The Court of Tax Appeals (CTA) en banc has cancelled the P53-million tax collection case imposed by the Bureau of Internal Revenue (BIR) against the president of one of the country’s largest logistics and transport companies for violating his right to due process.
The BIR filed the civil suit against Jose Eduardo Delgado of Delbros Inc. of Port Area, Manila after the court’s First Division dropped the tax evasion complaint against the business executive.
The BIR argued that the court in division did not rule on the civil aspect of the case when it dismissed the criminal charges against Delgado and his company.
It said that the “court erred in not ruling the right of the BIR to collect the deficiency taxes based on valid assessment which has become final, executory and demandable.”
The deficiency taxes covered income and value-added taxes for 2008.
The taxpayer insisted on not receiving assessment notices, which the full court agreed with when revenue witnesses failed to presen proof of ever sending the preliminary and final notices.
They could not present the registry card issued by the Bureau of Post, or the registry return card signed by the taxpayer, or his authorized representative during the trial.
“Section 228 of the Tax Code requires that taxpayers shall be informed in writing of the law and the facts on which the assessment is made, otherwise the assessment shall be void,” said Associate Justice Juanito Castaneda, Jr. who wrote the 20-page decision.
The resolution also explained that the criminal case was earlier dismissed due to the failure of the prosecutors to prove “willful neglect” in the non-payment of the tax debts as the taxpayer himself complained of not receiving any assessment notice.