THE Court of Tax Appeals (CTA) has granted the appeal of Atlas Precision Environment Corp. to revoke and cancel its alleged value-added tax (VAT) deficiency amounting to P1.8 million for the calendar year 2013.
In a decision on March 30, the court’s third division ruled that the tax assessment made by the Bureau of Internal Revenue (BIR) is revoked for the year 2013.
The petitioner is a corporation engaged in the supply, installation, maintenance of computer support systems, and other controlled environment facilities.
The respondent is the BIR commissioner who has the authority to decide refunds of internal revenue taxes, fees, and other charges in relation to the country’s revenue code.
“First, all VAT payments due on sales invoices issued from 1 Jan. 2013 to 30 Jan. have been actually fully paid,” the court said in its ruling written by CTA Associate Justice Maria Belen M. Ringpis-Liban.
The tribunal noted that the commissioner’s claim of unsupported input tax was disproven by receipts presented by the company during the audit.
The company earlier raised these pieces of evidence to the respondent against the BIR’s preliminary notice of assessment but said that the revenue officers issued a final notice without acknowledging its arguments.
The respondent sent the petitioner the final assessment notice, which reiterated the same basic tax due.
“Consequently, petitioner was left unaware of how the BIR appreciated the explanations or defenses petitioner raised against the preliminary assessment notice in clear violation of its right to administrative due process, thereby rendering the subject VAT assessment void,” said the tax court.
The appellate court said that under the 1987 Constitution, both parties — the taxpayer and the state — should have equal protection of the laws and due process.
“In view of the finding that the subject VAT assessment is invalid for violation of petitioner’s right to due process, and thus bear no valid fruit, it becomes unnecessary to address the issue and matters raised by the parties,” it said. — John Victor D. Ordoñez