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    COMMISSIONER OF INTERNAL REVENUE Vs METRO STAR SUPERAMA

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    Charles Roger Raya
    The Court ruled that the respondent was denied due process. Section 228 of the Tax Code requires that taxpayers must first receive a Preliminary Assessment Notice informing them of any tax deficiency and the facts and laws supporting the assessment. Failure to send this notice before attempting to collect the deficient taxes violates the taxpayer's right to present their case. Since the respondent did not receive the required Preliminary Assessment Notice, their due process rights were violated and the assessment against them was void.

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    COMMISSIONER OF INTERNAL REVENUE Vs METRO STAR SUPERAMA

    Uploaded by

    Charles Roger Raya
    130 views1 page
    The Court ruled that the respondent was denied due process. Section 228 of the Tax Code requires that taxpayers must first receive a Preliminary Assessment Notice informing them of any tax deficiency and the facts and laws supporting the assessment. Failure to send this notice before attempting to collect the deficient taxes violates the taxpayer's right to present their case. Since the respondent did not receive the required Preliminary Assessment Notice, their due process rights were violated and the assessment against them was void.

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    COMMISSIONER OF INTERNAL REVENUE vs METRO STAR SUPERAMA

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    The Court ruled that the respondent was denied due process. Section 228 of the Tax Code requires that taxpayers must first receive a Preliminary Assessment Notice informing them of any tax deficiency and the facts and laws supporting the assessment. Failure to send this notice before attempting to collect the deficient taxes violates the taxpayer's right to present their case. Since the respondent did not receive the required Preliminary Assessment Notice, their due process rights were violated and the assessment against them was void.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    130 views1 page

    COMMISSIONER OF INTERNAL REVENUE Vs METRO STAR SUPERAMA

    Uploaded by

    Charles Roger Raya
    The Court ruled that the respondent was denied due process. Section 228 of the Tax Code requires that taxpayers must first receive a Preliminary Assessment Notice informing them of any tax deficiency and the facts and laws supporting the assessment. Failure to send this notice before attempting to collect the deficient taxes violates the taxpayer's right to present their case. Since the respondent did not receive the required Preliminary Assessment Notice, their due process rights were violated and the assessment against them was void.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    COMMISSIONER OF INTERNAL REVENUE, RULING: YES. Respondent was denied due process.

    Section
    Petitioner, -versus- METRO STAR SUPERAMA, INC., 228 of the Tax Code clearly requires that the taxpayer must
    Respondent first be informed that he is liable for deficiency taxes through
    G.R. No. 185371, December 8, 2010 the sending of a PAN. He must be informed of the facts and
    the law upon which the assessment is made. The law imposes
    Indeed, Section 228 of the Tax Code clearly requires that the a substantive, not merely a formal, requirement. To proceed
    taxpayer must first be informed that he is liable for deficiency heedlessly with tax collection without first establishing a valid
    taxes through the sending of a PAN. He must be informed of assessment is evidently violative of the cardinal principle in
    the facts and the law upon which the assessment is made. The administrative investigations — that taxpayers should be able
    law imposes a substantive, not merely a formal, requirement. to present their case and adduce supporting evidence.
    To proceed heedlessly with tax collection without first
    establishing a valid assessment is evidently violative of the From the provision of Sec 3, RR no. 12-99, it is clear that the
    cardinal principle in administrative investigations - that sending of a PAN to taxpayer to inform him of the assessment
    taxpayers should be able to present their case and adduce made is but part of the "due process requirement in the
    supporting evidence. issuance of a deficiency tax assessment," the absence of which
    renders nugatory any assessment made by the tax authorities.
    Since Metro Star did not receive the PAN, failure to comply The use of the word "shall" in subsection 3.1.2 describes
    with such is tantamount to a denial of due process. the mandatory nature of the service of a PAN. The
    persuasiveness of the right to due process reaches both
    FACTS: On November 8, 2001, Revenue District Officer substantial and procedural rights and the failure of the CIR to
    Socorro O. Ramos-Lafuente issued a Preliminary 15- day strictly comply with the requirements laid down by law and its
    Letter, which Metro Star received on November 9, 2001. The own rules is a denial of Metro Star's right to due process. 15
    said letter stated that a post audit review was held and it was Thus, for its failure to send the PAN stating the facts and the
    ascertained that there was deficiency value-added and law on which the assessment was made as required by Section
    withholding taxes due from respondent in the amount of ₱ 228 of R.A. No. 8424, the assessment made by the CIR is
    292,874.16. void.

    On April 11, 2002, Metro Star received a Formal Letter of


    Demand dated April 3, 2002 from Revenue District No. 67,
    Legazpi City, assessing Metro Star the amount of Two
    Hundred Ninety Two Thousand Eight Hundred Seventy Four
    Pesos and Sixteen Centavos (₱292,874.16.) for deficiency
    value-added and withholding taxes for the taxable year 1999.

    Subsequently, Revenue District Office No. 67 sent a copy of


    the Final Notice of Seizure dated May 12, 2003, which Metro
    Star received on May 15, 2003, giving the latter last
    opportunity to settle its deficiency tax liabilities within ten
    (10) [days] from receipt thereof, otherwise respondent BIR
    shall be constrained to serve and execute the Warrants of
    Distraint and/or Levy and Garnishment to enforce collection.

    On February 6, 2004, Metro Star received from Revenue


    District Office No. 67 a Warrant of Distraint and/or Levy No.
    67-0029-23 dated May 12, 2003 demanding payment of
    deficiency value-added tax and withholding tax payment in the
    amount of ₱292,874.16.

    Denying that it received a Preliminary Assessment Notice


    (PAN) and claiming that it was not accorded due process,
    Metro Star filed a petition for review with the CTA which
    ruled in its favor.

    Aggrieved, the CIR filed a petition for review with the CTA-
    En Banc, but the petition was dismissed after a determination
    that no new matters were raised.

    ISSUE: Whether failure to strictly comply with notice


    requirements prescribed under Section 228 of the National
    Internal Revenue Code of 1997 and Revenue Regulations
    (R.R.) No. 12-99 tantamount to a denial of due process.

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