ARIOLA, LOUELLA C.

I.
Section 228 of the NIRC provides that If the request for reconsideration is denied
in whole or in part, or is not acted upon within 180 days from submission of
documents, the taxpayer adversely affected by the decision or inaction may appeal to
the Court of Tax Appeals within 30 days from receipt of the said decision, or from the
lapse of 180-day period; otherwise, the decision shall become final, executory and
demandable.
However, the Supreme Court held in RCBC v. CIR that the taxpayer may
also wait for the final decision of the Commissioner on the disputed
assessments, and then appeal such final decision to the Court of Tax
Appeals within 30 days after receipt of a copy of such decision.
Hence, the taxpayer may construe the lapse of the 180-day period as an implied
denial of the request for reconsideration, in which case he can already appeal to the
CTA even without a decision from the CIR, or he can also wait for the decision of the
CIR even beyond the 180-day period. However, once the taxpayer chooses to file an
appeal to the CTA even without a decision from the CIR, and such appeal turns out to
have been filed out of time, the taxpayer can no longer avail of the second option and
claim that he is still waiting for the decision of the CIR. Thus, the taxpayer may
choose any of the two options, but it is more advisable for the taxpayer to wait for the
decision of the CIR because his 30-day period to appeal such decision in case it is
adverse to him will remain intact and will commence only upon the receipt of the
decision.

II. The law provides that criminal cases involving taxes shall be filed before the regular
courts if the action does not specify the amount of tax due from the taxpayer. In this
case, it may be inferred that the CIR has not yet determined the tax due from Mr. A
because only a Notice has been served upon the latter, and as a rule, a Notice merely
informs the taxpayer of the possibility of a deficiency in the taxes paid. Hence, either
the RTC or the MTC may acquire jurisdiction over the criminal case, depending on
the imposable penalty. Section 254 of the NIRC provides that an attempt to evade or
defeat tax shall be punishable with imprisonment of not more than 4 years. Since the
imposable penalty is not more than 6 years, the RTC cannot acquire jurisdiction.
Rather, the case is under the jurisdiction of the MTC.
The RTC was also incorrect in saying that the criminal case cannot proceed
independently of the assessment case pending before the CTA. The NIRC does not
prohibit the simultaneous filing of a criminal case while there is still a pending
assessment case before the CTA. In fact, the NIRC allows that a proceeding in court
be filed even without assessment within 10 years from the discovery of false or
fraudulent return with intent to evade tax, or failure to file such. What the law
proscribes is the reservation of the civil aspect of a criminal case that has already
 been filed, because the criminal case is deemed to carry with it the civil aspect of the
case.
Hence, the RTC is correct in dismissing the case, but not for the grounds it cited.
III. The Irrevocability Rule provides that once the taxpayer utilizes the option to carry-
over excess payment of tax, the same shall be irrevocable for that taxable year. In this
case, Vanderful has already opted to carry-over P750,000 excess payment for taxable
year 2015. As such, the option to carry-over said amount is already irrevocable for
that taxable year. In other words, Vanderful can no longer claim for a refund of the
P750,000. On the other hand, Vanderful is allowed to recover the excess payment for
the taxable year 2016. In marking the option “To be refunded”, Vanderful is clearly
exercising the option to refund the excess payment. Since the P750,000 carried over
from 2015 can no longer be refunded, Vanderful may only claim for the refund of
P350,000 excess payment for the taxable year 2016, not for the entire excess payment
of P1,100,000.
IV. Under the Rule of Preemption, if the national government already imposes a tax on a
particular subject or area, the Local Government Unit no longer has the power to tax
the same subject or area. Section 133 of the Local Government Code provides for the
kinds of taxes that a local government unit cannot impose, on the ground that these
taxes are already levied by the national government. Among these prohibited taxes is
the tax on the gross receipts of transportation contractors and persons engaged in the
transportation of passengers or freight by hire and common carriers by air, land or
water. Thus, local government units may no longer impose transport taxes on persons
engaged in the transportation business within its territorial jurisdiction.
In this case, the local government of Manila imposed a 5% transport tax on the
purchase of private vehicles. Clearly, the taxpayer is not a person or entity engaged in
the transport business, and the subject of the tax is not the gross receipts from the
transportation business, but rather the purchase price of the vehicle. As such, the tax
is not within the purview of transport taxes as defined in Section 133.
However, the alleged transport tax still may not be imposed by the City of Manila.
While it cannot be considered strictly as a transport tax, it is still prohibited because it
partakes the nature of a value-added tax, which is also imposed by the national
government and therefore is one of the taxes that a local government unit cannot
impose. A value-added tax is defined as “a tax imposed on each sale, barter, exchange
or lease of goods or properties or on each rendition of services in the course of trade
or business as they pass along the production and distribution chain, the tax being
limited only to the value added to such goods, properties or services by the seller,
transferor or lessor.”
In this case, what is being taxed by the City of Manila is actually the sale of
vehicles to the private vehicle owner. This sale is already subject to VAT which is,
like transport taxes, among those taxes enumerated under Section 133 of the Local
Government Code. As such, the City of Manila cannot impose a similar tax, even
under the guise of a “transport tax”, because this would violate the rule of
 preemption. Hence, the Ordinance is illegal for violating the rule of preemption and
Section 133 of the Local Government Code.
V. A) RMO 14-2016, which became effective on April 18, 2016, provides the
requirements for a valid waiver of the statute of limitations for the assessment and
collection of taxes. Firstly, the form may not necessarily be in the form prescribed
under the earlier RMO 20-90, so long as the date of execution of the waiver and the
expiry date are indicated therein, and that both dates are within the original period to
assess and collect, or within the extended period in case of a subsequent waiver. It
must also be signed by the taxpayer, or in the case of corporations, by a responsible
official. It is the taxpayer’s duty to ensure that the waiver was executed by an
authorized official. In case of a waiver of the period to assess, there is no need to
specify the tax being assessed. However, if the waiver is for the period to collect, the
tax being collected must be specified. The waiver may be notarized. However, it is
sufficient that it is in writing.
The waiver is considered valid upon its execution because it is deemed a voluntary
act of the taxpayer. It is the taxpayer’s duty to submit the waiver to the CIR and the
latter must indicate its acceptance of the waiver by signing the same. While the date
of acceptance need not be indicated in the waiver, such date is still material because it
must also be within the period to assess and collect. Otherwise, the waiver is void.
Lastly, the taxpayer must retain a copy of the waiver.
B) Under the NIRC, the ordinary period for the government to assess a taxpayer’s tax
liability is within 3 years from the last day prescribed by law for the filing of the
return, or, if the return was filed beyond such day, within 3 years from the day that
the return was actually filed. If the return was filed before the last day, it shall be
presumed to have been filed on the last day prescribed by law.
In this case, Vantage Point is required by law to file its return for the taxable year
2012 on April 15, 2013. Thus, the government’s period to assess any deficiency ends
on April 15, 2016. In this case, the BIR issued a PAN only in 2017, which is beyond
the 3-year prescriptive period. Ramon, as comptroller of Vantage Point, may be
considered as one of those responsible officials authorized under RMO 14-2016 to
sign the waiver in behalf of the corporate taxpayer. However, the waiver was
executed in 2017, which is outside the 3-year period to assess tax liability. As such,
the waiver is void and the government’s right to assess and collect the tax has already
prescribed on April 15, 2016.
VI. The Local Government Code specifically authorizes cities to impose taxes that
provinces and municipalities are allowed to impose. Under Section 143 of the Local
Government Code, municipalities may levy business taxes on manufacturers,
wholesalers, exporters, contractors, banks, peddlers, and any other business not
otherwise specified therein provided that those businesses already subject to excise,
VAT or percentage tax under the NIRC shall be subject to a business tax rate not
exceeding 2% of gross sales or receipts of the preceding calendar year. Section 143
does not specifically identify general professional partnerships as among the taxable
businesses, but they may be covered under the “other businesses” clause. As such, the
 percentage business tax may be imposed by the City of Valenzuela, subject to the
condition stated above as regards the tax rate because BATAS Law is already subject
to VAT.
VII. A) Section 11 of R.A. No. 1125, as amended by RA 9282, provides that when in the
opinion of the Court the collection by the Bureau of Internal Revenue or the
Commissioner of Customs may jeopardize the interest of the Government and/or the
taxpayer, the Court at any stage of the proceeding may suspend the said collection
and require the taxpayer either to deposit the amount claimed or to file a surety bond
for not more than double the amount with the Court. Hence, collection of taxes may
be suspended by the CTA Division as long as the taxpayer deposits either the amount
claimed, or a surety bond not more than double the amount claimed, if the collection
of the tax may jeopardize the interest of the government or the taxpayer.
B) In Tridharma v. CTA, the Supreme Court held that the CTA may order the
suspension of the collection of taxes provided that the taxpayer either deposits the
amount claimed, or files a surety bond for not more than double the amount. In this
case, the CTA Division require a surety bond that is more than double the amount
claimed by the BIR. Since the alleged deficiency tax is P48 million, the surety bond
should not exceed P96 million. In this case, the surety bond required was P124
million. Clearly, the CTA division did not comply with the limitation regarding surety
bonds for the suspension of tax collection.
VIII. Under the NIRC, the CTA has exclusive appellate jurisdiction over disputed
assessments ruled upon by the CIR. In this case, the issue was the disputed
assessment over the deficiency income tax of Babuyan Water District, a government
entity. Since the issue is a disputed assessment, it is the CTA and not the SOJ that has
jurisdiction over case. However, the Supreme Court has held in CIR v. Secretary of
Justice and PAGCOR that on previous occasions, the Court has overruled the defense
of jurisdiction in the interest of public welfare and for the advancement of public
policy. Since the Secretary of Justice has already ruled on the issue presented before
it, it would be a useless exercise to refer the matter to the CTA on the ground that the
SOJ did not have jurisdiction. Hence, the appeal should be brought directly before the
Supreme Court, and not to the CTA, especially considering the urgency of the matter
of tax collection.
IX. The NIRC provides that quarterly returns should be filed within 25 days after the
close of the taxable quarter. In this case, the first quarter ended on March 31, 2018.
As such, the taxpayer had until April 25, 2018 to file its return. The return was filed
on May 25, 2018. Section 248 of the NIRC provides that a penalty equivalent to
twenty-five percent (25%) of the amount due for failure to file any return and pay the
tax due thereon as required by law. Since there was late filing and payment in this
case, the total amount due from the taxpayer shall be P6,250,000.
X. A) The government can assess the tax liability until July 1, 2018, because the
government may assess the tax liability within 3 years after the last day prescribed for
the filing of the return if the return was filed before such last day. In this case, the
return was filed on April 15, 2015, before the last day prescribed. Hence, the rule
 applies, and the 3-year period commences from July 1, 2015 which is the last day
prescribed by law, being the last day of the 6 months after death.
B) The last day prescribed for the filing of the estate tax return is on July 1, 2015, or 6
months after the date of death. Thus, the government has until July 1, 2018 to assess
the tax liability.
C) The estate may file a written claim for refund within 2 years from the date of
payment, as provided under the NIRC. Thus, the estate may claim for refund until
April 15, 2017.
D) They may request for reinvestigation within 30 days from the issuance of the
assessment notice, or until March 30, 2015. The supporting documents may be
submitted until May 30, 2015.

XI. The taxpayer himself has the personality to claim for refund,