CTA grants BIR's petition vs RTC ruling on businessman
The Court of Tax Appeals (CTA) has remanded to the La Union regional trial court (RTC) the case of a businessman for the determination of the correct taxes he should pay the Bureau of Internal Revenue (BIR) for 2018.
The RTC based in San Fernando City had earlier found Datu Amerhassan Lucman, as president of Royal AGL Quality Foods, Inc., guilty for failure to supply correct and accurate information on his company's annual income tax return and value-added tax returns for taxable year 2018 and was sentenced to pay a fine of P10,000.
The BIR later filed a motion for partial reconsideration before the RTC assailing the non-imposition of civil liability against Lucman. It asked the trial court to order Lucman to settle his delinquent accounts and penalties -- income tax of P868,639.07, VAT of P440,250.95, and additional penalty of P100,000.
When the BIR’s motion was denied by the RTC, it elevated the case to the CTA.
The BIR told the CTA that the RTC committed grave abuse of discretion. It said the RTC should have at least provided a legal explanation why it did not impose any civil liability even though the accused (Lucman) pleaded guilty.
The CTA granted the BIR’s petition.
The tax court said: "It is imperative for courts to prescribe the proper penalties when convicting the accused and to impose the appropriate civil liabilities. Consequently, the Order dated July 5, 2023 is invalid insofar as it failed to impose the statutory penal and civil liabilities on the accused."
It also said: “Respondent (RTC) is directed to conduct proceedings for the determination of the civil and penal liabilities of accused in accordance with this decision, and to resolve the same with reasonable dispatch.”
The CTA’s 19-page decision was written by Associate Justice Catherine T. Manahan with the concurrence of Associate Justices Marian Ivy F. Reyes Fajardo and Henry S. Angeles.