THE COURT of Tax Appeals (CTA) has ruled to cancel the P10.87-million delinquent tax of Star Sports Corporation for the fiscal year 2014 because the company did not receive proper notice regarding its tax obligation.
In an 18-page decision dated Nov. 6, 2023 and penned by Associate Justice Maria Rowena Modesto-San Pedro, the CTA Second Division also nullified the warrant of distraint and levy (WDL) — which enforces the seizure of a taxpayer’s property to satisfy a tax debt — issued against the company since the tax assessment has been voided.
Star Sports has denied receipt of the preliminary assessment notice (PAN) and final assessment notice (FAN), which the Bureau of Internal Revenue (BIR) allegedly issued on Dec. 6, 2017 and Jan. 9, 2018, respectively.
In its ruling, the CTA noted that the BIR failed to present any registry receipts to prove that the PAN and FAN had been served to the company.
The appellate court stated that a lack of notice is enough to void an assessment based on a taxpayer’s right to due process, as cited in the National Internal Revenue Code, adding that in this case, “the burden of proof falls on the CIR (Commissioner of Internal Revenue) to prove such receipt.” — Jomel R. Paguian
