The Court of Tax Appeals (CTA) has erased the more than P13 million tax liabilities of an international hauling company for the failure of the Bureau of Internal Revenue (BIR) to follow its own audit guideline.

The court's Second Division said the deficiency tax assessment of AGS Four Winds International Movers, Inc., formerly Executive International Movers, Inc. of Bagumbayan, Quezon City, was based on a revenue memorandum of assignment (RMA) and not on letter of authority (LA) as required under Revenue Memorandum Order 43-90.

Associate Justice Lanee Cui-David, who penned the decision, dismissed the explanation of a BIR witness that the RMA was issued by his district officer to continue the investigation in view of the transfer of the original revenue officer who had the LA.

"The use of RMA to audit a taxpayer usurped the authority of the revenue commissioner and his authorized representative to issue LA," said David, a former revenue deputy commissioner for information technology.

She said the original LA should have been replaced with a new LA with the names of designated officers, thus protecting the due process right of the taxpayer.

The deficiency taxes covered income, value-added and final withholding for the whole year of 2009.

Associate Justices Jean Marie A. Bacorro-Villena and Juanito C. Castaneda, Jr. jointly signed and agreed with the decision.