PEOPLE OF THE PHILIPPINES v. PACIFICO Q. LIM

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION PEOPLE OF THE CTA Crim. Case No. 0-115 PHILIPPINES, Plaintiff, For: Violation of Section 255 in relation to Section 253 (d) & 256, Tax Code of 1997 as amended by Republic Act 8424 -versus- Members: MANAHAN, Chairperson, REYES-FAJARDO, and PACIFICO Q. LIM ANGELES, JJ. cj o Dimsun Unlimited Inc. 901 Ongpin St., Sta.Cruz, Promulgated: Manila _____ x- _______________ ~c~~~e_d~ __ -~-~ ?_,~.o~_ Q!~ x RESOLUTION Accused Pacifico Q. Lim was charged for violation of Section 255 in relation to Section 253 (d) of the Tax Code of 1997 as amended by Republic Act 8424, the Information is hereunder quoted below: " That on or about February 23, 2004, in the City of Manila, Philippines, the said accused, being then the President/ Authorized Officer and responsible officer of Dimsun Unlimited, Inc. with business address at 901 Ongpin cor. T. Alonzo Sts., Sta. Cruz, in said City, having filed his internal revenue tax of the latter for the year 2000 and after examination and audit of the same, it has been found that there is due collectibles from said Dimsun Unlimited, Inc. the following to wit: Kind of Tax Amount Def. Income p 1, 074, 384.01 Def. MCIT 166,240.20 Def. VAT 1, 6 13 ,137.60 Def. WT Def. EWT 32,376.31 73,746-42

RESOLUTION CfA Crim. Case No. 0-115 for the said year under BIR Assessment/ Demand No. 31-2000, did then and there willfully and unlawfully fail and refuse and neglect to pay said taxes and without formally appealing the same despite due assessment, notice and demand to do so, to the damage and prejudice of the Republic of the Philippines, in the total amount of P2,959,884.54, Philippine Currency." CONTRARYTO LAW." In a Resolution dated March 19, 20091, the Court found the existence of probable cause to hold the accused for trial and ordered the issuance of a Warrant ofArrest. The Warrant ofArrest was issued on March 20, 20092 � Subsequently, on May 15, 2009, a Return of Warrant was submitted to the Court through registered mail and received on May 26, 2009. In the said Return of Warrant, it states that the subject of the Warrant of Arrest cannot be located in the given address despite diligent efforts exerted3. The same was noted by the Court in a Resolution4 dated May 29, 2009 and an Alias Warrant ofArrest was issueds. On November 10, 2009, the Court issued a Resolution6 archiving the case. The said Resolution is hereunder quoted, as follows: It appearing from the record of the above-entitled case that the Warrant of Arrest, dated March 20, 2009, has been returned unserved for the reason that "accused could not be found at said given address despite diligent efforts exerted", and in order that this case may not remain pending in the Court's docket for an indefinite period of time; the above-captioned case is hereby ARCHIVED, without prejudice to its revival immediately upon apprehension of the accused. Let a copy of this Resolution be furnished the Office of the Commissioner of Internal Revenue, in order that diligent efforts may be taken for the early apprehension of said accused. SO ORDERED. Meanwhile, the number of criminal cases archived due to the authorities' failure to cause the arrest of the accused, as well as the successive dismissal of recent cases on the ground of prescription, prompted this Court to review the archived cases to determine whether ' Division Docket, page 28. 2 Division Docket, page 29. 3 Division Docket, page 34� 4 Division Docket, page 37 . s Division Docket, page 38. 6 Division Docket, page 43.

RESOLUTION CfA Crim. Case No. 0-115 Page 3 ofs they were filed within the prescriptive period provided under Section 281 of the 1997 NIRC, as amended. Upon revisiting the instant case, the Court finds that the same has prescribed. Pursuant to Section 281 ofthe 1997 NIRC, as amended, states the prescription for violations of any provision of the NIRC, viz.: SEC.281. Prescription for Violations of any Provision of this Code. - All violations of any provision of this Code shall prescribe after five (5) years. Prescription shall begin to run from the date 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. The prescription shall be interrupted when proceedings are instituted against the guilty persons and shall begin to run again if the proceedings are dismissed for reasons not constituting jeopardy. The term of prescription shall not run when the offender is absent from the Philippines. [Emphasis Supplied]. With the above provision, all violations of any provision of 1997 NIRC shall prescribe after five (5) years and shall begin to run from the date of the commission of the violation of the law. The institution of criminal actions shall interrupt the running of the period of prescription as provided by Section 2, Rule 9 of the Revised Rules of the Court of Tax Appeals (RRCTA), to wit: Section 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 ofan information in the name of the Republic 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 ofcriminal actions shall interrupt the running ofthe period of prescription. (Emphasis supplied) Based on the prosecutor's Resolution9, it was alleged that the above-mentioned corporation failed to pay the following internal 9 Division Docket, page 3.

RESOLUTION CfA Crim. Case No. 0-115 Page 4 ofs revenue tax obligation for the year 2000, to wit: Income Tax (IT), Minimum Corporate Income Tax (MCIT), Value-Added Tax (VAT), Withholding Tax (Wf) and Expanded Withholding Tax (EWf). Further, he alleges that despite several demands made upon the said respondent and the service of Warrant of Distraint and/or Levy, it failed and refused to pay the aforesaid tax obligations. Further, based on the Affidavit Atty. Gerlo C. Cacatian10, the Assessment Notices dated January 23, 2004 for IT11, MCIT12 , VAT13, Wf14, and EWf1s were sent to the taxpayer through registered mail under Registry Receipt No. 803534. The said tax assessments against accused became final, executory, and demandable considering that no protest was filed against it. The Court observed that Registry Receipt No. 803534 was not attached to the Affidavit ofAtty. Gerlo C. Cacatian. In view thereof, the Court cannot ascertain when the Assessment Notices were received by the taxpayer. Thus, the offense was committed after the due date reflected on the Assessment Notices which is February 23, 2004. As the offense of failure to pay tax under Section 255 of the 1997 NIRC, as amended, was committed on February 24, 2004, plaintiff had five (5) years from said date or until February 24, 2009, within which to file the Information in Court. Here, the Information was filed on March 12, 2009. In view of the foregoing, the five (5) year prescriptive period commenced when the Assessment Notices became final, executory and demandable on February 23, 2004 and the prescriptive period to institute the criminal action lapsed on February 23, 2009. Thus, the subject Information filed on March 12, 2009 was clearly beyond the five (5) year prescriptive period. WHEREFORE, premises considered, CTA Crim. Case No. 0- 115 is hereby WITHDRAWN from the archives. Moreover, the instant Information is hereby DISMISSED due to prescription of the offense charged. Let the Warrant of Arrest issued against accused be RECALLED and SET ASIDE. IO Division Docket, page 7. I I Division Docket, page 10. 12 Division Docket, page 12 . 13 Division Docket, page 14. 14 Division Docket, page 18. IS Division Docket, page 16.

RESOLUTION CfA Crim. Case No. 0-115 Page 5 ofs SO ORDERED. c~�.l.~ CATHERINE T. MANAHAN Associate Justice (On Leave) MARIAN IVY F. REYES-FAJARDO Associate Justice /)P- HENRYS. ANGELES Associate Justice