PEOPLE OF THE PHILIPPINES v. FLORENTINA VILLANNUEVA

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC PEOPLE OF THE CTA EB CRIM. NO. 100 PHILIPPINES, (CTA Crim. Case No. A-n) Petitioner, Present: -versus- RINGPIS-LIBAN, Acting P.J., MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. Promulgated: FLORENTINA VILLANUEVA, NOV 0 3 2025 Respondent. X- - - - - - - - - - - - - - - - - - - -: - - - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION ANGELES, J.: Before the Court En Bane is a Petition for Review1 filed by the People of the Philippines (petitioner) against Florentina Villanueva (respondent), praying for the reversal of the Decision2 and Resolution3 (assailed Orders) promulgated on September 30, 2022 and January 6, 2023, respectively, and issued by the First Division (Court in Division) in CTA Crim. Case No. A-11. The assailed Orders denied petitioner's appeal from the Decision4 dated August 2, 2017 and Orders dated December 1, 2017, issued by the Regional Trial Court (RTC) of Manila, Branch 21, in Criminal Case No. 08-261193, acquitting respondent of the crime of violation of Section 255, in relation to Sections 253(d) and 256 of the National Internal Revenue Code (NIRC) of 1997, as amended. 1 En Bane (EB) Docket, pp. 5-15, with Annexes. 2 EB Docket, pp. 16-32. 3 EB Docket , pp. 33-35. 4 Division Docket , pp. 39-54 . s Division Docket, pp. 55-57.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) Page 2 ofl2 x--------------------------------------------------x ANTECEDENTS Petitioner is represented by the Bureau of Internal Revenue (BIR), the government agency primarily tasked to collect internal revenue taxes for the support of the government. Respondent rs represented by her counsel on record, Atty. Lazaro EC. Valdez, Jr.6 The facts of the case were stated by the Court in Division, as follows: The BIR, through Regional Director Ruperta P. Somera, issued on September 16, 2002, Letter of Authority (LOA) No. 2000 00048637 authorizing Revenue Officer (RO) Genaro Guevara to conduct an examination of [respondent's] books of accounts and other accounting records for all internal revenue taxes for the period from January 2000 to December 31, 2000. [Respondent] received the LOA on September 19, 2002. On September 19, 2002, a First Request for Presentation of Records was issued against [respondent], seeking the production of her books of accounts and accounting records for the purpose of the examination under the aforementioned LOA. For [respondent's] failure to produce the requested documents, RO Guevara recommended that a subpoena be issued against [respondent]. On November 4, 2002, a Final Notice was issued for [respondent] to produce the requested documents prior to the issuance of a subpoena. Failing to heed the Final Notice, Summons and/or Subpoena Duces Tecum was issued on April 28, 2003, which [respondent] received on May 5, 2003. RO Guevara then recommended that an assessment notice be issued against [respondent] for deficiency income tax and value- added tax (VAT) using the best evidence obtainable. A Pre-Assessment Notice (PAN) was issued on December 29, 2003, finding [respondent] liable for deficiency income tax, VAT and compromise penalty. The BIR issued a Formal Letter of Demand (FLD) denominated as Assessment No. 31-2000 on January 23, 2004, with attached Assessment Notices (ANs), ordering [respondent] to pay deficiency income tax and deficiency VAT in the amounts of 1"78,483.82 and 1"672,873-43, respectively, inclusive of interest and penalties, on or before February 23, 2004. The BIR issued a First Notice dated June 22, 2004 and a Second Notice dated August 11, 2004, calling for the payment of 'Petition for Review dated February 3, 2023, EB Docket, p. 6.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) Page 3 of12 X--------------------------------------------------X [respondent's] tax liabilities prior to undertaking summary remedies for collection. On September 15, 2004, a Final Notice Before Seizure was issued against [respondent]. Thereafter, [respondent] received a Warrant of Distraint and/or Levy on February 4,2005, and a Warrant of Garnishment on March 9, 2005. The Chief of the Legal Division of BIR Revenue Region No. 6 sent a Letter dated May 12, 2005 addressed to [respondent] informing her that the assessment was referred to said Division for judicial action to enforce collection. On November 23, 2005, Regional Director Alfredo V. Misajon referred the criminal prosecution of [respondent] to the City Prosecutor of Manila, with the attached Affidavit of Atty. Maki T. Datu-Ramos II of the Legal Division, Revenue Region No.6, BIR. On April 26, 2007, the City Prosecutor of Manila approved a Resolution finding probable cause to charge [respondent] with violation of Section 255 of the NIRC of 1997, as amended. Thus, on May 20, 2008, an Information was filed with the RTC of Manila charging appellee with Violation of Section 255, in relation to Sections 253(d) and 256 of the NIRC of1997, as amended, the accusatory portion of which reads: "That on or about January 23, 2004, in the City of Manila, Philippines, the said accused, did then and there willfully and unlawfully fail, refuse and neglect, as she still fails, refuses and neglects to pay her deficiency income tax, value-added tax and compromise penalties for the year 2000 in the amount of [1"]90,483.82, [1"]688,873-43 and [f"]34,40o.oo, respectively, or all valued at [!']813,757.25, under BIR Assessment/Demand Notices No. 31-2000, without formally protesting against or appealing the same, despite due notice of said assessment and demand to do so, to the damage and prejudice of the Republic of the Philippines, in the total amount of [1"]813,757�25, Philippine Currency. Contrary to law. "7 The proceedings before the RTC were likewise narrated, to wit: In an Order dated May 28. 2008, the RTC directed the issuance of a Warrant of Arrest against [respondent]. 'Decision dated September 30, 2022, EB Docket, pp. 17-19. r

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) Page 4 of12 X--------------------------------------------------X On May 30, 2008, the RTC issued an Order of Arrest against [respondent], and set her bail at P24,000.00. The Certificate of Detention dated June 4, 2008 disclosed that [respondent] has been detained at the Warrant & Subpoena Section of the Manila Police District pursuant to the Order of Arrest issued by the RTC. On even date, [respondent] posted bail by depositing cash in the amount ofP24,000.00. Accordingly, the RTC ordered her release from detention. Arraignment was conducted on June 10, 2008, where [respondent] pleaded "NOT GUILTY". During the pendency of this case before the RTC, [respondent] sent on September 26, 2008 an Offer of Compromise to the BIR, proposing the settlement of her tax liabilities of !'420,840-48, exclusive of surcharges, interest and penalties, with initial down payment of Pso,ooo.oo and the balance to be paid at P10,ooo.oo a month until fully paid. On June 10, 2009, [respondent] filed a Manifestation and Motion informing the RTC that she sent a Letter dated June 8, 2009 to the BIR offering to settle her tax liability. Pre-trial proceeded on July 22 2009. XXX XXX XXX On November 21, 2013, pre-trial conference was completed, and a Pre-Trial Order was issued. Thereafter, trial ensued xxx xxx xxx On August 2, 2017, the RTC rendered the assailed Decision, acquitting [respondent] ofthe crime charged in the Information. On August 22, 2017, [petitioner] filed a Motion for Reconsideration on the Civil Aspect of the Decision, praying that the assessment issued against [respondent] be declared valid, and the latter to pay her deficiency taxes, including charges and interests, pursuant to said assessment. XXX XXX XXX On December 1, 2017, the RTC issued the assailed Order denying [respondent's] Motion for Reconsideration on the Civil Aspect ofthe Decision.s Aggrieved by the RTC's findings, petitioner filed a Notice of Appea[9 on January 26, 2018, which was given due course on January 29, 2018. 10 8 Decision dated September 30, 2022, EB Docket, pp. 20-24. 9 RTC Docket, pp. 475-476. "Order dated January 29, 2018, RTC Docket, p. 477.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) Page 5 of12 x--------------------------------------------------x PROCEEDINGS BEFORE THE COURT IN DIVISION On May 31, 2018, the Clerk of Court of RTC Manila, Branch 21, transmitted to the Court in Division the complete records of the case. This was received by the said Court on December 15, 2021.n On April12, 2022, in compliance with the Court's Notice to File Brief dated February 10, 2022, petitioner filed a Motion for Leave to Admit Attached Appellant's Brief,12 which the Court granted on May 2, 2022.'3 However, per a Records Verification Report dated June 28, 2022, it was stated that respondent failed to file her Appellee's Brief, despite notice.'4 As such, the case was submitted for decision.'5 The Court in Division promulgated the assailed Decision on September 30, 2022, the dispositive portion of which reads: WHEREFORE, the present appeal is DENIED for lack of merit. The Decision dated August 2, 2017 and Order dated December 1, 2017, both rendered by the Regional Trial Court of Manila, Branch 21, in Criminal Case No. oS-261193 are AFFIRMED. 16 Petitioner filed a Motion for Reconsideration (Re: Decision dated 30 September 2022) on October 25, 2022,17 to which respondent filed no comment's On January 6, 2023, the Court in Division promulgated the assailed Resolution, ultimately denying the aforesaid motion. PROCEEDINGS BEFORE THIS COURT After requesting for an extension oftime,'9 which was granted by the Court,20 petitioner filed the instant Petition for Review21 on February 8, 2023. In a Resolution22 dated March 30, 2023, respondent was ordered to file her comment thereon. n Division Docket, p. 5� " Division Docket, pp. 25-38. ''Resolution dated May 2, 2022, RTC Docket, p. 257-258. '4 Division Docket, p. 260. �s Resolution dated August 5, 2022, RTC Docket, p. 262. 16 Supra, note 2. ''Division Docket, pp. 281-285. �B Records Verification Report dated November 28, 2022, RTC Docket, p. 288. "EB Docket, pp. 1-2. '"Resolution dated January 26, 2023, EB Docket, pp. 4. 21 Supra, note 1. "EB Docket, pp. 38-39.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) Page 6 of12 x--------------------------------------------------x However, the Court received a Records Verification Report dated May 9, 2023, stating that no Return Card and/or Returned Registered Mail was received by the Court in connection with the Resolution dated March 30, 2023 which was addressed and sent to Atty. Valdez and the Office of the Solicitor General (OSG).23 Thus, on May 12, 2023, the EB Clerk of Court, Atty. Danilo B. Fernando, wrote a letter to the Postmaster of the Quezon City Post Office, requiring the latter to inform the Court within ten (10) days from notice, ofthe exact date when the Registered Letter No. RE 580- 224-153 ZZ pertaining to the Resolution dated March 30, 2023 was delivered and received by Atty. Valdez with address at 1063 C. Zobel St. Ermita, Manila.24 On July 25, 2023, the Court received a Certification from the Office of the Postmaster of the Manila Central Post Office, stating that the record of the aforesaid registered letter was gutted by fire. 2s As such, in a Resolution26 dated September 15, 2023, the Court reiterated the Resolution dated March 30, 2023, ordering respondent to file her comment on the instant Petition for Review. The Court again received a Records Verification Report dated November 23, 2023, stating that no Return Card was received by the Court in connection with the Resolution dated September 15, 2023 which was addressed to Atty. Valdez.27 On December 5, 2023, Atty. Fernando wrote another letter to the Postmaster of the Quezon City Post Office, requiring the latter to inform the Court within ten (1o) days from notice, of the exact date when the Registered Letter No. RE 493-574-402 pertaining to the Resolution dated September 15, 2023 was delivered and received by Atty. Valdez with address at 1063 C. Zobel St. Ermita, Manila.28 On March 26, 2024, Atty. Fernando wrote a letter, this time to the Postmaster of the Manila Central Post Office, making a similar request as in the aforesaid letter dated December 5, 2023. Despite the foregoing letters, the Court received another Records Verification Report dated May 27, 2024, stating that no Return Card, '' EB Docket, p. 41. '4 EB Docket, p. 42. '' EB Docket, p. 45. '6 EB Docket, pp. 48-49. "EB Docket, p. 51. ,s EB Docket, p. 52.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) X--------------------------------------------------X Returned Registered Mail or Certification from the Postmaster was received by its Judicial Records Division, relative to the Resolution dated September 15, 2023 sent to Atty. Valdez.29 In a Resolution3� dated August 5, 2024, the Court resolved to give due course to the instant Petition for Review, considering that in the Notices of Resolution attached to the records of the case, in connection with the Resolutions dated March 30, 2023 and September 15, 2023, the same were personally served to respondent's address on record and received by one "Richard Villanueva" on April15, 2023 and September 25, 2023, respectively. The Court further noted that as regards Atty. Valdez, since there is a notation "cannot find specific address," the said Resolutions were not personally served to him. Thereafter, the Court submitted the case for decision. ASSIGNMENT OF ERRORS Petitioner assigns the following errors of fact and law: WITH ALL DUE RESPECT, THE HONORABLE COURT A QUO ERRED IN AFFIRMING THE RULING OF THE REGIONAL TRIAL COURT THAT RESPONDENT- APPELLEE WAS NOT SERVED WITH THE ASSESSMENT NOTICES. THE RIGHT OF THE BIR TO COLLECT THE DEFICIENCY TAXES IS BASED ON A VALID ASSESSMENT WHICH IS FINAL, EXECUTORY AND DEMANDABLE AND WHICH CAN NO LONGER BE DISTURE ED .3' Petitioner argues that when a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged is deemed instituted with the criminal action; and that in civil cases, the burden of proof is on the plaintiff to establish his/her case by preponderance of evidence. Following this, petitioner submits that there is no need to prove that respondent received the Assessment Notices subject of this case. Petitioner claims that respondent was very well aware of the existence of the deficiency tax assessment issued against her for taxable '9 EB Docket, p. 6o. 3� EB Docket, pp. 62-65. 3' Petition for Review dated February 3, 2023, EB Docket, p. g.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-n) Page 8 of12 x--------------------------------------------------x year 2000. Respondent even stipulated on the following facts during the Pre-Trial Conference before the RTC: XXX XXX XXX d. That on January 23, 2004, the BIR issued Assessment Notice No. 31-2000 to respondent-appellee FLO RENTINA VILLANUEVA for deficiency income tax, value-added tax and compromise penalties for taxable year 2000 in the amounts of P78,483.82, P672,873-43 and P62,ooo.oo, respectively; e. That notices/demand for payment of the 2000 deficiency tax assessments were made upon respondent-appellee; f. That appellee has offered to settle her 2000 deficiency tax liabilities by compromise settlement; and g. That respondent-appellee made partial payments on April 26, 2012 in the amount P1,500.00 and on January 31, 2013 in the amount of Ps,ooo.oo Petitioner maintains that it is clear from the foregoing stipulations/admissions that respondent has knowledge of the 2000 deficiency tax assessments issued by the BIR against her. Petitioner points out that while the Pre-Trial Order issued by the RTC does not show that it was signed by respondent and her counsel, it contains the following directive: The parties are enjoined to go over this Pre-Trial and manifest within five (5) days from receipt hereof any correction or amendment they may wish to incorporate herein as it shall no longer be subject to change once trial begins xxx xxx xxx Petitioner emphasizes that the records of the case are bereft of any manifestation filed by respondent to amend or withdraw the facts stipulated in the Pre-Trial Order. Petitioner adds that the fact that respondent made several offers to pay her 2000 deficiency tax liability clearly shows that she no longer contested the propriety of the subject assessment. Petitioner concludes that for failure of respondent to file a valid protest against the subject assessment, the same had long become final, executory and demandable, hence, overdue, delinquent and incontestable. RULING OF THE COURT EN BANC The instant Petition must be dismissed.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) Page 9 ofl2 x--------------------------------------------------x Section 10, Rule 9 of the Revised Rules of the Court of Tax Appeals (RRCTA) expressly provides the authority and duty of the OSG to represent the People of the Philippines in all cases brought to the CTA in the exercise of its appellate jurisdiction, viz.: RULE9 Procedure in Criminal Cases XXX XXX XXX SECTION 10. Solicitor General as Counsel for the People and Government Officials Sued in their Official Capacity. - The Solicitor General shall represent the People of the Philippines and government officials sued in their official capacity in all cases brought to the Court in the exercise of its appellate jurisdiction. He may deputize the legal officers of the Bureau of Internal Revenue in cases brought under the National Internal Revenue Code or other laws enforced by the Bureau of Internal Revenue, or the legal officers of the Bureau of Customs in cases brought under the Tariff and Customs Code of the Philippines or other laws enforced by the Bureau of Customs, to appear in behalf of the officials of said agencies sued in their official capacity: Provided, however, such duly deputized legal officers shall remain at all times under the direct control and supervision of the Solicitor General. (Emphasis supplied) As early as in the cases of Commissioner ofInternal Revenue v. La Suerte Cigar & Cigarette Factory32 and LG Electronics Philippines, Inc v. Commissioner ofInternal Revenue,33 as well as in the recent case of People v. Tuyay,34 the Supreme Court has consistently held that it is the Solicitor General who has the primary responsibility to appear for the government in appellate proceedings. Further, in Carino v. De Castro,35 the Supreme Court clarified that it is the OSG who is the appellate counsel of the People of the Philippines in all criminal cases. The general rule is that only the Solicitor General can bring or defend actions on behalf of the Republic of the Philippines, and that actions filed in the name of the Republic, or its agencies and instrumentalities, if not initiated by the Solicitor General, should be summarily dismissed.36 3' G.R. No. 144942, July 4, 2002. 33 G.R. No. 165451, December 3, 2014. 34 G.R. No. 206579, December 1, 2021. 35 G.R. No. 176084, April3o, 2008. 36 Republic v. "G" Holdings Inc., G.R. No. 141241, November 22, 2005. v

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-n) x--------------------------------------------------x The only exceptions to the foregoing rule are: (1) when the government is adversely affected by a contrary position taken by the OSG; (2) when there is an express authorization by the OSG deputizing legal officers to assist the Solicitor General and appear or represent the government in cases involving their respective offices; and (3) when the dismissal of the petition could have a lasting effect on government tax revenues as in the case of La Suerte Cigar.37 With respect to the second exception, the Supreme Court in Republic v. Viaje38 recognized the power of the OSG to deputize legal officers of government departments, bureaus, agencies and offices to assist it in representing the government. This notwithstanding, the High Court emphasized that the OSG's deputized counsel is "no more than the 'surrogate' of the Solicitor General in any particular proceeding" and the latter remains the principal counsel entitled to be furnished copies of all court orders, notices, and decisions.39 In this case, what is involved is an appeal filed by the People of the Philippines from the assailed Orders rendered by the Court in Division in CTA Crim. Case No. A-n. Thus, it is the Solicitor General through the OSG who is the proper party statutorily authorized to represent petitioner in the present appeal. While the OSG is allowed to deputize lawyers from the BIR to serve as special counsel for petitioner, such deputization must be express or at least apparent to this Court. A perusal of the Motion for Extension ofTime to File Petition for Review filed on January 25, 2023, and the Petition for Review filed on February 8, 2023, readily show that the same were executed, signed and filed by lawyers from the Legal Division of the BIR. However, nowhere in the records of the case does it appear that the OSG duly deputized the said BIR lawyers as special counsel for purposes of initiating the present appeal. Neither do the records of the case bear any proof that the said Motion and Petition were served on the OSG. Scrutiny of the said Motion and Petition reveal that the same were copy furnished only to respondent and her counsel. It can be reasonably concluded, therefore, in the absence of sufficient contrary proof, that the OSG was not duly informed of the filing of the said Motion and Petition at the time they were respectively filed. 37 Id. 38 G.R. No. 180993, January 27, 2016. 39 Id.

DECISION CTA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) x--------------------------------------------------x Based on the foregoing, We find petitioner's Motion and Petition to have been filed without the conformity and participation of the OSG. As no written authorization from the OSG was ever submitted as proof of authority to file the instant Petition on behalf of the OSG, this Court is constrained to consider the Petition as not validly filed. Consequently, the assailed Orders have attained finality. It bears noting that in Carino v. De Castro,4� the Supreme Court affirmed the decision of the Court of Appeals which dismissed the petition for review filed before it because it was filed only by the private prosecutor and not by the OSG as mandated by law. More squarely, in People v. Tuyay,4' the High Court upheld the decision of the CTA En Bane which denied due course to the petition for review and dismissed the same on the ground that petitioner People of the Philippines was represented by Special Prosecutors and not by the OSG. Applying the foregoing to the case at bar, with the instant Petition suffering from the fatal infirmity of lack of the requisite imprimatur from the OSG, the same must be dismissed. WHEREFORE, premises considered, the Petitionfor Review filed on February 8, 2023 is DISMISSED. Accordingly, the Decision and Resolution promulgated on September 30, 2022 and January 6, 2023, respectively, are AFFIRMED. SO ORDERED. HENRJRANGELES Associate Justice WE CONCUR: ~,~ _,--- MA. BELEN M. RINGPIS-LIBAN Acting Presiding Justice 4� Supra, note 35. 4l Supra, note 34.

DECISION CIA EB CRIM. NO. 100 (CTA Crim. Case No. A-11) Page 12 of12 x--------------------------------------------------x c~�~-~ CATHERINl. MANAHAN . Associate Justice JEAN MAR~It~eJ~u~sOti-cVeILLENA ~IW. FQ,_...., fR.' E~~- S-i~A. ~O Associate Justice fLAnll);tnJ' LANiff~cUI-IYAVID Associate Justice co~~F~s Associate Justice CERTIFICATION Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that the conclusions in the above Decision were reached in consultation before the case was assigned to the writer of the opinion of the Court. MA. BELEN M. RINGPIS-LIBAN Acting Presiding Justice