CTA Case No. 2723 (Decision)

- REPUBLIC OF THE PHILIPPIMIB COURT OF TAX APPEALS QUEZON CITY PROCTER & GAMBLE PHILIPPINE C.T.A. CASE NO. 2723 MANUFACTURING CORPORATION, Petitioner, - verSLIS - COMMISSIONER OF INTERNAL REVENUE, Respondent. X- - - - - - - - - - - X DE C 0N In this appeal, petitioner ~eeks the review of the decision of respondent dated August 7, 1965 denying the protest against the assessment of def ic: ienc:y ~ nu f ac: turer � s sa 1es ta>t and sure harge for the years 1962 to 1966. It appears that petitioner is ~ domestic corporation engaged, among others, in the manufacture of vegetable lard, margarine, edible cooking oil, soap, toothpaste, etc. On the basis of the report and recommendation and suppletory memorandum of the revenue examiners, and having determined that petitioner wilfully failed to pay the correct sci\les tau:es manLifac:turer for the years 1962 to 1963, and the failure to pay the correct sales t.:n:es on taxable

DECISION CTA CASE NO. 2723 - 2- sales for 1964, 1965 and 1966 in violation of Sections 183 and 186, penalized under Section 209, respectively, all of the Tax Code, respondent issued a letter dated August 21, 1970 assessing and demanding from petitioner the aggregate amount of P18,401,232.09, inclusive of surcharges for the said years. (Exhs. A & 3, pp. 272-273, BIR rec.) In a letter dated December 8, 1970, petitioner protested the assessment on grounds showing lack of factual and legal basis. (Exhs. G 8< 4, pp. 292- 333, BIR rec.) In a letter dated August 7, 1975, respondent rendered his final decision on the disputed assessment denying the protest and reiterating the demand for the amount of P18,401,232.09. (Exhs. J & 5, pp. 343-353, BIR rec.) Hence, this appeal. The issues for resolution in this controversy are as follows: 1. Whether or not cooking oi 1 is legally subject to the 7% sales tax; 2. Whether or not the disallowance of the market value of crude coconut oil deducted in compt.tting the ta>:able sales of manufactured soap, lard, margarine, etc. is justifiedJ 3. Whether or not the disallowance of the cost of certain imported raw materials not covered by official l0u

DECISION CTA CASE NO. 2723 - 3- ~eceipts evidencing payment of advance sales tax has legal and factual basig; 4. Whether or not the disallowance of the cost of ce~tain raw materials not fo~ming pa~t of the finished p~oducts is justified a 5. Whether or not the disallowance of the cost of ce~tain ~aw materials not ta>:ed under Sections 186 and 189 of the Tax Code is proper~ 6. Whether or not petitioner has complied with the ~equi~ement of separate bi 11 ing of sales tax in the issuance of the invoices to its custome~sa 7. Whethe~ o~ not petitioner unde~decla~ed i t s sales of cooking oi 1 for the yea~s in questiona 8. Whethe~ o~ not the ~ight to sales tax for the yea~s assess deficiency 31, 1965 has already 1962 to August p~escribed~ and 9. Whethe~ o~ not the imposition of the 50% su~cha~ge is justified in this case. Set forth a~e the disct.lssions of the mbove issues. Petitioner contends that cooking oil subject only to the millers tax of 2% under Section 189 of the Tax Code since th~ law imposes said tax on coconut oil, among other products without distinction and subjecting cooking oil to the 7':1. sales tax is unjustified. Respondent on the other hand~ asse~ts that the coconut oil subject to the 2':1. millers tax refe~s to

� ,j DECISION CTA CASE NO. 2723 - 4- the product of coconut oi 1 mi 11 s operators where copra is a by- product disposable as such and does not include cooking oil being a manufactured product which has undergone chemical or physical process before it becomes marketable, thus, subject to 7% s ales tax under Section 186 of the Tax Code. The i ssue is not new. The question has already been resolved in the case of Procter & Gamble Philippine Manufacturing Corporation vs. The Commissioner of Internal Revenue, C.T.A. Case No. 2740, September 30, 1985, where respondent withdrew the assessment for deficiency sales tax on cooking oil in view of BIR Ruling No. 203- 000-00-098-83 dated June 8, 1983, holding that proprietors or operators of coconut oil mills are subject to the millers tax of 2% and not to the 7% sales tax assessed against petitioner. In a more recent case, thi s Court con formed to the said ruling as the law c learly imposes the 2% millers ta>: on all coconut oil manufactured or processed or milled by proprietors or operators of oil mills without distinction, it is enough that what is produced is coconut oil; and considering that the above ruling is a contemporaneous and practical interpretation of Section 189 of the Tax Code relative to coconut oil, it should be respected and not to be disturbed ....

DECISION CTA CASE NO. 2723 - 5- e>:cept for cogent reasons unless contrary to the statute or exceeding departmental authority and they are binding upon the Commissioner and taxpayer alike. (Please see Philippine Refining Company, Inc. vs. Commissioner of Internal Revenue, C.T.A. Cases Nos. 3148 & 3499.) 2. Di?.~.lJ..Pw~nce of the tnar~~ et value of cO� on Ll i;___Q...;!J_ \:.l?e_c2._J.._t,__t he manu fa c t u r t;;?_____Qf the f ini..�.b~�L.P.rodu�.ts. - Respondent disallowed the va 1ue o �f crude coconut oil used in the manufacture of soap, lard, margarine, toothpaste, etc. on the ground that said crude oil is not within the purview of Section 189 of the Tax Code and payment of the 2% millers tax is erroneous. Thus, respondent argued that said crude oil had not been covered by purchase invoice or invoices because petitioner itself is the miller and owner. And, considering that the manufacture of petitioner's products is a continuing process, there was no actual removal. In other words, the value of crude coconut oil used had not been duly established as there was not actual removal thereof within the contemplation of the law. We find the arguments of respondent unfounded. The fact that petitioner is the miller and owner, and because the manufacture of finished products is a continuing process, do not signify that there was 14.1

.f �~' DECISION CTA CASE NO. 2723 - 6- no removal of the coconut crude oil for the accrual of the tax under Section 189 of the Tax Code is not dependent on the actual sale of the products. As ruled by the Supreme Court in an analogous case: x x x The text of Section 189 of the Revenue Code indicates that actual sale of the product is not essential to the accrual of the ta>: since the ta>: is based on the actual selling price or market value of these articles at the time they leave the factory or mill warehouse without taking into account the reason why the article is withdrawn. The fact that the distillery and the SLigar mi 11 are in the same compound, does not prove that they are not independent units. It is not contended that all the sugar produced by the mi 11 is converted into alcohol; and the manufacture of alcohol from sugar is c:lear�ly distinct fr�om the processing of sugar cane into sugar. Since manufacture of alcohol does not have to be the manufacture of the sugar, ta>:wise the roLiting of sugar and molasses to the c:fisti llery is as mLICh a withdrawal of sugar from the central as a removal thereof for the purpose of selling it. (Collector of Internal Revenue vs. Central Azucarera de Tarlac, G.R. No. L-11760, July 31, 1958.) Moreover, the Supreme Court in the latest decision involving the same issLie under consideration, held: The attempt of the respondent Court to distinguish between a manufacturer and purchaser of coconut oil and to discriminate against the former is unwarranted and unreasonable. To deny to the petitioner the right to deduct the 2% miller's ta>: enjoyed by the other soap, 14~

DECISION CTA CASE NO. 2723 - 7- lard, and margarine manufacturers who, un 1 ike petitioner b~J.Y., instead of ru:g�1.\JJ::e ~ their raw materia 1s would discourage the establishment of integrated or self-sufficient industries. The State would be regressing from~ instead of progressing toward, the national goal of self-sufficiency. It is no argument for disallowing, for purposes of the sales ta>:, the deduction of the 2% miller's tax as part of the "tota 1 cost" of the coconut oi 1 used in the manLtfacture of lard, soap, and margarine, that the manufacturer (herein petitioner) would enjoy a "double advantage" because it may also deduct the 2% miller's tax from its gross income for purposes of income tax. Although the petitioner� denies that it deducted said mi 11 er � s ta>: from its gross income for income ta>: purposes, the point is, even if it did deduct the 2% ta>:, the "double advantage" reaped by it would be its just reward for having integrated its industry." (Procter 8< Gamble Philippine Manufacturing Corporation vs. The Commissioner of Internal Revenue and the Cour� t of Ta>: Appeals, G.R. No. L-33425, January 20, 1989.) We see no cogent reason to deviate from the above precedents. 3� s.: Di.�~.!1...o~an cg.___p f__.tb.~__ 0�_1;__p_f__ c e r t a_.t n !.m.P..9I teq._.r.~_m_e..t._er i a 1 s -~-�tt hou_t__ad vance sa 1 es_1;_@11_r:_~ceJ.,...Q.!;.?- - Respondent disallowed as deduction the cost of certain imported raw materials mainly on the ground that payments of the advance sales tax thereon were not duly covered by official receipts. According to respondent's examiners, the fact that they came into possession of a confidential letter Exhibit 14u

DECISION CTA CASE NO. 2723 - 8- 10, which appears to be an instruction on "how much of the sa 1es should be reduced for imported tide for sales ta>: pLtrposes" made them more certain that no advance sales ta>t payments were ever made on these raw materials. Petitioner on the other hand, asserts that there is no legal or factual basis for the disallowance of the cost of said raw materials. In support of this assertion, petitioner presented witness Celia Garcia who testified as follows: Q. On this issue of alleged missing advance sales tax receipt. I believe that BIR records has listing o �f all shipments or importations where advance sales tax receipts could not be produced. First of all, what records were presented to the BIR from which they obtained this listing of alleged missing tax receipts on importations? A. From our importation documents. Voluminous importation were examined by them. Q. What does these importation documents contain? A. They contain all data being required. Q. Are they in separate folders? A. Yes. Q. Letter of Credit? i4��

DECISION CTA CASE NO. 2723 - 9- A. Yes. Q. Declaration with the formal entry? A. Yes. Q. Is it a fact or is it true that the amount for which you cannot produce allegedly the advance sales ta>: receipts is that total alleged by the BIR? A. No. How could we possibly make importation without allegedly paying sales tax? We could not bring them out of the Customs. Q. You have importation a 11 eged 1y not covered by official receipts and they disallowed the total amount o �f - For the year 1963 - P988,028.79 For the year 1964 - P6,076,020.89 For the year 1965 - P6,600,805.40 These figures come up to? A. Almost thirteen million. Q. What can you say about this fantastic amount which you allegedly failed to pay AST? A. As I mentioned before, I don� t believe a big firm as Procter & Gamble PMC could possibly bring in these materials without paying advance sales tax. Q. Were you able to locate these alleged missing receipts? A. Yes. Q. Do you have those of �f .ic ia 1 receipts available?

DECISION CTA CASE NO. 2723 - 10 - A. Yes, in fact, ther-e was an ar-r-angement made with the BIR. We will confine the pr-esentation of official r-eceipts on those a hLmdr-ed thousand and above. Q. When you say a hundr-ed thousand and above, is it AST or- amount of impor-tation? A. Mar-k up landed cost. Q. So that the sales tax would be 7%? A. Yes. Q. Per- par-ticular- shipment? A. Yes. Q. Did you pr-esent copies of off ic ia 1 r-eceipts to the BIR? A. Yes, the total items which wer-e selected totals 59 shipments. Out of the total 59 shipments, we wer-e able to pr-esent to the BIR 43 official r-eceipts. Now, on the r-emaining i terns because we wer-e not able to secur-e tr-ue c:opies fr-om the Bur-eau of Customs, because of their- topsy-tur-vy r-ecor-ds, what we did was to pr-esent the cancelled checks of such shipment. Q. Ar-e these documents available in the ne>: t hear-ing? A. Yes. Q. I under-stand that copies wer-e given to BIR examiner-s as secondar-y evidence. Do you feel that they made use of the official r-eceipts given to them? A. I r-eally do not think they did.

DECISION CTA CASE NO . 2 723 -- l l ..... Q. Please scrutinize the records and see if they attached those? A. No. They are all working papers. (Please see t.s.n.~ pp. 25-28~ July 1~ .1980.) Witness �fur� t:.ht:-?r.. test.i. �fied c:Jn the c:l .i.~:::, allowi'.lnr:f.�~ of ~-~orne thing not c 1 i::\imecl as cleduc t.i.on ~ pr�-ror. ~;; in th12 computation by the eNam:.i.ner.. s ~ duplication of cl isa 11 owanc::e ~ .ill og i.ca 1 pr� esumpti.on wh.i.c h r-emi'.\.i.ns uncontr"DVf.?r. tecl. petitioner's witness and the evidence presented ( E>: hs. CCC -- DDDD ~ :i.nc:lur:.;.i.ve) ~ which show t:.h;:~t peti t.i.oner" pa.i.t:l thf.-? advl'\nC:E' ~;;a l �-?f..; ta>: on thf.-? r. aw mi'.\ ter.. .i �"~ 1 s ~ vito' '"' re r.: onv inc E.'d t. hat t:. he d i sal 1 ow.::\nc: e of the cos t of raw materials is baseless and unj ust .i �f iPd. 4� !)},_2,�:;\JJq~_9..r.:!.~.:. ~~ ... P .�t ... .<.::f~ CJ;.9..! . r..1.......r..9..".:1.......rD.9. .tf:?.t:.t . 9.J.S... D.<::!..t . :f.9.r.::_r_,_l..i... r.:!.9.......J:'9..r.:.ot.,......<::!.:.t ........t.:.h.f:.?........t ..:i..rJ. ,:i...s.h.~.9.....n.r.:: q..<J..~='�<.::...t .s. -- Respondent disallowed as deduction the cost o f certain imported raw materials on which the 7% sales tax had been paid for the years under review on the ground that said materials are supplies and rnerr2 agents o �f produc t.ion CH" do not gel i n to the cornposi tion of the �fin is heel pr�oduc: ts. Ot.ht.~r� vJi s e stated~ disallowance of said materials not forming part of the finished products is justified. We disagree with respondent. 14t

DECISION CTA CASE NO. 2723 - 12 - The controlling provision of Section 186 of the Tax Code, as amended by Republic Act No. 6110, in part pertinent~ states: x x x That where the articles subject to tax under this section are manufactured out of materials likewise subject to tax under this section and section one hundred and eighty-nine~ the total cost of such materials~ as duly established, shall be deductible from th~ gross selling price or gross value in money of such manufactured articles. Under the foregoing provision~ i t is not necessary for the raw materials to become part of the �finished prodLtcts to be dedLtctible. To our mind, it ls enough that the said materials which had been subjected to the 7% sales tax were used in the manufacture of the finished products otherwise the interpretation would defeat the very purpose of said law, to wit: x x x that the purpose of Section 186 of the Internal Revenue code authorizing the deduction of the costs of materials manufactured from the gross selling price, is to avoid or prevent double taxation; that the purpose of the law is to prevent a second assessment of the percentage tax on materials that went into the production of the manufactLtred ar-ticles >: >: >e. (Tan Chiu vs. Coll. of Internal Revenue, 110 Phil. 910.) 5 � Q..~ S.�..llR.~.~o-~~�-. -�..Q.f__.._i;;_Q.?...t... _ .QJ_ ........c;..~...r:.t._.~.!.o.. _ ..r .~.~ l!l�...t.ff.!. ~.l.?.. _. n.Q..t.. -.:t~. ~.~.9. . ._t,.t n..Q.~.r_...J?..~.!;_.t..! 08 ....-.t.~.9._..Q.r: !..�~_.9...f..._j,:JJ.~.--T ~.?.L..!:;. Qf!..~. - Respondent disallowed the cost of certain raw materials basically for the reason that l4u

DECISION CTA CASE NO. 2723 - 13 - petitioner's suppliers have been paying the 3% contractor's tax under Section 191 and were no longer enjoying e>:emption under Republic Ac: t No. 901. He argued that since said raw materials were not taxed under Section 186 and 189, the deduction of the cost thereof is not in order. We find respondent stand untenable in the light o �f our decision in Procter Gamble Philippine Manufacturing Corporation vs. The Commissioner o �f Internal Revenue, C.T.A. Case No. 2740, ~.!::!.P.r..~. ' where the dedt.1cti bi 1 i ty raw materials has been succinctly disposed of as follows: Even assuming ~.r..9.!::Lf?nQ...g_ but without deciding it that only 3% tax was paid by the supplier�s as alleged by respondent., ther�e i s no va 1 id reason II'Jhy peti t.ioner should be precluded from deducting the cost of raw materials considering that. the s uppl ier�s are manufacturers and not contrac tcJrs; and, that if any error II'Jas ever commit ted, it is an error on the part. of the suppliers who should be truly taxed as manufacturers of the raw materials they supplied to petitioner. As such, the suppliers should be made to pay the 7% sales ta>:, instead of prejudicing an innocent purchaser. Before proceeding with ou~ discussion of this issue, it must be pointed out that respondent also raises the issue of whether or not for purposes of computing the 7% sa 1es tax, the 2% miller� s ta>: i 4J

DECISION CTA CASE NO. 2723 - 14 - should be considered as part o �f the tota 1 cost of coconut oil deductible from the gross sales of the manufactured products. A careful review of the recor�ds, however, reveals that the controversy relates to the separate billing or shifted tax sales as indicated in the e>:aminers � worksheets. (Please see E>:hs. 29 8( 30, pp. 2 8( 3, BIR rec.) Hence, we zeroed in on this issue of whether or not petitioner has complied with the requirement of separate bi 11 ing of sales ta>: in the issuance of invoices to its customers. Petitioner assails the inclusion of the amoLtnts representing the 7% sales ta>: as part of the gross selling price in computing the tax under Section 186 of the Tax Code claiming that the sales invoices c 1ear 1y indicate the amount of sa 1es ta>: included in the total amount payable by the customers, thereby complying with the rule on separate billings. Respondent on the other hand, maintains that said amount should be inc 1uded in the gross sales because the sales invoices issued by petitioner contained a column 11 amount sa 1es ta>: inc 1uded 11 indicating non-compliance with the rule of separate bi 11 ings invoking the Supreme CoLtrt � s decision in the case of Connel Bros. Co., Phil. vs. Collector of Internal Revenue, L-15470, Dec. 26, l~U

DECISION CTA CASE NO. 2723 - 15 - 1963, 9 SCRA 735, which states that "Ltnless billed to the purchaser as separate items in the invoices, the amounts intended to cover the sales tax shall be considered as part of the gross selling price of the artie 1es so 1d and dedLtc tions thereof wi 11 not be a 1 1owed " � Again, we disagree with the assertion of respondent. This Court has a 1 ready passed upon this question on separate bi 11 ings in the case of Procter Gamble Philippine Manufacturing Corporation, C. T. A. Case No. s2740, sq.m:a, which held in part pertinent, thus: >: >: >t With respect to the ground advanced by respondent's letter of denial subject of this appeal, witness Araceli Garcia testified to the effect that since 1962, petitioner corporation had been billing the tax separately to its customers (pp. 4, 7, t.s.n., April 5, 1977) and that since that time on there was no other examiner who had raised this question. At the hear� ing of October 6, 1978, (p. 46, CTA rec.) witness presented samples of sales invoices for the year in question and official receipts evidencing payments made by customers. A perusal of E:�:hs. "Q", "R" and "S" (pp. 117-119, CTA rec.), said invoices wi 11 indicate that there are three columns therein, namely: "Unit price sales ta>: incl.", "Amount Sales Ta>: included" and "Sales Ta>:". Under the second money column of "Exh. Q", appears the product of quantity multiplied by unit price for each item, e.g., "Tide 60", etc. For each item, the sales tax is recorded under the third money co 1umn. Thus for the second i tern, "Tide 288" shows a unit pr� ice of P24.95", the amount sales tax included or

DECISION CTA CASE NO. 2723 - 16 - P823.35", and sales t.:n: of "P22.44" under the column "sales ta>:". The CListomer is appraised of the unit price and total amount of each item, and tax on such amount but at the end of the invoice the following information appears: l"'b.tL.Er.!.!;~ ~\D.t. ~J.~. .T a x. ~tli'?P_._I~?:~_JD!;.l1:!9.�:Q ~l~__T�.'.>.L..Io_c;J1:!9.�Q P53. t"8 P2, 559.::.:0 End o�f Invoice Gross 2"/. disca..1nt --�-�-~l! .t9 Ne t F'2, ~S.31 From the information gathered from the invoices, the customer is appraised of the details by item and by totals. The customer is appraised too of the sales tax being shifted to them. This manner of separate bi 11 ing the sales tax is in e~ccord with the Conne 1 Bros. case, ~q,gr~..~- We find no valid and cogent reason to modify or depe~rt from the conclusion reached in the above cited case and the se~me should resolve the similar question now before u s in this appeal. 7� R!?._.!. _._J)nft~.r..!;t~�1.�.'J:..~_tJ_Q_IJ._._,.Q1_a.~ .t~.?._Jd.f__.,c;..Q.Q.k_.t..D_Q. QJ. l For the reason that respondent's examiners were in possession of E>:hibit 10 which in their opinion is C\ secret instruction to petitioner's employees to reduce the sales of imported tide for sales te~x purposes and believing that this was a pattern of deliberate intent to defraud the Government o �f sales ta>:, respondent justifies the use of the inventory method of e>:amination. Thus, using said method e~nd avai 1 ing of the e>:cerpts of

DECISION CTA CASE NO. 2723 - 17 - tin plate data from Court records in C.T.A. Cases Nos. 1568 and 1740, usage factor, plant inventories, summary of sa 1es of cooking oi 1 and price lists, respondent came out with the findings that petitioner has understated the sales of cooking oil in the amount of P1,985,668.07. Petitioner however, disagree with the findings of fraud for lack of legal and factual basis, and through its witness explains that the alleged secret instr"uction is nothing more than precaLttion against double ta>tation. (Please see t.s.n., pp. 17-19, July 1, 1980 and t.s.n., pp. 12- 14, AugLtst 4, 1982.) It also assails the use of the inventory method of investigation invoking the doctrine laid down by the Supreme Court in the case of Collector of Internal Revenue vs. Alberto D. Benipayo, G.R. No. L-13656, January 31, 1963, 4 SCRA 182, which states: x x x assessment should not be based on mere presumptions no matter how reasonable or logical said presumption may be >t >t >t. In order to stand the test of judicial scrutiny, the assessment must be based on actual facts. The presumption cannot be made to rest on another presumption. x x x. And more, petitioner pointed out to some inherent de �fects in the method used, like: lack of beginning and ending inventories of copra, crude

DECISION CTA CASE NO. 2723 - 18 - coconut oil and other materials used in the manufacture of cooking oil; failure to consider pLirchases of copra and crude oil from other millers; failure to take into account short deliveries of tin plates~ and failure to consider that some tin plates were used in some prodLicts other than cooking oil. After careful study of the respective position of the parties and on the basis of the uncontroverted testimony of petitioner's witness, precedent and reasons~ we feel compelled to subscribe to petitioner's position as to the non - e>:istence of fraud. Hence, we find no underdec:laration of sales of cooking oil. 8 � R�'_J__��---�-�--.Er..�'_l:?..�:.L.i.P.:t1P.D.______Q.f.____tb..~._.r:-A..gb.j;__._..t_g ~l�.!':?..�~?- - Petitioner invariably contends that the deficiency sales tax assessment for the years 1962 to 1965 has already prescribed because the assessment was issued beyond the 5-year period pursuant to the provisions of Section 331 of the Ta>: Code. Respondent however, asserts that while the 1et ter of demand was admit ted 1y isSLied beyond the five year� period~ the app 1 ic:abl e provision is Sec: tion 319 (now Sec: tion 269) which grant!! him a period o �f 10 years within which to assess revenue

DECISION CTA CASE NO. 2723 - l.9 - taxes from discovery of fraud~ since petitioner deliberately and substantially underdeclared its sales of cooking oil during the period in question and made improper deductions for materials clearly not deduc tible. The argument of respondent does not appear plausible under the c ircumstances obtaining in this case as found earlier and it is hardly necessary to reiterate our find i ngs in the pr eceding iss ue discuss ed above, wherein we subscribed to the position of petitioner. On the allegation that petitioner made improper deduc tions from supplies clearly not deductible~ suffice i t to say that we have al s o disposed of earlier the i s sue adverse to respondent in the 1 ight of our� dec is ion in C. T. A. Case No. 2 740 ~ ~~.Q ~-~-� I n f ine ~ t here being no s ufficient ev i de n ce t o f:?!:"-tahl.i.sh on the part CJf pPti t inne r� to d t:�f t�� aud the Gover n men t o�f sa 1 es tax fur t he period i n q u estion and res pondent 's f ai lu re to prove h is a ll egation s t h at wo ul d pl ace h is case wit h in t he exce p tion o f Section 33 1 o f t he Ta x Co d e~ h is positio n on t h is issue becomes l ess tf.?nab l P. fin d an cl so ho l d th at: r �.i q h t to is a l rea d y ti me

DECISION CTA CASE NO. 2723 - 20 - Wi t h t h E> above c::o n c: lu s .io n ~ t h e iss UE' as to wh e th er or n o t th e i mpo s ition o f th e 50% fr au d pena lt y becomes moot an d aca d e mic . WHEREFORE, the decision appealed fr-om is hereby r-eversed and set aside. No pr-onouncement as to c o s ts. SO ORDERED. Quezon City, Metr-o Manila, July 3 1~ 1990. WE CONCUR: ROAQUIN ,11.1dge CERTIFICATION I her-eby cer-tify that this decision was reached after- due consultation among the member-s of the Cour-t of Tax Appeals in accor-dance with Sect i on 13 , Ar-ticle VIII of the Constitution. Presid " g Judge Cour-t of Tax Appeals