RIZAL COMMERCIAL G.R. No. 168498
BANKING CORPORATION,
Petitioner, Present:
Panganiban, C.J.
(Chairperson),
- versus - Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
COMMISSIONER
OF INTERNAL
REVENUE, Promulgated:
Respondent.
x
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x
YNARES-SANTIAGO,
J.:
This is a petition for review under
Rule 45 of the Rules of Court assailing the Decision[1] of
the Court of Tax Appeals (CTA) En Banc dated June 7, 2005 in C.T.A. EB
No. 50 which affirmed the Resolutions of the CTA Second Division dated May 3,
2004[2]
and November 5, 2004[3] in
C.T.A. Case No. 6475 denying petitioner’s Petition for Relief from Judgment and
the Motion for Reconsideration thereof, respectively.
The undisputed facts are as follows:
On July 5, 2001, petitioner Rizal Commercial Banking
Corporation received a Formal Letter of Demand dated May 25, 2001 from the
respondent Commissioner of Internal Revenue for its tax liabilities
particularly for Gross Onshore Tax in the amount of P53,998,428.29 and
Documentary Stamp Tax for its Special Savings Placements in the amount of
P46,717,952.76, for the taxable year 1997.[4]
On July 20, 2001, petitioner filed a
protest letter/request for reconsideration/reinvestigation pursuant to Section
228 of the National Internal Revenue Code of 1997 (NIRC).[5]
As the protest was not acted upon by
the respondent, petitioner filed on
On
Petitioner
did not file a motion for reconsideration or an appeal to the CTA En Banc
from the dismissal of its petition for review.
Consequently, the
On
On
Petitioner’s motion for reconsideration was denied in a
Resolution dated November 5, 2004,[16] hence it filed a petition for
review with the CTA En Banc, docketed as C.T.A. EB No. 50, which
affirmed the assailed Resolutions of the CTA Second Division in a Decision
dated June 7, 2005.
Hence, this petition for review based
on the following grounds:
I.
THE HONORABLE
CTA AND CTA EN BANC GRAVELY ERRED IN DENYING PETITIONER’S PETITION FOR
RELIEF, WITHOUT FIRST AFFORDING IT THE
II.
CONSIDERING THAT
THE SUBJECT ASSESSMENT, INSOFAR AS IT INVOLVES ALLEGED DEFICIENCY DOCUMENTARY
STAMP TAXES ON SPECIAL SAVINGS ACCOUNTS, IS AN ISSUE AFFECTING ALL MEMBERS OF
THE BANKING INDUSTRY, PETITIONER, LIKE ALL OTHER BANKS, SHOULD BE AFFORDED AN
EQUAL OPPORTUNITY TO FULLY LITIGATE THE ISSUE, AND HAVE THE CASE DETERMINED
BASED ON ITS MERITS, RATHER THAN ON A MERE TECHNICALITY.[17]
Relief from judgment under Rule 38 of
the Rules of Court is a legal remedy that is allowed only in exceptional cases
whereby a party seeks to set aside a judgment rendered against him by a court
whenever he was unjustly deprived of a hearing or was prevented from taking an
appeal, in either case, because of fraud, accident, mistake or excusable
neglect.[18]
Petitioner argues that it was denied due process when it was
not given the opportunity to be heard to prove that its failure to file a
motion for reconsideration or appeal from the dismissal of its petition for
review was due to the failure of its employee to forward the copy of the
September 10, 2003 Resolution which constitutes excusable negligence.
Petitioner’s argument lacks merit.
It is basic that as long as a party is
given the opportunity to defend his interests in due course, he would have no
reason to complain, for it is this opportunity to be heard that makes up the
essence of due process.[19] In Batongbakal v. Zafra,[20]
the Court held that:
There
is no question that the “essence of due process is a hearing before conviction
and before an impartial and disinterested tribunal” but due process as a
constitutional precept does not, always and in all situations, require a
trial-type proceeding. The essence of due process is to be found in the
reasonable opportunity to be heard and submit any evidence one may have in
support of one’s defense. “To be heard” does not only mean verbal
arguments in court; one may be heard also through pleadings. Where
opportunity to be heard, either through oral arguments or pleadings, is
accorded, there is no denial of procedural due process. (Emphasis supplied)
As
correctly pointed by the Office of the Solicitor General (OSG), the CTA Second
Division set the case for hearing on April 2, 2004 after the filing by the
petitioner of its petition for relief from judgment. Petitioner’s counsel was present on the scheduled
hearing and in fact orally argued its petition.
Moreover, after the CTA Second Division dismissed the
petition for relief from judgment in a Resolution dated
Relief cannot be granted on the flimsy excuse that the
failure to appeal was due to the neglect of petitioner’s counsel.[21] Otherwise, all that a losing party would do
to salvage his case would be to invoke neglect or mistake of his counsel as a
ground for reversing or setting aside the adverse judgment, thereby putting no
end to litigation.[22]
Negligence to be “excusable” must be one which ordinary
diligence and prudence could not have guarded against and by reason of which
the rights of an aggrieved party have probably been impaired.[23] Petitioner’s former counsel’s omission could
hardly be characterized as excusable, much less unavoidable.
The Court has repeatedly admonished lawyers to adopt a system
whereby they can always receive promptly judicial notices and pleadings
intended for them.[24] Apparently, petitioner’s counsel was not only
remiss in complying with this admonition but he also failed to check
periodically, as an act of prudence and diligence, the status of the pending
case before the CTA Second Division. The
fact that counsel allegedly had not renewed the employment of his secretary, thereby
making the latter no longer attentive or focused on her work, did not relieve
him of his responsibilities to his client.
It is a problem personal to him which should not in any manner interfere
with his professional commitments.
In exceptional cases, when the mistake of counsel is so
palpable that it amounts to gross negligence, this Court affords a party a
second opportunity to vindicate his right. But this opportunity is unavailing
in the case at bar, especially since petitioner had squandered the various
opportunities available to it at the different stages of this case. Public interest demands an end to every
litigation and a belated effort to reopen a case that has already attained
finality will serve no purpose other than to delay the administration of
justice.[25]
Since petitioner’s ground for relief is not well-taken, it
follows that the assailed judgment stands.
Assuming ex gratia argumenti that the negligence of petitioner’s
counsel is excusable, still the petition must fail. As aptly observed by the OSG, even if the
petition for relief from judgment would be granted, petitioner will not fare
any better if the case were to be returned to the CTA Second Division since its
action for the cancellation of its assessments had already prescribed.[26]
Petitioner protested the assessments
pursuant to Section 228 of the NIRC, which provides:
SEC.
228. Protesting of Assessment.- x x x.
x
x x x
Within
a period to be prescribed by implementing rules and regulations, the taxpayer
shall be required to respond to said notice.
If the taxpayer fails to respond, the Commissioner or his duly
authorized representative shall issue an assessment based on his findings.
Such
assessment may be protested administratively by filing a request for
reconsideration or reinvestigation within thirty (30) days from receipt of the
assessment in such form and manner as may be prescribed by implementing rules
and regulations. Within sixty (60) days
from filing of the protest, all relevant supporting documents shall have been
submitted; otherwise, the assessment shall become final.
If
the protest is denied in whole or in part, or is not acted upon within one
hundred eighty (180) days from submission of documents, the taxpayer adversely
affected by the decision or inaction may appeal to the Court of Tax Appeals
within (30) days from receipt of the said decision, or from the lapse of the
one hundred eighty (180)-day period; otherwise the decision shall become final,
executory and demandable. (Emphasis
supplied)
The CTA Second Division held:
Following the periods provided for
in the aforementioned laws, from
As provided in Section 228, the
failure of a taxpayer to appeal from an assessment on time rendered the
assessment final, executory and demandable.
Consequently, petitioner is precluded from disputing the correctness of
the assessment.
In Ker & Company, Ltd. v. Court
of Tax Appeals,[28]
the Court held that while the right to appeal a decision of the Commissioner to
the Court of Tax Appeals is merely a statutory remedy, nevertheless the
requirement that it must be brought within 30 days is jurisdictional. If a statutory remedy provides as a condition
precedent that the action to enforce it must be commenced within a prescribed
time, such requirement is jurisdictional and failure to comply therewith may be
raised in a motion to dismiss.
In fine, the failure to comply with
the 30-day statutory period would bar the appeal and deprive the Court of Tax
Appeals of its jurisdiction to entertain and determine the correctness of the
assessment.[29]
WHEREFORE,
in view of the foregoing, the Decision of the Court of Tax Appeals En Banc
dated June 7, 2005 in C.T.A. EB No. 50 affirming the Resolutions of the Court
of Tax Appeals Second Division dated May 3, 2004 and November 5, 2004 in C.T.A.
Case No. 6475 denying petitioner’s Petition for Relief from Judgment and Motion
for Reconsideration, respectively, is AFFIRMED.
SO
ORDERED.
CONSUELO YNARES-SANTIAGO
Associate Justice
WE
CONCUR:
ARTEMIO V. PANGANIBAN
Chief Justice
Chairperson
MA. ALICIA AUSTRIA-MARTINEZ
ROMEO J. CALLEJO, SR.
Associate Justice Associate Justice
MINITA V. CHICO-NAZARIO
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII
of the Constitution, it is hereby certified that the conclusions in the above
Decision were reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1] Rollo, pp. 35-42. Penned by Associate Justice Juanito C.
Castañeda, Jr. and concurred in by Associate Justices Lovell R. Bautista,
Erlinda P. Uy and Caesar A. Casanova.
[2]
[3]
[4]
CTA Second Division records, pp. 8-9.
[5]
[6]
[7]
Rollo, pp. 87-94.
[8]
[9]
CTA Second Division records, p. 113.
[10]
[11]
[12]
[13]
[14]
[15]
[16]
[17]
[18] Quelnan
v. VHF
[19] Estares
v. Court of Appeals, G.R. No. 144755, June 8, 2005, 459 SCRA 604, 623.
[20]
G.R. No. 141806, January 17, 2005, 448 SCRA 399, 410.
[21] Insular
Life Savings and Trust Company v. Runes, Jr., G.R. No. 152530, August 12, 2004, 436 SCRA 317, 326.
[22]
Ragudo v. Fabella Estate Tennants Association, Inc., G.R. No. 146823,
August 9, 2005, 466 SCRA 136, 146.
[23] Philippine
Phosphate Fertilizer Corporation v. Commissioner of Internal Revenue, G.R. No. 141973, June 28, 2005, 461 SCRA 369, 388.
[24] Azucena
v. Foreign Manpower Services, G.
R. No. 147955, October 25, 2004, 441 SCRA 346, 356.
[25] Mesina
v. Meer, 433 Phil. 124, 137 (2002).
[26] Rollo,
pp. 170-171.
[27]
[28]
G.R. No. L-12396, January 31, 1962, 4 SCRA 160, 163.
[29] Commissioner
of Internal Revenue v. Western Pacific Corporation, 121 Phil. 889, 893 (1965).