CIR versus METRO STAR SUPERAMA

G.R. No. 185371

December 8 !"1"
SECOND DI#ISION
$ACTS AS TO PETITIONER
BIR conducted an examination over respondents records for income tax and other internal
revenue taxes for the taxable year 1999.For Respondents failure to comply with several
requests for the presentation of BIR proceeded with the investiation based on the best
evidence obtainable preparatory to the issuance of assessment notice. !n "ovember #$
%&&1$ it was ascertained that there was deficiency value'added and withholdin taxes due
from Respondent.
$ACTS AS TO RESPONDENT
!n (pril 11$ %&&%$ Respondent received a Formal )etter of *emand for deficiency value'
added and withholdin taxes for the taxable year 1999. +ubsequently$ BIR sent a copy of the
Final "otice of +ei,ure !n February -$ %&&.$ Respondent received a /arrant of *istraint
and0or )evy demandin payment of deficiency value'added tax and withholdin tax payment.
1he 21( ranted petitioners claim findin that respondent did not received the 3(". It$
accordinly$ ruled that the Formal )etter of *emand dated (pril 4$ %&&%$ as well as the
/arrant of *istraint and0or )evy dated 5ay 1%$ %&&4 were void$ as 5etro +tar was denied
due process. 1he 2IR$ insisted that 5etro +tar received the 3("$ dated 6anuary 1-$ %&&%$
and that due process was served nonetheless because the latter received the Final
(ssessment "otice 7F("8$
ISSUE RAISED %& PETITIONER
1. 3etitioner arues that respondent received the 3("
%. 3etitioner also arues that due process is nevertheless served because respondent
received F(".
ISSUE RAISED %& PETITIONER
1. Respondent arues that it did not received the 3("
%. Respondent arues that the warrant of distraint and0or levy is void since it did not
received a 3(".
RU'ING O$ T(E SUPREME COURT
1. (s to whether respondent received any 3("$ the 2ourt ruled in favor of respondent.
It is incumbent upon the BIR to prove by competent evidence that such notice was
indeed received by the addressee. 1he onus probandi is shifted to 2IR to prove by
contrary evidence that the respondent received the assessment in the due course of
mail. as found by the 21($ the 2IR failed to dischare its duty and present any
evidence to show that respondent received the 3(" dated 6anuary 1-$ %&&%. It
could have simply presented the reistry receipt or the certification from the
postmaster that it mailed the 3("$ but failed. 9ence$ as far as the 2ourt is
concerned$ respondent did not receive any 3(".
%. (s to whether the 3(" is not necessary the 2ourt ruled in favor of respondent.
+ection %%# of the 1ax 2ode requires that the taxpayer must first be informed that he
is liable for deficiency taxes throuh the sendin of a 3(". It is clear that the sendin
of a 3(" to taxpayer to inform him of the assessment made is but part of the :due
process requirement in the issuance of a deficiency tax assessment$: the absence of
which renders nuatory any assessment made by the tax authorities. 9e must be
informed of the facts and the law upon which the assessment is made. 1he law
imposes a substantive$ not merely a formal$ requirement. 1o proceed heedlessly with
tax collection without first establishin a valid assessment is evidently violative of the
cardinal principle in administrative investiations ' that taxpayers should be able to
present their case and adduce supportin evidence.
1.
PERSONA' END NOTES
1axes are the lifeblood of the overnment and so should be collected without unnecessary
hindrance. !n the other hand$ such collection should be made in accordance with law as any
arbitrariness will neate the very reason for overnment itself. It is therefore necessary to
reconcile the apparently conflictin interests of the authorities and the taxpayers so that the
real purpose of taxation$ which is the promotion of the common ood$ may be achieved.