Oceanic Wireless Network. Inc. Petitio N Er vs. The Commissioner of Internal Revenue, et al.

DECISION

contractor's fixed tax - 2 -

FAR- 4- 1984- 88-001132

FAR- 4- 88- 001133

Deficiency tax Deficiency Deficiency franchise tax FAR- 4- 84- 88- 001134 20,849.06 12,083.65 227,712. 00 In a letter dated April 1 2, 1988, petitio ner t h ro ugh co un se l, filed it s protest against s ubject a ssess me nt s a nd r·e qu ested fol" t h e l"econ s ideration and/or ca ncellation ther e of. In a l etter d ate d Ja n uai"Y 2 4, 1991, t h e Chief, Acco unt s Recei va bl es /Billing Divi s ion , acti ng f 0 I" t h e Co mm i ss ion e r of In t e I" n a 1 He ven u e , l"e iterated t h e assess me nt s a nd deni e d t h e petit ion er ' s reque s t for r e in vesti gation.

Conseq uently, on Octo b er 10 , 1991 and Oc tober 1 7 , 1991, warrant of di st raint a nd/l evy and warrant of gar nis hm e nt were s erved on t h e petition er r es pectively on the sa id date s to e nfor ce collection . Hence, this appeal by wa y of pet ition for review wa s filed by th e petition e r on Nove mb er 8, 1994 .

Pet itioner· a ll eges that the right of t h e res p o nd e nt to e n ·for ce col le ct ion h as alrea dy pl"escribed c onsidering the failure of t h e re s pond e n t to e nfoi"Ce the sa rn e l,Jithin thr ee (3) year s fro rn the i ss u a n ce of the assess ment s pur s u a nt to Sec tion 223 (c) of the Tax Code.

Furt hermore, 916

DECISI ON

CTA CASE NO . 4668 - 3 - that petitioner co uld not be held liable to p a y sai d de ·ficiency taxes because of t h e "in lieu of any a nd all taxes" pro visio n of the p e titioner' s fr a n c hi se und er Hepublic Act No. 2357, as a mended by R.A. 4555.

Res p o nd ent o n t h e other h a nd , b e lie ves that this court h as not acq uir ed juri s di c tion over this case becau s e the decision of t h e respondent d e nying the pr otest ha s long become final a nd executory eve n before petitioner ·filed the instant pet ition for t· eview.

In ot her wor ds, the assessments became final i n view of t h e failut· e of the petitionet· to institute t h e appeal I,Jithin thirty ( 3 0) day s from t· eceipt of t h e final d ecisio n of the Commissioner of I nt er nal Revenue.

Granting for purpo ses of argument t hat the assess me nt s a re not yet final, t h e "in li eu of a ny a nd al l taxes" pro vis ion in the franchise of petition e t· h as a lready been repealed by Sectio n 2 of Republi c Act No .

5431 dat e d June 27, 1 968, by way o ·f a me ndm e nt to Sectio n 2 4 of the National Intet·nal Reve nu e Cod e.

Furthermore, her righ t to e nfor ce co ll ect ion h as not yet pre sc ribed beca use t h e running of the prescriptive period ha s b ee n s u s pend ed whe n petitioner filed it s prote s t on 91 /

DECISI ON

CTA CA SE NO. 4668 - 4 - April 12, 1988 whic h was given due course by the respondent.

Ba se d on the for· ego ing facts, the following issues are pre se nt e d for re so lution by this c.ourt: (1) lt-Jh et rr er o r· not this court ha s ac quired jur"i sd i c tion over the di s puted assessme nt ;

( 2 ) Whether or not r·es pondent can s till validly enforce h er assess ment s; ( 3 ) Whether or not the "in lieu of any and all taxe s " pr· ovi s ion in the franchise of petitioner ha s alr·ea dy been repealed by Sect ion 2 of Republic Act No. 5431. On th e f i r·s t issue, find for the re s pond e nt .

Th e recor· d s will s how that respondent denied the prote st or reque s t for reinvestigation filed by t h e p e t i t i o n e r· i n a 1 e t t e r· d a t e d J a' n u a r y 2 4 , 1 9 9 1 s igned by th e Chi ef, Account s Receivable/Billing Di vision fo r· the Co mmi ss ioner· of Internal Hevenue with a particular not atio n.on the left bottom s ide of th e letter a s follow s: "Note:

reinve s tigation ·failure to Your ha s s ubmit request for been denied for the ne cessary

DECISI ON

CT A CASE NO. 466 8 supporting letter ·from - 5 - paper s a s the Office per of e ndor se ment the Special Operation Service dated 12 - 12 - 90." Thi s receipt of denial of petitioner's protest was affir med by its witness, Ms.

Monna Brenda Camin s , Finance t'lanager, during her direct examination (T.S.N., July 2 4, 1992, pp. 10-11). It was during this direct exa mination that s aid denial of prote st was marked by petitioner's counsel as Exhibit "F" .

In the absence of proof of the exact date said denial wa s received by the petitioner, it is pre s umed that the same was received within reasonable time from January 2 4 ' 1991 in the regular course of mail pur s uant to Section 2(v) of Rule 131 o·f the Rule s of Court.

The finality of the said d e nial of the prote s t is further supported by the fact that su bse quently, the respondent served on October 10 and 17, . 1991, warrants of .

di s traint and/ot' l evy a nd warrant of garnishme n t, re s pective ly , to enforce collection of the defi ciency taxes.

Petitioner filed the· instant _petition for review on November 8, 1991, counting the thirty ( 3 0) day period from the receipt of the aforementioned warrants, ignoring totally the

91 ~J

•'

DECISI ON

CTA CASE NO.

4 6 68 - 6 - denial o·f the prote s t which ·following the regular course of mail s hould have been received by the peti tione r· in one or two weeks time. Even if we will double this per iod, the filing of the petition for review wi ll still be beyond the required thirty

(30) day period. Whil e the denial of the protest was in the form of a demand letter, the notation in the sai d letter making reference to the protest filed by petiti oner clearly s how s the intention of t he re s pondent to mak e it as her final decision. In fact, this circumstance is a clearer manifestatio n of the finality of her decision taking into acc ount the Supreme Court case of Surig ao Electric c 0 •• Inc.

vs.

Court of Tax Appeals, L- 25289, June 28, 1974, (57 SCRA 523) wherein a mere demand letter was considered as the final de cisio n of the Commissioner of Internal Re ve nu e.

On the seco nd issue, we find again for the respondent.

Petitioner also completely ignored the fact that it filed a .letter of protest an d reconsideration on April 1 2, 1988 against s ubject assessment s which was given due course by the respondent.

Thi s s u s pend s the running of the 92(J statute of limitation as expressly provided under Section 224 of the Tax Code:

"SEC. 224. Suspensian af running af statute. - The running of the statute of limitation provided in Section 203 and 223 on the making of assessment and the beginning of distraint or levy or a proceeding in court for collection, in respect of any deficiency, shall be suspended for the period during which the Commissioner is prohibited from making the assessment or beginning distraint or levy or a proceeding in court and for sixty days thereafter; when the taxpayer cateessetessorenorrenterestoqssosangnanszenvecnececeesstorsunnsegnssstaacnedlcaetoreteeMenenveaee requests for a reinvestigation which is tonocesuevennaboronessovecensernasuentertar eesnevensnsdsoussronsnensonetocggustornonssennsteetertestteautsenneseteabenrsanuvecemstereehene ssececueorseneutentnsrecrsvsasunac hangenseeresenenvecsstesoquboasevessasecescnsonen Qranted by the Commissioner; when the taxpayer cannot be located in the address given by him in the return filed upon which a tax is being assessed or collected: Pravided, That, if the taxpayer inform the Commissioner of any change of address, the running of the statute of limitations will not be suspended; when the warrant of distraint and levy is duly served upon the taxpayer, his authorized representative, or a member of his household with sufficient discretion, and no property could be located; and when the taxpayer is out of the Philippines." (Underscoring supplied.)

Since the protest was finally decided by respondent on January 24, 1991, the issuance of the corresponding warrant of distraint and/or levy and warrant of garnishment on October 10 and 17, 1991, respectively, has not yet prescribed.

In view of the foregoing, the discussion of the third issue is no longer necessary. It becomes 924 moot and academic to discuss the merits of the case considering the finality of the assessments.

WHEREFORE, the petition for review is hereby dismissed for lack of jurisdiction.

WE CONCUR:

UE ne aru) ee Judge 7 sal RA on oO.

/ pee ed va CERTIFICATION I hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution.

Coie a Qk ERNESTO D. ACOSTA Presiding Judge Court of Tax Appeals es ho DD