CIR v. T Shuttle Services
G.R. No. 240729, August 24, 2020
Laws and Regulations: Sec. 228 of the NIRC, Section 3 of RR 12-99, RMO 40-2019
Doctrine: Limitation on Presumption of Registered Mail
• July 15, 2009: CIR issued to respondent a Letter of Notice (LN) No. 057-RLF-07-00-00047 informing it of the discrepancy found after comparing its tax returns for CY 2007 with the RELIEF and Third-Party Matching under the Tax Reconciliation System
• July 24, 2009: LN was received and signed by a certain Malou Bohol
• January 12, 2010: CIR issued Letter of Authority (LOA) No. 200800044533 AND nic
• March 29, 2010: CIR issued a PAN for IT and VAT
• July 20, 2010: CIR issued a FAN for IT and VAT
• November 28, 2012: RDO issued a PCL requesting respondent to pay the assessed tax liability within 10 days from notice
• January 23, 2013: RDO issued a FNBS giving respondent the last opportunity to settle its tax liability within 10 days from notice
• March 20, 2013: T Shuttle sent a letter to the RDO and the collection officers stating that: (1) it is not aware of any pending liability for CY 2007 (2) Mr. B. Benitez, who signed and received the preliminary notices, was a disgruntled rank-and-file employee not authorized to receive the notices; and (3) Mr. B. Benitez did not forward the notices to it. It also requested a grace period of 1 month to review its documents.
• April 2, 2013: RDO denied the requested 1-month grace period.
• April 19, 2013: T Shuttle protested the FNBS: (1) not liable for IT (2) exemp from VAT as common carrier (3) service of the NIC was invalid (4) did not receive the PAN and FAN prior to the issuance of the FNBS.
• April 23, 2013: constructively served with WDL
• May 2, 2013: filed a Petition for Review (With Prayer for Preliminary Injunction and Issuance of a Temporary Restraining Order) with the CTA
• August 22, 2013: CIR prayed for the denial of the petition for review (1) due process was observed (2) failed to timely protest FAN and to submit within the prescribed period of 60 days supporting documents (3) presumption of the propriety and exactness of tax assessments
• CTA Division: granted
• MR of CIR in CTA Division: denied
• CTA En Banc: affirmed the ruling of the CTA Division that the CIR failed to prove that the PAN and the FAN were properly and duly served upon and received by T Shuttle and failure to demand payment of the taxes due within a specific period
ISSUES:
1. W/N Due Process Observed
2. W/N FAN is void for not containing definite due date
HELD: petition for review on certiorari is DENIED
1. NO.
• As can be gleaned from the above provisions (due process requirement in Section 228 of the NIRC, Section 3 of RR 12-99 dated September 6, 1999), service of the PAN or the FAN to the taxpayer may be made by registered mail. Under Section 3(v), Rule 131 of the Rules of Court, there is a disputable presumption that "a letter duly directed and mailed was received in the regular course of the mail." However, the presumption is subject to controversion and direct denial, in which case the burden is shifted to the party favored by the presumption to establish that the subject mailed letter was actually received by the addressee.
• In view of respondent's categorical denial of due receipt of the PAN and the FAN, the burden was shifted to the CIR to prove that the mailed assessment notices were indeed received by respondent or by its authorized representative. As ruled by the CTA En Banc, the CIR's mere presentation of Registry Receipt Nos. 5187 and 2581 was insufficient to prove respondent's receipt of the PAN and the FAN. It held that the witnesses for the CIR failed to identify and authenticate the signatures appearing on the registry receipts; thus, it cannot be ascertained whether the signatures appearing in the documents were those of respondent's authorized representatives. It further noted that Revenue Officer Joseph V. Galicia (Galicia), the CIR's witness, had in fact admitted during cross-examination that he was uncertain whether the PAN and FAN were actually received by respondent.
• As can be gleaned from RMO 40-2019 dated May 30, 2019, a detailed record of all assessment notices issued by the CIR is required. Notably, among the details to be recorded by the Chief of the Assessment Division or the Head of the Reviewing Office are the "[n]ame of [t]axpayer/[p]erson who received the assessment notice" and, more importantly, the "[p]osition/designation/relationship to the taxpayer, if not served to the taxpayer named in the assessment notice." While RMO 40-2019 was not yet in force at the time the questioned PAN and FAN in the case were issued, the fact of such subsequent issuance of RMO 40-2019 by the CIR gives the Court all the more reason to affirm, if only for consistency and uniformity, the CTA En Banc's finding.
2. Yes. Question of fact which this Court will not entertain in the present appeal under Rule 45.