PEOPLE OF THE PHILIPPINES v. CONDI WILLIAM INDUSTRIAL CO. / DANIEL Y. CHUA

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION PEOPLE OF THE CTA Crim. Case No. 0-711 PHILIPPINES, (NPS Doc No. XVI-INV-17I-00235) Plaintiff, For: Violation of Section 255 of the NIRC of 1997, as amended. -versus- Members: MANAHAN, Chairperson, CONDI WILLIAM REYES-FAJARDO, and INDUSTRIAL CO./ DANIEL ANGELES, JJ. Y. CHUA, 234 Sumulong Highway, Mambungan 1870 Antipolo Promulgated: City, Accused. SEP 2 0 2024 X- - - - - - - - - - - - - - - - - - - - - - ?::::--::-::-: _/_ :p_:1: /':. ~�- - - - - X RESOLUTION On March 18, 20 19 , an Information was filed against accused Daniel Y. Chua. Said accused was charged for violation of Section 255 of the 1997 National Internal Revenue Code (NIRC), as amended. For easy reference, the accusatory portion of the Information reads: "That on or about January 14, 20 13 or on dates subsequent thereto, in Antipolo City, and within the jurisdiction of this Honora ble Court, th e above-named accused, as the General Manager of Condi William Industrial Co., which is registered with the Bureau of Internal Revenue (BIR) under Tax Identification No. (TI N) 007-304-398, and with registered business a ddress at 234 Sumulong Highway, Ma mbungan, Antipolo City, did then and there, willfully, unlawfully, a nd criminally fail and neglect to pay deficiency income tax amounting to Php24,3 13 ,223.06 (or for total amount of Php38, 11 5, 140.37 inclusive of interest and surch a rges) covering taxable year 2009, which he continua lly refused to pay despite final assessm ent, including post a nd prior notices a nd formal demands to pay, the latest being in the nature of dema nd before suit issued by the BIR on August

RESOLUTION CTA Crim. Case No. 0 -711 23, 2017 resulting in the deprivation of revenues due the Government. CONTRARY TO LAW." Meanwhile, the following documents were attached to subject Information: 1. Resolution dated February 21, 2018 issued by Assistant State Prosecutor Zenamar J. L. Machacon- Caparros, recommending the filing of Informations against the accused for violation of Section 255 of the 1997 NIRC, as amended, for the crime of willful failure to pay deficiency income tax, value added tax, and final withholding tax for taxable year (TY) 2009; 2. Referral Letter dated September 4, 2017 for preliminary investigation and filing of information against accused Paw, issued by Commissioner of Internal Revenue (CIR) Caesar R. Dulay; and 3. Joint Complaint-Affidavit of Revenue Officers (ROs) Arlyn T. Carro, Milagros Leni Q. Flores and Michael R. Nitafan, executed on September 14, 2017, with supporting documents. On April 12, 20 19, the Court issued a Resolution for the issuance ofWarrant of Arrest (WOA). On May 8, 2019, the WOA was issued. However, on July 23, 2019, a Return ofWOA was posted informing this Court that said WOA was unserved. Thus, the Court issued an Alias WOA on August 23, 2019. Again, said Alias WOA has yet to be served to the accused. Based on the records of this case, the warrant was not served to the accused because the latter cannot be located on its registered business address, hence, his whereabouts is unknown. On March 11 , 2020, the case was archived because the Alias WOA was not served and the accused is still at-large.

RESOLUTION CTA Crim. Case No. 0-711 Upon a second and careful evaluation of the Information issued to the accused, it appears that the Court has no jurisdiction over the case. Section 7(b)( 1) of Republic Act (RA) No. 1125, as amen ded by RA No. 9282, provides: "SEC. 7. Jurisdiction. -The CTA shall exercise: a. XXX XXX XXX: b. Jurisdiction over cases involving criminal offenses as herein provided: 1. Exclusive origina l jurisdiction over all criminal offenses arising from violations of the National Interna l Revenue Code or Tariff and Customs Code a nd other laws administered by the Bureau of Internal Revenue or the Bureau of Customs: Provided, however, That offenses or felonies mentioned in this paragraph where the principal amount of taxes and fees, exclusive of charges and penalties, claimed is less tha n One million pesos (Pl ,OOO,OOO.OO) or where there is no specified amount claimed shall be tried by the regular Courts and the jurisdiction of the CTA sha ll be appellate. Any provision of law or the Rules of Court to the contrary notwithstand ing, the crimina l action and the corresponding civil action for t he recovery of civil liability for taxes and penalties shall at all times be simultaneously instituted with, and jointly determined in th e sam e proceeding by the CTA, the filing of the crimina l action bein g deemed to n ecessarily carry with it the filing of the civil action, and no right to reserve the filing of such civil action separately from the crimina l action will be recognized ...." (Emphasis supplied) In order for this Court to acquire jurisdiction over the criminal case, the requisites, among others, is that the principal amount of taxes and fees must be exclusive of charges and penalties. However, as shown in the accu satory portion of su ch Inform ation , th e amount of deficiency income tax is inclusive of in terest and su rcharges and that th e p hrase "exclu sive of ch arges and penalties" is not indicated therein. Hence, th e defect in su ch Information affects the Court's jurisdiction over the instant case.

RESOLUTION CTA Cr i m . Case No. 0-7 1 1 Page 4 of4 Jurisdiction is defined as the power and authority of a court to hear, try, and decide a case. In order for the court or an adjudicative body to have authority to dispose of the case on the merits, it must acquire, among others, jurisdiction over the subject matter. It is conferred by law and not by the consent or acqu iescen ce of any or all of th e parties or by erron eou s belief of th e cou rt that it exists. Thus , when a court has no jurisdiction over the subject matter, the only power it has is to dismiss the action.1 ACCORDINGLY, CTA Crim. Case No. 0 -7 11 1s DISMISSED for lack ofjurisdiction. SO ORDERED. C~7�~ CATHERINE T. MANAHAN Associate Justice ~~ t ~~ ~�~ MARIAN rivfJ. REYis~FAJARDO Associate Justice (With Sep arate lfncurring Op inion) HENRY S. ANGELES Associate Justice I Mitsubishi Motors Philippines Corporation v. Bureau of Customs, G.R. No. 209830, J une 17, 20 15; Nippon Express (Philippines) Corp. v. Commissioner of Internal Revenue, G.R. No. 185666, February 04, 20 15.

REPUBLIC OF THE PHILIPPINES COURTOFTAXAPPlliUB QUEZON CITY THIRD DIVISION PEOPLE OF THE CTA Crim. Case No. 0-711 PHILIPPINES, Plaintiff, Members: -versus- MANAHAN, Chairperson, REYES-FAJARDO, and ANGELES, JJ. CONDI WILLIAM INDUSTRIAL CO./DANIEL Y.CHUA 234 Sumulong Highway, Promulgated: SEP Mambungan 1870 Antipolo City, 2 &l)JnV;;-4 Accused. x - - - - - - - - - - - - - - - - - - - -- - - - - - - -G:-- - - - - - j~ ~ '="1'.: ~� - - - - - -x SEPARATE CONCURRING OPINION ANGELES, J.: I agree with the Resolution to dismiss to the above-captioned case, but not for the reasons stated therein. With due respect to the ponente, I would like to discuss further the ground upon which the dismissal should be anchored in my humble opinion. The case should be dismissed due to prescription of the offense charged Section 281 of the NIRC, as amended, provides the period of prescription for violations of any provision of the NIRC, viz.: 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 date of the commission of the violation of the law, and if the same be not

SEPARATE CONCURRING OPINION CTA Crim. Case No. 0-711 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 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. (Emphasis supplied) Further, Section 2, Rule 9 of the Revised Rules of the Court of Tax Appeals (RRCTA) provides that the institution of criminal actions shall interrupt the running of the period of prescription, to wit: Section 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 Republic 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 criminal actions shall interrupt the running of the period of prescription. (Emphasis supplied) Pursuant to the foregoing provisions, all violations of any provision of NIRC shall prescribe after five (5) years and such period shall begin to run from the date of the commission of the violation of the law. Meanwhile, only the institution of criminal actions shall interrupt the running of the s-year prescriptive period. Based on the allegations in the Information1, together with the Resolution2 dated February 21, 2018 and Joint-Complaint Affidavit3 dated September 14, 2017, the Formal Letter of Demand (FLD) and Assessment Notices (ANs)4were issued to the accused on January 14, 2013 and personally received by the latter's authorized representative at its registered address. Since the accused is alleged to have failed to file a protest against the said FLD and ANs, the subject tax assessment became final, executory and demandable after the lapse of thirty (30) days from receipt or on February 14, 2013. � Division Docket, pp. 8-10. 2 Division Docket, pp. 11-15. 3 Division Docket, pp. 38-44. 4 Annexes "I", "I-1", "I-2" and "I-3", Joint Complaint-Affidavit dated September 14, 2017, pp. 57- 63.

SEPARATE CONCURRING OPINION CTA Crim. Case No . 0-711 Page3 of3 Accordingly, the cause of action of the Bureau of Internal Revenue (BIR) accrued on February 14, 2013. It is noted that the due date for payment as indicated on the FLD and ANs was also on February 14, 2013. As the offense of failure to pay tax under Section 255 ofthe NIRC, as amended, was committed on February 14, 2013, plaintiff had five (5) years from the said date or until February 14, 2018 within which to file the Information in Court. In this case, the Information was filed only on March 18, 2019. Considering that the five (5) year prescriptive period commenced when the FLD became final, executory and demandable on February 14, 2013, and that the prescriptive period to institute the criminal action lapsed on February 14, 2018, the subject Information filed on March 18, 2019 was clearly beyond the five (5) year prescriptive period. HENRY~~GELES Associate Justice