118 Adamson vs. CA (GR No. 120935, May 21, 2009)
118 Adamson vs. CA (GR No. 120935, May 21, 2009)
118 Adamson vs. CA (GR No. 120935, May 21, 2009)
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* FIRST DIVISION.
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PUNO, C.J.:
Before the Court are the consolidated cases of G.R. No.
120935 and G.R. No. 124557.
G.R. No. 120935 involves a petition for review on
certiorari filed by petitioners LUCAS G. ADAMSON,
THERESE JUNE D. ADAMSON, and SARA S. DE LOS
REYES (private respondents), in their respective capacities
as president, treasurer and secretary of Adamson
Management Corporation (AMC) against then
Commissioner of Internal Revenue Liwayway Vinzons-
Chato (COMMISSIONER), under Rule 45 of the Revised
Rules of Court. They seek to review and reverse the
Decision promulgated on March 21, 1995 and Resolution
issued on July 6, 1995 of the Court of Appeals in CA-G.R.
SP No. 35488 (Liwayway Vinzons-Chato, et al. v. Hon.
Judge Erna Falloran-Aliposa, et al.).
G.R. No. 124557 is a petition for review on certiorari
filed by the Commissioner, assailing the Decision dated
March 29, 1996 of the Court of Appeals in CA-G.R. SP No.
35520, titled Commissioner of Internal Revenue v. Court of
Tax Appeals, Adamson Management Corporation, Lucas G.
Adamson, Therese June D.
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president or other principal officer, and shall be sworn to by such officer and by the
treasurer or assistant treasurer.
x x x
(D) Return on Capital Gains Realized from Sale of Shares of Stock.—Every
corporation deriving capital gains from the sale or exchange of shares of stock not traded
thru a local stock exchange as prescribed under Sections 24 (e) 2 A, 25 (a) (6) (C) (i), 25(b)
(5)(C) (i), shall file a return within thirty (30) days after each transactions and a final
consolidated return of all transactions during the taxable year on or before the fifteenth
(15th) day of the fourth (4th) month following the close of the taxable year.
4 SECTION 110. Return and Payment of Value-Added Tax.—
(A) Where to File the Return and Pay the Tax.—Every person subject to value-added
tax shall file a quarterly return of his gross sales or receipts and pay the tax due thereon
to a bank duly accredited by the Commissioner located in the revenue district where such
person is registered or required to be registered. However, in cases where there are no
duly accredited agent banks within the city or municipality, the return shall be filed and
any amount due shall be paid to any duly accredited bank within the district, or to the
Revenue District Officer, Collection Agent or duly authorized Treasurer of the city or
municipality where such taxpayer has his principal place of business. Only one
consolidated return shall be filed by the taxpayer for all the branches and lines of
business subject to value-added tax. If no tax is payable because the amount of input tax
and any amount authorized to be offset against the output tax is equal to or is in excess
of the output tax due on the return, the taxpayer shall file the return with the Revenue
District Officer, Collection Agent or authorized municipal treasurer where the taxpayer’s
principal place of business is located.
(B) Time for filing of return and payment of tax.—The return shall be filed and the
tax paid within 20 days following the end of each quarter specifically prescribed for a
VAT-registered person under regulations to be promulgated by the Secretary of Finance:
Provided, however, That any person whose registration is cancelled in accordance with
paragraph (e) of Section 107 shall file a return within 20 days from the cancellation of
such registration.
(C) Initial returns.—The Commissioner may prescribe an initial taxable period for
any VAT-registered person for his first return, which in no case shall exceed 5 months.
5 Supra note 3 at pp. 588-590.
Section 100. Value-Added Tax on Sale of Goods.—
(A) Rate and Base of Tax.—There shall be levied, assessed and collected on every
sale, barter or exchange of goods, a value-added tax equivalent to 10% of the gross selling
price or gross value in money of the goods or properties sold, bartered or exchanged, such
tax to be paid by the seller or transferor: Provided, That the following sales by VAT-
registered persons shall be subject to zero percent (0%):
(1) Export sales; and
(2) Sales to persons or entities whose exemption under special laws or international
agreements to which the Philippines is a signatory effectively subjects such sales to
zero rate.
“Export Sales” means the sale and shipment or exportation of goods from the
Philippines to a foreign country, irrespective of any shipping arrangement that may be
agreed upon which may influence or determine the transfer of ownership of the goods so
exported, or foreign currency denominated sales. “Foreign currency denominated sales,”
means sales to nonresidents of goods assembled or manufactured in the Philippines, for
delivery to residents in the
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Philippines and paid for in convertible foreign currency remitted through the banking
system in the Philippines.
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VOL. 588, MAY 21, 2009 33
Adamson vs. Court of Apepals
tion 252 (b) and (d) of the National Internal Revenue Code
(NIRC).8
AMC, Lucas G. Adamson, Therese June D. Adamson
and Sara S. de los Reyes filed with the DOJ a motion to
suspend proceedings on the ground of prejudicial question,
pendency of a civil case with the Supreme Court, and
pendency of their letter-request for re-investigation with
the Commissioner. After the preliminary investigation,
State Prosecutor Alfredo P. Agcaoili found probable cause.
The Motion for Reconsideration against the findings of
probable cause was denied by the prosecutor.
On April 29, 1994, Lucas G. Adamson, Therese June D.
Adamson and Sara S. de los Reyes were charged before the
Regional Trial Court (RTC) of Makati, Branch 150 in
Criminal Case Nos. 94-1842 to 94-1846. They filed a
Motion to Dismiss or Suspend the Proceedings. They
invoked the grounds that there was yet no final assessment
of their tax liability, and there were still pending relevant
Supreme Court and CTA cases. Initially, the trial court
denied the motion. A Motion for Reconsideration was
however filed, this time assailing the trial court’s lack of
jurisdiction over the nature of the subject cases. On August
8, 1994, the trial court granted the Motion. It ruled that
the complaints for tax evasion filed by the Commissioner
should be regarded as a decision of the Commissioner
regarding the tax liabilities of Lucas G. Adamson, Therese
June D. Adamson and Sara S. de los Reyes, and appealable
to the CTA. It further held that the said cases cannot
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Section 253. Attempt to evade or defeat tax.—Any person who willfully attempts in
any manner to evade or defeat any tax imposed under this Code or the payment thereof
shall, in addition to other penalties provided by law, upon conviction thereof, be fined not
more than ten thousand pesos or imprisoned for not more than two years, or both.
8 Id., pp. 1020-1021.
Section 252. General provisions.
x x x
(b) Any person who willfully aids or abets in the commission of a crime penalized
herein or who causes the commission of any such offense by another, shall be liable in the
same manner as the principal.
x x x
(d) In the case of associations, partnerships, or corporations, the penalty shall be
imposed on the partner, president, general manager, branch manager, treasurer, officer-
in-charge, and employees responsible for the violation.
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9 Rollo, p. 65.
10 Id., at p. 64.
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VOL. 588, MAY 21, 2009 35
Adamson vs. Court of Apepals
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15 Id.
“Sec. 222. Exceptions as to Period of Limitation of Assessment and Collection
of Taxes.—
(a) In the case of a false or fraudulent return with intent to evade tax
or of failure to file a return, the tax may be assessed, or a proceeding in
court for the collection of such tax may be filed without assessment, at any
time within ten (10) years after the discovery of the falsity, fraud or
omission: Provided, That in a fraud assessment which has become final
and executory, the fact of fraud shall be judicially taken cognizance of in
the civil or criminal action for the collection thereof.
(b) If before the expiration of the time prescribed in the Section 203 for
the assessment of the tax, both the Commissioner and the taxpayer have
agreed in writing to its assessment after such time, the tax may be
assessed within the period agreed upon. The period so agreed upon may be
extended by subsequent written agreement made before the expiration of
the period previously agreed upon.
(c) Any internal revenue tax which has been assessed within the
period of limitation as prescribed in paragraph (a) hereof may be collected
by distraint or levy or by a proceeding in court within five (5) years
following the assessment of the tax.
(d) Any internal revenue tax, which has been assessed within the
period agreed upon as provided in paragraph (b) hereinabove, may be
collected by distraint or levy or by a proceeding in court within the period
agreed upon writing before the expiration of the five (5)-year period. The
period so agreed upon may be extended by subsequent written agreements
made before the expiration of the period previously agreed upon.
(e) Provided, however, That nothing in the immediately preceding
Section and paragraph (a) hereof shall be construed to authorize the
examination and investigation or inquiry into any tax return filed in
accordance with the provisions of any tax amnesty law or decree.”
16 Id.
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more, Section 205 of the same Code clearly mandates that the
civil and criminal aspects of the case may be pursued
simultaneously. In Ungab v. Cusi,20 petitioner therein sought the
dismissal of the criminal Complaints for being premature, since
his protest to the CTA had not yet been resolved. The Court held
that such protests could not stop or suspend the criminal action
which was independent of the resolution of the protest in the
CTA. 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.
Private respondents insist that Section 222 should be read in
relation to Section 255 of the NIRC,21 which penalizes failure to
file a return. They add that a tax assessment should precede a
criminal indictment. We disagree. To reiterate, said Section 222
states that an assessment is not necessary before a criminal
charge can be filed. This is the general rule. Private respondents
failed to show that they are entitled to an exception. Moreover,
the criminal charge need only be supported by a prima facie
showing of failure to file a required return. This fact need not be
proven by an assessment.
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26 An Act Expanding The Jurisdiction Of The Court Of Tax Appeals (CTA),
Elevating Its Rank To The Level Of A Collegiate Court With Special Jurisdiction
And Enlarging Its Membership, Amending For The Purpose Certain Sections Of
Republic Act No. 1125, As Amended, Otherwise Known As The Law Creating The
Court Of Tax Appeals, And For Other Purposes.
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