GLEND AGNES LLANTADA (SERVIPLUS MEDICAL EQUIPMENT SERVICES & SUPPLY) v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SECOND DIVISION GLEND AGNES LLANTADA CTA CASE NO. 10468 (SERVIPLUS MEDICAL Members: EQUIPMENT SERVICES & RINGPIS-LIBAN, Chairperson, MODESTO-SAN PEDRO, and SUPPLY), FERRER-FLORES, Jl. Petitioner, - versus - COMMISSIONER OF INTERNAL Promulgated: REVENUE, JAN 0 8 2025 '/.' ~ M '~-~-J,v Respondent. ' X------- -- ~--- -- --- --- ----- ---- - -- - ------ --------- - -------- ---- - - - - ---- - -- ----- - - -- -- - - - -- - -- - - --- - --- - --~.- RESOLUTION RINGPIS-LIBAN, J: Submitted before this Court is respondent's Motion for Reconsideration (Re: Decision dated 26 July 2024) ftled on August 21,2024, with petitioner's Comment (Re: Respondent's Motion for Reconsideration dated 21 August 2024) filed through an accredited courier on September 23, 2024 and received by the Court on September 24, 2024. O n July 26, 2024, the Court promulgated a D ecision cancelling respondent's Warrant of Distraint and/ or Levy (WDL) dated January 19, 2021 against petitioner for violating the latter's right to administrative due process of law, the dispositive portio n of which reads as follows: "WHEREFORE, in light of the foregoing considerations, the present Petition f or Review is GRANTED. Accordingly, the WDL I o. RR7I\ -01 -08-2021 -0009 dated january 19, 2021 issued against petitioner is CANCELLED and SET ASIDE. Moreover, while the LO.t\ with SN: eL�\201500079628 I L0�\- 028-2018-00000120 dated April 25, 2018 is valid , the FLD (Part.!" f a~

RESOLUTION ' CTA Case No. 10468 II), with DetaiLr qf DZ:rtrepanry, all dated June 17, 2019, 1s likewise CANCELLED and SET ASIDE, for being void. SO ORDERED." In his Motion, respondent raises the lone argument that petitioner's right to due process of law was not violated since it was afforded due opportunity to respond and assail the deficiency income tax and value-added tax 01AT) assessments in the aggregate amount ofP4,336,365.82 for taxable period January 1, 2015 to July 19,2016. Respondent points out that not addressing any of the arguments raised by petitioner in its Repb' to the Preliminary Assessment Notia dated June 4, 2019 does not automatically mean that he disregarded petitioner's right to administrative due process. Respondent expounds that he simply did not agree with and, concomitantly, consider petitioner's arguments in issuing the Formal Letter of Demand and Final Assessment Notices (FLD/FAN) on june 17,2019. In any case, respondent maintains that the Preliminary Assessment N otice (PAN) as well as the FLD /FAN clearly and distinctly stated the facts, laws, and rules and regulations upon which the assessments were based. Moreover, respondent asserts that when petltloner received the FLD/FAN, it was able to timely file a Protest Letter dated July 15,2019 thereto and was in fact given due course by respondent. This eventually led in the issuance of the Final Detision on Disputed Assessment (FDDA) dated December 17, 2019 which effectively reduced the deficiency taxes of petitioner from 1>7,665,672.50 to 1>4,342,320.67. Hence, respondent contends that petitioner was never deprived of its right to due process and was actually afforded all possible opportunity to assail the deficiency assessments issued against it. Lastly, respondent cites the Court of Tax Appeals (CTA) En Bane case of CommisJ�ioner of Internal Re7Jemte 7). AJinomoto Philippines Corporation (CIA EB Nos. 1010 and 1015, Mqy 26, 20 15), wherein the Court E11 Bane ruled that "xxx there is no violation of the cardinal principle in administrative investigations - that taxpayers should be able to present their case and adduce supporting evidenced. While the FAN was issued before the period to response to PAN has expired, Ajinomoto nevertheless received the PAN and FA , was informed of the factual and legal bases of the assessments, and was able to intelligently response to the PAN and FAN in a Letter dated December 23, 2008. " On the other hand, in its Comment, petitioner asserts that respondent neither raised any significant or new arguments nor presented controverting evidence, other than the reiteration that he did not vio late petitioner's right to due process of law. As such, petitioner claims that the present Motion for Reconsideration is not impressed with merit. ;/

RESOLUTION ' CTA Case No. 10468 Petitioner cites the case of Commissioner of Internal Revenue v. Avon Products Manufacturing; Inc., et seq./ when the Supreme Court clarified that administrative due process is violated when a taxpayer: "xxx was no t fully apprised of the legal and factual bases of the assessments issued against it. The Details of Discrepancy attached to the Preliminary Assessment Notice, as well as the Formal Letter of Demand with Final Assessment Notices, did not even comment or address the defenses and documents submitted by Avon. Thus, Avon was left unaware on how the Commissioner or her authorized representatives appreciated the explanations or defenses raised in connection with the assessments . xxx The Commissioner's total disregard of due process rendered the identical Preliminary Assessment Notice, Final Assessment Notices, and Collection Letter null and void, and of no force and effect." Applying the foregoing, petitioner reiterates that respondent violated its right to due process of law since respondent was unable to give any reason and particular facts upon which his conclusions were based . Petitioner further points out that even in the instant Motion for Reconsideratio n, respondent was unable to provide any acceptable explanation on why the amounts stated in the basic tax assessments both in the PA and FLD /FAN were identical. Petitioner continues that the pro forma response contained in the FLD reiterating the amounts of assessment for income tax and VAT without stating the factual and legal bases for the assessment and without addressing the arguments raised by petitioner in his Rep!J toPAN, constitute a violation of its right to due process of law. With regard to the CTA En Bane Case cited by respondent, which considered that the taxpayer therein was informed of the factual and legal bases of the assessments since it was able to intelligently respond to the PAN and FLD, petitioner submits that that while the cited CTA En Bane case has persuasive authority, it is only decisions of the Supreme Court establish jurisprudence and are binding on all courts pursuant to Article 8 of the ew Civil Code of the Philippines. As such, petitioner contends that it is not enough that the taxpayer was able to intelligently respond to the PAN and protest the FLD. Violation of due process is still present when there is failure on the part of respondent to give some reason for rejecting the taxpayer's explanatio ns and he must give the particular facts upon which his conclusion is based and those facts must appear in the record. After due consideration, the Court find s respondent's Motion for Reconsideration bereft of merit. It must be emphasized that the Supreme Court, by tradition and in our system of judicial administration, has the last word on what the law is; it is the final arbiter of any justiciable controversy. There is o nly one Supreme Court f r o / ~/ 1 G.R. Nos. 201398-99, October 03, 2018.

RESOLUTION � CTA Case No. 10468 whose decisions all other courts should take their bearings. 2 Inciclentally, the Supreme Court has already clearly declared in the A von case that when respondent rejects the taxpayer's explanations, he must give some reason for doing so and the particular facts and law upon which his conclusion are based, to wit: "The facts demonstrate that Avon was deprived of due pro cess. It was not fully apprised of the legal and factual bases of the assessments issued against it. The Details of Discrepancy attached to the Preliminary Assessment Notice, as well as the Formal Letter of Demand with Final Assessment Notices, did not even comment or address the defenses and documents submitted by Avon. Thus, Avon was left unaware on how the Commissioner or her authorized representatives appreciated the explanations or defenses raised in connection with the assessments. There was clear inaction of the Commissioner at every stage of the pro ceedings. XXX It is true that the Commissioner is not o bliged to accept the taxpayer's explanations, as explained by the Co urt o f Tax ,\ppeals. However, when he or she rejects these explanations, he or she must give some reason for doing so. He or she must give the particular facts upon which his or her conclusion are based, and those facts must appear in the record. XXX The Commissioner's total disregard of due process rendered the identical Preliminary Assessment Notice, Final Assessment Notices, and Collection Letter null and void, and of no force and effect." (Empha.re.r and tmdencoring Jttpplied) Herein, while the aggregate amount of taxes being assessed increased from the PAN dated May 17,2019 to the FLD dated June 17, 2019, a C01T1pa.rison of the figures stated in the PAN vis-a-vis the figures in the FLD, easily reveal that the respective amounts of basic taxes, twenty percent (20%) interest, and compromise penalty remain unchanged -it was only the twelve percent (12%) interest being imposed that was adjusted. In fact, the Detai!J of DiJcrepancieJ attached to the said FLD merely reiterated in verbatim those in the Detai!J rif DiscrepancieJ attached to the PAN . In addition, no t addressing an y of the refutations made by petitioner in his Rep!J to Prelimi11a~y A JJeJJmenl N otir:e (PAN) is a clear indication that respondent did not consider the same when it issued the subject FLD. As to CTA En Banr; Case cited by responden t, the facts and issues in the said case is not on all fours with the present case. "\ reading o f the said case shows that the issue therein is the Bureau of Internal Revenue (BIR)'s issuancy 2 Commissioner ofInternal Revenue v. Michel J. LhUtllier Pawnshop, Inc., G.R. No. 150947, July 15, 2003.

RESOLUTION � CTA Case No. 10468 of the FAN before the expiration of the period within which the taxpayer may respond to the PAN. Furthermore, suffice it to state that CTA decisions do not constitute precedents. That is why CfA decisions are appealable to the Supreme Court, which may affirm, reverse, or modify said decisions as the facts and the law may warrant. Only decisions of the Supreme Court constitute binding precedents, forming part of the Philippine legal system.3 In view of the foregoing disquisitions, there being no new matter or substantial issue raised by respondent in his Motion for Reconsideration, the Court finds no compelling reason to reverse or modify the Decision promulgated on July 26, 2024. WHEREFORE, premises considered, respondent's Motion for Reconsideration (Re: Decision dated 26 July 2024) is DENIED for lack of merit. SO ORDERED. <lt. ~ --, "- MA. BELEN M. RINGPIS-LIBAN Associate Justice IVE CONCUR� (On Leave) MARIA ROWENA MODESTO-SAN PEDRO Associate Justice 3 Commissioner ofInternal Revenue v. San Roque Power Corporation et seq., G.R. Nos . 187485, 196113 and 197156, February 12, 2013.