COMMISSIONER OF INTERNAL REVENUE v. APEX CHEMICAL CORPORATION

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC COMMISSIONER OF INTERNAL CTA EB N0.1382 REVENUE, (CTA Case No. 8698) Petitioner, -versus- APEX CHEMICAL CORPORATION, Respondent. x------------------------------------------x APEX CHEMICAL CTA EB N0.1387 (CTA Case No. 8698) CORPORATION Present: Petitioner, Del Rosario, P.J, -versus- Castaneda, Jr., Bautista, COMMISSIONER OF INTERNAL Uy, REVENUE, Casanova, Pabon-Victorino, Respondent. Mindaro-Grulla, Ringpis-Liban, and Manahan,JJ Promulgated: x---------------------------------------------------------------------------------------------x RESOLUTION ~

RESOLUTION CTA EB Nos. 1382 & 1387 Pagel ofS CASTANEDA, JR., J.: For resolution of the Court En Bane is the Commissioner of Internal Revenue's (CIR) Motion for Reconsideration (Decision promulgated on October 14, 2016) filed on October 26, 2016, with Apex Chemical Corporation's (Apex) Opposition to Motion for Reconsideration filed on January 9, 2017. For easy reference, the dispositive portion of the assailed Decision states: "WHEREFORE, petitioner Apex Chemical Corporation's Petition for Review in CTA EB No. 1387 is GRANTED. On the other hand, petitioner Commissioner of Internal Revenue's Petition for Review in CTA EB No. 1382 is DENIED, for lack of merit. Accordingly, the Decision dated August 26, 2015 is modified as follows: 'WHEREFORE, the instant Petition for Review is GRANTED. Accordingly, Assessment Notices with Demand No. 043B-B060-07 are CANCELLED.' SO ORDERED." 1 In the instant motion, the CIR asserts that it observed the right to due process of Apex. Meanwhile, assuming that the CIR committed lapses, these lapses were already cured when it accommodated Apex' request for reinvestigation. On the other hand, Apex asserts that it was denied of its right to due process. Apex further asserts that it did not request for reinvestigation. Instead, it requested for the termination of the tax examination. The core issue to be resolved by the Court En Bane is whether Apex' right to due process was observed. The Court En Bane denies the instant motion. )k-- 1 Court En Bane Docket, p. 119.

RESOLUTION CTA EB Nos. 1382 & 1387 Page 3 of5 Apex did not request for re- investigation The CIR would like to impress upon the Court En Bane that assuming he committed lapses vis-a-vis the observance of Apex' right to due process, the same is cured when it accommodated Apex' request for reinvestigation. A review of the records shows, however, that Apex did not file a request for reinvestigation. Instead, Apex merely reiterated that it already complied with the CIR's requirement. Apex' subject letter dated March 21, 20122 states: "We acknowledge receipt of your letter last March 8, 2012. It requests us to file within 15 days from receipt thereof a protest letter to the Final Assessment Notice you issued our company last January 7, 2011. In this regard, we would like to bring to your attention the fact that we already complied with the requirement." The fact that Apex did not request for reinvestigation was further clarified in its letter dated July 23, 2012,3 viz: "In connection therewith, please be informed that nowhere in our letter ofMarch 21, 2012 (copy attached), did we request for re-investigation. xxx" In light of the foregoing, the Court En Bane gives no consideration to the CIR' s assertion because there is no request for reinvestigation filed by Apex. There is no reason for the Court En Bane to deviate from its previous ruling In this regard, the Court En Bane sees no error when it ruled in the assailed Decision that: "In the more recent ruling of this Court, We ruled that the 15-day period afforded to a taxpayer to protest a PAN is an important part of the due process requirement in the issuance of a deficiency tax assessment. ~ 2 Exhibit "P-6", Court in Division Docket, Vol. 1, p. 433. 3 Exhibit "P-9", Court in Division Docket, Vol. 1, p. 436.

RESOLUTION CTA EB Nos. 1382 & 1387 Page 4 of5 XXX XXX XXX Moreover, this Court notes that not only did the CIR fail to observe Apex'15-day period to file a protest against the PAN, the CIR likewise issued the FANs as early as January 7, 2011, or even before Apex received the PAN on January 13, 2011. In other words, the CIR already prejudged that Apex is liable to pay the subject deficiency taxes, which further violates Apex' right to due process." Thus, aside from non-observance of Apex' 15-day period to protest the PAN, the CIR issued the FAN ahead of Apex' receipt ofthe PAN. These circumstances constitute prejudgment on the part of the CIR which violate Apex' right to due process. WHEREFORE, in view thereof, the Commissioner of Internal Revenue's Motion for Reconsideration (Decision promulgated on October 14, 2016) is DENIED, for lack of merit. Accordingly, the assailed Decision dated October 14,2016 is AFFIRMED. SO ORDERED. ~~AN-IT~OzC.,CAeS. TA~ NE~DA~, JR. WE CONCUR: Associate Justice Presiding Justice LOVELL~ BAUTISTA E~.UY Associate Justice Associate Justice CAESAR.c/lf.;ANOVA Associate Justice

RESOLUTION ~.~~-1....:. CTA EB Nos. 1382 & 1387 PageS ofS MA. BELEN M. RINGPIS�LIBAN Associate Justice ~N-~.G~ CIELITO N. MINDARO-GRULLA Associate Justice ~-;r.~ CATHERINE T. MANAHAN Associate Justice