GR 21874; (June, 1970) (Digest)
G.R. No. L-21874 June 30, 1970
REPUBLIC OF THE PHILIPPINES, plaintiff-appellee, vs. GUADALUPIO AQUIAS, defendant-appellant.
FACTS
The Republic of the Philippines filed a complaint on May 2, 1962, for the collection of deficiency percentage taxes from Guadalupio Aquias for the years 1952 and 1953, amounting to P10,600.21 inclusive of surcharge and penalty. The Bureau of Internal Revenue assessed this amount on June 12, 1954. The defendant requested a reinvestigation on August 9, 1954, which was granted on September 2, 1954. A reinvestigation was scheduled for October 15, 1956, but neither the defendant nor his counsel appeared. On November 21, 1960, the Bureau issued a Warrant of Distraint and Levy, which was not executed due to the defendant’s counsel requesting its lifting on the ground of prescription. The Bureau denied a further reinvestigation and reiterated its demand on March 2, 1962. The defendant did not contest the assessment or the final decision in the Court of Tax Appeals and did not pay the deficiency.
ISSUE
Whether or not the action for collection of the deficiency taxes had prescribed when it was filed on May 2, 1962.
RULING
No, the action had not prescribed. Under Section 332(c) of the National Internal Revenue Code, an assessed tax may be collected by a proceeding in court if begun within five years after the assessment. The assessment was made on June 12, 1954, and the complaint was filed on May 2, 1962, which is 7 years, 10 months, and 20 days later. However, the running of the prescriptive period was suspended. The suspension began on September 2, 1954, when the plaintiff granted the defendant’s request for reinvestigation, as this act prevented the plaintiff from filing the action. The suspension ended on November 21, 1960, when the Bureau issued the Warrant of Distraint and Levy, which was a clear act signifying the finality of the assessment and the commencement of collection. This interruption period lasted 6 years, 2 months, and 19 days. Deducting this interruption from the total elapsed time, the actual time that prescription ran was only 1 year, 8 months, and 1 day, which is within the five-year statutory period. Therefore, the decision of the Court of First Instance ordering the defendant to pay the deficiency tax was affirmed.