CASE DIGEST
PEOPLE V. CONSEBIDO
[G.R. No. 258563,
April 2, 2025]
EN BANC, Inting,
J.
Prescription of Tax Offenses; Tolling of Prescription; Filing of Complaint with the DOJ; Willful Failure to File VAT Return.
For violations of the National Internal Revenue Code (NIRC), the five-year prescriptive period under Section 281 generally begins from the date of the commission of the offense. Where the violation is not known at the time of its commission, prescription begins from the date of its discovery. The filing of the criminal complaint before the Department of Justice for preliminary investigation (not when the case reaches the court) interrupts the running of the prescriptive period. However, the Discovery Rule does not apply where the Bureau of Internal Revenue, through reasonable diligence and the records readily available to it, could have discovered the violation at the time it was committed.
Ulysses Palconit Consebido, doing business as Seven Digit Construction and Supplies, was charged with Willful Failure to File a Quarterly Value-Added Tax (VAT) Return for the third quarter of taxable year 2008, in violation of Sections 255 and 114 of the National Internal Revenue Code (NIRC). The Bureau of Internal Revenue (BIR) filed a Joint Complaint-Affidavit before the Department of Justice (DOJ) on January 30, 2014, and an Information was eventually filed before the Court of Tax Appeals (CTA) on March 18, 2019.
The CTA Second Division dismissed the Information on the ground of prescription, holding that the five-year prescriptive period under Section 281 of the NIRC had already lapsed before the filing of the Information. The CTA En Banc affirmed, relying on Lim, Sr. v. Court of Appeals, which interpreted Section 281 to require that the Information be filed within five years from the discovery of the offense. The People, through the Office of the Solicitor General, elevated the case to the Supreme Court.
Issue No. 1: Whether or not the Court of Tax Appeals erred in dismissing the Information on the ground of prescription.
NO. The Supreme Court affirmed the dismissal of the Information. The Court clarified that although the filing of a criminal complaint before the DOJ interrupts the running of the prescriptive period under Section 281 of the NIRC, such interruption could no longer benefit the prosecution because the offense had already prescribed before the complaint was filed.
The alleged failure to file the quarterly VAT return occurred on October 25, 2008, the statutory deadline for filing the return. Since the complaint before the DOJ was filed only on January 30, 2014, more than five years had already elapsed. Consequently, the offense had already prescribed even before the commencement of the preliminary investigation.
Issue No. 2: Whether
or not the Discovery Rule applied so that prescription should be reckoned only
from January 30, 2014, when the BIR allegedly discovered the violation.
NO. The Court held that the
Discovery Rule was inapplicable. The Discovery Rule applies only where the
commission of the tax offense could not reasonably have been discovered at the
time it occurred. In this case, the BIR had sufficient means to determine that
Consebido failed to file his quarterly VAT return because:
- he was a VAT-registered taxpayer;
- he was legally required to file monthly
and quarterly VAT returns;
- his transactions involved payments by
the Provincial Government of Palawan, which was itself required to
withhold and report VAT; and
- the BIR's Electronic Filing and Payment System readily allowed verification of taxpayers who failed to file required returns.
Given these readily available records, the BIR could have discovered the omission immediately upon the expiration of the filing deadline. Hence, prescription should be reckoned from October 25, 2008, not from the date the BIR actually filed its complaint.
Issue No. 3: Whether
or not preliminary investigation before the Department of Justice interrupts
the running of the prescriptive period for violations of the National Internal
Revenue Code.
YES. The Supreme Court revisited
and clarified its earlier ruling in Lim, Sr. v. Court of Appeals. The Court
observed that the literal interpretation adopted in Lim, Sr. produced an
absurd result because prescription would both begin and be interrupted upon the
institution of proceedings. To harmonize Section 281 of the NIRC, the Court
adopted the reasoning in People v. Duque and Panaguiton, Jr. v. DOJ, holding
that prescription begins from the commission of the offense, or from its
discovery if previously unknown, while the filing of the complaint for
preliminary investigation interrupts its running. Accordingly, the Court
clarified that the filing of the complaint before the DOJ tolls the
prescriptive period for criminal violations of the NIRC.
Issue No. 4: Whether
or not the Court modified existing jurisprudence on the interruption of
prescription in criminal cases.
YES. The Court announced an
important doctrinal clarification. It held that henceforth, the filing
of a criminal complaint before the prosecution office interrupts the running of
the prescriptive period even for offenses covered by the 2022 Rules on
Expedited Procedures in the First Level Courts. Consequently, the Court
expressly abandoned the contrary rulings in Republic v. Desierto and Corpus,
Jr. v. People, insofar as they required the filing of the Information in court
before prescription could be interrupted for offenses governed by summary or
expedited procedures. The Court, however, ruled that this new interpretation
shall apply prospectively, in keeping with the rule that laws on
prescription must be liberally construed in favor of the accused.
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