CTA Case No. 659 (Decision)

REPUBUC OF .TTIE PHILil?PlmZB COURT OF TAX APPEAJ..3 OT'tt70N CITV KI SHINCHAND CHELLARAM (!vli\KIL.i\) 1 C.T.A. CASE �NO. 659 INC. I Petitioner, / - versus - THE CCLLECTOR OF IN'l' ERNAL REVENUE, Respondent. X- - - - - - - - - - - - ~- X DECI SI 0 N This action is one of a deficiency assessment for inco me and advance sales taxes in the res- pective amounts of Pl51 , 579 . 00 and Pl77 , 076~22 for the years 195 3 to 19 57, e verred by petitioner to have been illeg Rlly imp o sed by the res p ondent Coll e ctor (now Commiss ion e r) of Int e rnal Revenue. The re~ords s h ow tha t (l) Petiti one r corpo- Phili pp ines i::: enc:;.?ged in U:e il'1portation o f mer- ch andise and as a genc.r<~l mcrchdnt , in 1-.r'nolesc.le and retail business with address at R-~ 10, Marvel Building, 576 Juan Luna, Manila ; (2) Sometime on September 1 9 ~ 1958, petitioner's off ice together with otLer t .u s ine~3S establ i shments "':o re searcrH:.!d upon valid \�Jarrant duly� issued by Judge Amado Roan ... 1

DEC I.S I OJ::1 - CTA CM:E J'; O . 6 59 - 2- of t h e Ma nil a Ci ~y Cou r t ~nd various b o oks of accounts , busin~ss records and coMne rc i a' l d c cu- men t s were se i ze d by a t eam of th e Co n stabulaty- Revenue-Customs Service Group (C-R-C) stationed a t Camp Cr ame , Cu czon Ci ty ; ( 3 ) Based .o n the r ecords se i zed an d i nve st ig ~ ti on cond uc te d by t he BIR exa~ine rs, r e t i t i one r was assesse d~ de - ficienc y in com e ~ nd advence sa les t a xes for the years 195 3-195 7, inclus ive , under l ettomof demand dat ed J an u ~ ry 23 1 a nd Fe ~r u a ry 1 2 , 19 59 of the r espondent, and (4 ) warrant3 of ga r nishment were served in March 1 9 59 to seve ra l Ma nil 2 bank ing in st i tut.i ons aga ir�s t any acco unt/depo:::; i t o r other property 'i n the n .:::.rne of pet .i t ioner , ~;.i[l ich n etted P 539.37 deposi t with the Ch urtered Bank ; {5 ) On March 17, 1959 peti tioGer protested by filing a r equest fo r reinvestigat ion an~ fo r ma l hearing of the sa i d as~e~~mPn t s but res0onden t in h i s lett e r d.:,ted 11.pril l, 1 959 c'let'ied t.he r:.=t,�ue for pct itiooe r 1 s f a ilur e t o co:np l y vdth the r eq ui si. t e �,v,, iv e r of �the s t a tut.e of l ir..iL=l ti ons and pa yment. of l/2 of the t ut2 l 2ss essnents with su r ety bond for the bal ence t her Po f . Hence , petitioner ' s appea l. j\ssa il ed i s t.h (:: V'lli.dity and cotTH~tn css of the assessment s for deficiency incoQc nnd advance J

DECI...ilCl: - CTA CJ. ~;E J:J("). 6 59 - 3- sales t ~xes - th~ issue for decision. The records show that upon order of' this Court as moved by pe titioner, all t~le pertinent recdrds and documents whj. ch were seized and in .the possession of the Ccnstabu l 2ry-Revenue-Cu stoms SGrvice Group including those bearing on the instant case were for .,..rarded 2nd deli veren t.o .I :he cus t:cd::l of t!Jis Court under covering l etter date~ October 12, 1959 of the Executive CoordinRtor of the Servic~ Group, available for petltioner 1 s examination and scrutiny. T~is notwithstanding , petitioner would find ar.. i :-;s.uc out of the "s a les invoices and ufficial rcceirLs covering the period frnm J anuary 1, 1953 t o Scpte~ber 1958" allegedly sei~ed but net e>mo n<J the n :> cur. ents brought to tl:e Court , u�~ercby "renderi ng i: cl~;o~.si;:-:le for petitioner to erroneous asse~�sr:v:nt." Tl'~e ste>rve ling ,qgitatic�n therefor would persist as ~ disturbing pre-occu- p0.ticn of ':.he pr:!:itioncr thrntlgh 2 11 t!,~ 20 years ncnetheless, .-Je find ill.ogic the irnpre"'sion pre- G5

DECISION - CT!'. C''.~~E t:C. 6 59 .... 4 - cipit0tely bro'3ched that the sought for 11 invoices . and receipts 11 could he the sole evident.iary basis� in bashing every conceiv2rle illegality in the <Iuestior..ed asses;-:;rnents. And, neither should it be narrowly or naively viewed as an excuse for pe~ .� titioner from further bearing c~e burden of p ro- ving its cause of action. Recourse to other means or modes of a8certaining the truth of its allegation is Jfforded under the existing Rul es. But, the rc svondent 1 s findir..gs are not short of specific suu.�ort in term s c�f t.rcct2ble clata and records oprnly laid and disclosed for PX ~ mination ,,_;ld verj fic,,,t_ion. Suffice i t to .st�1 te 1 howPver, th~t townrds the end of t~P two dec?des of the pendency of t'r:Js "'l-�.,;ea l, retitio ;-;e r �,.;cu.ld still fi~d tr.c "n~".E:d :�:or mere tin~e to s;o over the volurninolL> 'Doc:}:>:, of c:tccounts und r:.:::cords in the cu;.:;tody of the court. 11 (Ietitioner�~ Urqent Hot ions t�-.o P'�,�t- P ">ri �J��� - 2c: rn~-�� �c:--fi''-/R- ! ... _.__ '- l ..._;~ .. J. .. _ ""~ ..._. _.. 1 r.... __l. .. ,' LT .-...".. 1~J ,-~,..o. c-_, r":i . -J 1 __ I'P� 288-:~90 CT.". T'-.e c crr:...3 ; i\uJu.�t 18 1 J979, p. 31':2 Cr"\i... Reccrds). Tris Court h3cl coyly ucc.<~iesced policy of the courts to expedite the dispos~l of 9G

DECI:..:lJOF 659 CTT'~ CA:::E - 5- casE.s to prr. v~nt �l:heir docLets from Decomiog clogg-ed, and i t is incumbc~t u~on parties , espLcially plain- tiff to t.u}:e tr~ e :Lr. i tiai::ive in the prortlpt dis pose 1 of c ases as 0uty to themselves, to the�court and (M as igl Rt v. Mayor of P0so.y Ci t-.y 1 10 �1 Fhil. 319; cit ec' in 1 0 1 :.'~CRA 651) .. To dispel any sprouting impccs sicn , as seems to ']E.c-,r.s, r�r~�t:_ t.ic~rwr remn i nr:: d in ir:Lpoter:t ,:_:tnguish yet trcubl~d ~t ~oshio~ing possib~llli~3 out of One can thus i:ound: " Te st. .i :-::cni<:J l and c~c cn r:tcnte. r~r sv.idc:.��ce pr.L~~.3 .;-;-_t~t'd J..)~,. ~.l"'J..::-~ r;_:.:~~- C'.C.\1 ft:-nt ~}"';_(,.' tJ �-,t~ f.leti- tio ne: r 1,._-rcL: rc::--,:_1~ e:;c c:'tlci:. �:J �:�h�: 'fC< rs in ..... CJ-tlr~- tic�n L~1.c.- fc::!.J.c; ,i_YiQ t -�x.c~J-, l~? i1 c.;~l~~.. e ~-ft~~icl1 1. ,_ lc;53 � 1954 l:'!:)S ~ lr~l;- l s ':�7 ._. l -' ��:7'1~\~ --.r; L't ... :--1eclr�rr.::rJ j r .~.L:.:;r::c:- ~.tr('.. cl(.::..r~.J" t;hO'r!D in lhc c : :n~:-u tc. d n ns rr,;~c1c :.;y the sc id 97

D::CIS::LCF - 6- ~liF<. (:1)((-:r~ ir1cts ir~ c:lu ~~ ::_:�Jg th(-"' ~._):.:>.~. ir� tl-1rreof, ,...,6 ( r.:.-.-v.....i.....!-.:,.,.--). ...... ... _r,_., . l� nJ.~ ~ - ._,...... ;,rr r.,r_, ,~t-.,_::,e tc ' lcc:.r~ -~, .. T t_f~j.,._ .. . _ ... ....:;1\t";". �) - ~ �--"- _, I . _ ... ..._._.._ )....;- & 27, ~~ge~ 11 6 & 1 1 7, Vo l a 1 1 DI~ Rcc0rds , p~g 7 t0 1 0 Tsn , ta~e~ during the hPar i ng on .\u::,c~,t: 1~~ , 1S7~') 'tFirt ~:5irl ~E: o� -Lt'1r-"l .<�cjic1 BI~<. e.Y.:.:..:Ct~itlE.;-,:-:; ci J c:; o ._) :~0 1.\r trl~:~ t pet-. it.: i c�" L ... 2..- t1 �~~ .::1~ jr"!JJO!. te .r. . delibnratc l y u ~derstatcd its 2ctu0 l im- �yf� ,r�,-" ( 1 �"3 .lt-o' �� +"-"ut l � n �...._ �J. '"".1....> f---U-.r.-� ,-, u,-..,-. ....... .4.. !-�'11. r~-� l' �� �J. .i.�ir�n � ~ .I. \ ~ �. .._.. ..._ ......; � :1 ....) t.o 1957 ) thns n:-st~ l tir'rJ i:; iU; Li.lt;rp to r.e rr::1. 0 rt: ;y 1d p<:..y t C<:; :t" rr�:c t 3 d V c' rlC....f' .. ;:::). es t o:X cue t.l1"':: 9<)Vern:ncnt . (.'::88 ':,:or}:::CJCC t S ,.r.. "'') ' ',;:; �, , 1 7 1 O rl.:. c...�...�� �:"11"'."1'l. .,,....1,-: ~ .) I J..-'l.- � l. l C <":. J_ Vn I �.~ .1.L � I 2T.,1'."t>'\. P.<-,C o ) 'l' }; � t o t l 1 VC:J l l.IC o:f pE.t:itL::�:er 1 ~-; ir.~porL.i t i.~'fl:J \�Ihich l t f, .i.lcc1 tc cJ.ccL.:1 r e du.cir1'j t11C l.:'Prioc'l ir '�J IJr: :;t ir_-;;-, c...J:'!.,; c:CS fc;llc,-~ ;EJ: 1953 � ". 0 p 400 , 0 1 8 ., tl8 19 5 '1 � 233 , 437. 02 1955 � " �. 318, 442 ~ 21 1956 � ,. 0:0 , 29 1a 49 19::>7 � � � ..c1.or T 0 'I' i\ L � " _ G�1 , 226.87 (i:�leElOr ...1nr1 Ui�l i'~e:.-c;~r)~-l~icnt Po p . JS-1 ) p 1 " 1 56 I 4 1 6 .. 0 7 .. 3 ; CTt. J. r.~ cc::C'3 I t is incon~ruo u s f~r ~~titicDcr to prove purticular i!1fc:ren c e of ,:[ac t c ar: h e:1V e n o effect ., .J

DSCI.Sim; - CTA C2'~::�E lJC. 659 - 7- even shculd it constitute a prima facie case, or should as further proof be oxcus~d by a ruJA of lav:., 11 (31 C.J.S. 720-721) 0 It may be nece6sary to repeat what ~o often may h2ve been said an~ what so plain ly apply to the case at b~r.. The burdca of proof is on tl:e 1-. 2:1xp ayer conLt:.sting the validi t:y or corr c ct-.ness of �an asse:::sr~;en t to prove not onJy th c:~ t the Cormnis:.:;:Lcncr cf Intccn.J.l Revcr~ue Gut i erre~ v. Collector of Int~rnal R2venuc, CTh of Tax Appeals, L- 2 3 676 1 April 27 1 1967, 19 SCRA 903) othervd..se tho pr.csu;nption in favor of the correctness cf tax assP3sment stands. (Imter- provincial Auto-bus Co., Inc. v .. Collector of Internal i~f!venue, L-67<11 1 LTur:uu.ry 31, 1956, 98 Phil . 2) 0; Coll<'ctr;r of In terna 1 Revenue v. Bohol Land Trar:s ~;orLlticn Co .. , L-13099 c.:.nd L-l31J62, April 29, 1960, lC7 M~il., 9fi5). The burden o~ u~on the pe~i ~ionc r allPging i t to be sq, and i t In the c 0se ~t L2r 1 petilioner h '~ not pre- sented any evidr::>nce of t'he �rslevance 2ad c omp<:tence )

DECISIC'I:J CT~ CASE NO . 659 - 8- re qu ired, ar..d as such, "that .if he fa ils ::>at.is- fac-tori 2.::/ to sli.:J'.v the fact upon \vhicl) he iJases ~1 is clairr, the dPfc ndcmt is under no oblic;ation to prove his r:~xcept i ons or c1efen.se. 11 '(Belen v. Belen, 13 Phil. ?J2). Further, if the facts hdve not produced a velid c n~ e as ~ consequence of frus- trati o n to secure the supporting evidencP ~~ch fru ~ tr 2 ti on ~oes no~ oper ate to automa~ically prove pet.i -Li une r 1 s c <" c~ E' o For such default tr,e action mu�jt fi..iil ar,d l.:.his Court C�:tn not afford a remedy, it having no ~ower nor duty to provide i t . Be it of cold comfort, " ;rh e courts cannot constitute themselves gua rdi ~ns of ?erscns who are not le') a lly incor:tpe-Lent. Men may do foolish things, r'!ake ridicl.llon:> contracts, u.se .niser::-able judgme nts, and lose ~1oney by -tJ:em - inc'leed, a l l they have in the wor1~; hut nnL for th~ t n l cne c a n the law i~te J. V Pne and Lestore. There must ~e , in a.__..:;_r,_l_ l.c:.':::... o n, v ( v ;�--,-}. n'�~�:.: \'l'' 1 � 3 5 i'h _; l � 7 (-, 9) � . t. ~- tC..:.'l I According l y, we hold that petitioner st2nds l i e ble for thE~ _::hyrncnt of t~!e .sw-;1 of Pl51, 579.00 '"

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