PRESUMPTIVE ASSESSMENT SHALL BE PREPARED BY THE CITY TREASURER IF THERE IS A FAILURE OF TAXPAYER TO PROVIDE PERTINENT DOCUMENTS

Petitioner Smart Communications, Inc. filed a Petition for Review challenging the CTA 2^nd Division’s earlier Decision and Resolution affirming the Resolution of the Makati Regional Trial Court (RTC-Makati), which granted the Respondent Makati City’s Motion for Production or Inspection of Documents. Petitioner argued that the documents for production or inspection are irrelevant and immaterial to the resolution of the case. On the other hand, the Respondent differed and countered that the requested documents are relevant and material. The issue in the case before RTC-Makati is whether Makati City Treasurer erred in assessing the Petitioner for deficiency franchise taxes based on its total nationwide revenue as appearing in its Income Tax Returns and not merely based on gross annual receipts within Makati City. Hence, the requested documents would probably aid the RTC-Makati in the determination of the payment of the correct local franchise taxes. In ruling, the Court held that the City Treasurer’s power to require the submission of documents is necessary to enforce Makati local tax laws, by examination of books of accounts and pertinent records, to determine and ascertain the correct tax liability of any person. In view of the failure of the Petitioner to provide the requested documents, Makati City presumed Petitioner to be liable for deficiency franchise taxes based on available records. In reviewing the City Treasurer’s assessment, RTC-Makati must make its determination of the taxpayer’s tax liabilities and may require the production of documents to aid its resolution of the principal issue of the correct amount of deficiency local franchise taxes to be paid. Hence, no grave abuse of discretion was committed by RTC-Makati in granting the Motion for Production or Inspection of Documents. Consequently, the Petition was DENIED. [SMART COMMUNICATIONS, INC. VS. HON. JUDGE AUGUSTO JOSE Y. ARREZA AS ACTING PRESIDING JUDGE OF THE REGIONAL TRIAL COURT, BRANCH 133, MAKATI CITY, HON. JESUSA E. CUNETA, IN HER CAPACITY AS OIC CITY TREASURER OF MAKATI CITY & CITY OF MAKATI, CTA EN BANC CASE NO. 2386, AUGUST 15, 2022]

ELEMENTS OF TECHNICAL SMUGGLING

Accused-Appellant Ian Chirstopher Miguel y Bayoneta appealed the Joint Decision and Order convicting him of the crime of violation of Section 3601 of the Tariff and Customs Code of the Philippines (TCCP), as amended. The Accused argued that the trial court erred in convicting him of smuggling because Silver Glade Enterprises is not a registered importer of garlic and was not issued a Sanitary and Phytosanitary (SPS) Import Clearance. The Office of the Solicitor General (OSG) countered that the elements of smuggling were complied with in this case. In ruling, Section 3601 of the TCCP, punishes the crime of smuggling, which is committed by any person who: (1) fraudulently imports or brings into the Philippines any article contrary to law; (2) assists in so doing any article contrary to law; or (3) receives, conceals, buys, sells, or in any manner facilitate the transportation, concealment, or sale of such goods after importation, knowing the same to have been imported contrary to law. The elements of the 2^nd type of smuggling are as follows: (1) there is importation into the Philippines of any article; (2) contrary to law; (3) done fraudulently; and (4) the Accused assisted in the importation. A perusal of records revealed that the 3^rd element of fraud was not satisfied. No willful or deliberate intent to defraud the Government of the correct taxes and duties to be paid can be inferred from the Accused. The only issue is the lack of SPS Import Clearance, which is borne of the Accused’s erroneous interpretation of an Administrative Order of the Department of Agriculture. Considering that the Prosecution was not able to establish that all the elements of the crime of smuggling were satisfied, the Appeal was GRANTED.  Consequently, the Accused was ACQUITTED of the crime of Violation of Section 3601 of the TCCP. [PEOPLE OF THE PHILIPPINES VS. IAN CHRISTOPHER MIGUEL Y BAYONETA, MARCELO N. GOMEZ, CTA CRIMINAL CASE NO. A-7, AUGUST 10, 2022]

A PARTY ADVERSELY AFFECTED BY A DECISION OR RULING OF THE COMMISSIONER OF CUSTOMS MAY FILE AN APPEAL WITH THE CTA WITHIN 30 DAYS AFTER THE RECEIPT OF SUCH DECISION OR RULING

Petitioner Monacat Trading, an accredited importer, filed a Petition for Review seeking to reverse the Respondent Commissioner of Customs’ Order, denying its Motion for Reconsideration. Petitioner argued that there was no probable cause for the issuance of the seizure and forfeiture order. Likewise, there was no undervaluation because it used the declared transaction values from the commercial invoices as the basis for the dutiable values of the subject vehicles. On the other hand, the Respondent countered that the Court lacks jurisdiction. In ruling, the Court held that it has no jurisdiction over the instant case. Section 11 of Republic Act No. 1125 (“An Act Creating the Court of Ta Appeals”), as amended, mandates that the period to file an appeal to the Court of Tax Appeals is 30 days from receipt of the assailed decision or ruling. Petitioner alleged in its Petition that it received the Respondent’s Order on May 3, 2018. It, thus, had 30 days from receipt thereof to file the Petition, or until June 2, 2018. In support of its claim on the timeliness of the appeal, Petitioner offered as evidence the Respondent’s Order (exhibit). However, the Court denied the admission of the exhibit as it was not duly identified by a competent witness. With the denial of admission of the exhibit, Petitioner was, thus, left with no evidence to prove that it indeed received the Respondent’s assailed Order on the date claimed. As Petitioner failed to clearly establish the timely filing of its Petition, it must perforce fail. Assuming the Court has jurisdiction, contrary to the Petitioner’s argument, the Court still finds that there exists probable cause for seizure and/or forfeiture of the subject vehicles for misdeclaration and undervaluation. Consequently, the Petition was DENIED. [MONACAT TRADING VS. COMMISSIONER OF CUSTOMS, BUREAU OF CUSTOMS, CTA CASE NO. 9851, AUGUST 4, 2022]

[THE AUTHORITY TO RELEASE IMPORTED GOODS IS NOT NECESSARY AT THE TIME OF THE SHIPMENTS’ ARRIVAL] [THE IMPORTER’S SWORN STATEMENT SHALL BE SUBMITTED TOGETHER WITH THE IMPORT ENTRY/SINGLE ADMINISTRATIVE DOCUMENT FOR EACH SHIPMENT FOR VALIDATION AND CLEARANCE PURPOSES] [A PERMIT TO OPERATE IS A CONDITION SINE QUA NON BEFORE ENGAGING IN BUSINESS AS AN IMPORTER OF AUTOMOBILES]

Petitioner Gamma Gray Marketing filed a Petition for Review seeking to cancel the Respondent Bureau of Customs Commissioner’s earlier Decision. Petitioner contended that the Importer’s Sworn Statement (ISS) and the Authority to Release Imported Goods (ATRIG) are not required prior to importation, but only necessary before the release of the subject motor vehicles from customs custody. On the other hand, the Respondent countered that it is legally impossible for the Petitioner to submit the required ISS and the ATRIG covering the subject imported motor vehicles because it lacked the necessary BIR Permit to Operate as an Importer of Automobiles. Also, given that the Petitioner grossly undervalued its importations, the Respondent insisted that the subject motor vehicles were illegally imported and validly subjected to seizure and forfeiture by the government. In ruling, the Court held that the ATRIG is not necessary upon the arrival of the shipments as long as the custody thereof is still with the Respondent. However, this is not the case for the ISS because it forms an integral part of the import/shipping documents submitted at the port of entry. The purpose of such ISS requirements is to obtain an accurate valuation of the imported goods and to ensure that all duties, taxes, and other charges due on the imported goods are properly collected. Moreover, before engaging in the business of importing automobiles, an importer must secure a BIR Permit to Operate, and such permit is a pre-requisite for the issuance of the ATRIG. Taking into consideration the discrepancies discovered during value verification that evince intent to under-declare the subject shipments’ value, plus the fact that the Petitioner imported the subject motor vehicles without securing the requisite BIR Permit to Operate as Importer of Automobiles, the Court is inclined to rule that there exists probable cause for the issuance of Warrants of Seizure and Detention against the subject imported motor vehicles. Consequently, the Petition was DENIED. [GAMMA GRAY MARKETING VS. BUREAU OF CUSTOMS, REPRESENTED BY ITS COMMISSIONER, ISIDRO S. LAPENA, CTA CASE NO. 9855, JULY 27, 2022]