THE Court of Tax Appeals granted the petition of Jollibee Worldwide Pte. Ltd. for a refund of the P18.4-million tax it paid for 2009.
In a decision dated Aug. 26, the court’s third division ordered the Bureau of Internal Revenue to refund or issue a tax credit certificate to the company as its right to due process was violated.
“In this case, considering that petitioner’s right to due process was violated by respondent, the Court has the power to grant the refund prayed for by petitioner,” it said.
The court said the final assessment notices and formal letter of demand to Jollibee Worldwide was issued prematurely as they were received by the company only five days after it received the preliminary assessment notice.
Under Section 3 Revenue Regulation No 12-99, a formal letter of demand and assessment notice should be issued if a taxpayer fails to respond within 15 days from receipt of the preliminary assessment.
“Respondent, in failing to await the lapse of the fifteen (15) day period, correspondingly disregarded the mandatory due process requirement laid down under RR No. 12-99. As a consequence, the petitioner was denied of its right to due process,” it said.
“As a result, the assessments issued in this case are void, and all the proceedings and orders emanating from there are likewise void. As a rule, a void assessment bears no valid fruit,” it added.
The warrant of distraint and/or levy issued by the bureau in March 2015 was declared null and void, the court ruled.
Jollibee Worldwide paid the amount when the case was pending.
The company filed separate appeals to the preliminary assessment and final assessment notice in January and February 2013. The regional director, in August that year, issued the final decision and requested the company to pay the alleged tax liabilities, according to the court.
Jollibee Worldwide raised the appeal to the commissioner for the cancellation and was denied in February 2015.
The company elevated the case to the court in March 2015. In the same month, the bureau issued the warrant of distraint and/or levy.
It also filed a motion to quash the warrant but was denied for lack of merit. The court allowed the petitioner to file an amended petition for review as it deposited its alleged tax liabilities to the BIR.
The BIR argued that the assessment is final, executory and demandable, and the claim of the company that it was not given the opportunity to reply to the preliminary assessment was erroneous, among others. — Vann Marlo M. Villegas
