[FAILURE OF THE PROSECUTION TO SHOW THAT THE PAN & FAN WERE MAILED TO & SERVED UPON THE ACCUSED, THE ASSESSMENT IS RENDERED VOID] [FAN IS INVALID IF IT DOES NOT BEAR A DUE DATE FOR THE PAYMENT OF TAX AS IT NEGATES THE BIR'S DEMAND FOR PAYMENT]

Accused Errizaro Shoe Corporation (ESC) and its officers, Efren Rizalito Lazaro and Edna Lazaro were involved in a criminal case for violation of the 1997 Tax Code, as amended, for their alleged refusal and failure to pay the basic deficiency Value-Added Tax (VAT). The sole issue for resolution is whether the Accused willfully failed to file VAT returns and to pay the corresponding tax therein. In ruling, to determine whether the Accused ESC willfully failed to pay deficiency VAT, it is proper to ascertain first whether the assessment issued by the Bureau of Internal Revenue (BIR) is valid. Here, there is no proof that the Preliminary Assessment Notice (PAN) and Final Assessment Notice (FAN) were mailed to and served upon the Accused ESC or its officers. Moreover, the Formal Assessment Notice (FAN) does not bear a due date or deadline for the payment of deficiency VAT. With the glaring failure of the Prosecution to prove that the Accused ESC was served with a valid FAN, the Court finds that the Accused has no obligation to pay the deficiency VAT as indicated in the void FAN. Stated differently, the failure of the Accused to pay the deficiency VAT assessed in a void FAN does not give rise to any criminal or civil liability. Since there is no valid assessment to speak of, the third element (i.e., taxpayer’s failure to pay the tax was willful) of the crime of Willful Failure to Pay Tax was not met. Hence, the Accused ESC and its officers were ACQUITTED without any civil liability. [PEOPLE OF THE PHILIPPINES VS. ERRIZARO SHOE CORPORATION, EFREN RIZALITO M. LAZARO & EDNA S. LAZARO, CTA CRIMINAL CASE NO. O-704, SEPTEMBER 28, 2022]

[THE IMPOSITION OF TAX RATES, OVER & ABOVE THE CEILING RATES IMPOSED BY A STATUTE IS BEYOND THE SCOPE OF CORPORATE POWERS OF THE LOCAL GOVERNMENT UNIT] [LBT EXCEEDING THE RATE UNDER LGC IS NOT VALID]

Petitioners City of Angeles and the City Treasurer of Angeles filed a Petition for Review praying for the reversal of the earlier Decision of the Regional Trial Court (RTC) invalidating the Local Business Tax (LBT) assessment of the Respondents Super Shopping Market, Inc., and Sanford Marketing Corporation. The Petitioners argued that the 3.3% and 1.65% tax rate imposed is valid pursuant to Section 191 of the Local Government Code (LGC). On the other hand, Respondents countered that the Petitioners cannot impose LBT on retailers of non-essential commodities at a rate exceeding the adjustment allowed by LGC. In ruling, the maximum tax rates that can be imposed by municipalities for retailers of essential commodities as stated under Section 143(c) of the LGC, as amended, are as follows: with gross sales or receipts for the preceding calendar year of Php 400,000 or less, the annual rate is 1%; and if more than Php 400,000, the rate is 0.5%. Meanwhile, the maximum tax rates that a city may impose may exceed the maximum rates allowed for the province or municipality by not more than 50%. However, a perusal shows that the tax rates imposed by the Angeles City Revenue Code on retailers exceeded the maximum allowable rates of tax prescribed by the statute. The Court held that the RTC’s computation of the tax refund is supported by law and jurisprudence, and therefore valid, albeit with slight modifications. Consequently, the Petition was DENIED, and the earlier Decision of the RTC was AFFIRMED WITH MODIFICATION. [THE CITY OF ANGELES & THE CITY TREASURER OF ANGELES VS. SUPER SHOPPING MARKET, INC. & SANFORD MARKETING CORPORATION, CTA AC NO. 237, SEPTEMBER 28, 2022]

[SALE AT PUBLIC AUCTION OF ABANDONED RICE] [NOTWITHSTANDING THE FAILURE TO ACKNOWLEDGE DULY SENT NOTICES & COMMUNICATIONS TO THE ACCREDITED IMPORTER’S REGISTERED ELECTRONIC MAIL ADDRESS, THE SAME SHALL BE DEEMED RECEIVED UPON SUCCESSFUL TRANSMITTAL THEREOF]

Petitioner Silverice Trading Corporation filed a Petition for Review impugning the Consolidated Order and Resolution of the Respondent Commissioner of Customs, which affirmed the Decree of Abandonment and approved the public auction of the Petitioner’s rice shipment. The Petitioner maintained that Section 1129 of the Customs Modernization and Tariff Act (CMTA) requires that notice to claim goods must be given to the owner, importer, or consignee thereof before Respondents may declare abandonment of said goods in favor of the government. In ruling, to set Section 1129 of the CMTA in motion, the following conditions must concur: (1) the assessed duties, taxes, and other charges were paid by the owner, importer, consignee, or interested parties on the imported goods; (2) due notice by the customs authorities to claim such goods must be served upon the owner, importer, consignee, or interested parties thereof; and (3) the owner, importer, consignee, or interested parties failed to claim said goods within 30 days from the payment of assessed duties, taxes, and other charges. These conditions were met. The contention of the Petitioner that the e-mail notice is invalid since it did not acknowledge the receipt thereof, nor did the Respondents present an affidavit of the party serving the same, was held to be specious. Hence, the Decree of Abandonment was issued in consonance with Section 1129 of CMTA, and the approval of the public auction of the rice shipments abandoned by the Petitioner was, as well, warranted. Consequently, the Petition was DENIED. [SILVERICE TRADING CORPORATION VS. HON. REY LEONARDO GUERRERO, IN HIS OFFICIAL CAPACITY AS COMMISSIONER OF CUSTOMS, ATTY. ERASTUS SANDINO AUSTRIA, IN HIS OFFICIAL CAPACITY AS DISTRICT COLLECTOR, MANILA INTERNATIONAL CONTAINER PORT & THE BUREAU OF CUSTOMS, CTA CASE NO. 10088, SEPTEMBER 22, 2022]