THE Supreme Court (SC) has ruled that a taxpayer acquitted of a criminal tax violation remains liable for unpaid taxes, provided a valid tax assessment exists.
The high court’s Second Division dismissed the criminal charges against E & D Parts and Supply Inc. and its treasurer, Margaret Uy, for lack of evidence, according to the SC Office of the Spokesperson.
Associate Justice Mario V. Lopez penned the decision.
The Office of the Solicitor General had filed cases before the Court of Tax Appeals (CTA) accusing the company and Uy of failing to file the company’s income tax return and pay income and value-added taxes.
However, the CTA dismissed the criminal cases, ruling that Uy was not a responsible officer of the company and, therefore, could not be held criminally liable.
Uy’s acquittal also removed the element of willfulness in the company’s tax violations.
The related civil case seeking to determine the company’s tax liability was also dismissed by the CTA.
The OSG argued before the SC that the company should still pay the unpaid taxes regardless of the acquittal.
The SC clarified that a taxpayer’s obligation to pay taxes is derived from the law itself, not from committing a criminal act such as tax evasion.
In this case, however, the SC ruled that the company was not required to pay the taxes due to an invalid tax assessment. / KAL