PEOPLE OF THE PHILIPPINES v. ABUBAKAR YSMAEL AZIZ (Proprietor of YSMABAZ IMPORTER AND GEN. MDSE. 252 Zuzuaregui St., Old Balara, Quezon City) [consol with O-759]

CTA Form No. 8 (For DCC) 1111111111111111111111IIIII IIIIIIIIII 1111111111111111111111111111111111111111111 19-000323-0019 REPUBLIC OF THE PHILIPPINES COURT OFTAX APPEALS QUEZON CITY FIRST DIVISION CTA CRIM. CASE NOS. 0-758 & 0-759 PEOPLE OF THE PIDLIPPINES, Plaintiff, -versus- ABUBAKAR YSMAEL AZIZ NOTICE OF RESOLUTION (Proprietor of YSMABAZ IMPORTER AND GENERAL MERCHANDISE), Accused. To: PROSECUTOR GENERAL RICHARD ANTHONY D. FADULLON Department ofJustice Padre Faura Street, Ermita 1000 Manila ATTY. YVETTE MARIE Y. MANADIEGO Bureau of Internal Revenue- Revenue Region No. 7A Room 516, Roofdeck Fisher Mall Fernando Poe Jr., Avenuer comer Quezon Avenue Quezon City GREETINGS: You are hereby notified by these presents that on January 6, 2025,a Resolution was rendered in the above-entitled case, copy of which is attached hereto. Quezon City, Philippines, January 7, 2025. Jo~. ~�ourt Atty. Maria Chan-Te Executive II

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION PEOPLE OF THE PHILIPPINES, CTA Crim. Case Nos. 0-758 Pla i ntiff, and 0-759 For: Violation of Section 255 of the National Internal Revenue Code of 1997, as amended -versus - Members: DEL ROSARIO, P.J. , Chairperson, BACORRO-VILLENA, and ABUBAKAR YSMAEL AZIZ CUI-DAVID, JJ. (Proprietor of YSMABAZ IMPORTER AND GENERAL MERCHANDISE), Promu lgated : '/d.171J'~11 Accused. 'JAN 06 ~ X- - --- - - - - -- - - - - ---------------- - -- :~ ~--------- X RESOLUTION For the Court's resolution is plaintiff's "Motion for Reconsideration"1 (MR) filed on 13 September 2024, praying for the reversal of the Resolution dated 15 August 20242 (assailed Resolution) wh ich dismissed the instant case due to prescription. In the MR, plaintiff mainly argues that the institution of the criminal action before the Department of Justice (DOJ) for purposes of preliminary investigation effectively tolled the running of the prescriptive period . Citing Herminia T. Disini v. The Han. Sandiganbayan, First Division, and the People of the Philippines3, plaintiff claims that the Supreme Court already ruled that irrespective of whether the offense charged is punishable by the Revised Penal Code or by a special law, it is the filing of the complaint or information in the office of the public prosecutor for purposes of the preliminary Division Docket, pp. I0 1- 106. ld., pp. 90-1 00. G.R. Nos. 169823-24 and G. R. Nos. 174764-65, II September 2013.

RESOLUTION CTA Crim. Case Nos. 0-758 and 0-759 People of the Philippines v. Abubakar Ysmael Aziz (Proprietor ofYsmabaz Importer and General Merchandise) x----------------------------------------------x investigation that interrupts the period of prescription. Applying the foregoing, from the finality of the subject assessments on 23 December 2010, the Joint Complaint-Affidavit was filed on 22 May 2014 before the DOJ. Thus, the prescriptive period was effectively tolled before the lapse of the five (5)-year period. We resolve. Although the MR was duly filed on time4 , an examination of the arguments raised therein does not warrant the modification of the assailed Resolution. As held in the assailed Resolution, We have clearly pointed out that in Emilio E. Lim, Sr. and Antonia Sun Lim v. Court of Appeals and People of the Philippines5, and the Revised Rules of the Court of Tax Appeals6 (RRCTA), prescription of criminal offenses shall only be interrupted when the criminal action (or Information) is instituted before a court- In the case of Lim, the Supreme Court interpreted Section 354 of the NIRC of 1939, as amended, (which contains the exact provision as the present Section 281 of the NIRC of 1997, as amended) to mean that tax cases are practically imprescriptible for as long as the period from the discovery and institution of judicial proceedings for its investigation and punishment, up to the filing of the information in court does not exceed five (5) years, viz: Not only that. The Solicitor General stresses that Section 354 [now, Section 281] speaks not only of discovery of the fraud but also institution of judicial proceedings. Note the conjunctive word "and" between the phrases "the discovery thereof" and "the institution of judicial proceedings for its investigation and proceedings." In other words, in addition to the fact of discovery, there must be a judicial proceeding for the investigation and punishment of the tax offense before the five-year limiting period begins to run. It was on September 1, 1969 that the offenses subject of Criminal Cases Nos. 1790 and 1791 were indorsed to the Fiscal's Office for preliminary investigation. Inasmuch as a preliminary investigation is a proceeding for The public prosecutor received the assailed Resolution on 29 August 2024. Counting 15 days therefrom, plaintiff had until 13 September 2024 to file an appeal or motion. The Motion for Reconsideration was filed on 13 September 2024, thus, it was timely filed. G.R. Nos. L-48134-37, 18 October 1990. 6 A.M. No. 05-11-07-CTA.

RESOLUTION CTA Crim. Case Nos. 0-758 and 0-759 People of the Philippines v. Abubakar Ysmael Aziz (Proprietor ofYsmabaz Importer and General Merchandise] X----------------------------------------------X investigation and punishment of a crime, it was only on September 1, 1969 that the prescriptive period commenced. The Court is inclined to adopt the view of the Solicitor General. For while that particular point might have been raised in the Ching Lak case, the Court, at that time, did not give a definitive ruling which would have settled the question once and for all. As Section 354 [now, Section 281) stands in the statute book (and to this day it has remained unchanged) it would indeed seem that tax cases, such as the present ones, are practically imprescriptible for as long as the period from the discovery and institution of judicial proceedings for its investigation and punishment, up to the filing of the information in court does not exceed five (5) years. Unless amended by the legislature, Section 354 [now, Section 281] stays in the Tax Code as it was written during the days of the Commonwealth. And as it is, must be applied regardless of its apparent one- sidedness in favor of the Government. In criminal cases, statutes of limitations are acts of grace, a surrendering by the sovereign of its right to prosecute. They receive a strict construction in favor of the Government and limitations in such cases will not be presumed in the absence of clear legislation. Relevantly, Section 2, Rule 9 of the Revised Rules of the Court of Tax Appeals (RRCTA), as amended, provides: SEC. 2. Institution of criminal actions. - All criminal actions before the Court in Division in the exercise of its original jurisdiction shall be instituted by the filing of an information in the name of the People of the Philippines. In criminal actions involving violations of the National Internal Revenue Code and other laws enforced by the Bureau of Internal Revenue, the Commissioner of Internal Revenue must approve their filing. In criminal actions involving violations of the Tariff and Customs Code and other laws enforced by the Bureau of Customs, the Commissioner of Customs must approve their filing. The institution of the criminal action shall interrupt the running of the period of prescription. Verily, pursuant to the Supreme Court's pronouncement in Lim and the above-quoted provision of the RRCTA, the prescriptive period to file a criminal case is tolled only when the Information is filed before the Court. In this case, the Information was filed beyond

RESOLUTION CTA Crim. Case Nos. 0-758 and 0-759 People of the Philippines v. Abubakar Ysmael Aziz (Proprietor of Ysmabaz Importer and General Merchandise) Page 4 of4 X---------------------------------------------- X the five (5)-year prescriptive period, thus there is no interruption of said period. To be sure, criminal offenses for violations of the NIRC of 1997, as amended, including known offenses, are not intended to be imprescriptible. However, if the prescriptive period is interrupted once preliminary investigation proceedings are instituted before the Department of Justice (DOJ), it suggests that there is no fixed deadline for filing an Information in court. As a result, the offense could indefinitely remain actionable once a complaint reaches the DOJ. This grants the DOJ discretionary power over when to act, potentially allowing the misuse of the rule on prescription as a means to intimidate, harass, and disrupt taxpayers suspected of tax violations. 7 ACCORDINGLY, plaintiff's "Motion for Reconsideration" filed on 13 September 2024 is hereby DENIED for lack of merit. SO ORDERED. Ass..o._ciate Justice ON LEAVE LANEE S. CUI-DAVID Associate Justice Supra at note 2, pp. 97-99; Citations omitted, emphasis and italics in the original text.