digest iv b cases

7/26/2019 Digest IV b Cases

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G.R. No. L-41919-24 May 30, 1980

QUIRICO P. UNGAB, petitioner,

vs.

HON. VICENTE N. CUI, !R., "# $"% &a'a&"(y a% !)*+ o ($ Co)( o /"%( I#%(a#&,

Ba#&$ 1, 1TH !)*"&"a "%("&(, aao C"(y, THE COMMIIONER O/ INTERNAL

REVENUE, a#* !EU N. ACEBE, "# $"% &a'a&"(y a% (a( Po%&)(o, respondents.

CONCEPCION !R., J:

Xxx there is no requirement for the precise computation and assessment of the tax before

there can be a criminal prosecution under the Code.

Xxx The crime is complete when the violator has, as in this case,

knowingly and willfully filed fraudulent returns with intent to evade and

defeat a part or all of the tax. 14

xxx The perpetration of the crime is grounded upon knowledge on the part

of the taxpayer that he has made an inaccurate return, and thegovernment's failure to discover the error xxx.

esides, it has been ruled that a petition for reconsideration of an assessment may affect

the suspension of the prescriptive period for the collection of taxes, but not the prescriptive

period of a criminal action for violation of law. 1!bviously, the protest of the petitioner

against the assessment of the "istrict #evenue !fficer cannot stop his prosecution for

violation of the $ational %nternal #evenue Code.

G.R. No. 119322 !)# 4, 199

COMMIIONER ON INTERNAL REVENUE, ENIOR TATE PROECUTOR AURORA

. LAGMAN, ENIOR TATE PROECUTOR BERNELITO R. /ERNANE, ENIORTATE PROECUTOR HENRIC5 P. GINGO6ON, ROGELIO /. VITA, TATE

PROECUTOR AL/REO AGCAOILI, PROECUTING ATTORNE6 EMMANUEL

VELACO, CIT6 PROECUTOR CANIO V. RIVERA, AN AITANT CIT6

PROECUTOR LEOPOLO E. BARAQUIA, petitioners,

vs.

THE HONORABLE COURT O/ APPEAL, THE HONORABLE TIRO 7C VELACO,

PREIING !UGE, REGIONAL TRIAL COURT O/ QUEON CIT6, BRANCH 88,

/ORTUNE TOBACCO CORPORATION, LUCIO TAN, HARR6 C. TAN, CARMEN 5AO

TAN, /LORENCIO ANTO, ALVAOR MION, CHUNG POE 5EE, RO!A CHUA,

MARIANO TANENGLIAN, !UANITA LEE AN ANTONIO P. ABA6A, respondents.

AGUPAN COMBINE COMMOITIE, INC., TONMAN COMMERCIAL, INC.,

LANMAR5 ALE AN MAR5ETING INC., CRIMON CROC5ER ITRIBUTOR,

INC., MOUNT MATUTUM MAR5ETING CORP., /IRT UNION TRAING CORP.,

CARLBURG AN ON, INC., OMAR ALI ITRIBUTOR, INC., ORIEL AN

COMPAN6, NEMEIO TAN, QUINTIN CALLE!A, 6OLANA MANALILI, CARLO CHAN,

ROMEO TAN, VICENTE CO, ILLIAM 6U, LETICIA LIM, GLORIA LOPE, ROBERT

TANTAMCO, /ELIPE LO6, ROLANO CHUA, HONORINA TAN, ILLIE TANTAMCO,

HENR6 EECHEE, !EU LIM, TEOORO TAN, ANTONIO APOTOL, OMINGO

TENG, CANELARIO LI, ERLINA CRU, CARLO TUMPALAN, LARR6 !OHN 6,

ERNETO ONG, IL/REO MACROHON, ANTONIO TIU, ROARIO LETER,

IL/REO ONG, BONI/ACIO CHUA, GO CHING CHUAN, HENR6 CHUA, LOPE LIM

GUAN, EMILIO TAN, /ELIPE TAN EH CHUAN, ANRE CO, /ELIPE 5EE, HENR6 GO

CO, NARCIO GO, AOL/O LIM, CO HU, ANIEL 6AO CABIGUN, GABRIELLE.

QUINTELA, NELON TE, EMILLIO GO, EIN LEE, CEAR LEEMA, !R., !AO

CHEP ENG, ARNUL/O TAN, BEN!AMIN T. HONG, PHILIP !AO, !OE P. 6U, AN

AVI R. CORTE,respondents&intervenors.

5APUNAN, J.:p

xxx or the purpose of determining the ()anufacturer's #egistered *holesale +rice( a

cigarette manufacturer is required to file a )anufacturer's "eclaration %# orm $o. -./-0

for each brand of cigarette manufactured, stating1 a0 )aterials, b0 2abor3 c0 !verhead3 d0

Tax urden and the *holesale +rice by Case. The data submitted therewith is verified by

the #evenue !fficers and approved by the Commission of %nternal #evenue. 4ny change in

the manufacturer's registered wholesale price of any brand cannot be effected without

submitting the corresponding 5worn )anufacturer's "eclaration and verified by the

#evenue !fficer and approved by the Commissioner on %nternal #evenue.22

$ow, if every step in the production of cigarettes was closely monitored and supervised bythe %# personnel specifically assigned to ortune's premises, and considering that the

)anufacturer's 5worn "eclarations on the data required to be submitted by the

manufacturer were scrutini6ed and verified by the %# and, further, since the manufacturer's

wholesale price was duly approved by the %#, then it is presumed that such registered

wholesale price is the same as, or approximates (the price, excluding the value&added tax,

at which the goods are sold at wholesale in the place production,( otherwise, the %# would

not have approved the registered wholesale price of the goods for purposes of imposing the

ad valorem tax due. %n such case, and in the absence of contrary evidence, it was

precipitate and premature to conclude that private respondents made fraudulent returns or


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wilfully attempted to evade payment of taxes due. (*ilful( means (premeditated3 malicious3

done with intent, or with bad motive or purpose, or with indifference to the natural

consequence . . .(24(raud( in its general sense, (is deemed to comprise anything

calculated to deceive, including all acts, omissions, and concealment involving a breach of

legal or equitable duty, trust or confidence 7ustly reposed, resulting in the damage to

another, or by which an undue and unconscionable advantage taken of another.2

raud cannot be presumed. %f there was fraud or wilful attempt to evade payment of ad

valorem taxes by private respondents through the manipulation of the registered wholesale

price of the cigarettes, it must have been with the connivance or cooperation of certain %#

officials and employees who supervised and monitored ortune's production activities to see

to it that the correct taxes were paid. ut there is no allegation, much less evidence, of %#

personnel's malfeasance. %n the very least, there is the presumption that the %# personnel

performed their duties in the regular course in ensuing the correct taxes were paid by

ortune.2

xxx

xxx it cannot be correctly asserted that private respondents have wilfully attempted to evade

or defeat the taxes sought to be collected from ortune. %n plain words, before one is

prosecuted for wilful attempt to evade or defeat any tax under 5ections 89- and 899 of the

Tax code, the fact that a tax is due must first be proved.

xxx

%n plain words, for criminal prosecution to proceed before assessment, there must be

aprima facieshowing of a wilful attempt to evade taxes. Xxx %n the mind of the trial court

and the Court of 4ppeals, ortune's situation is quite apart factually since the registered

wholesale price of the goods, approved by the %#, is presumed to be the actual wholesale

price, therefore, not fraudulent and unless and until the %# has made a final determination

of what is supposed to be the correct taxes, the taxpayer should not be placed in the

crucible of criminal prosecution. xxx

!n this point, the trial court stressed that the prosecutor conducting the preliminary

investigation should have allowed the production of the ("aily )anufacturer's 5worn

5tatements( submitted by ortune without which there was no valid basis for the allegation

that private respondents wilfully attempted to evade payment of the correct taxes. The

prosecutors should also have produced the ("aily )anufacturer's 5worn 5tatements( by

other cigarette companies, as sought by private respondents, to show that these companies

which had paid the ad valorem taxes on the same basis and in the same manner as ortune

were not similarly criminally charged. ut the investigating prosecutors denied private

respondents' motion, thus, indicating that only ortune was singled out for prosecution.

G.R. No. 12831 !)# 29, 1999

COMMIIONER O/ INTERNAL REVENUE, petitioner,

vs.

PACOR REALT6 AN EVELOPMENT CORPORATION, ROGELIO A. IO a#*

VIRGINIA . IO,respondents.

PANGANIBAN, J.:

xxx

xxx proceedings in court may be commenced without an assessment. urthermore, 5ection

8/9 of the same Code clearly mandates that the civil and criminal aspects of the case may

be pursued simultaneously. xxx This was because the commissioner of internal revenue

had, in such tax evasion cases, discretion on whether to issue an assessment or to file a

criminal case against the taxpayer or to do both.

xxx To reiterate, said 5ection 888 states that an assessment is not necessary before a

criminal charge can be filed. This is the general rule. +rivate respondents failed to show that

they are entitled to an exception. )oreover, the criminal charge need only be supported by

aprima facieshowing of failure to file a required return. This fact need not be proven by an

assessment.

The issuance of an assessment must be distinguished from the filing of a complaint. efore

an assessment is issued, there is, by practice, a pre&assessment notice sent to the

taxpayer. The taxpayer is then given a chance to submit position papers and documents to

prove that the assessment is unwarranted. %f the commissioner is unsatisfied, an

assessment signed by him or her is then sent to the taxpayer informing the latter specifically

and clearly that an assessment has been made against him or her. %n contrast, the criminalcharge need not go through all these. The criminal charge is filed directly with the "!:.

Thereafter, the taxpayer is notified that a criminal case had been filed against him, not that

the commissioner has issued an assessment. %t must be stressed that a criminal complaint

is instituted not to demand payment, but to penali6e the taxpayer for violation of the Tax

Code.

G.R. No. 12093 May 21, 2009


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LUCA G. AAMON, THEREE !UNE . AAMON, a#* ARA . E LO RE6E,

"# ($" &a'a&"("% a% P%"*#(, Ta%) a#* &(ay o A*a:%o# Ma#a+:#(

Co'oa("o#,+etitioners,

vs.

COURT O/ APPEAL a#* LIA6A6 VINON-CHATO, "# $ &a'a&"(y a%

Co::"%%"o# o ($ B)a) o I#(#a R#),#espondents.

x & & & & & & & & & & & & & & & & & & & & & & &x

G.R. No. 124; May 21, 2009

INTERNAL REVENUE,+etitioner,

vs.

COMMIIONER O/ COURT O/ APPEAL, COURT O/ TA< APPEAL, AAMON

MANAGEMENT CORPORATION, LUCA G. AAMON, THEREE !UNE .

AAMON, a#* ARA . E LO RE6E,#espondents.

" ; C % 5 % ! $

PUNO, C.J.:

4n assessment contains not only a computation of tax liabilities, but also a demand for

payment within a prescribed period. %t also signals the time when penalties and interests

begin to accrue against the taxpayer. To enable the taxpayer to determine his remedies

thereon, due process requires that it must be served on and received by the taxpayer.

4ccordingly, an affidavit, which was executed by revenue officers stating the tax liabilities of

a taxpayer and attached to a criminal complaint for tax evasion, cannot be deemed an

assessment that can be questioned before the Court of Tax 4ppeals.

xxx To consider the affidavit attached to the Complaint as a proper assessment is to subvert

the nature of an assessment and to set a bad precedent that will pre7udice innocent

taxpayers.

True, as pointed out by the private respondents, an assessment informs the taxpayer that

he or she has tax liabilities. ut not all documents coming from the %# containing a

computation of the tax liability can be deemed assessments.

xxx

%t should also be stressed that the said document is a notice duly sent to the taxpayer.

%ndeed, an assessment is deemed made only when the collector of internal revenue

releases, mails or sends such notice to the taxpayer..#. $os. 2&8@8D E 2&8@-8, )arch -, @80.(

=G.R. No. 14;188. '(:> 14, 2004?

COMMIIONER O/ INTERNAL REVENUE,petitioner, vs.THE ETATE O/ BENIGNO

P. TOA, !R., R'%#(* >y '&"a Co-a*:"#"%(a(o% Lo#a 5a')#a# a#*

Ma"o L)@a Ba)("%(a, respondents.

E C I I O N

AVIE, !R., C.J.

Tax avoidanceand tax evasionare the two most common ways used by taxpayers in

escaping from taxation. Tax avoidance is the tax saving device within the means sanctioned

by law. This method should be used by the taxpayer in good faith and at arms length. Tax

evasion, on the other hand, is a scheme used outside of those lawful means and when

availed of, it usually sub7ects the taxpayer to further or additional civil or criminal liabilities.F8-G
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Tax evasion connotes the integration of three factors1 0 the end to be

achieved, i.e., the payment of less than that known by the taxpayer to be legally due, or the

non&payment of tax when it is shown that a tax is due3 80 an accompanying state of mind

which is described as being Hevil,I in Hbad faith,I Hwillfull,Ior Hdeliberate and not accidentalI3

and -0 a course of action or failure of action which is unlawful.F8?G

Xxx

The scheme resorted to by C%C in making it appear that there were two sales of the

sub7ect properties, i.e., from C%C to 4ltonaga, and then from 4ltonaga to #)% cannot be

considered a legitimate tax planning. 5uch scheme is tainted with fraud.

Fraudin its general sense, His deemed to comprise anything calculated to deceive,

including all acts, omissions, and concealment involving a breach of legal or equitable duty,

trust or confidence 7ustly reposed, resulting in the damage to another, or by which an undue

and unconscionable advantage is taken of another.IF-/G

xxx The incidence of taxation depends upon the substance of a transaction. xxx

The two sale transactions should be treated as a single direct sale by C%C to #)%.xxx

Ha% ($ '"o* o

a%%%%:#( '%&">*

$o. 5ection 8@ of the $%#C of @D now 5ection 888 of the Tax #eform 4ct of @@.#. $os. 2&


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deemed included in the criminal action, acquittal of the taxpayer in the criminal proceeding

does not necessarily entail exoneration from his liability to pay the taxes. %t is error to hold,

as the lower court has held, that the 7udgment in the criminal cases $os. 8/D@ and 8/@/

bars the action in the present case. The acquittal in the said criminal cases cannot operate

to discharge defendant appellee from the duty of paying the taxes which the law requires to

be paid, since that duty is imposed by statute prior to and independently of any attempts by

the taxpayer to evade payment. 5aid obligation is not a consequence of the felonious acts

charged in the criminal proceeding, nor is it a mere civil liability arising from crime that could

be wiped out by the 7udicial declaration of non&existence of the criminal acts charged.

Castro vs. The Collector of %nternal #evenue, >.#. $o. 2&8

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