Motions to Quash by Lee Teng and Priscilla Castillo de Cura.
People’s Motion for Reconsideration denied 17 February 1977.
12 September 1977: People filed the present Petition for Certiorari and Mandamus.
Court initially resolved to dismiss petition (5 July 1978), but on People’s motion for reconsideration the Court set aside dismissal and considered case submitted for decision (1 October 1979).

Issues Raised and Framed by the Court

Primary substantive issues:
- Whether accused Valencia, Lee Teng and Priscilla Castillo de Cura were entitled to the benefits of tax amnesty under Presidential Decree No. 370.
- Whether dismissal of criminal informations against Valencia inured to the benefit of co-accused Lee Teng and Priscilla Castillo de Cura.
Preliminary issues raised by private respondents and addressed by the Court:
- Whether the People were guilty of laches for delay in filing the petition.
- Whether double jeopardy became available to the accused as a result of the dismissals.

Court’s Analysis — Preliminary Issue 1: Laches

Private respondents alleged the People’s petition was barred by laches due to delay (seven months after denial of motion for reconsideration and subsequent procedural time).
The Court declined to apply laches, reasoning:
- Applying laches would perpetuate an inequitable situation created by respondent Judge’s orders which grossly disregarded the People’s legal rights.
- The nature and importance of the substantive issues and the result of the respondent Judge’s orders (denying the People a fair opportunity to prosecute) weighed against barring the petition.
- The prosecution had vigorously resisted the dismissals by filing oppositions and motions for reconsideration, so private respondents could not claim prejudice by surprise.
Conclusion: Petition for Certiorari and Mandamus was not barred by laches in the circumstances of the case.

Court’s Analysis — Preliminar