G.R. No. 230104 . March 16, 2022.
BUREAU OF INTERNAL REVENUE, PETITIONER, VS. SAMUEL B. CAGANG, RESPONDENT.

FACTS

On March 4, 2003, CEDCO, Inc. (CEDCO) received a Letter of Authority from the Bureau of Internal Revenue (BIR) for the examination of its books for taxable years 1997 to 2001. CEDCO protested, citing prior examinations, its availment of the Voluntary Assessment and Abatement Program for 2000 and 2001, and the disposal of old records as allowed by law. The BIR denied the protest. On May 24, 2005, CEDCO received a Preliminary Assessment Notice (PAN) for deficiency taxes for 2000 and 2001. CEDCO protested the PAN and a subsequent Formal Letter of Demand (FLD). The BIR issued a Final Decision on Disputed Assessment (FDDA) on September 28, 2007, denying CEDCO’s protest and detailing its tax liabilities. On November 28, 2007, CEDCO availed of the tax amnesty under Republic Act No. 9480 and paid the amnesty tax the next day. Despite this, the BIR sent a collection letter on June 24, 2008. On August 14, 2009, the BIR filed a complaint-affidavit against respondent Samuel B. Cagang (CEDCO’s treasurer) and Romulo M. Paredes (CEDCO’s president) for alleged willful failure to pay taxes under Section 255 of the National Internal Revenue Code (NIRC). The Department of Justice – National Prosecution Service (DOJ-NPS) initially dismissed the complaint for lack of probable cause, ruling that a complaint pending preliminary investigation did not disqualify a taxpayer from the amnesty’s immunity. The BIR’s motion for reconsideration was denied. The BIR then filed a petition for review with the Secretary of Justice, which was initially denied but later granted upon a second motion for reconsideration by Secretary Leila M. De Lima. The Secretary’s Resolution dated August 13, 2013, found probable cause and directed the filing of Informations. Cagang filed a petition for certiorari with the Court of Appeals (CA). Meanwhile, Informations were filed against Cagang and Paredes before the Court of Tax Appeals and the Regional Trial Court of Cebu City. The CA granted Cagang’s petition, annulling the DOJ Resolution and reinstating the earlier resolutions dismissing the complaint, holding that CEDCO’s valid availment of the tax amnesty extinguished its criminal liability. The BIR’s motion for reconsideration was denied.

ISSUE

Whether the Court of Appeals erred in annulling the Department of Justice Resolution which found probable cause to file criminal charges against respondent Samuel B. Cagang for violation of Section 255 of the NIRC, despite CEDCO’s availment of the tax amnesty under R.A. No. 9480 .

RULING

No, the Court of Appeals did not err. The Supreme Court denied the BIR’s petition and affirmed the CA Decision. The Court held that CEDCO validly availed of the tax amnesty under R.A. No. 9480 . The law grants immunity from all criminal offenses arising from the failure to pay taxes for the covered years. The BIR’s complaint-affidavit, filed on August 14, 2009, was a “pending criminal case” that was not yet in existence when R.A. No. 9480 took effect on June 6, 2007, and when CEDCO filed its amnesty return and payment on November 28 and 29, 2007. Following the law and its implementing rules, a taxpayer is disqualified from the amnesty only if there is a pending criminal case filed in court or with the DOJ as of the effectivity of the law. Since the complaint against Cagang was filed after the law’s effectivity and after CEDCO’s compliance, CEDCO was qualified for the amnesty, and its criminal liability was extinguished. The Court also found that the respondent, as a corporate officer, could be held criminally liable under the NIRC, but such liability was precisely extinguished by the amnesty. The Court further noted that the BIR’s own actions, including issuing the FDDA after CEDCO had already expressed its intent to avail of the amnesty, contributed to the procedural complexity but did not affect the validity of the amnesty availment.