THE Supreme Court (SC) has affirmed the cancellation of the tax assessment on First Gas Power Corp. for the calendar year 2000 worth P37 million, and tax liabilities for 2001 worth P82.4 million.
In a ruling on Feb. 15 and made public on May 16, the High Court reiterated the Court of Tax Appeals (CTA) full court’s ruling that said the formal letter of demand and the final assessment notice were issued beyond the mandated three-year period.
The tribunal added that the assessment did not indicate the date within which the tax liabilities should have been paid by the company.
The company is a renewable energy company that operates a natural gas power plant in Batangas City.
The High Court noted that the company received the final notice and demand letter in 2004 for the 2000 tax assessment, which was clearly beyond the three-year prescriptive period provided by the country’s revenue code.
The commissioner of internal revenue, the petitioner, said that the inadvertent absence of dates should not be a fatal error that invalidates the assessment.
“Similarly, in this case, the failure to indicate the date of acceptance by petitioner in the First Waiver means that the same is defective, and therefore, the original three-year prescriptive period to assess the deficiency income tax of respondent for the taxable year 2000 was never extended,” according to a copy of the ruling written by SC Associate Justice Jhosep Y. Lopez.
The SC said that the CTA did not err in canceling the final assessment notice and formal letter of demand, all dated 2004.
“They are all invalid assessments because the period of the petitioner to issue the same for the taxable year 2000 has already been prescribed, and the assessments for the taxable year 2001 did not contain a definite due date for payment by the respondent,” it added. — John Victor D. Ordoñez
