The Court of Tax Appeals (CTA) has scraped the more than P172 million tax liabilities of a subsidiary of Jollibee Food Corporation which has more than 250 branches in the country and the United States.

In affirming the decision of the Third Division, the court en banc said the books of accounts of Red Ribbon Bakeshop were audited by unauthorized Bureau of Internal Revenue's (BIR) large taxpayers service (LTS) examiners.

Court records showed the LTS issued a letter of authority (LA) to investigate Red Ribbon Bakeshop to a group of revenue officers (ROs) who were latter transferred elsewhere without finishing the audit.

The investigation was continued by another set of examiners based on a memorandum of assignment (MOA) signed by a division chief of the LTS using the same LA issued to the previous examiners.

In a 23-page decision, Associate Justice Lanee C. Cui-David, who penned the resolution, stated the LA should had been changed with the names of new ROs as required under Sections 6, 10 and 13 of the Tax Code and implemented by RMO 43-90.

"The practice of transferring ROs who are the original authorized named in the LA and substituting them with new ROs who do not have separate LA issued in their names is a usurpation of the statutory power of the BIR commissioner and his authorized representatives," said David who was a former revenue deputy commissioner before her appointment to the CTA early this year.

The bakeshop deficiency tax assessments covered income and value-added taxes for 2009.