3. PEOPLE OF THE PHILIPPINES VS ROBERT SIA AND JOHN KENNETH L.

OCAMPO CTA
(En Banc) Crim. Case No. 045 promulgated 12 December 2018
a. Can the accused be held civilly liable for the tax assessment despite their
acquittal from the criminal case?

Facts:
On or about December 28, 2001, in the City of Manila, Philippines, Robert
Sia and John Kenneth L. Ocampo, conspiring and confederating together and
mutually helping each other, being then the President and Treasurer, respectively
of Roxy Industrial Sales Corporation, with business address at 691 Gonzalo Puyat
Street, Quiapo, this City, having filed his internal revenue tax of the latter for the
year 1998 and after examination and audit of the same, it has been found that
there is due collectibles from said Roxy Industrial Sales Corporation the following,
to wit:

Income Tax P 73,401.64

Compromise Penalty on Income 8,500.00
Value Added Tax 3,452,965.34
Compromise Penalty on VAT 25,000.00
Expanded Withholding Tax 3,649.27
Compromise Penalty on EWT 1,000.00

for the said year under BIR Assessment/Demand Notice No. 32-1-98, did then and
there willfully and unlawfully fail and refuse and neglect to pay said Deficiency
Income Tax, and Compromise Penalty 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 P3,564,516.25,
Philippine Currency.
Robert Sia and John Kenneth L. Ocampo were ACQUITTED for violation of
Section 255, in relation to Sections 253 (d) and 256 of the 1997 National Internal
Revenue Code (NIRC), as amended. The case is DISMISSED for failure of the
prosecution to prove beyond reasonable doubt the guilt of both accused.
The filed Motion for Reconsideration is DENIED hence this Petition for Review
prays for a reconsideration of the civil aspect of the Decision.
 Petitioner raises the following assignment of error "THE RIGHT TO COLLECT
OF THE BIR IS BASED ON A VALID ASSESSMENT WHICH IS FINAL, EXECUTORY AND
DEMANDABLE AND WHICH CAN NO LONGER BE DISTURBED.

Issue: Whether or not, despite the acquittal of the accused, they can be held
civilly liable for the subject assessments.

Ruling:
Settled is the rule that the extinction of the penal action does not carry with it the
extinction of the civil liability, where the acquittal is based on reasonable doubt,
as only preponderance of evidence is required in civil cases.21 Otherwise stated,
a taxpayer can still be held civilly liable despite an acquittal, when the
prosecution discharges its burden of proving its case, by a preponderance of
evidence.
The sending of a Preliminary Assessment Notice (PAN), Final Assessment Notice
(FAN), and Formal Letter of Demand (FLO) to a 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 nugatory any
assessment made by the tax authorities.
Considering that the petitioner failed to prove that the PAN or FAN was indeed
served to the taxpayer, either personally, or through registered mail, the subject
deficiency tax assessments must be declared void. Hence, the respondents
cannot be held civilly liable for the subject assessments in this case, as a void
assessment bears no valid fruit.