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Republic v. IAC and Sps. Pastor

26 April 1991 | Ponente: Grino-Aquino, J.

Notes:

1. On Tax Amnesty

general pardon or intentional overlooking by the State of its authority to impose

penalties on persons otherwise guilty of evasion or violation of a revenue or tax law.

partakes of an absolute forgiveness or waiver by the Government of its right to

collect what otherwise would be due it, and in this sense prejudicial thereto,

particularly to give tax evaders, who wish to relent and are willing to reform a chance

to do so and thereby become a part of the new society with a clean slate

2. This case also reiterated the principle that in case of doubt, tax statutes are to be

construed strictly against the Government and liberally in favor of the taxpayer, for

taxes, being burdens are not to be presumed beyond what the applicable statute

expressly and clearly declares.

FACTS RP filed a case in the CFI to collect from Sps. Antoion and Clara Pastor,

deficiency income taxes for years 1955-1959 amountng to P17,117.08 + 5%

surcharge + 1% monthly interest and costs.

Sps Pastors defense in their Answer:

- there was an assemssment but no liability therefor

- they availed of the tax amnesty under PD Nos. 23, 213 and 370 and paid

corresponding amnesty taxes

- that Government is in estoppel to demand and compel further payment of

income taxes

ISSUEWhether or not the payment of deficiency income tax under PD 23 and the acceptance by

the Government operated to divest the Government the right to further recover from the

taxpayer, even if there was an existing assessment against the latter at the time the

amnesty tax was paid. YES. BY ACCEPTING THE PAYMENT OF AMNESTY INCOME

TAXES, GOVERNMENT WAIVED ITS RIGHT TO FURTHER RECOVER DEFICIENCY

INCOME TAXES.

RTC:

- Defendants had settled their income tax deficiency for the years 1966 to 1959

under PD 213 as evidenced by the Annual Income Tax Returns Summary

Statement and the Payment Acceptance Order with receipt.

o Tax amnesty payment was made by defendants under PD 213, hence

it had the effect of remission of the Income Tax deficiency

o PD 213 did not make any exceptions nor impose any conditions for

application. Revenue Regulation 7-73 which excludes taxpayers is

null and void because there was nothing in the LOI which can be

construed as authority for the BIR to introduce exceptions

CA

Dismissed Governments appeal

- Acceptance of the tax amnesty payment operated to divest the Government of

its right to further recover- Revenue Regulation 7-73 providing for an exeption to the coverage of PD 213

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is null and void for being contrary to or restrictive of the clear mandate of PD

213

SC

Petition is devoid of merit

- PD 213 not merely granted an exemption but an amnesty for their past tax

failings

- The Government is estopped from collecting the difference between the

deficiency tax assessment and the amount already paid by them as amnesty

tax.

- [Kindly refer to Notes above for the Courts discussion on tax amnesty]