PEOPLE OF THE PHILIPPINES v. MARINA C. BABASA PEDRO C. CARANDANG Both care of Portland Chemicals Corporation No. 2354 Concha St., San Andres, Manila

REPUBL C OF THE PHILIPPINES COU T OF TAX APPEALS QUEZON CITY PEOPLE OF THE PHILI PINES, CTA Crim. Case No. 0-654 Plaintiff, (NPS Docket No. XV-07-INV-17G- 04267) For: Violation of Section 255, in relation to Sections 253 (d) & 256, of the NIRC of 1997, as amended by R.A. 8424 -versus- MARINA C. BABASA & Members: CARANDANG, CASTANEDA, JR. , Chairperson EDRO C. CASANOVA, and Accused. MANAHAN, JJ. Promulgated: ){- - - - - - - - - - - - - - - - - - DEC 0 1 2017 / r 7 ~:21 ,.,. . - - - - - - - - -- - - - - - - - - - - - - - ){ SOLUTION On November 9, 2017, an Information was filed by the prosecution against t e accused Marina C. Bahasa & Pedro C. Carandang, as Pres~dent and Treasurer, respectively, of Portland Chemicals Corporation for violation of Section 255 in relation to Section 253J(d) and 256 of the 1997 National Internal Revenue Code (" 1997 NIRC") as amended by Republic Act (RA) No. 8424, which readslas follows: "The undersigned accuses Marina C. Babasa & Pedro C. Carandang of VIOL. Of Sec. 255 in rel. to SEC. 253 (d) and 256 of the National Inte nal Revenue Code of 1997 as amended by R.A 8424 committe as follows:

I RESOLUTION CTA CRIM . CASE No. 0-654 That on or about Januazy 25, 2014, and for sometime prior thereto, in the City of M~nila, Philippines, the said accused, being then the President lnd Treasurer, respectively of Portland I Chemicals Corporation wf.th business address at 2354 Concha St., San Andres, this City, did then and there willfully, unlawfully fail and refuse knd neglect as they still fail, refuse and neglect to pay the deficie1~cy internal revenue tax liabilities for the year 2010 in the amount of Php2,281,187.88 under Assessment/Demand Le ter No. 34-10-IT-630 and 34-10-VT- 6308, despite notice and service of said assessment and Warrant of Distraint and /or Lt.~ dated January 24, 2014, without formally protesting agai st or appealing the same and repeated demands made upon the to do so, to the damage and prejudice of the Republic of the Philippines, in the total amount of P2,281,187.88, Philippi e Currency. Contrary to law." Attached thereto are t e following supporting documents by the Department of Justic Prosecution Staff: 1) Resolution dated Se tember 25, 2017 issued by Assistant State Prosecutor Ire e Coloso- Zabala and duly approved by Senior Assistan City Prosecutor Raymunda A. Cruz Apolo and City Prosecutor, Edward M. Togonon, recommending tha respondents Marina C. Babasa & Pedro C. Carandan be charged with violation of Section 255 of the Tax Cod� of 1997 and for filing of the requisite Information agains~ them. of~ 2) Original Copy Authority and Approval for the filing and institution of the criminal complaint against Portland i Chemicals Corpo~ation and its responsible officers, Marina C. Bahasa Pedro C. Carandang. 3) Joint Complaint-Affidavit ofBIR revenue officers, Jefferson T. Ocampo and S11:ah H. Dolina dated July 21, 2017 with office address at c o Legal Division, Revenue Region No. 6, Bureau of Internal Revenue Manila, 5th floor, BIR Building I, Solana St., Idtramuros, Manila with the following attachments: a. Assessment Notice issued on January 24, 2014 for income tax deficiency; b. Assessment Notice issued on January 24, 2014 for value-adde tax deficiency;

RESOLUTION CTA CRIM. CASE No. 0-654 c. Formal Letter ofiDemand dated January 24, 2014 for deficiency incomb and VAT for taxable year ending 20 10 with Detait of Discrepancies; d. Letter of Authori( dated August 31, 2011; e. Memorandum o � Assignment addressed to revenue officers Reinhad A. Anaban and Alma Celestial T. Caybayab; f. List of Audit �equirements Per Tax Type dated September 1, 20/11; fo ) g. First Request Presentation of Records; h. Second Request for Presentation of Records; i. Final Notice adqressed to Portland Chemicals Corp. dated September 19, 2011; j. Notice for Infor1 al Conference dated July 29, 2013; k. Memorandum fdr the Regional Director dated August 22, 2013; 1. Assignment Sli:R; m.Preliminary Asl ssment Notice (PAN) for deficiency income taxes d VAT for taxable year ended 20 10 dated January �, 2014; n. Preliminary Col ection Letter dated June 9, 2014; o. Final Notice Be ore Seizure dated July 4, 2014; p. Warrant of Dist aint and/or Levy signed by Regional Director, Aracel[ L. Francisco; q. Warrants of Gj nishment addressed to the following banks: 1. Lan Bank of the Philippines; Philippines;

RESOLUTION CTA CRIM. CASE No. 0 -654 Pa ge 4 of 6 3. Uniol Bank of the Philippines; 4. East ~l, est Banking Corporation; 5. Philtr st Bank; I 6. Metror.ank; 7. United Coconut Planters Bank; 8. Secu+ y Bank; 10.Citibank; I 10.China Banking Corporation; 11.Banf de oro; 12.BanU of the Philippine Islands. r. Memorandum l ated March 25, 2015 signed by Revenue Officer II, Jefferson T. Ocampo; Based on the allegation$ in the Information, the accused are charged herein for violatio+ of section 255 in relation to Section 253 (d) and 256 of the 1Q97 NIRC, as amended by RA 8424. allegedly due to the failur~ of Portland Chemicals Corporation to pay its income taxes J and VAT in the total amount of Php2 ,281, 187.88 for taxa~le year 20 10. The Court will now determine probable cause for the issuance of the warrant oflarrest. The primary offense ch I ged is the crime of failure to pay tax under Section 255 of the 1997 NIRC which has the following elements, to wit: (a)That a corporate tar,payer is required under the 1997 NIRC, or by rules anf regulations, to pay any tax, make a return, keep any reaord or supply correct and accurate information, or with old or remit taxes withheld, or refund excess taxes withhe d on compensation, at the time or times required by la or rules and regulations.

RESOLUTION CTA CRIM . CASE No. 0 -654 (b)That the corporate taxpayer failed to pay the required tax, make a return or keJp the required record or supply the correct and accurate !information. Section 253 (d) of the 1997F IRC provides the persons to be held liable in case the crime is leged to have been committed by a juridical person, thus: "Section 253. General Pl ovisions. d. In the case of associat ons, partnerships or corporations, the ft penalty shall be impos~d on the partner, president, general manager, branch manager, treasurer, officer-in-charge and the employees responsible the violation." (italics ours) Upon a careful conside[ ation of the supporting documents attached to the records of ~he case, the Court finds that there is no probable cause to issu~ a warrant of arrest for the following reasons: I (a) There was no evidenc~ to support that MARINA C. BABASA and PEDRO c. CARArDANG , are the designated President and Treasurer, respectively of Portland Chemicals Corporation at the t*1 .e the alleged crime was committed. The names Marina C. Bahasa and Pero C. Carandang were mentioned in the I ormation in their capacity as said officers of the Corpo~ation yet no evidence was submitted to prove that these Pf rsons are or were still officers when the alleged crime wal committed in 2014. It is quite possible t at the two aforementioned persons were not officers of t~e Portland Chemicals Corporation in 2014 when the crime,was allegedly committed. (b)The documents attaahed to the Joint Affidavit-Complaint prepared and signetl by the revenue officers are not certified true copies tlut are mere photocopies particularly the Assessment Notif es and the Preliminary Assessment Notice. Further, records show that the copies of the Assessment Notices l ttached to the Joint-Affidavit are not clear copies that oneTcould no longer read the details and figures contained therein. In view of the foregoing[, this case is hereby DISMISSED for failure of the evidence on fecord to establish probable cause as provided in Section 6 (a) of Rule 112 of the Rules of Court and

RESOLUTION CTA CRIM. CASE No. 0-654 Page 6 of6 Rule 9 of the Revised Rj les of the Court of Tax Appeals. SO ORDERED. f� Q . a . a:r~o~.,.~ . JUANfTO CASTANEDA, JR. Assf ciate Justice CAESAR A. CASANOVA ~~ ~, /~~---- Associate Justice CATHERINET. MANAHAN Associate Justice