PEOPLE OF THE PHILIPPINES v. ZIEGFRIED LOO TIAN (No. 1013, Juan Luna Street, Brgy. 27, Zone 1, Tondo, Manila)

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC PEOPLE OF THE CTA EB CRIM. NO. 116 PHILIPPINES, (CTA CRlM. CASE NO. 0-944) For: Violation of Section 255, Petitioner, paragraph 1, of the National Internal Revenue Code (NIRC) of 1997, as -versus- amended. Present: DEL ROSARIO, P.J., RINGPIS-LIBAN, MANAHAN, BACORRO-VILLENA, MODESTO-SAN PEDRO, REYES-FAJARDO, CUI-DAVID, FERRER-FLORES, and ANGELES, JJ. ZIEGFRIED LOO TIAN, Promulgated: Respondent. SEP 2 6 202~ X-------------------------------------------- ---------- - --- X DECISION FERRER-FLORES, J.: Before this Court is the Amended Verified Petition for Review (of the Resolution dated March 02, 2023) {A mended Verified Petition for Review) filed on July 25 , 2023 via registered mail by the People of the Philippines (petitioner) against Ziegfried Loo Tian (respondent) appealing the Resolution dated December 5, 2022 (1st assailed Resolution),' which dismissed the case on the ground of prescription, and the Resolution dated March 2, 2023 (2"d assailed Resolution),2 which denied the motion for \ 1 Rollo, pp. 25 to 30. 2 Rollo, pp. 3 1 to 34.

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian reconsideration, rendered by the then Second Division3 of this Court (Court in Division). The dispositive portions ofthe assailed Resolutions read as follows: JS1 assailed Resolution WHEREFORE, considering the foregoing, the instant case 1s DISMISSED on the ground of prescription. SO ORDERED. 2nd assailed Resolution WHEREFORE, premises considered, the prosecution's Motion for Reconsideration is DENIED. SO ORDERED. THE ANTECEDENT FACTS On October 26, 2022, an Information4 was filed against respondent for violation of Section 255, paragraph 1, of the National Internal Revenue Code (NIRC) of 1997, as amended, the accusatory portion of which reads: That on or before October 20, 2010, in Quezon City, Philippines, and within the jurisdiction of this Honorable Court, the above-named accused, a Filipino citizen, filed his Quarterly Value-Added Tax Return (VAT return), for third (3'ct) quarter of taxable year 20 I0, knowing fully well that he is required by the law and by the rules and regulations to supply correct and accurate information within the period mentioned therein, did then and there, willfully, unlawfully and feloniously failed to supply correct and accurate information in his VAT return by stating in the entry fields of the said return the word "exempt", when in truth and in fact said accused is not exempted as he failed to comply with the substantiation and reporting requirement under the tax law and revenue regulations, which willful failure to supply correct and accurate information resulted to the damage and prejudice of the Government in the amount of Two Million Eight Hundred Sixty Eight Thousand Five Hundred Forty Three Pesos and Sixteen Centavos (Php2,868,543.16), exclusive of interests, penalties and surcharges. Thereafter, the Court issued the JSI assailed Resolution on December 5, 2022, dismissing the above Information for failure ofthe prosecution to timely file the Information in Court within the five (5)-year prescriptive period.5 \ 3 Composed of Associate Justice Erlinda P. Uy, Associate Justice Jean Marie A. Bacorro-Villena, and Associate Justice Lanee S. Cui-David. 4 Division Docket, p. S. 5 Rollo, pp. 25 to 30.

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegji'ied LaoTian Aggrieved, petitioner moved for reconsideration6 which was still denied for lack of merit on March 2, 2023 through the 2nd assailed Resolution issued by the Court in Division.7 Hence, this Petition. THE PROCEEDINGS BEFORE THE COURT EN BANC On March 28, 2023, this Court received petitioner's Verified Petition for Review filed via registered mail on March 22, 2023.8 In the Resolution dated July 11, 2023, this Court ordered the petitioner to file an amended Verified Petition for Review incorporating the new title of the case and the proper representation of the petitioner in the case. Meanwhile, the counsel for the respondent filed a Notice of Appearance9 on July 12, 2023, which was noted by the Court on July 17, 2023. 10 Petitioner then filed the present Amended Verified Petition for Review11 via registered mail on July 25, 2023, which was received by this Court on August I, 2023. On July 27, 2023, respondent filed his Comment/Opposition (Re: Verified Petition for Review ofthe Resolution dated 02 March 2023). 12 The Court noted, on September 26, 2023, the filing of the Amended Verified Petition for Review and respondent's Comment/Opposition (Re: Verified Petitionfor Review ofthe Resolution dated 02 March 2023). On even date, the case was submitted for decision. 13 \ 6 Motion for Reconsideration (of Resolution dated December 05, 2022), Rollo, pp. 230 to 239. 7 Rollo, pp. 31 to 34. 8 Rollo, pp. I to 19. 9 Rolin. pp. 247 to 248. '" Minute Resolution dated July 17, 2023, Rollo, p. 251. 11 Rollo, pp. 272 to 291. 12 Rollo, pp. 252 to 270. 13 Minute Resolution dated September 26, 2023, Rollo, p. 522.

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian THE ISSUE In petitioner's Amended Verified Petition for Review, the sole error raised was that the Court in Division erred when it found no probable cause to charge respondent Loo Tian for Section 255 of the NIRC of 1997, as amended, or willful attempt to evade or defeat payment of tax (VAT) for the third 14 quarter of taxable year (TY) 2010. THE ARGUMENTS Petitioner interposes the following arguments in support of its petition: A. Prescription has not set in as the period of discovery and the institution of judicial proceedings for violation of Section 255, paragraph 1, ofthe NIRC of 1997, as amended, not only triggers the commencement of the prescriptive period but, at the same time, triggers the interruption of the same prescriptive period, on July 5, 2012, or the date of filing of complaint with the Department of Justice (DOJ); and, B. Respondent should be held liable for deliberate failure to supply correct and accurate information in the VAT return for the third quarter of TY 2010 in violation of Section 255, paragraph I, of the NIRC of 1997, as amended. On the other hand, respondent counter-argues that: A. The right of the government to prosecute him has prescribed under Section 281 of the NIRC of 1997, as amended; and, B. The case must be dismissed for violation of the accused's right to speedy disposition of cases as the prosecution took more than ten (! 0) years from the filing of the complaint to the filing of the Information in the Court of Tax Appeals (CTA). \ 14 In the Assignment of ErrorIs of the Amended Verified Petition for Review, the issue raised was that the Court erred when it found no probable cause to charge respondent Loo Tian for Section 255, or willful attempt to evade or defeat payment of tax for the second quarter of TV 2010: however. the accusatory portion of the Information states that the alleged violation involves the third quarter of TY 20 I0; For purposes of this Decision, the Court shall adopt the period as stated in the Information (i.e., third quarter ofTY 2010).

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian THE RULING OF THE COURT The Amended Verified Petition for Review lacks merit. The Motion for Reconsideration of the 1'1 assailed Resolution was belatedly filed; hence, the 1" assailed Resolution has become final and executory. Section I, Rule 15 of the Revised Rules of the Court of Tax Appeals (RRCTA) provides that "[a]ny aggrieved party may seek a reconsideration or new trial of any decision, resolution or order of the Court by filing a motion for reconsideration or new trial within fifteen days from the date of receipt of notice of the decision, resolution or order of the Court in question." In petitioner's Motion for Reconsideration, it reckoned the fifteen (15)- day period to file the said motion from the receipt of the alleged deputized special prosecutor, Bureau of Internal Revenue (BIR) National Office - Prosecution Division (NOPD), on December 21, 2022. 15 A scrutiny of the records would show, however, that the DOJ received the F' assailed Resolution on December 15, 2022. 16 A question now arises on whether the fifteen (15)-day period should be reckoned from the receipt of the DOJ or the BIRNOPD. At first glance, there should be no conflict considering that, at the time the 1'1 assailed Resolution was issued on December 5, 2022, there were no other special prosecutors to speak of. It was only on January 5, 2023 that the counsels from the BIR NOPD filed their Formal Entry of Appearance as Deputized Special Prosecutors. Thus, the fifteen (15)-day reglementary period to file a motion for reconsideration should simply be reckoned from the date of receipt by the DOJ, as principal prosecutor, on December 15, 2022. Counting fifteen (15) days therefrom, petitioner had until December 30, 2022 within which to file a motion for reconsideration against the P' assailed Resolution. Since December 30, 2022 was a holiday, petitioner had until January 3, 2023, the next working day, to file a motion for reconsideration. Clearly, petitioner's Motion for Reconsideration in relation the 1" assailed Resolution was belatedly filed on January 5, 2023. 17 Reso/ut~ 15 Paragraph 5, Statement ofMateria1 Dates, Motion for Reconsideration (ofthe dated December 05, 2022), Rollo, p. 231. 16 Notice ofResolution dated December 5, 2022, Division Docket, p. 212. 17 Formal Entty ofAppearance with Motion for Reconsideration, Rollo, pp. 225 to 239.

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian Even if this Court is to consider the effect of the deputization ofthe BIR NOPD, such deputization should not affect the counting of the fifteen (15)- day reglementary period. No less than the Supreme Court has clarified that the period to file a motion for reconsideration should be reckoned from the receipt of the principal counsel and not from the receipt of the deputized counsel. In these cases, 18 the Supreme Court held that the Office of the Solicitor General (OSG), the principal counsel therein, remains to be the principal counsel and the service of legal processes to it is decisive. In the recent case of Claudine Monette Baldovino-Torres vs. Jasper A. Torres, 19 the Supreme Court reiterated these rulings, viz.: The Court finds no merit in the contention that the OSG filed its Motion for Reconsideration out of time in the RIC. Admittedly, the public prosecutor in charge of the case, who was deputized by the OSG to appear on its behalf, received a copy of the RIC Decision on March 20, 2017. On the other hand, the OSG received its copy only on April4, 2017. In the case of National Power Corporation v. National Labor Relations Commission (NAPOCOR), the Court held that the proper basis for computing the reglementary period to file an appeal and in determining whether a decision had attained finality is service on the OSG. In holding so, the Court emphasized that the lawyer deputized by the OSG is considered as a mere representative of the latter who retains supervision and control over the deputized lawyer. As a consequence, copies of orders and decisions served on the deputized counsel, acting as agent or representative of the Solicitor General, are not binding until they are actually received by the latter. The NAPOCOR case was cited in the subsequent case of Commissioner o(Customs v. Court o(Tax Appeals, where it was reiterated that although the OSG may have deputized the lawyers in a government agency represented by it, the OSG continues to be the principal counsel and, therefore, service on it of legal processes, and not that on the deputized lawyers, is decisive. In the same vein, the period to file a motion for reconsideration in the present case should be counted from the receipt by the OSG of a copy of the RTC Decision on April 4, 2017. Consequently, the filing by the OSG of its Motion for Reconsideration questioning the RIC Decision on April 18, 2017 was well within the reglementary period for filing such motion. The counting of the period for its filing should be reckoned from the date of receipt of the assailed decision by the OSG and not by the public prosecutor. This is because the public prosecutor acted as a mere representative of the OSG which, in turn, retained supervision and control over the former. (Emphasis and underscoring supplied; citations omitted) Based on the foregoing jurisprudential pronouncements, when the party IS represented by several counsels, such as when the principal counsel 1997~ 1' National Power C'nrp. VS. National rahor Relations Commission. G.R. Nos. 90933-6 L May 29. Commissioner ofCustoms vs. Court ofTax Appeals, G.R. No. 132929, March 27, 2000. 19 Baldovino-Torres vs Torres, G.R. No. 248675, July 20, 2022, citing the cases of National Power Corp. vs. National Labor Relations Commission, G.R. Nos. 90933-61, May 29, 1997 and Commissioner of Customs vs. Court ofTax Appeals, G.R. No. 132929, March 27, 2000.

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian deputizes another lawyer from the government agency it represents, it is the receipt of the principal counsel that is binding and the date from which the fifteen ( 15)-day period is counted. Verily, this Court will still find the Motion for Reconsideration filed out of time and hold that the P' assailed Resolution has become final, executory and no longer appealable. Consequently, the same is already immutable and may no longer be modified in any respect. In People of the Philippines vs. Benedicta Mallari, et al. (Mallari)/0 the Supreme Court ruled that the CTA First Division's December 14, 2009 Resolution had already attained finality because of petitioner's failure to file a motion for reconsideration within the fifteen ( 15)-day reglementary period allowed under the CTA's revised internal rules. As a result, it now becomes immutable and unalterable and may no longer be modified in any respect, even if the modification is meant to correct erroneous conclusions offact and law, and whether it be made by the Court that rendered it or by the Highest Court of the land. In fine, this Court can no longer entertain the present Amended Verified Petition for Review as petitioner's Motion for Reconsideration before the Court in Division was filed out of time; thus, it already lost its right to appeal. Failure to interpose a timely appeal deprives the appellate body of any opportunity to alter the final judgment, more so to entertain the appeal. 21 Even assuming arguendo that the Motion for Reconsideration was timely filed and, thus, the Court can entertain this Petition, the same will still be denied since the government's right to prosecute the case has already prescribed. The Information was filed beyond the five (5)-year prescriptive period. In resolving the issue of prescription of the offense charged, the following should be considered: (1) the period of prescription for the offense charged; (2) the time the period of prescription starts to run; and, (3) the time the prescriptive period is interrupted. 22 There is no dispute as to the first and second considerations. The issue, however, lies with the third consideration. \ 20 G.R. No.l97l64, December 4, 2019. 21 Bureau ofInternal Revenue vs. TJCO Insurance Co., Inc., G.R. No. 204226, April 18, 2022. 22 Romualdez vs. Marcela (Resolution), G.R. Nos. 165510-33, July 28, 2006, citing the case of Domingo vs. Sandiganbayan, G.R. No. 109376, January 20,2000.

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian For an orderly disposition of the issues, the Court will briefly discuss the first and second considerations before proceeding to the third. As to the first consideration, Section 281 of the NIRC of 1997, as amended, provides that violations of the said Code shall prescribe after five (5) years. Prescription shall begin to run from the day of the commission of the violation of the law, and if the same be not known at the time, from the discovery thereof and the institution of judicial proceedings for its investigation and punishment. Inasmuch as respondent was charged for violation of Section 255, paragraph 1, of the NIRC of 1997, as amended, the applicable prescriptive period is five (5) years as provided above. With regard to the second consideration (i.e., commencement of the prescriptive period), Section 281 of the NIRC of 1997, as amended, provides for two (2) reckoning points from when the period of prescription begins to run: (1) If the day of commission is known, prescription begins to run from the day of the commission of the violation of the law; or, (2) If the day of the commission is unknown, from its discovery and the institution ofjudicial proceedings for its investigation and punishment. A perusal of the Information shows that the violation alleged therein is that the accused "willfully, unlawfully and feloniously failed to supply correct and accurate information in his VAT return by stating in the entry fields of the said return the word 'exempt', when in truth and in fact said accused is not exempted[ ... ]". Such being an omission and misrepresentation on the part of the accused, the day ofthe commission of the violation is unknown until the same is discovered. Thus, the Court En Bane agrees with the finding of the Court in Division that the commencement of the prescriptive period is from the discovery ofthe commission and the institution ofjudicial proceedings for its investigation and punishment. In the instant case, by the nature of the violation charged against the accused, the day of the commission of the violation was not known; thus, the prescriptive period began to run when the violation was discovered and the case was indorsed by the Commissioner of Internal Revenue (CIR) for preliminary investigation to the DOJ on July 5, 2012. \

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried Loo Tian The present controversy is with the third consideration, particularly, when the period of prescription is interrupted. Petitioner claims that the discovery and the institution of judicial proceedings not only trigger the commencement of the prescriptive period but also trigger the interruption of the same prescriptive period pursuant to Section 281 of the NIRC of 1997, as amended. It likewise invokes Section 1 of Rule 110 of the Revised Rules on Criminal Procedure which provides: SECTION 1. Institution of criminal actions. - Criminal actions shall be instituted as follows: (a) For offenses where a preliminary investigation is required pursuant to Section 1 of Rule 112, by filing the complaint with the proper officer for the purpose of conducting the requisite preliminary investigation; (b) For all other offenses, by filing the complaint or information directly with the Municipal Trial Courts and Municipal Circuit Trial Courts, or the complaint with the office of the prosecutor. In Manila and other chartered cities, the complaint shall be filed with the office of the prosecutor unless otherwise provided in their charters. The institution of the criminal action shall interrupt the running of the period of prescription of the offense charged unless otherwise provided in special laws. As such, petitioner maintains that prescription has not set in as the filing of the complaint with the DOJ for the conduct of preliminary investigation triggered both the commencement and interruption of the running of the prescriptive period. This Court cannot subscribe to such interpretation. As early as 1990, the Supreme Court has held in Emilio E. Lim, Sr. and Antonia Sun Lim vs. Court of Appeals and People of the Philippines23 (Lim case) that the prescriptive period is interrupted by the filing of the Information in Court. Specifically, it was declared therein that tax cases are practically imprescriptible for as long as the period from the discovery and institution of judicial proceedings for its investigation and punishment, up to the filing of the Information in Court does not exceed five (5) years. In 2005, the Supreme Court approved A.M. No. 05-11-07-CTA, otherwise known as the RRCTA, which provides that the prescriptive period \ ,. -' G.R. Nos. L-48134-37, October 18, 1990.

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian for violations of the NIRC of 1997, inter alia, is interrupted by the filing of an Information before the Court, consistent with the pronouncement in the Lim case.24 Specifically, Section 2 of Rule 9 of the RRCTA reads: SEC. 2. Institution of criminal actions. - All criminal actions before the Court in Division in the exercise of its original jurisdiction shall be instituted by the filing of an information in the name of the People of the Philippines. In criminal actions involving violations of the National Internal Revenue Code and other laws enforced by the Bureau of Internal Revenue, the Commissioner of Internal Revenue must approve their filing. In criminal actions involving violations of the Tariff and Customs Code and other laws enforced by the Bureau of Customs, the Commissioner of Customs must approve their filing. The institution of the criminal action shall interrupt the running of the period of prescription. (Emphasis supplied) Based on the foregoing, criminal cases falling within the jurisdiction of the Court in Division is instituted by filing of the information before the said Court. Such institution of the criminal action before the Court shall interrupt the running ofthe period of prescription. Evidently, petitioner's reliance on Rule 110 of the Revised Rules on Criminal Procedure is misplaced considering that it only applies suppletorily to the RRCTA25 and that the latter specifically provides that criminal actions are instituted by the filing of an Information before the CTA which filing shall interrupt the running of the prescriptive period. In view of the foregoing disquisitions, the running of the prescriptive period is interrupted by the filing of the Information before the Court and not by the filing ofthe complaint before the DOJ. As correctly found by the Court in Division, the right to prosecute the criminal action herein has prescribed. Counting from the discovery of the violation of the NIRC of 1997, as amended, and the institution of judicial proceedings for preliminary investigation (i.e., CIR's referral of the case to the DOJ) on July 5, 2012, the Information should have been filed before this Court within five (5) years from July 5, 2012, or until July 5, 2017. Clearly, when the instant Information was filed before this Court on October 26, 2022, more than five (5) years have passed since the government's right to institute a criminal action \ prescribed. 2-t !d. 25 Section 3 of Rule 1 of the RRCTA provides that "[t]he Rules of Court in the Philippines shall apply suppletorily to these Rules."

DECISION CIA EB Crim. No. 116 (CIA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian All told, the Court En Bane finds no compelling reason to reverse the Court in Division's assailed Resolutions. WHEREFORE, premises considered, petitioner's Amended Verified Petition for Review (of the Resolution dated March 02, 2023) is DENIED for lack of merit. Accordingly, the assailed Resolutions dated December 5, 2022 and March 2, 2023 in CTA Crim. Case No. 0-944 are AFFIRMED. SO ORDERED. c~t~RR~~ Associate Justice WE CONCUR: Presiding Justice ~-~ -"7"----- MA. BELEN M. RINGPIS-LIBAN Associate Justice C~7� CATHERINE T. MANAHAN Associate Justice (O:t Official Business) JEAN MARIE A. BACORRO-VILLENA Associate Justice ~ ~ r~~Fa1~ MARIAN IV-{' F. REYfs-FAJARDO Associate Justice

DECISION CTA EB Crim. No. 116 (CTA Crim. Case No. 0-944) People ofthe Philippines vs. Ziegfried LaoTian :on Official Busine~s) LANEE S. CUI-DAVID Associate Justice HENRY a~NGELES 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. Presiding Justice