COMMISSIONER OF INTERNAL REVENUE, petitioner,

vs.
LILIA YUSAY GONZALES and THE COURT OF TAX APPEALS, respondents.
November 24, 1966

FACTS:

In 1948, Martial Yusay died intestate leaving two heirs, namely Jose and Lilia. Jose was
appointed administrator in the intestate proceedings for the settlement of the estate. Jose Yusay
filed with the BIR an estate and inheritance tax return. The BIR upon their tax audit and
investigation discovered properties which were not included in the return and no heirs were
included the same. Due to the under declaration of the properties, the inheritance tax assessment
were increased.

In view of the death of Jose, the assessment was sent to his widow Florencia who succeeded
him as the administrator of the estate of Martial. Florencia was made administrator of 2/3 of the
estate, while Lilia Yusay administered 1/3 of the estate.

No payment has been made despite repeated demands made by the CIR. The CIR filed a
proof of claim for the estate and the inheritance taxes due and a motion for its allowance with the
settlement court in voting priority of lien pursuant to the Tax Code.

Lilia Yusay filed a petition for review in the CTA assailing the legality of the assessment.
After hearing the parties, said Court declared the right of the CIR to assess the estate and
inheritance taxes to have prescribed.

ISSUE: Whether or not the right of the Commissioner of Internal Revenue to assess the estate and
inheritance taxes in question has prescribed?

LAW: Based on Sec 331 of the Tax Code the CIR is limited to make his assessment. However, it is
subject to exception. SEC. 332. Exceptions as to period of limitation of assessment and collection of
taxes. (a) In the case of a false or fraudulent return with intent to evade tax or of a failure to file a
return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun
without assessment, at any time within ten years after the discovery of the falsity, fraud or
omission.

ARGUMENTS:

Petitioner
Lilia Yusay is estopped from raising the defense
of prescription because she failed to raise the
same in her answer to the motion for allowance
of claim and for the payment of taxes filed in the
settlement court
Respondent
Lilia Yusay claims that since the latest
assessment was issued only on February 13,
1958 or eight years and two days from the filing
of the estate and inheritance tax return, the
Commissioners right to make it has expired. She
would rest her stand on Section 331 of the Tax
Code which limits the right of the Commissioner
to assess the tax within five years from the filing
of the return
COURTS RULING:

No. The return filed in the case was deficient that it prevented the Commissioner from
computing taxes due on the estate. It was as though no return was made. The Commissioner has to
determine the and assess the taxes on data obtained, not from the return but from other sources.

The law imposes upon the taxpayer the burden of supplying by the return the information
upon which an assessment would be based. His duty complied with, the taxpayer is bound to do
anything more than to wait for the Commissioner to assess the tax. Section 331 gives the
Commissioner 5 years within which to make his assessment. Except, if the taxpayer failed to
observe the law, in which case Section 332 grants the Commissioner longer period. Non observance
consists in a filing a false cause or fraudulent return with intent to evade the tax or in filing no
return at all.

The running of the period of limitations under Sec 332(a) of the Tax Code should therefore
be reckoned from said date for, as aforesaid, it is from that time the Commissioner was expected by
law to make his return and assess the tax due thereon. The prescription did not abate the
Commissioners right to issue said assessment.
 RIZAL COMMERCIAL BANKING CORP, petitioner
vs
COMMISSIONER OF INTERNAL REVENUE, respondent
June 11, 2006

FACTS:

RCBC received the final assessment notice on July 5, 2001. It filed a protest on July 20, 2001.
The protest was not acted upon by the respondent. Petitioner filed a Petition for Review with the
Court of Tax Appeals (CTA) on April 30, 2002 for the cancellation of the assessments. The petition
was dismissed because it was filed beyond the 30 day period following the lapse of 180 days from
the petitioners submission of documents in support of its protest.

ISSUE: Whether or not the action to protest the assessment judicially prescribed?

LAW:

Section 228 provides that the failure of the taxpayer to appeal from an assessment on time
rendered the assessment final, executor and demandable.

ARGUMENTS:

Petitioner Respondent
Petitioner argues that the petition should have Respondent argues that petition should be
been taken cognizance by the CTA for having dismissed for having been filed beyond the
been filed within the prescriptive period prescriptive period

COURTS RULING:

YES. The assessment has become final. The jurisdiction of the CTA has been expanded to
include not only decision but also inactions and both are jurisdictional such that failure to observe
either is fatal.

However, if there has been inaction, the taxpayer can choose between (1) file a Petition with
the CTA within 30 days from the lapse of the 180-day period OR (2) await the final decision of the
CIR and appeal such decision to the CTA within 30 days after receipt of the decision. These options
are mutually exclusive and resort to one bars the application of the other. Thus, if petitioner
belatedly filed an action based on inaction, it can not subsequently file another petition once the
decision comes out.
 CHEVRON PHILIPPINES INC
Vs
COMMISSIONER OF THE BUREAU OF CUSTOMS
August 11, 2008

FACTS:

Chevron is engaged in the business of importing and marketing petroleum products in the
Philippines. Chevron made an importation evidencing by bills of lading. The shipments were
unloaded from the carrying vessels onto petitioners oil tank of over 3 days from the date of arrival.
Subsequently, the import entry declarations (IED) were filed and 90% of the total customs duties
were paid. The import entry and internal revenue declarations (IEIRDs) of the shipment were
thereafter filed.

The Finance Secretary received a letter denouncing the deliberate concealment,

manipulation and scheme employed by the petitioner in the importation of crude oil, thereby
resulting in huge losses of revenue for the government. This letter was endorsed to the Bureau of
Customs for investigation.

The District Collector required the petitioner to settle the amounts representing the
difference between 10% and 3% tariff rates on the shipments.

The Special Investigator found that there was an irregularity in the filing and acceptance of
the import entries beyond the 30 day non extendible period prescribed under 1301 of the Tariff
and Customs Code and in the release of the shipments after the same has already been abandoned
in favor of the government.

ISSUES:

1. Whether or not the entry under Section 1301 in relation to Section 1801 of the TCC refers
to the IED or the IEIRD

2. Whether fraud was perpetrated by petitioner and

3. Whether or not the importation can be considered abandoned under Section 1801

LAW:

1. Under Section 1301 of the TCC, imported articles must be entered within a non-extendible period
of 30 days from the date of discharge of the last package from a vessel.

Otherwise, the BOC will deem the imported goods impliedly abandoned under Section 1801.

Section 1801. Abandonment, Kinds and Effect of. - An imported article is deemed abandoned under
any of the following circumstances:

b. When the owner, importer, consignee or interested party after due notice, fails to file an
entry within thirty (30) days, which shall not be extendible, from the date of discharge of
the last package from the vessel or aircraft, or having filed such entry, fails to claim his
importation within fifteen (15) days, which shall not likewise be extendible, from the date
of posting of the notice to claim such importation.

2. Section 1603. Finality of Liquidation. When articles have been entered and passed free of duty or
final adjustments of duties made, with subsequent delivery, such entry and passage free of duty or
settlements of duties will, after the expiration of one (1) year, from the date of the final payment of
duties, in the absence of fraud or protest or compliance audit pursuant to the provisions of this
Code, be final and conclusive upon all parties, unless the liquidation of the import entry was merely
tentative.

ARGUMENTS:

Petitioner
Petitioner objects that the 10% and 3% tariff
rates on the shipments.
The import entry to be filed within 30 day
period refers to the IED and not the IEIRD, has
no legal basis
Respondent
The filing of the IEIRDs constituted entry under
TCC since they were filed beyond 30 day period,
they were seasonably entered in accordance
with Section 1301 in relation to Section 205 of
TCC.

Petitioner also denies the commission of fraud.

It maintains that it had no predetermined and
deliberate intention not to comply with the 30-
day period in order to evade the payment of the
10% rate of duty.

COURTS RULING:

1. The petitioners position has no basis. Both the IED and IEIRD should be filed within 30 days
from the date of discharge of the last package from the vessel or aircraft. The IED serves as basis for
the payment of advance duties on importations whereas the IEIRD evidences the final payment of
duties and taxes. The operative act that constitutes entry of the imported articles at the port of
entry is the filing and acceptance of the specified entry form together with the other documents
required by law and regulations. There is no dispute that the specified entry form refers to the
IEIRD. Section 205 defines the precise moment when the imported articles are deemed entered.

2. The evidence showed that petitioner bided its time to file the IEIRD so as to avail of a lower rate
of duty. There was a calculated and preconceived course of action adopted by petitioner purposely
to evade the payment of the correct customs duties then prevailing. This was done in collusion with
the former District Collector, who allowed the acceptance of the late IEIRDs and the collection of
duties using the 3% declared rate. A clear indication of petitioners deliberate intention to defraud
the government was its non-disclosure of discrepancies on the duties declared in the IEDs (10%)
and IEIRDs (3%) covering the shipments.

Hence, due to the presence of fraud, the prescriptive period of the finality of liquidation under
Section 1603 was inapplicable.

3. Petitioners failure to file the required entries within a non-extendible period of thirty days from
date of discharge of the last package from the carrying vessel constituted implied abandonment of
its oil importations. This means that from the precise moment that the non-extendible thirty-day
period lapsed, the abandoned shipments were deemed the property of the government. Therefore,
when petitioner withdrew the oil shipments for consumption, it appropriated for itself properties
which already belonged to the government.