Commissioner of Customs:
a. Decisions of the Secretary of Trade and Industry or the Secretary of Agriculture in anti-dumping and countervailing duty cases are appealable to the Court of Tax Appeals within thirty (30) days from receipt of such decisions.
b. In case of automatic review by the Secretary of Finance in seizure or forfeiture cases where the value of the importation exceeds P5 million or where the decision of the Collector of Customs which fully or partially releases the shipment seized is affirmed by the Commissioner of Customs.
c. In case of automatic review by the Secretary of Finance of a decision of a Collector of Customs acting favorably upon a customs protest.
21. As a general rule, “ No court shall have the
authority to grant an injunction to restrain the collection of
any national internal revenue tax, fee or charge.”
(Sec. 218, NIRC)“ No appeal taken to the CTA from the decision of the Commissioner of Internal Revenue or the Commissioner of Customs or the Regional Trial Court, provincial, city or municipal treasurer or the Secretary of Finance, the Secretary of Trade and Industry and Secretary of Agriculture, as the case may be shall suspend the payment, levy, distraint, and/or sale of any property of the taxpayer for the satisfaction of his tax liability as provided by existing law: Provided,
however, That when in the opinion of the Court the collection by the aforementioned government agencies may jeopardize the interest of the Government and/or the taxpayer the Court at any stage of the proceeding may suspend the said collection and require the taxpayer either to deposit the amount claimed or to file a surety bond for not more than double the amount with the Court.” (Sec. 11, Rep. Act No. 1125, as amended by Sec.9, Rep. Act No. 9282 )
The Supreme Court may enjoin the collection of taxes under its general judicial power but it should be apparent that the source of the power is not statutory but constitutional.
The Supreme Court did not grant the provisional remedy prayed for in Southern Cross Cement Corporation v. The Philippine Cement
Manufacturers Corp., et al., G. R. No. 158540, July 8, 2004 for it would
be tantamount to enjoining the collection of taxes, a peremptory judicial act which is traditionally frowned upon unless there is a clear statutory basis for it. Evident is the clear legislative intent that the imposition of safeguard measures, despite the availability of judicial review, should not be enjoined notwithstanding any timely appeal of the imposition. This so because the Safeguard Measures Act states that the filing of a petition for review before the CTA does not stop, suspend, or otherwise toll the imposition or collection of the appropriate tariff duties or the adoption of other appropriate safeguard measures.
22. General rule: “ The rule is that in the absence of
accounting records of a taxpayer, his tax liability may be determined by estimation. The petitioner (Commissioner of Internal Revenue) is not required to compute such tax liabilities with mathematical exactness. Approximation in the calculation of taxes due is justified. To hold otherwise would be tantamount to holding that skillful concealment is an invincible barrier to proof.” [Commissioner of Internal Revenue v.
Hantex Trading Co., Inc. G. R. No. 136975, March 31, 2005 citing United States v. Johnson, 319 U.S. 1233 (1943)] “ However, the rule
does not apply where the estimation is arrived at arbitrarily and capriciously.” [Commissioner of Internal Revenue v. Hantex Trading
Co., Inc., citing United States v. Rindskopf, 105 U.S.418 (1881)]
23. Meaning of "best evidence obtainable" under Sec. 6 (B),
NIRC of 1997. This means that the original documents must be produced. If it could not be produced, secondary evidence must be adduced. (Hantex Trading Co., Inc. v. Commissioner of Internal
Revenue, CA - G.R. SP No. 47172, September 30, 1998)
NOTES AND COMMENTS:
a. The secondary evidence referred to are those that may
be adduced using the general methods for reconstructing a taxpayer’ s income or the indirect approach to tax investigation.
The “ best evidence” envisaged in Section 16 of the 1977 NIRC [now Sec. 6 (B),NIRC of 1997] “ includes the corporate and accounting records of the taxpayer who is the subject of the assessment process, the accounting records of other taxpayers engaged in the same line of business, including their gross profit and net profit sales.” (Commissioner of Internal Revenue v. Hantex Trading Co., Inc. G. R. No. 136975, March 31, 2005 citing De Leon, The National Internal
Revenue Code Annotated, p. 37)
“ Such evidence also includes data, record, paper, document or any evidence gathered by internal revenue officers from other taxpayers who had personal transactions or from whom the subject taxpayer received any income; and record, data, document and information secured from government offices or agencies, such as the SEC, the Central Bank of the Philippines, the Bureau of Customs, and the “ Tariff and Customs Commission.” (sic, Commissioner v. Hantex
Trading Co., Inc., supra)
“ The law allows the BIR access to all relevant or material records or data in the person of the taxpayer. It places no limit or condition on the type or form of the medium by which the record subject of the order of the BIR is kept.” (Ibid.)
Purpose of the “ best evidence obtainable” rule under Sec, 6 (B), NIRC of 1997. “ The purpose of the law is to enable the BIR to get at the taxpayer’ s records in whatever form they may be kept.” (Commissioner of Internal Revenue v. Hantex Trading Co., Inc. G. R. No. 136975, March 31, 2005)
24. Sec. 6 (B) of the NIRC of 1997 allows the BIR to make or amend a tax return from his own knowledge or obtained through testimony or otherwise. Thus, the Commissioner of Internal
Revenue investigates ” any circumstance which led him to believe that the taxpayer had taxable income larger than that reported. Necessarily, this inquiry would have to be outside of the books because they supported the return as filed. He may take the sworn testimony of the taxpayer, he may take the testimony of third parties; he may examine and subpoena, if necessary, traders’ and brokers’ accounts and books and the taxpayer’ s books of accounts. The Commissioner is not bound to follow any set of patterns. The existence of unreported income may be shown by any particular proof that is available in the circumstances of the particular situation. [Commissioner of Internal
Revenue v. Hantex Trading Co., Inc. citing Campbell, Jr., v. Guetersloh, 287 F.2d 878 (1961)]
Citing its ruling in a previous case, a “ U.S. appellate court declared that where the records of the taxpayer are manifestly inaccurate and incomplete, the Commissioner may look to other sources of information to establish income made by the taxpayer
during the years in question. (Ibid., in turn citing Kenney v.
Commissioner, 111 F.2d 374)
25. The following are the general methods developed by the Bureau of Internal Revenue for reconstructing a taxpayer’ s income where the records do not show the true income or where no
return was filed or what was filed was a false and fraudulent return (a) Percentage method;
(b) Net worth method.; (c) Bank deposit method; (d) Cash expenditure method; (e) Unit and value method;
(f) Third party information or access to records method; (g) Surveillance and assessment method. (Chapter XIII. Indirect Approach to Investigation, Handbook on Audit Procedures and Techniques – Volume I, pp. 68-74)
26. Third party information or access to records method.
The BIR may require third parties, public or private to supply information to the BIR, and thus, “ obtain on a regular basis from any person other than the person whose internal revenue tax liability is subject to audit or investigation, or from any office or officer of the national and local governments, government agencies and instrumentalities including the Bangko Sentral ng Pilipinas and government-owned or – controlled corporations, any information such as, but not limited to, costs and volume of production, receipts or sales and gross incomes of taxpayers, and the names , addresses, and financial statements of corporations, mutual fund companies, insurance companies, regional operating headquarters or multinational companies, joint accounts, associations, joint ventures or consortia and registered partnerships, and their members; xxx” [Sec. 5 (B), NIRC of 1997)
27. A pre-assessment notice is a letter sent by the Bureau
of Internal Revenue to a taxpayer asking him to explain within a period of fifteen (15) days from receipt why he should not be the subject of an assessment notice. It is part of the due process rights of a taxpayer.
As a general rule, the BIR could not issue an assessment notice without first issuing a pre-assessment notice because it is part of the due process rights of a taxpayer to be given notice in the form of a pre- assessment notice, and for him to explain why he should not be the subject of an assessment notice.