PEOPLE OF THE PHILIPPINES v. EDUARDO YU TAN (Unit G03 Grand Midori, 160 Legaspi St., Legaspi Village, Makati City 1229)

Republic of the Philippines COURT OF TAX APPEALS

Quezon City

SECOND DIVISION

PEOPLE PHILIPPINES OF Plaintiff. THE CTA. Crim. Case No. O-1482 For : Violation of Section 255 of the National Internal Revenue Code

"NIRC") of 1997,as amended -versus - Members :

St., Legaspi Village, Makati City 1229 EDUARDO YU TAN Unit G03 Grand Midroi, 160 Legaspi BACORRO-VILLENA TESTON, JJ. CUI-DAVID,and Chairperson

(At-Large) Accused. Promulgated: EP 3 0 2026 4'23 pM

.

RESOLUTION

2026 against the Accused, EDUARDO YU TAN ("Tan") for.violation of Section 2551 of the NIRC of 1997, as amended On 12 August 2026, Plaintiff filed an Information dated 29 June

the accusatory portion of which reads:

Midori, 160 Legaspi St., Legaspi Village, Makati City, Metro TAN, a taxpayer and the sole proprietor of ALLIUM and neglect to pay his deficiency internal revenue tax liabilities of RESTAURANT, with business address at Unit G03 Grand Manila, din then and there willfully and unlawfully fail, refuse On or about the 5th day of February 2021, and subsequently thereafter, in Makati City, Philippines, accused EDUARDO YU

for taxable period from 01 January 2017 to 03 September 2018, to Wit:

1 Sec. 255. Failure to File Return, Supply Correct and Accurate Information, Pay Tax Withhold and Remit Tax and Refund Excess Taxes Withheld on Compensation.

PEOPLE OF THE PHILIPPINES o. EDUARDO YU TAN RESOLUTION CTA Crim. Case No. O-1482 page 2 of 11

Kind of Tax Basic Tax Due (in PhP)

(for taxable year 2017) (for taxable year 2017) Value Added Tax Income Tax 1,981,256.18 1,028,663.91

(for taxable year 2018) Value Added Tax 1,591,762.37

Withholding Tax on Compensation Expanded Withholding Tax (for taxable year 2017) (for taxable year2017) 37,912.56 10,183.50

Withholding Tax on Compensation (for taxable year 2018) 1,592.81

or in the total amount of PhP4,651,371.33, as well as the computed taxable year 2017),PhP388,581.32 (Value Added Tax for taxable interest therefor in the amount of PhP696,316.55 (Income Tax for

taxable year 2017,~and PhP466.59 (Withholding Tax on Compensation for taxable year 2018), despite notice and due year 2017), PhP458,427.56 (Value Added Tax for taxable year 2017), PhP14,446.24 (Withholding Tax on Compensation) for 2018), PhP3,880.33 (Expanded Withholding Tax for taxable year

service of said assessments and Warrants of Distraint and/or Levy and Garnishment, and despite demands made upon him to pay such tax, to the damage and prejudice of the Government of the Republic of the Philippines in the total amount of PhP6,213,489.92.

CONTRARY TO LAW.

following documents: In support of the Information, the Plaintiff submitted the

1. Certified True Xerox Copy2 ("CTXC") of the Resolution dated 29 June 2026 by the Office of the City Prosecutor of Makati;

2. Minutes dated 12 and 19 May 2026;

3. CTXC of the Information Data Form dated 13 April 2026;

2 More properly termed "Certified True Copy" ("CTC").

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4. Referral Letter (to file criminal and civil charges) signed by Director Antonio L. Ilagan; the Bureau of Internal Revenue ("BIR") OIC-Regional

5. Original Copy of the Joint Complaint-Affidavit dated 13 April 2026; 6. Copy of the Internal Revenue Integrated Tax System (IRIS)

generated Taxpayer Information dated 12 March 2026; 7. Certified True Copy ("CTC") Letter of Authority No 23 November 2018 ("LOA"); eLA201600036125 (LOA-047-2018-00000622) dated

8. CTC of the Checklist of Requirements dated 03 December 2018 9. CTC of the Notice of Informal Conference; Letter dated

23 April 2019; 10.CTC of the undated Special Power of Attorney executed by

Tan; 11.CTCs of the Preliminary Assessment Notice ("PAN") and

Details of Discrepancies ("DoD") both dated 08 January 2021 with Acknowledgement of Receipt on 12 January 2021; 12.CTCs of the Six (6) Assessment Notices all dated 05 February 2021; 13.Formal Letter of Demand ("FLD/FAN") with Details of Discrepancies ("DoD") both dated 05 February 2021 and

Acknowledgement of Receipt on 09 February 2021;

14.CTC of the Notarized Special Power of Attorney executed by

Tan dated 20 January 2021; 15.CTC of the BIR Memorandum dated 01 July 2021; 16.CTC of the Memorandum of Assignment dated 16 September 2021; 17.CTC of the Warrant of Distraint and/or Levy ("WDL") dated

24 September 2021; 18.CTC of Seventeen (17) Warrants of Garnishment ("WoG"); and 19.CTC of the 2nd Indorsement dated 08 September 2025.

The Court shall now proceed to determine whether probable Cause exists to warrant the issuance of Warrant of Arrest.

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In Silver, et al. v. Daray, et al.3, the Supreme Court explained that when a trial court decides to issue a warrant of arrest, the same must be issued only after the judge has personally determined the existence of probable cause. Thus :

If the trial court decides to issue a warrant of arrest, such

the judge. At this stage, the judge is tasked to merely determine so, the judge need not conduct a de novo hearing; he or she only needs to personally review the prosecutor's initial determination warrant must have been issued after compliance with the requirement that probable cause be personally determined by the probability, not the certainty of guilt of the accused. In doing

and see if it is supported by substantial evidence.

In the same case, the Supreme Court further explained the nature and quantum of probable cause required for the issuance of a warrant of arrest, to wit:

Probable cause for the purpose of issuing a Warrant of arrest pertains to facts and circumstances which would lead a his or her knowledge may be nil. Rather, the person relies reasonably discreet and prudent person to believe that an offense has been committed by the person sought to be arrested. In determining probable cause, the average to the calibration of our technical rules of evidence of which person weighs facts and circumstances without resorting

on the calculus of common sense of which all reasonable persons have an abundance. Thus, the standard used for issuance of a warran of arrest is less stringent than that used for establishing the guilt of the accused. So long as the

the trial court judge has sufficient ground to issue a warrant evidence presented show a prima facie case against the accused.

of arrest against him or her.4

Thus, at this stage of the proceedings, the Court is tasked to determine only the probability, and not the certainty, of the guilt of the Accused. This determination does not require a de novo hearing. Rather, the Court must personally evaluate the Prosecutor's determination and the supporting evidence to ascertain whether they sufficiently establish a prima facie case against the Accused.

3 G.R. No. 219157, August 14, 2019 4 Id

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deficiency internal revenue taxes under Section 255 of the NIRC, as In this case, Tan is charged with willful failure to pay

amended.

Supreme Court laid down the elements necessary to secure a In People of the Philippines v. E & D Parts Supply, Inc.5, the

conviction for the offense charged. To wit:

and regulations. 253(d) and 256 of the Tax Code, the following elements must be To secure a conviction under Section 255 in relation to Sections the tax ; (2) the corporate taxpayer failed to pay the tax at the time or times required by law or rules and regulations ; and (3) the failed to pay such tax at the time or times required by law or rules established: (1) the corporate taxpayer is required by law to pay accused, as the employee responsible for the violation, willfully

(Underscoring supplied.)

taxpayer and its responsible officer, the pertinent elements of the Although the above-mentioned case involved a corporate

offense mandate that the taxpayer be required by law to pay the tax, that the taxpayer failed to pay the same at the time required by law or rules and regulations, and that such failure to pay was willful.

of the Information and supporting evidence, the Court finds no probable cause against Tan, the offense charged having already Guided by the foregoing, and upon personal evaluation

prescribed.

Section 281 of the NIRC provides:

SEC. 281. Prescription for Violations of any Provision of this after five (5) years. Code. - All violations of any provision of this Code shall prescribe

the violation of the law, and if the same be not known at the time, Prescription shall begin to run from the day of the commission of

5 G.R. No. 259284, 24 January 2024.

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from the discovery thereof and the institution of judicial proceedings for its investigation and punishment.

if the proceedings are dismissed for reasons not constituting jeopardy. instituted against the guilty persons and shall begin to run again The prescription shall be interrupted when proceedings are

from the Philippines. The term of prescription shall not run when the offender is absent

Thus, violations of the NIRC prescribe after five (5) years. As a rule, prescription begins to run from the day of the commission of the violation. It is only when the violation is not known at the time of its commission that prescription is reckoned from its discovery

In Tupaz v. Ulep6, the Supreme Court explained when the offense of willful failure to pay deficiency taxes is committed, thus:

Court of Appeals, we stated that by its nature the violation could after repeated demands by the taxing authority. In Lim, Sr. vs. Petitioner was charged with failure to pay deficiency income tax only be committed after service of notice and demand fon payment of the deficiency taxes upon the taxpayer. Hence, it cannot be said that the offense has been committed as early

prior to the finality of the assessment, the taxpayer has as 1980, upon filing of the income tax return. This is so because The offense was committed only after the finality of the not committed any violation for nonpayment of the tax

the taxes within the allotted period. In this case, when the assessment coupled with taxpayer's willful refusal to pay

notice of assessment was issued on July 16, 1984, the taxpayer still had thirty (30) days from receipt thereof to protest or question the assessment. Otherwise, the assessment would become final and unappealable. As he did not protest, the assessment became final and unappealable on August 16,

investigation was filed with the Department of Justice on June 8, 1984. Consequently, when the complaint for preliminary 1989, the criminal action was instituted within the five (5) year prescriptive period.

6 G.R. No. 127777, 01 October 1999, citing Emilio E. Lim, Sr. and Antonia Sun Lim v. Court of Appeals and People of the Philippines, G.R. Nos. L-48134-37, 18 October 1990.

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(Emphasis and underscoring supplied.)

The same principle was applied by this Court in People of the Philippines v. Cosco Petroleum Company, Inc., et al.7, where it held:

In the instant case, since, by the nature of the violation the taxes within the allotted period. of the assessment coupled with taxpayer's willful refusal to pay charged against the accused (i.e., willful refusal to pay taxes despite demand), the day of the commission of the violation when the prescriptive period begins to run is upon the finality

(Emphasis and underscoring supplied.)

Accordingly, in determining whether the present charge has prescribed, the Court must ascertain when the assessment became final and that Tan thereafter failed or refused to pay the deficiency taxes within the period allowed.

offense "[o]n or about the 5th day of February 2021, and subsequently thereafter." Taken on its face, the five-year prescriptive period from the date alleged therein would have already expired on The Information expressly alleges that Tan committed the

05 February 2026, which is before the filing of the Joint Complaint Affidavit on 13 April 2026.

The evidence submitted by the prosecution, however, shows

2021. that the offense could not yet have been committed on 05 February

The FLD/FAN, although dated 05 February 2021, were received by Tan's authorized representative on 09 February 2021 Further, the records do not show that Tan filed a protest against the FLD/FAN within the prescribed period.

may administratively protest the FLD/FAN within thirty (30) days from receipt thereof. If the taxpayer fails to file a valid protest within such period, the assessment becomes final, executory. Under Revenue Regulations No. 18-2013, a taxpayer

7 CTA Crim. Case No. O-805, 20 January 2025.

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itself expressly required Tan to pay the assessed deficiency taxes and demandable.: Nevertheless, the Court notes that the FLD on or before 19 March 2021.9

commission of the offense should be reckoned only after the Thus, even assuming in favor of the prosecution that the

failure to pay could have arisen no later than upon his failure to pay expiration of this later payment deadline, Tan's alleged willful after 19 March 2021.

Consequently, even under the reckoning most favorable to the prosecution, the five-year prescriptive period had already elapsed by 20 March 2026.

The Joint Complaint-Affidavit was filed only on 13 April 2026

Subsequently, the Information dated 29 June 2026 was filed before after the five-year prescriptive period had already expired.

this Court on 12 August 2026.

Thus, whether reckoned from the institution of the

Information on 12 August 2026, the five-year prescriptive period had preliminary investigation on 13 April 2026 or the filing of the

already elapsed.

The subsequent collection measures undertaken by the Bureau of Internal Revenue ("BIR") do not alter this conclusion. The records show that the WDL was subsequently issued on 24 September 2021, and WoGs were thereafter issued to enforce

rise to a new Section 255 offense each time the BIR sought to collection of the same deficiency taxes. These collection measures pertain to the same deficiency assessments and did not give

collect the outstanding liabilities.

8 Revenue Regulations No. 18-2013, Sec. 3.1.4, amending Revenue Regulations No. 12-99. The pertinent provision states that if the taxpayer fails to file a valid protest against the FLD/FAN within thirty (30) days from date of receipt thereof, "the assessment shall become final, 9 Supra, Page 2, Annex "K" - Formal Letter of Demand dated 05 February 2021. executory and demandable.

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notices, a warrant of distraint and/or levy, and a later final demand before suit, this Court reckoned the commission of the Section 255 taxpayer's willful refusal to pay within the allotted period.10 The subsequent pursuit of administrative collection remedies violation from the finality of the assessment coupled with the did not operate to reset the date of commission of the offense fon In Cosco Petroleum, notwithstanding subsequent collection

purposes of prescription.

for purposes of Section 281.11 Information operate to render the offense indefinitely continuing Neither can the words "and subsequently thereafter" in the

under Section 281 nugatory. liabilities cannot perpetually renew the offense and restart the five- taxes remain unpaid, thereby rendering the five-year limitation year period. Otherwise, the statutory period of prescription would] effectively never commence for so long as the assessed deficiency The continued nonpayment of the same deficiency tax

the reckoning of prescription. The discovery rule under Section 281 likewise does not alter

In People v. Consebido,12 the Supreme Court explained that when the commission of a tax violation is known, the prescriptive period begins to run from the date of its commission. The

was not known at the time of its commission. alternative reckoning from discovery applies when the violation

deficiency taxes which the BIR itself assessed and demanded Here, the alleged offense consists of Tan's failure to pay

Having issued and served the FLD/FAN and fixed the period within which payment was required, the BIR was necessarily aware whether the deficiency taxes remained unpaid after such period

12 G.R. No. 258563, 02 April 2025 10 Supra. 11 Sec. 281. Prescription for Violations of any Provision of [the NIRC].

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Indeed, the records show that on 01 July 2021, a Memorandum was issued stating that the subject assessments had become final and demandable and requesting the institution of collection proceedings.13 Thereafter, the BIR issued the WDL and pursued further collection remedies against Tan. These circumstances demonstrate that the alleged violation was known to the

some later date for purposes of Section 281. taxing authority and could not be treated as one discovered only at

The records likewise contain no showing that Tan was absent

as to prevent prescription from running pursuant to the last paragraph of Section 281. from the Philippines during any portion of the relevant period so

Consequently, whether the five-year period is reckoned from 05 February 2021, as alleged in the Information, or, more favorably to the prosecution, from the expiration of the payment period on 19 March 2021, the offense had already prescribed before proceedings were instituted against Tan on 13 April 2026. A fortiori, the offense had already prescribed when the Information dated 29 June 2026 was filed before this Court on 12 August 2026.

The institution of proceedings could no longer interrupt a prescriptive period which had already completely elapsed By then, the offense charged had already been extinguished by prescription.

Under Rule 9, Section 4 of the Revised Rules of the Court of Tax Appeals ("RRCTA"), the Court is required to evaluate the Resolution of the public prosecutor and its supporting evidence

the case if the evidence on record clearly fails to establish probable The same provision authorizes the Court to immediately dismiss

cause.14

13 Supra, Annex "N" - Memorandum dated 01 July 2021. the Division of the Court to which the case was raffled shall evaluate the resolution of the public prosecutor and its supporting evidence. The Division may immediately dismiss the case if it finds that the evidence on record clearly fails to establish probable cause. 14 RRCTA, Rule 9, Sec. 4. Warrant of arrest. -- Within ten days from the filing of the information,

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the public prosecutor, and the supporting evidence submitted by the Plaintiff, the Court finds that the evidence on record shows that Upon personal evaluation of the Information, the Resolution of

the offense charged has already prescribed before proceedings were instituted against Tan. Accordingly, probable cause is wanting and the case must be dismissed.

accused, EDUARDO YU TAN for violation of Section 255 of the the same law. NIRC, as amended, is hereby DISMISSED on the ground that the offense charged has already prescribed pursuant to Section 281 of WHEREFORE, premises considered, the instant case against

SOORDERED

JEAN MARIE/ BACORRO-VILLENA

Assotiate Justice

LANEE S. CUI-DAVID (On Leave

Associate Justice

PAOLOS.TESTON

Associate Justice