Commissioner of Internal Revenue vs Wyeth Suaco Laboratories, Inc.

G.R. No. 76281 – 279 Phil. 132 – 202 SCRA 125 – Taxation Law – NIRC Rules of Procedure – Prescriptive Period – Tax Collection

On December 16 and 17, 1974, the Commissioner of Internal Revenue (CIR) issued two assessment notices to Wyeth Suaco Laboratories, Inc. (Wyeth) asking the latter to pay about P2 million in taxes. On January 17, 1975, Wyeth filed its protest. In December 1979, Wyeth’s protest was denied and was directed to pay the tax due. On January 18, 1980, Wyeth filed a petition for review with the Court of Tax Appeals (CTA) asking the said court to enjoin the CIR from enforcing the assessment on the ground that the government’s right to collect the assessed taxes has already prescribed; that the CIR has 5 years from December 1974 (issuance of assessment) to collect but it never did and the right has already prescribed in December 1975. The CIR then issued a warrant of distraint/levy in February 1980.

Meanwhile, the CIR filed its answer with the CTA. It averred that the running of the prescriptive period was suspended when Wyeth filed its protest; that such protest was a request for reinvestigation and reconsideration, hence, the suspension of the period of prescription.

Wyeth however averred that it never requested for a reconsideration or a reinvestigation but rather its protest was a request for cancellation and withdrawal of the assessment, hence, the prescriptive period was never tolled.

ISSUE: Whether or not the prescriptive period was suspended.

HELD: Yes. What Wyeth asked was a request for a reconsideration and reinvestigation based on the letters it sent to the CIR, to wit:

xxx We submit this letter as a follow-up to our protest filed with your office, through our tax advisers, Sycip, Gorres, Velayo & Co., on January 20 and February 10, 1975 regarding alleged deficiency on withholding tax at source of P3,178, and on percentage tax of P60,, including interest and surcharges, on which we are seeking reconsideration. (emphasis supplied) xxx

Further, the assessments issued in 1974 are not yet final. These assessments only became final in December 1979 when the CIR finally denied the protest filed by Wyeth. Hence, the warrant of distraint/levy issued by the CIR in February 1980 was issued well within the prescriptive period for the government to collect the assessed taxes.

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