CTA Case No. 1060 (Resolution)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION PEOPLE OF THE PHILIPPINES, CTA Crim. Case No. 0-1060 Plnintiff, (NPS Docket No. XVI-INV-19L- 00509) -versus- For: Viol. of Section 255 in relation to Sec. 253(d) and 256 of the NIRC of 1997, as amended. Members: MANAHAN, Chairperson and REYES-FAJARDO lL JUSTBEST SALES CORPORATION and ANGELES G. MANUEL, d (No. 621 Bagumbo ng Taas, Bag umbong Promulgate : 2023 1 4 Road, Brgy. 171 Zone 15, Ca loocan City), . Accused. -J='-U""'-'l---=-~-==----- x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - {::--_- - - - - Y_:~o~~ :.~ : - - - - -x RESOLUTION In the Resolution dated May 26, 2023, the Court directed the prosecution to submit proof of actual receipt of the Final Assessment Notice (FAN) and Formal Letter of Demand (FLD) and the original or certified true copies of Resolution dated March 12, 2020, Investigation Data Form, Letter Referral, and Complaint Affidavit dated December 13, 2019. The Compliance filed by the prosecution on June 26, 2023 submitting certified true copies of the aforementioned documents is NOTED. The prosecution alleged in its Compliance that the FAN and FLD were served to accused through registered mail and that an

RESOLUTION CTA Crim Case No. 0-1060 Affidavit of Service of Final Assessment Notice and Formal Letter of Demand was executed as proof of service thereof. After evaluating the In�ormation together with its supporting documents, the Court finds that there is no probable cause to issue a warrant of arrest. On April 20, 2023, an In�ormation was filed against accused JUSTBEST SALES CORPORATION and ANGELES G. MANU EL indicting them of violation of Section 255 of the National Internal Revenue Code (NIRC) of 1997, as amended. The accusatory portion of which states: That on or prior to March 14, 2019, and thereafter, in Caloocan ay, Philippines, and within the jurisdiction of this Honorable Court, accused MANUEL G. ANGELES, as president of Ju stbest Sales Corporation, and accused JUSTBEST SALES CORPORATION, a domestic corpora ti on primarily engaged in wholesale trade and commission trade except for motor vehicles and registered with the Bureau of Internal Revenue (BIR) wi th Tax Iden tifica tion No. 008- 285-947, which earned income within the Philippines for the taxable year 2016, and therefore required to pay value added tax at the time required under the law or rules and regulations, did then and there, willfully, unlawfully and knowingly fail to pay deficiency value added tax in the amount of Two Hundred Eight Million Sixty Two Thousand Four Hundred sixty Two Pesos and Forty Nine Centavos (Php208,062,462.49), exclusive of interest and surcharge, for the taxable year 2016, despite assessmen t notices, including prior and post notices and demand before suit issued by the BIRon March 14, 2019, to the damage and prejudice of the Government or the Republic of the Philippines. CONTRARY TO LAW. In support thereof, the following documents were attached to said In�ormation: 1. Resolution dated March 12, 2020 issued by Prosecution Attorney January L. Tria-Llarena, recommending that JUSTBEST SALES CORPORATION and ANGELES G. MANUEL be charged for v iolation of Section 255 of the National Internal Revenue Code of 1997, as a111enJed;

RESOLUTION CTA C rim Case No. 0 -1060 2. A letter of the then Commissioner of Internal Revenue (CIR) Caesar R. Dulay to the Secretary of the Department of Jus tice (DOJ) stating the authority and approval for the filing and institution of criminal Complaint against accused JUSTBEST SALES CORPORATION and ANGELES G. MANUEL; and 3. Complaint Affidavit (CA) of Mohammad Salic Macadindang, Charlote A. Abecilla, and Meribe th Joyce Danielle R. Remo da ted December 13, 2019 and filed w ith the DOJ on December 18, 2019, w ith the follow ing attachments: a. General Informa tion Sheet; 1 b. Le tter of Authority d a ted March 28, 2017;2 c. Notice for the Presentation/ Submission of Documents/ Records dated March 28, 2017;3 d. Reminder Before Issu ance of Subpoen a Duces Tecum da ted April24, 201 7;4 e. Memorandum for the Regional Direc tor;s f. Revenue Officer's Audit Report on Va lue-Added Tax for the Period from January 1 to June 30, 201 6;6 g. Preliminary Assessment Notice d a ted February 15, 2018;7 h. Details of Discrepancy; s 1. Affid avit of Service of Preliminary Assessment Notice dated February 22, 2018;9 J� Assess ment Notice dated April23, 2018;1 0 k. Formal Le tter of Demand d ated April 23, 2018;11 I. Affid avit of Service of Final Assessment Notice and Formal Le tter of Dem and d a ted May 16, 2018; 12 m. Memorandum dated July 25, 2018 addressed to Abecilla, Charlote A.;13 A nnex" A," C A. Annex "B," CA. A nnex "C," CA. A nnex " D," CA. Annex " E," CA. b A nnex " F," C A. Annex " G," C A. 8 Annex "G-1," CA. 9 Annex " K," C A . 10 A nnex " L," C A. II Annex " L -1," CA . 12 Anne>.. " M ," CA .

RESOLUTION CTA C rim Case o. 0-1060 n . Preliminary Collection Letter dated August 2, 2018;14 o. Final Notice Before Seizure dated August 22, 2018; 15 p. Men1orandum dated October 11, 2019 addressed to Remo, Meribeth Joyce Danielle R.; 16 q. Warrants of Garnishment dated October 25, 2018;17 and r. Demand Before Suit dated March 14, 2019.18 OUR RULING This case merits outright dis missal. In the case of E111ilio E. Lilll, Sr. nnd Antonin Sun Lil7l vs. Court of Appenls,19 the crin1e of failure to pay tax was committed only after receip t of the final notice and d emand for payment was coupled wi th the w illful refusal to pay the taxes due w ithin the allotted period. The Supreme Court ruled as follows: Inasmuch as the final notice and demand for payment of the d eficiency taxes was served on petitioners on Jul y 3, 1968, it was only then that the cause of ac tion on the pa rt of the BIR accru ed. This is so because prior to the receipt of the letter-assessme nt, no violation has yet been committed by the taxpayers. The offense was committed only after receipt was coupled with the willful refusal to pay the taxes due within th e alloted period. The two criminal informations, having been filed on June 23, 1970, are well- w ithin the five-yea r prescriptive period a nd are not time-barred. (Bo ldfacing s upplied) Therefore, absent an y proof that the final notice and demand for payment was received by the taxpayer, it cannot be said that an offense has been committed because prior to the receipt of the letter- assessment, no violation has yet been committed. 13 A nne"" ," CA. 14 A nne' "0," CA. 15 Anne" " P," CA. 16 An nex "Q," CA . 17 A nnexes " R" to "R-22," CA. 18 Annex "S," CA. 19 G.R. Nos. 48134-37. October 18, 1990.

RESOLUTION CTA Crim Case No. 0-1060 In the ins tant case, the Affidavit of Service of Final Assessment Notice and Formal Letter of Demand dated May 16, 2018 submitted by the prosecution showed that the FAN and FLO both dated April 23, 2019 were sent to accused through registered mai l on April 25, 2018. However, the prosecution failed to submit any proof that the FAN and FLO were received by the accused. Absent proof of receipt, these assessments could not have a ttained finality, there is no willfu l failure to pay tax and there is insufficiency to show tha t the accused sought to be arrested probably committed the crime charged . WHEREFORE, the instant Informa tion docketed as CTA Crim. Case No. 0-1060 is hereby DISMISSED for clear failure of the evidence on record to es tablish probable cause. SO ORDERED. c~�;:~ CATHERINE T. MANAHAN Associate Jus tice ~bF.~-F~ MARIAN I(ry F. REYES-FAJARDO Associate Jus tice