Petronila Tupaz vs Benedicto Ulep

written by Howard

G.R. No. 127777 – 374 Phil. 474 – 316 SCRA 118 – Taxation Law – NIRC Rules of Procedure – Prescriptive Period for Violations against the Tax Code

In April 1980, Petronila Tupaz and her husband filed, in behalf of their corporation, an income tax return. On July 16, 1984, an assessment was issued against the spouses Tupaz demanding payment of P2.3 million in corporate tax deficiency (note: prescriptive period to issue assessment then was 5 years). No protest was filed by Tupaz within the 30 day prescriptive period. In June 1989, a criminal complaint for violation of the tax code was filed  by the Bureau of Internal Revenue (BIR) against Tupaz with the Department of Justice (DOJ). Eventually, a special prosecutor filed an information against Tupaz. Judge Benedicto Ulep heard the case. Tupaz opposed the said criminal complaint on the ground that it was filed out of time. It was her theory that the crime alleged was committed in 1979 when they failed to pay the correct corporate tax; that the prescriptive period for the government to file criminal proceedings for violation of the tax code is 5 years, hence, the criminal proceeding filed in 1989 (ten years from 1979) is already filed out of time.

ISSUE: Whether or not the criminal case was filed out of time.

HELD: No. It was filed within the prescriptive period. The prescriptive period to file a criminal case did not begin to run in 1979 or the time when Tupaz paid the deficient tax amount. It only begun to run when the assessment became final and unappealable. The assessment was issued on July 16, 1984. Tupaz did not protest so on August 16, 1984, the assessment became final and unappealable. The counting of the 5 year prescriptive period begun on August 16, 1984 and so the criminal complaint filed with the DOJ in June 1989 is well within the 5 year prescriptive period. The rationale behind this is that there is no crime to speak of in 1979 when Tupaz failed to pay the correct tax. The act only became criminal when in 1984, despite demand, she willingly failed to pay the correct tax as assessed. Nonetheless, Tupaz got a favorable judgment from the Supreme Court based on double jeopardy.

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