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G.R. No. 224764

BUREAU OF INTERNAL REVENUE, ASSISTANT COMMISSIONER ALFREDO V. MISAJON,

GROUP SUPERVISOR ROLANDO M. BALBIDO, and EXAMINER REYNANTE DP.
MARTIREZ, Petitioners,
vs.
LEPANTO CERAMICS, INC., Respondent.

https://lawphil.net/judjuris/juri2017/apr2017/gr_224764_2017.html

Facts:
Lepanto Ceramics, Inc. (LCI) submitted a petition to the RTC in Calamba City for corporate
rehabilitation in accordance with RA 10142. In addition to financial issues, the petition for
rehabilitation claimed that LCI owed 6.3 million pesos in taxes. An Order for Commencement
(Order) was issued by the Rehabilitation (Rehab Court). The Order placed LCI under
rehabilitation and suspended all legal or extralegal measures or proceedings for the execution of
claims against LCI. Additionally, it instructed the BIR to submit and serve LCI with any
comments, opposition to the petition, or complaints.
In spite of this, petitioners—acting in their capacities as Assistant Commissioner, Group
Supervisor, and Examiner—sent LCI a notice of informal conference, informing it of its tax
obligations for the fiscal year that ended on June 30, 2010. The BIR sent LCI a formal letter of
demand despite receiving LCI's letter-reply addressing the ongoing rehab proceeding. LCI filed
an indirect contempt of court petition against the petitioners for disobeying the Order. In order to
defend themselves, the petitioners assert that the matter is now academic and irrelevant because
LCI has already been recognized as having undergone rehabilitation. Additionally, petitioners
contend that sending a Notice of Informal Conference and a Formal Letter of Demand against
LCI does not constitute "legal action or other recourse" against LCI outside of the rehabilitation
proceedings, that their actions do not amount to a defiance of the Commencement Order because
they were done merely to toll the prescriptive period in collecting deficiency taxes, and that the
indirect contempt proceedings interfere with their ability to perform their duties to collect.

Issue:
The issue for the Court's resolution is whether or not the RTC Br. 35 correctly found Misajon, et
al. to have defied the Commencement Order and, accordingly, cited them for indirect contempt.
Ruling:
Yes, they are guilty of indirect contempt. The distressed corporation must be temporarily
immune from the enforcement of all claims against it, including all claims of the government,
whether national or local, including taxes, tariffs, and customs duties, upon the issuance of a
commencement order, in accordance with RA 10142. To make things clear, creditors of the
distressed corporation still have options, as they can still bring their claims before the
rehabilitation court for proper consideration and to be included in the proceedings while keeping
in mind the law's general policy.
Petitioners' act of issuing a notice of informal conference and later a formal letter of demand, all
despite the written reminder by LCI regarding the pendency of the rehab proceeding, is in clear
defiance of the Commencement Order. According to the RTC Br. By simply presenting their
case before the Rehabilitation Court, they could have easily stopped the passage of such a
prescriptive period and continued to carry out their duties as BIR officers without disobeying the
Commencement Order or going against the noble purposes of RA 10142.