I.

GOOD DAY EVERYONE. TODAY I WILL BE DISCUSSING THREE CASES DECIDED

33BY THE COURT OF TAX APPEALS IN DIVISIONS.
The first case was decided by CTA THIRD DIVISION promulgated July 20,2018. CTA
CASE NO. 9834, the Petitioner in this case was MONARCH AGRICULTURAL
PRODUCTS, INC. vs CIR.

The CTA in Divisions shall exercise EXCLUSIVE ORIGINAL OR APPELLATE

JURISDICTION TO REVIEW BY APPEAL Decisions of the CIR in cases involving
disputed assessments, refunds of internal revenue taxes, fees or other charges and
penalties in relation thereto or other matters arising under the NIRC or other laws ad
ministered by the BIR.

THE FIRST CASE TACKLES THE REFUNDS OF EXCESS INPUT VALUE ADDED
TAX.

FACTS:
In its Motion to Withdraw dated June 29, 2018, petitioner informs the Court of its
decision not to judicially pursue its claim for refund of excess input value-adde d tax
arising from zero-rated sales s ubject of the instant Petition. Petitioner will instead
exercise the administrative options available to it in claiming such refund.

ISSUE: WHETHER OR NOT THE PETITIONER CAN RIGHTFULLY WITHDRAW ITS

CLAIM FOR REFUND OF EXCESS INPUT TAX.
-
THE CTA THIRD DIVISION RULED THAT YES.
Section 3, Rule 50 of the Revised Rules of Court, in relation to Section 3,
Rule 1 of the Revised Rules of the Court of Tax Appeals, pertinently provides:

SEC. 3. Withdrawal of appeal. - An appeal may be withdrawn as of right at any

time before the filing of the appellee's brief. Thereafter, the withdrawal may be
allowed in the discretion of the court.

t. Considering that Summons has yet to issue and no Answer has yet been filed, the
withdrawal of the Petition is clearly a matter of right oN the part of petitioner.

WHEREFORE, the Motion to Withdraw dated June 29, 2018 filed by petitioner is
GRANTED.
7-
II.
The second case was decided by the SECOND DIVISION of CTA promulgated last
July 26,2018. CTA Case No. 9355.Petitioner in this case was DUTY FREE
PHILIPPINES CORPORATION, Vs BUREAU OF INTERNAL REVENUE

FACTS:
Petitioner argues that this Court, CTA, has jurisdiction over its CASE against the BIR.
Respondent, on the other hand, argues in its Opposition that this Court had correctly
ruled that the latter has no jurisdiction over the instant petition.

The Supreme Court En Banc in Power Sector Assets and Liabilities Management
Corporation v. Commissioner of Internal Revenue (PSALM case) ruled that in disputes
and claims solely between government agencies and offices, including GOCCs, the
administrative procedure in Sections 2 and 3 of Presidential Decree (PD) No. 242
should be followed.

The use of the word "shall" in a statute connotes a mandatory order or an imperative
obligation. Its use rendered th e provisions mandatory and not merely permissive, and
unless PD 242 is declared unconstitutional, its provisions must be followed. The use of
the word "shall" means that administrative settlement or adjudication of disputes and
claims between government agencies and offices, including government-owned or
controlled corporations, is not merely permissive but mandatory and imperative.

Thus, under PD 242, it is mandatory that disputes and claims "solely" between
government agencies and offices, including government-owned or controlled
corporations, involving only questions of law, be submitted to and settled or adjudicated
by the Secretary of Justice.

ISSUE: Whether or not CTA has jurisdiction over the case between Duty Free
Philippines Corporation and the BIR.

The CTA RULED THAT: NO. DFPC is a government owned and controlled corporation
while respondent BIR is a government agency. Clearly, this is a dispute solely between
two government entities, as such following the PSALM CASE ruling, this Court has no
jurisdiction. It is very clear from the ruling itself that “ all disputes, claims and
controversies solely between or among the departments, bureaus, offices,
agencies and instrumentalities of the National Government, including
constitutional offices or agencies arising from the interpretation and application
of statutes, contracts or agreements are covered by Presidential Decree No. 242
as decided by the Supreme Court itself. Such duty to follow the legal doctrine
enunciated by the Supreme Court is not only pursuant to the doctrine of judicial notice
but because it is the only institution which the courts should follow. It is well settled that
courts must be cognizant of the decisions of the Supreme Court because of the doctrine
of STARE DECISIS as entrenched in in ARTICLE 8 of the Civil Code, to wit.
Article 8: Judicial Decisions applying or interpreting the laws or the Constitution
shall form part of the legal system of the Philippines,

Thus, petitioner's argument that this Court had jurisdiction on the instant case is totally
misplaced. WHEREFORE, premises considered, petitioner's Motion for Reconsideration
is hereby DENIED for lack of merit.

III.

The THIRD case was decided by the SECOND DIVISION of CTA promulgated last
July 24,2018. CTA CRIM. CASE NOS. 0-526, 0-527, 0-528 & 0-529. People of the
Philippines vs IZUMO CONTRACTORS, INC.REPRESENTED BY CEDRIC LEE,
JOHN K.ONG AND JUDY GUTIERREZ LEE.

FACTS:
For resolution of this Court are accused Cedric Lee and Judy Gutierrez Lee's Demurrer
to the Prosecution's Evidence, filed on January 29, 2018, and accused John K. Ong's
Motion for Leave to File Demurrer to Evidence with attached Demurrer to Evidence
Accused John K. Ong manifests that after prosecution has rested its case, the Court
issued an Order allowing him to file his Demurrer. He also alleged that the only tangible
documentary evidence against him was the 2012 General Information Sheet attached to
the Joint Complaint Affidavit dated March 27,2014. Furthermore, accused John K. Ong
claims that the prosecution failed to prove that the Final Assessment Notices were duly
sent or that he was aware of Izumo's tax liabilities in order to impute upon him the
required element of "willfulness".
ISSUE: WHETHER OR NOT THE COMPLAINANT DID NOT ISSUE A FORMAL
ASSESSMTN AGAINST IZUMO WHICJ IS REQUIRED BEFORE THE FILING OF THE
CRIMINAL COMPLAINT FOR TAX EVASION.
RULING: An assessment of a deficiency is not necessary to a criminal prosecution for
willful attempt to defeat and evade the income tax. A crime is complete when the
violator has knowingly and willfully filed a fraudulent return, with intent to evade and
defeat the tax. The perpetration of the crime is grounded upon knowledge on the part of
the taxpayer that he has made an inaccurate return, and the government's failure to
discover the error and promptly to assess has no connections with the commission of
the crime
Clearly, regardless of whether or not an assessment has been issued, a crime shall be
considered complete when the violator has knowingly and willfully filed a false or
fraudulent return, with intent to evade and defeat the tax. Considering that the very
documents relied upon by the BIR in ascertaining the undeclared income of Izumo for
taxable years 2006 to 2009 were indeed not admitted in evidence, the prosecution,
therefore, cannot prove that the accused herein indeed failed to supply correct and
accurate information.
WHEREFORE, premises considered, the accused Cedric Lee and Judy Gutierrez Lee's
Demurrer to the Prosecution's Evidence, and accused John K. Ong's Demurrer to
Evidence are GRANTED. Accordingly, accused Cedric Lee, Judy Gutierrez Lee and
John K. Ong are ACQUITTED of the offenses charged for failure of the prosecution to
establish the guilt of the accused beyond reasonable doubt, and without civil liability.
Accordingly, the instant consolidated cases are DISMISSED.