G.R. No.

180197

PEOPLE V. CASTAÑEDA

FACTS:

 Sometime in 1971, 2 informants submitted sworn information under Republic Act No. 2338 ("An Act to Provide for Reward
to Informers of Violations of the Internal Revenue and Customs Laws" to the BIR concerning alleged violations of
provisions of the Internal Revenue Code committed by the private respondents

 Following an investigation and examination by the BIR, the State Prosecutor filed with the CFI of Pampanga several
informations against private respondents

 Respondents were charged with various violations of the NIRC including possession of counterfeit internal revenue labels,
possession of liquors and spirits whose specific taxes have not been paid, and finally, manufacture of alcoholic products
without paying the privilege tax therefor.

 After arraignment, accused Valencia filed a Motion to Quash upon the grounds that the informations had been filed
without conducting the necessary preliminary investigation and that he was entitled to the benefits of the tax amnesty
provided by P.D. No. 370

 The State Prosecutor opposed saying that the lack of a preliminary investigation is not a ground for quashal.

 The prosecutor further argued that the accused Valencia was not entitled to avail himself of the benefits of P.D. No. 370
since his tax cases were the subject of valid information submitted under R.A. No. 2338 as of 31 December 1973

 The trial court judge granted the Motion to Quash. Reconsideration by the People was denied.

 The co-accused also filed Motions to Quash on the theory that the dismissal of the action as to Valencia inured to their
benefit. Such motions were also granted by the respondent judge

 Petitioner now filed a petition for certiorari and mandamus seeking the annulment of the order granting quashal

ISSUE:

1. W/N private respondents are entitled to the benefits of the tax amnesty?

2. Whether or not, assuming arguendo that Valencia is entitled to an amnesty, the dismissal of his case redounded to
the benefit of his co-accused?

RULING:

1. NO

 PD 370 provides for a tax amnesty in broad terms:

“A tax amnesty is hereby granted to any person, natural or juridical, xxx failed to include all that were required to be declared
therein if he now voluntarily discloses under this decree all his previously untaxed income and/or wealth such as earnings,
receipts, gifts, bequests or any other acquisitions from any source whatsoever which are or were previously taxable under the
National Internal Revenue Code, realized here or abroad by condoning all internal revenue taxes including the increments or
penalties on account of non-payment as well as all civil, criminal or administrative liabilities, under the National Internal
Revenue Code, the Revised Penal Code, the Anti-Graft and Corrupt Practices Act, the Revised Administrative Code, the Civil
Service Laws and Regulations, laws and regulations on Immigration and Deportation, or any other applicable law or
proclamation, as it is hereby condoned, provided a tax of fifteen (15%) per centum on such previously untaxed income and/or
wealth is imposed subject to the following conditions:

a. Such previously untaxed income and/or wealth must have been earned or realized prior to 1973, except the
following:

xxx

e. Tax cases which are the subject of a valid information under Republic Act No. 2338 as of December 31, 1973; and

xxx”

The amnesty provides for the extinction of ALL liability arising from such acts such as those of the respondents. Thus the
amnesty also eliminates the criminal liabilities attendant to the acts. HOWEVER, to avail of the benefits of the amnesty, it is
required that the claimant must have VOLUNTARILY disclosed of his untaxed income or wealth. Where the disclosure of such
previously untaxed income or wealth was not voluntary but rather the accompaniment or result of tax cases or tax assessments
already pending as of 31 December 1973, the claimant is not entitled to the benefits of P.D. No. 370. Section 1 (a) (4) of P.D. No.
370, expressly excluded from the coverage of P.D. No. 370: “tax cases which are the subject of a valid information under R.A.
No. 2338 as of December 31, 1973.”

In the instant case, the violations of the National Internal Revenue Code with which the respondent accused were charged, had
already been discovered by the BIR when P.D. No. 370 took effect on 9 January 1974, by reason of the sworn information or
affidavit-complaints filed by informers with the BIR. The information referred to in the PD refers to information provided by
informants under PD 2338 which is the situation obtaining in this case. Thus, it is clear from the provisions of the amnesty that
the acts of the respondents, not having been voluntarily disclosed, are not subject to the benefits under the same.

The fact that the agents of the BIR had already accepted Valencia’s application for tax amnesty and his payment of the required
fifteen percent (15%) special tax cannot be ground for estoppel on the part of the State. The State is not bound by the mistakes
of its agents. Still further, “a tax amnesty, much like to a tax exemption, is never favored nor presumed in law and if granted by
statute, the terms of the amnesty like that of a tax exemption must be construed strictly against the taxpayer and liberally in
favor of the taxing authority.”

2.NO

The fact that conspiracy was alleged does not automatically free the co-accused from liability. It must be shown that they
themselves complied with requirements of the grant of amnesty. The statute makes the defense of extinguishment of liability
available only under very specific circumstances and on the basis of reciprocity, as it were: the claimant must disclose his
previously untaxed income or wealth (which then may be effectively subjected to future taxation) and surrender to the
Government fifteen percent (15%) of such income or wealth; then, and only then, would the claimant's liability be extinguished.
However, as was established, Valencia was not entitled to the benefits of the amnesty. Hence nothing could have inured to the
benefit of his co-accused