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Tuesday, December 07, 2004
SC backs arraignment of tycoon for 'tax evasion'
By Benjamin B. Pulta
THE Supreme Court (SC) has turned down a plea filed by the government urging the SC to order transfer the tax evasion case against businessman Lucio Tan to the Court of Tax Appeals (CTA).
In a seven-page resolution dated December 1, the SC en banc stood by its earlier ruling last July that it is the Marikina Metropolitan Trial Court (MeTC) and not the CTA that has jurisdiction over the cases.
The court said in turning down the motion for reconsideration of the Office of the Solicitor General (OSG) that "even the new law recognizes the propriety of leaving the original jurisdiction with the regular court (which) have original jurisdiction."
In its motion for partial reconsideration, the OSG said the case should now be tried by the CTA following the passage of Republic Act 9282 on March 20, 2004, which expanded the jurisdiction of the tax court to include all criminal offenses including those arising from violations of the National Internal Revenue Code.
The OSG said under the new law, Congress recognized that it is the CTA that has technical competence to try and decide tax cases, such as Tan's.
The SC, in ruling against the OSG's position, however said criminal complaints for tax evasion are instituted not to demand payment but also to penalize the taxpayer.
"Accordingly, it is the MeTC and not the CTA, that has jurisdiction in the first instance over these cases, including the arraignment thereon and trial on the merits," the SC said.
The OSG insists there is no legal obstacle to the transfer of the case to the CTA, claiming that the Marikina MeTC has yet to acquire jurisdiction over the case.
The OSG noted that Tan and his co-accused -- mostly officers of the Fortune Tobacco Compoany's satellite firms -- have neither been arrested or posted bail or appeared in the lower court to answer their indictment.
The SC ruling had reversed the decisions of the Court of Appeals (CA) and Marikina Regional Trial Court (RTC), which upheld the dismissal of the nine counts of tax evasion against Tan and his co-accused.
The SC had also sent back to Branch 75 of the Metropolitan Trial Court (MeTC) of Marikina City for "appropriate action" the case against Tan and officers of nine alleged dummy firms that the tycoon allegedly used to enable Fortune Tobacco Company (FTC) to evade the payment of proper taxes from 1990 to 1992.
The SC had earlier given the green light to the government to go after Tan for alleged tax evasion offenses involving almost P20 billion when the Bureau of Internal Revenue initiated the case against him on Sept. 7, 1993.
Voting 13-0, the high court said in its July 13 ruling that the MeTC erred when it dismissed the case against the respondents after the BIR made a turnaround.
The SC also dismissed the contention of Tan's lawyers that the petition should be dismissed on technicality because the Department of Justice (DOJ) not only resorted to the wrong legal remedy of certiorari but also filed it after the 60-day deadline has lapsed.
Moreover, the SC said the DOJ was not late in filing the petition because the provision of the rules under which it was filed was subsequently amended and that new rules said the petition is on time.
FTC, manufacturer of Hope, Champion and More cigarettes, was accused of failing to pay some P19.6 billion in income deficiency, ad valorem and value added taxes from 1990 to 1992 and deprived the government of its much-needed revenues.
After numerous court battles to stop the DOJ investigation of the tax evasion case, the DOJ finally resolved the case on November 1998, finding probable cause to believe the respondents were guilty and should be held for trial.
On Dec. 1, 1998, the DOJ headed by then Secretary Serafin Cuevas filed nine counts of tax evasion cases for the taxable years 1990, 1991 and 1992 before the Branch 75 of MeTC of Marikina City
Eight days later, the BIR, headed by then Commissioner Beethoven Rualo, filed a manifestation and motion before the court, praying for the withdrawal of the case.
On March 22, 1999, Judge Alex Ruiz of the Marikina MeTC dismissed the case, doing the same later to a subsequent motion for reconsideration the DOJ filed.
The DOJ elevated the case to the Marikina RTC Branch 273 but Presiding Judge Olga Palanca Enriquez dismissed it on Aug. 25, 1999, ruling that that petition was filed late.
The Marikina RTC denied its motion for reconsideration so that the DOJ went to the CA on Oct. 20, 1999. On Aug. 29, 2000, the CA dismissed the DOJ's petition for lack of merit.
(December 7, 2004 issue)
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