PEOPLE OF THE PHILIPPINES v. SND99 FOOD CORPORATION and DANILO P. VITAN, JR. No 18 Caras De Andalucia, Visayas Ave., Culiat, Quezon City (At Large)

.' CTA Fonn No. 8 (For DCC) 1111111111111111111111 11111 11111 11111 11111111111111111111 11111 111111111111111111 20-0004 11-00 II REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION CTA CRIM CASE NO. 0-848 PEOPLE OF THE PHILIPPINES, Plaintiff, - versus - NOTICE OF RESOLUTION SND99 FOOD CORPORATION and DANILO P. VITAN, JR., Accused. To: PROSECUTOR GENERAL BENEDICTO A. MALCONTENTO ASST. STATE PROSECUTOR CONSUELO CORAZON M. PAZZUJAGAN DEPARTMENT OF JUSTICE Padre Faura St, Etmita, Manila COMMISSIONER OF INTERNAL REVENUE Thru Prosecution Division Room 704, BlR National Office Building Sen. Miriam P. Defensor-Santiago Avenue Diliman, Quezon City DIRECTOR National Bureau ofinvestigation Taft Avenue, Em1ita, Manila PNP CHIEF Thru: ClOG Philippine National Police Natonal Headquarters Camp General Rafael Tagle Crame EDSA, Quezon City C HI EF, WARRANT AND SUBPOENA SECTION Quezon City Police District Camp BGen Tomas Karingal, Sikatuna Village Diliman, Quezon City GREETINGS: You are hereby notified by these presents that on February 20, 2024, a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, February 22, 2024. .... AttyE. xMecauritaivJe~ "'~~~Crht aIIn-Te Page I of I

,; ... ' I. REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION PEOPLE OF THE PHILIPPINES, CTA Crim. Case No. 0-848 Plaintiff, For: Violation of Section 255 -versus- of the National Internal Revenue Code (NIRC) of 1997, as amended, in relation to Sections 253 and 256 of the same code. Members: DEL ROSARIO, P.J. , Chairperson , BACORRO-VILLENA, and CUI-DAVID, JJ. SND99 FOOD CORPORATION and DANILO P. VITAN, JR. , Accused. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - On 24 November 2020, the plaintiff filed an lnformation1 against herein accused SND99 FOOD CORPORATION and its President, DANILO P. VITAN, JR. (accused), for violation of Section 2552 of the National Internal Revenue Code (NIRC) of 1997, as amended , in relation to Sections 2533 and 2564 of the same Code allegedly committed as follows: "That on or about August 18, 2015 and thereafter, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused , SND99 Food Corporation , required by law to file tax returns and pay income tax, and accused Danilo P. Vitan, Jr., president, did then and there, willfully, unlawfully and feloniously fail to pay deficiency income tax from January 1, 2011 to Division Docket, pp. 5-6. SEC. 255. Failure to File Return, Supply Correct and Accurate !!?(ormation, Pay Tax Withhold and Remit Tax and Rrq(und Excess Taxes Withheld on Compensation. - ... SEC. 253 . General Provisions.- ... SEC. 256. Penal Liability ofCorporations. - ...

RESOLUTION CTA Crim. Case No. 0-848 People of t he Philippines v. SND99 Food Corporation a nd Danilo P. Vitan, Jr. Page 2 of8 x- -- - --- - - --- - --- - - -- - -- - ------ -- ------ - - --- ---------------x December 31 , 2011 in the amount of Three Million Five Hundred Nineteen Thousand, One Hundred Twelve Pesos and 22/100 (P3,519,112.22), exclusive of increments, despite final assessment notice, including prior and post notices, demands to pay and final notice before seizure dated August 18, 2015, to the damage and prejudice of the Government." CONTRARY TO LAW. The plaintiff attached the following supporting documents to the Information : 1) Certified True Copy of the Resolution dated 09 January 2020, signed by Assistant State Prosecutor (ASP) Consuela Corazon M. Pazziuagan, with recommending approval of Senior Deputy State Prosecutor Miguel F. Gudio, Jr., and approved by Prosecutor General Benedicta A. Malcontento;5 2) Certified True Copy of the National Prosecution Service Investigation Data Form dated 10 October 2019;6 3) Certified True Copy of the Referral Letter dated 23 September 2019 of the Bureau of Internal Revenue (BIR) Commissioner Caesar R. Dulay, addressed to Secretary of Justice Menardo I. Guevarra7; and, 4) Certified True Copy of the Joint Complaint-Affidavit dated 10 October 20198 of Revenue Officers (ROs) Rehmar Mortiz (Mortiz), Remedios May A. Roque (Roque) and Wilhelmina Rosario D. Dapit (Dapit), with attached Annexes "A" to "K", inclusive of sub-markings.9 In a Resolution dated 15 February 2021 10, the Second Division found probable cause and ordered the issuance of a Warrant of Arrest11 against accused Danilo P. Vitan, Jr. (accused Vitan, Jr.). It also fixed the bail bond for his provisional liberty in the amount of P60,000.00. Division Docket, pp. 7- 13 . 6 1d., p. 14. ld., pp. 15-16. ld. , pp. 17-23. 9 ld., pp. 24-47. 10 ld. , 55-56. II ld. , p.57.

RESOLUTION CTA Crim. Case No. 0-848 People of the Philippines v. SND99 Food Corporation and Danilo P. Vitan, Jr. Page 3 of8 x-- ------------ ------------ --------------------------------x As accused Vitan , Jr. was not apprehended after the lapse of eight (8) months, the Second Division issued an Alias Warrant of Arrest on 10 November 2021 12 and sent the case to the archives. Even after a considerable period, accused Vitan , Jr. remained at large. Hence, the instant case stayed in the archives, subject to revival upon the arrest of accused Vitan , Jr.13 In the meantime, following the reorganization of the different divisions of the Court, the case was transferred to the First Division.14 In an effort to speedily dispose the cases and to de-clog court dockets, an inventory of the archived cases was made thereafter. As a result and upon a second hard look and evaluation of the allegations in the lnformation15 and the supporting documents16 submitted, this Court finds that the right to institute the criminal action has indeed already prescribed. In resolving the issue of prescription of the offense charged, the following should be considered: (1) the period of prescription for the offense charged ; (2) the time the period of prescription starts to run; and , (3) the time the prescriptive period was interrupted.17 Relevantly, Section 281 of the NIRC of 1997, as amended , which governs the prescriptive period for criminal tax actions, provides: SEC. 281 . Prescription for Violations of any Provision of this Code. - All violations of any provision of this Code shall prescribe after five (5) years. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment. The prescription shall be interrupted when proceedings are instituted against the guilty persons and shall begin to run 12 See Resolution dated I0 November 202 1, id., p. 60; Alias Warrant of Arrest, id., p. 6 1. 13 See Resolution dated 29 March 2022, id., p. 64. 14 See Notice dated 29 May 2023, id., p. 65. 15 Supra at note I. 16 Supra at notes 5-9. 17 Benjamin ('' Kokoy'') T. Romualdez v. Hon. Simeon V. Marcelo, in his official capacity as the Ombudsman, and Presidential Commission on Good Government, G.R. Nos. 165510-33, 28 July 2006, citing Panfilo 0. Domingo v. The Sandiganbayan (Second Division) and The People ofthe Philippines, G.R. No. 109376, 20 January 2000.

RESOLUTION CTA Crim. Case No. 0-848 People of the Ph ilip pi nes v. SND99 Food Corporation a nd Danilo P. Vi tan, Jr. Page 4 of8 x------------- - -- - --- - ---------- ---- - - ------- -- - ----- --- -- - x again if the proceedings are dismissed for reasons not constituting jeopardy. The term of prescription shall not run when the offender is absent from the Philippines.18 The above provision is clear that the period of prescription for the offense charged is five (5) years. Relative thereto, the period of prescription commences to run from the day of the perpetration of the offense, and if not known, from its discovery and the institution of judicial proceedings for its investigation and punishment. It shall be interrupted when proceedings are instituted against the offender and shall run again if the proceedings are dismissed for reasons not constituting jeopardy. The prescriptive period shall not run when the offender is not in the country. In construing when the prescriptive period for crimes punishable under the NIRC of 1997, as amended, is suspended, it is proper to interpret the provision with reference to its context, i.e. , that every part of the statute must be considered together with the other parts and kept subservient to the general intent of the whole enactment. 19 The second paragraph of Section 281 speaks of "judicial proceedings", which means that the "proceedings" referred to in the third paragraph likewise pertains to proceedings which are judicial in nature, i.e., the filing of criminal information with the court. In the case of Emilio E. Lim, Sr. and Antonia Sun Lim v. Court of Appeals and People of the Phi/ippine$2� (Emilio E. Lim, Sr.), the Supreme Court explained that in criminal cases involving refusal to pay, the commission of the offense will only happen after the taxpayer was notified of his or her obligation to pay and the latter refused to do SO , VIZ: Relative to Criminal Cases Nos. 1788 and 1789 which involved petitioners' refusal to pay the deficiency income taxes due, again both parties are in accord that by their nature, the violations as charged could only be committed after service of notice and demand for payment of the deficiency taxes upon the taxpayers. Petitioners maintain that the five-year period of limitation under Section 354 should be reckoned from April 7, 1965, the date of the original 18 Emphasis supplied and italics in the original text. 19 Philippine International Trading Corporation v. Commission on Audit, G.R. No. 1835 17, 22 June 2010. 20 G.R. Nos. L-48 134-37, 18 October 1990.

RESOLUTION CTA Cr im. Case No. 0-848 People of the Philippines v. SN0 99 Food Corporation a nd Danilo P. Vitan, Jr. Page 5 of8 x------- ------ -- ------ ----- -- --- -- ---- ---------- ---- ----- -- x assessment while the Government insists that it should be counted from July 3, 1968 when the final notice and demand was served on petitioners' daughter-in-law. We hold for the Government. Section 51 (b) of the Tax Code provides : (b) Assessment and payment of deficiency tax. - After the return is filed , the Commissioner of internal Revenue shall examine it and assess the correct amount of the tax. The tax or deficiency in tax so discovered shall be paid upon notice and demand from the Commissioner of Internal Revenue. (Emphasis supplied) Inasmuch as the final notice and demand for payment of the deficiency taxes was served on petitioners on July 3, 1968, it was only then that the cause of action on the part of the BIR accrued. This is so because prior to the receipt of the letter- assessment, no violation has yet been committed by the taxpayers. The offense was committed only after receipt was coupled with the wil[l]ful refusal to pay the taxes due within the allot[t]ed period. The two criminal informations, having been filed on June 23, 1970, are well-within the five-year prescriptive period and are not time-barred.21 Following the pronouncement in Emilio E. Lim, Sr., the BIR issued Revenue Memorandum Circular (RMC) No. 101-9022 reiterating the above: 1. When cause of action for willful failure to pay deficiency tax occurs. The cause of action for willful failure to pay deficiency tax occurs when the final notice and demand for the payment thereof is served on the taxpayer. Prior thereto, no violation is committed . The offense is committed only after receipt is coupled with refusal to pay the tax within the allotted period. 2. Prescription under Section 280 of the Tax Code. a) The 5-year prescriptive period in an offense or willful failure to pay a deficiency tax assessment commences to run only after the receipt of the final notice and demand by the taxpayer and he refuses to pay. 21 Emphasis supplied and ita lics in the origina l text. 22 Determination of Whe n Cause of Action for Willful Failure to Pay De fic iency Tax Occurs; and Prescription under Sectio n 280 of the T ax Code.

RESOLUTION CTA Crim. Case No. 0-848 People of t he Philippines v. SND99 Food Corporatio n and Danilo P. Vitan, Jr. Page 6 of8 x--------- ------- ---------- - -- -- ------- -------- - -- - - --- -- -- x b) [A] protested assessment, the 5-year period starts from the service of the final notice and demand disposing of the protest, and not from the date of the original assessment. ... 23 The above-mentioned principle was affirmed in Petronila C. Tupaz v. Hon. Benedicta B. Ulep, Presiding Judge of RTC Quezon City, Branch 105, eta/. 24 (Tupaz), where the Supreme Court explained that failure to pay deficiency tax may only be committed when , after the finality of the assessment, taxpayer refused to pay the taxes within the allotted period, and/or protest or question the assessment within thirty (30) days from receipt therefrom. The relevant portions state: We agree with the Solicitor General that the offense has not prescribed. Petitioner was charged with fa ilure to pay deficiency income tax after repeated demands by the taxi ng authority. In Lim, Sr. v. Court of Appeals, we stated that by its nature the violation could only be committed after service of notice and demand for payment of the deficiency taxes upon the taxpayer. Hence, it cannot be said that the offense has been committed as early as 1980, upon filing of the income tax return . This is so because prior to the final ity of the assessment, the taxpayer has not committed any violation for nonpayment of the tax. The offense was committed only after the finality of the assessment coupled with taxpayer's willful refusal to pay the taxes within the allotted period. In this case, when the notice of assessment was !ssued on July 16, 1984, the taxpayer still had thirty (30) days from receipt thereof to protest or question the assessment. Otherwise, the assessment would become final and unappealable. As he did not protest, the assessment became final and unappealable on August 16, 1984. Consequently, when the comp laint for preliminary investigation was filed with the Department of Justice on June 8, 1989, the criminal action was instituted within the five (5) year prescriptive period. In this case, the records show that the Formal Letter of Demand25 (FLO) with attached Details of Discrepancies26, together with the Assessment Notices27 (ANs), all dated 08 January 2015 were received by the accused on 09 January 2015. The ANs indicated that the deficiency taxes should be paid on or before 06 February 2015. 23 Underscoring supplied . 24 G.R. No. 127777, 0 1 October 1999; Citations omitted, emphasis suppl ied and italics in the original text. 25 Annex "G", Division Docket, pp. 33-35. 26 ld., p. 40 27 Id., pp. 36-39.

RESOLUT ION CTA Crim. Case No. 0-848 People of the Philippines v. SND99 Food Corporation a nd Danilo P. Vitan, Jr . Page 7 of8 x-------- -- ----- -- -------------- -- --- --- -- - ----- - ------ -- -- x Applying the ruling in Emilio E. Lim, Sr. and RMC No. 101-90, upon receipt of the FLO and ANs, the offense will be committed only after accused fails to pay the taxes due on 06 February 2015, or the due date for the payment. Hence, the prescriptive period commences to run on 07 February 2015, or the day after accused willfully refused to pay the taxes despite due notice. Counting five (5) years therefrom , plaintiff had until 07 February 2020 within which to file the subject Information with the Court. Notably, the said Information was filed with this Court only on 24 November 2020. As such, the plaintiff's right to file the subject criminal action has already prescribed. Even if We are to apply Tupaz and count the prescriptive period from the lapse of the 30-day period to protest or question the assessment, the subject criminal action had still prescribed. To elaborate, accused received the FLO on 09 January 2015, thus counting 30 days from receipt thereof, accused had until 08 February 2015 to file its protest or question the assessment. As accused failed to file the protest, the FLO became final and unappealable on 09 February 2015. Counting five (5) years therefrom , plaintiff had until 09 February 2020 to file the subject Information. However, as noted above, the said Information was filed with this Court only on 24 November 2020 , thus the criminal offense has inevitably prescribed . Although the present lnformation28 was dated 09 January 2020, the same was filed with the Court only on 24 November 2020. Thus, the right of the government to institute the case against accused SND99 FOOD CORPORATION and its President, DANILO P. VITAN, JR. had already clearly prescribed when the Information was filed , perforce justifying the dismissal of the present case. It is settled that the waiver or loss of the right to prosecute the offender is automatic and by operation of law.29 Evidently, in this case, prescription has automatically set in when the plaintiff failed to file the present Information within the five (5)-year prescriptive period provided under Section 281 of the NIRC of 1997, as amended. WHEREFORE, in light of the foregoing considerations, CTA Criminal Case No. 0-848 is hereby RETRIEVED from the archives and accordingly DISMISSED on the ground of prescription. 28 Supra at note I. 29 Rafael Yapdiangco v. The Hon. Concepcion B. Buencamino and Hon. Justiniano Cortez, G.R. No. L-2884 1, 24 June 1983.

RESOLUTION CTA Crim. Case No. 0 -848 People ofthe Philippines v. SND99 Food Corporation and Danilo P. Vi tan, Jr. Page 8 of8 x---------------------- - ----------- - ---- - -- -- - -- - -- - -- -----x The Alias Warrant of Arrest issued against the accused is hereby RECALLED and SET ASIDE . SO ORDERED. Associate Justice JEAN MA . BACORRO-V'ILLENA ciate Justice ON OFFICIAL BUSINESS LANEE S. CUI-DAVID Associate Justice