For filing a premature pleading that resulted in lack of jurisdiction, the Court of Tax Appeals (CTA) dismissed the petition filed by Pentagon Gas Corporation against the P27.67 million deficiency tax assessments issued by the Bureau of Internal Revenue (BIR) for taxable year 2014.
The BIR issued a warrant of distraint or levy (WDL) against Pentagon Gas on March 11, 2022 to collect P27,666,395.21 alleged income tax (IT) and value added tax (VAT) liabilities.
Pentagon Gas is a firm engaged in the manufacture and production of oxygen gas and acetylene gas and allied products, and to lease, operate and or manage, for or on account of other persons or entities, plants, equipment and machineries for the manufacture and production of oxygen and acetylene gas.
Despite Pentagon Gas' request for reconsideration, the warrants of garnishment (WoGs) were later issued by the BIR and addressed to various banks, informing them that Pentagon Gas' accounts will be garnished to cover its payment of deficiency taxes.
Pentagon Gas then raised the issue before the CTA, arguing that the BIR's right to assess had already prescribed. Citing Section 203 of the National Internal Revenue Code (NIRC) of 1997, Pentagon Gas said that the BIR only had three years from the filing of the return to assess it.
In its decision, the CTA dismissed the petition for lack of jurisdiction.
"Succinctly, when a taxpayer files a petition for review before the CTA without validly contesting the assessment with the Commissioner of Internal Revenue, the appeal is premature, and the Court has no jurisdiction over it," the CTA ruled.
Even if the tax court would assume jurisdiction over the case, it said that it remains "unconvinced" that the period to assess had already prescribed and that the resulting assessments of the BIR are null and void.
The 32-page decision was written by Associate Justice Jean Marie Bacorro-Villena with the concurrence of Presiding Justice Roman G. Del Rosario.