G.R. No. L-41919-24 May 30, 1980
QUIRICO P. UNGAB, petitioner, vs. HON. VICENTE N. CUSI, JR., in his capacity as Judge of the Court of First Instance, Branch 1, 16TH Judicial District, Davao City, THE COMMISSIONER OF INTERNAL REVENUE, and JESUS N. ACEBES, in his capacity as State Prosecutor, respondents.

FACTS

Petitioner Quirico P. Ungab was assessed by the Bureau of Internal Revenue (BIR) for deficiency income tax, business tax, and forest charges for 1973 after an examiner discovered he failed to report income from banana sapling sales. Ungab protested the assessment. Subsequently, the BIR’s Special Investigation Division found sufficient proof of tax evasion and recommended criminal prosecution. State Prosecutor Jesus Acebes, acting under a designated authority, conducted a preliminary investigation and, finding probable cause, filed six criminal informations against Ungab in the Court of First Instance of Davao for violations of the National Internal Revenue Code, including filing a fraudulent return and failure to pay fixed and percentage taxes.
Ungab moved to quash the informations, arguing primarily that the trial court lacked jurisdiction because his protest against the BIR’s assessment was still pending, thereby allegedly depriving the court of authority until the tax deficiency was finally determined. The trial court denied his motion. Ungab then filed this petition for certiorari and prohibition, seeking to annul the informations and restrain further proceedings.

ISSUE

Whether a pending protest against a tax assessment bars the criminal prosecution of the taxpayer for violations of the National Internal Revenue Code.

RULING

The Supreme Court dismissed the petition, ruling that a pending protest does not preclude criminal prosecution. The Court drew a clear distinction between the civil and criminal aspects of tax law. A civil action for tax collection requires the exhaustion of administrative assessment procedures, including recourse to the Court of Tax Appeals for disputed assessments. However, a criminal prosecution for statutory violations like filing a fraudulent return operates independently.
The crime is deemed complete at the moment the taxpayer knowingly and willfully files a fraudulent return with the intent to evade tax. The government’s subsequent act of assessment, or the taxpayer’s protest against it, is not an element of the offense. The prescriptive period for the criminal action is not suspended by a petition for reconsideration of the assessment. Therefore, the pendency of Ungab’s administrative protest did not strip the Court of First Instance of its jurisdiction over the criminal cases. The trial court correctly denied the motion to quash, as the criminal prosecution could proceed independently of the unresolved assessment protest. The temporary restraining order was lifted.