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REVENUE REGULATIONS NO. 4-
2012 issued on March 28, 2012
amends Revenue Section 2.6 of Rev-
enue Regulations No. 13-2011 by de-
leting Section 2.6.1 thereof, which
provides that penalties and/or interest
imposed on the taxpayer may be
abated or cancelled on the ground of
one day late filing and remittance due
to failure to beat the bank cut-off time.

REVENUE MEMORANDUM ORDER
NO. 5-2012 issued on March 30,
2012 prescribes the revised guide-
lines, policies procedures in the con-
duct of performance benchmarking
method, amending for this purpose
Revenue Memorandum Order (RMO)
No. 4-2006.Benchmarking Program/
Activities in the Regional/District offic-
es shall cover as many types of tax-
payers by industry as may be applica-
ble. Large Taxpayers, however, may
later be fully covered by the Bench-
marking Program/Activities. Bench-
marking shall be done separately for
corporate and individual taxpayers.

Benchmarking Committee shall be
created, chaired by the Deputy Com-
missioner for Operations. The Assis-
tant Commissioners (ACIRs) of As-
sessment Service, Policy and Plan-
ning Service, Large Taxpayers Ser-
vice (LTS) and the Proponent Region-
al Director for Benchmarking Program
shall be called as Project Directors,
and shall serve as committee mem-
bers with responsibilities specified in
the Order. Said committee shall be
responsible for reporting and recom-
mending the appropriate actions that
may be taken and/or sanctions that
may be imposed against taxpayers or
any other person found to be supply-
ing/submitting false or fabricated data
purportedly to meet the benchmark
requirements.

The Assistant Commissioner (ACIR),
LTS or the Head Revenue Executive
Assistants, in the absence of the for-
mer, the LTS Audit Division Chiefs,
the Regional Directors and all Reve-
nue District Officers (RDOs) shall
cause the implementation of the
Benchmarking Program and activities
under their respective jurisdictions.
For the Large Taxpayers, however,
the Benchmarking Program shall ini-
tially be limited to the gathering and
profiling of data and setting the
benchmark for taxpayers under their
jurisdiction. The RDOs, in close coor-
dination with their respective Regional
Directors, shall have the responsibility
of ensuring the timely conduct of tax
profiling and benchmarking. The
benchmarking cycle shall be strictly
followed and shall be completed with-
in the required timeframe.
1

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In cases where Letters of Authority
have been issued to taxpayers, the
LT Audit Division Chiefs and RDOs
concerned shall take into considera-
tion the established benchmark in the
industry where the subject taxpayer
belongs before considering the case
closed and terminated. Any down-
trend deviation from the benchmark
shall be fully explained and such data
shall form part of the inputs in the re-
vision of final benchmark rates. All
issues and concerns raised by tax-
payers in the implementation of this
program that call for immediate action
shall be the responsibility of the im-
plementing office. Reports of action
taken thereon must be furnished the
Benchmarking Committee.

Taxpayers whose tax compliance is
below the duly established and ap-
proved benchmark
shall be classified as follows:

Classifications Risk to
Revenue/Gap to Benchmark
High Risk Taxpayers Over 30%
below benchmark
Middle Risk Taxpayers 16%
to 30% below benchmark
Low Risk Taxpayers 15% or
less below benchmark

Taxpayers classified as high risk shall
be the top priority target for enforce-
ment actions, such as surveillance,
CRM/POS Post Evaluation, Oplan
Kandado, inventory stocktaking and
audit.

The Benchmarking Committee shall
be responsible for reporting and rec-
ommending the appropriate actions
that may be taken and/or sanctions
that may be imposed against taxpay-
ers or any other person found to be
supplying/submitting false or fabricat-
ed data purportedly to meet the
benchmark requirements.

The industry benchmark may be re-
vised every two (2) years from ap-
proval hereof or when a law is passed
changing the rate of Value-Added Tax
and Income Tax, whichever comes
first, or as may be directed by the
Commissioner. The guidelines and
procedures in the conduct of bench-
marking as well as the data and/or
reports required to be submitted by
the LTS (Audit Divisions and LTDOs),
Regional and District offices are spec-
ified in the Order.

2

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REVENUE MEMORANDUM CIRCU-
LAR NO. 10-2012 issued on March
19, 2012 prescribes the transition
procedures for all Electronic Filing
and Payment System (eFPS) filers in
using the enhanced Income Tax Re-
turns (November 2011 ENCS version
of BIR Form Nos. 1700, 1701 and
1702 prescribed under Revenue Reg-
ulations No. 19-2011).The eFPS ver-
sion of the enhanced BIR Forms are
still in the testing stage. In view of
this, the following work-around proce-
dures shall be adopted by eFPS filers
until the enhanced BIR forms are al-
ready available in the eFPS.

a. eFPS filers are required to use and
manually file the revised Income Tax
forms, with the corresponding pay-
ment to any Authorized Agent Bank
located within the territorial jurisdiction
of the Revenue District Office/Large
Taxpayers Office (RDO/LTO) where
the taxpayer is registered. In case of
no payment returns, the taxpayer
shall file the abovementioned tax
forms to the RDO/LTO where they are
registered.

b. Once the enhanced forms are
available in the eFPS, eFPS filers are
required to encode the contents of the
return previously filed manually, to
wit:

b.1 Enhanced Forms are available on
or before the deadline eFPS filers
shall encode the contents of the re-
turn on or before April 16, 2012

b.2 Enhanced Forms are available
after the deadline of April 16, 2012
eFPS filers shall encodethe contents
of the return within 10 days from date
of announcement of the eFPS availa-
bility via the BIR website.

c. e-Payment shall no longer be re-
quired if the tax due on the e-filed re-
turn is equal to the amount previously
paid. However, if the tax due on the e-
filed return is greater than the amount
previously paid, taxpayer shall e-pay
the unpaid amount, subject to applica-
ble penalties in case e-filing is made
after the due date for payment of In-
come Tax due.
REVENUE MEMORANDUM CIRCU-
LAR NO. 11-2012 issued on March
22, 2012 clarifies the tax conse-
quences of Power Sector Assets
and Liabilities Management Corpo-
ration (PSALM) transactions.
The Electric Power Industry Reform
Act of 2001 (EPIRA), particularly Sec-
3

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tion 50 thereof, provides that the pro-
ceeds from the sale of the National
Power Corporation (NPC) generation
assets and other real properties
and all its liabilities outstanding up-
on the expiration of its term of ex-
istence shall revert to and be as-
sumed by the National Government.
Based from the foregoing, PSALM will
not derive gain from the said sale of
the NPC generation assets and other
real properties. Accordingly, no In-
come Tax and consequently with-
holding tax is due from PSALM on its
sale of the NPC generation assets
and other real properties.
The enactment of Republic Act (RA)
No. 9337 on July 1, 2005 placed the
electric power industry in the Value-
Added Tax (VAT) System. Particu-
larly, the amendment included the
sale of electricity by generation com-
panies, transmission and distributions
companies, to sales subject to VAT.
Moreover, Revenue Regulations (RR)
No. 16-2005 was accordingly amend-
ed by RR No. 4-2007 and subjected
the sale of real properties not primari-
ly held for sale or for lease, but used
in business, to VAT.
Considering that the sale of electricity
is now subject to VAT, the real prop-
erties sold by PSALM are regarded as
real properties used in the trade or
business. While it is clear under the
Tax Code of 1997 that such sale is
not subject to Income Tax, there is no
provision under the same Code that
exempts it from VAT nor subject it to
VAT at zero rate. Section 106 of the
Tax Code of 1997 imposes VAT on
all kinds of goods and properties
sold in the Philippines, with the term
goods and properties given an all-
encompassing meaning by Con-
gress. Thus, any goods and prop-
erties sold should be deemed in-
cluded unless some provisions of law
especially exclude it. The sale of the
generation assets, real properties and
other disposable assets by PSALM
are no different from the goods and
properties provided under Section
106 of the Tax Code of 1997. It is to
be noted, however, that the VAT im-
posed on the sale of the transferred
assets may be utilized by the buyer
as creditable input VAT.
Pursuant to Section 196 of the Tax
Code of 1997, the sale of real proper-
ties by PSALM will be subject to Doc-
umentary Stamp Tax (DST) at the
rate of P15.00 for every P 1,000
based on the consideration contract-
ed to be paid for such realty or its fair
market value determined in accord-
ance with Section 6(E) thereof, which-
ever is higher. When one of the con-
tracting parties is the Government,
the tax to be imposed shall be based
on the actual consideration subject to
4

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the proviso that, where one party to
the transaction is exempt, the other
party shall pay the tax.
Accordingly, the sale of the NPC gen-
eration assets and other real proper-
ties by PSALM pursuant to the privati-
zation will be subject to DST based
on the fair market value or the actual
consideration that PSALM will re-
ceive, whichever is higher. After the
transfer of the NPC generation assets
and other real properties to PSALM
but prior to the privatization, PSALM
enters into contracts of lease with pri-
vate entities where the subject of the
lease are the NPC generation assets
and other real properties transferred
to PSALM. The income received by
PSALM from the lease is subject to
corporate Income Tax provided under
Section 27(A) of the Tax Code of
1997 .

5
JURISPRUDENCE
G.R. No. 193279 March 14, 2012
ELEANOR DE LEON
LLENADO, Petitioner,
vs.
PEOPLE OF THE PHILIPPINES and
EDITHA VILLAFLORES, Respondents.

FACTS:
Petitioner issued checks to secure
the loans obtained from private respondent.
Upon presentment, the checks were dishon-
ored, leading to the filing with the MeTC of
criminal cases docketed as Criminal Case
Nos. 54905, 54906, 54907, and 54908 for
four (4) counts of violation of B.P. 22.

Subsequently, petitioner settled the
loans subject of Criminal Case Nos. 54906,
54907 and 54908 using the funds of the
Children of Mary Immaculate College, of
which she was president. Private respond-
ent executed an Affidavit of Desistance for
the three cases;
1
thus, only Criminal Case
No. 54905 covering a check
worth, P1,500,000, proceeded to trial.

The MeTC found that all the following
elements of a violation of B.P. 22 were pre-
sent in the last check subject of the criminal
proceedings: (1) the making, drawing, and
issuance of any check to apply for account
or for value; (2) the knowledge of the maker,
drawer, or issuer that at the time of issue he
or she does not have sufficient funds in or
credit with the drawee bank for the payment
of the check in full upon its presentment;
and (3) the drawee banks subsequent dis-
honor of the check for insufficiency of funds
or credit, or dishonor of the check for the
same reason had not the drawer, without
any valid cause, ordered the bank to stop
payment.

In ruling against petitioner, the MeTC
took note that petitioner admitted knowledge
of the checks dishonor, and that the de-
mand letter with Notice of Dishonor mailed
to petitioners residence on 10 May 1999
was received by one Alfredo Abierra on 14
May 1999. Thus, petitioner was sentenced
to pay P1,500,000, the amount of the dis-
honored check, and a fine of P200,000 with
subsidiary imprisonment in case of insolven-
cy.

The MeTC also held the Children of
Mary Immaculate College liable for the value
of the check for being the drawer thereof.
The RTC affirmed the Decision of the
MeTC.

The CA ruled that the elements of a
violation of B.P. 22 were estab-
lished.
3
However, it held that the trial court
erred in holding Children of Mary Immacu-
late College civilly liable and petitioner was
SENTENCED to pay a fine of P200,000.00
with subsidiary imprisonment in case of in-
solvency. Petitioner is ORDERED to indem-
nify private complainant in the amount
of P1,500,000.00, the amount of the dishon-
ored check, with 12% interest per annum
from the date of judicial demand until the fi-
nality of this Decision plus attorneys fees
of P20,000.00 and litigation expenses
of P16,860.00.

ISSUES:

Whether or not herein petitioner rightfully
alleged that the herein respondent
failed to prove that there was actual
receipt of the notice of dishonor, a
question of fact.

Whether or not the imposition of interest
was proper.

HELD:
1. No. It is an established rule that the
remedy of appeal through a Petition for
Review on Certiorari under Rule 45 of
the Rules of Court contemplates only
questions of law and not questions of
fact. The issue in the case at bar is clear-
Volume IV Issue No. 3 M A R C H 2012
6
JURISPRUDENCE
ly a question of fact that rightfully be-
longed to the proper determination of the
MeTC, the RTC and the CA. All these
lower courts found the elements of a vio-
lation of B.P. 22 present. Petitioner failed
to provide any cogent reason for us to
overturn these findings, or to consider
this case as an exception to this general
rule.

2. Conforming to prevailing jurispru-
dence, we find the need to modify the
ruling of the CA with regard to the impo-
sition of interest on the judgment. It has
been established that in the absence of
stipulation, the rate of interest shall be
12% per annum to be computed from
default, that is, from judicial or extrajudi-
cial demand under and subject to the
provisions of Article 1169

of the Civil
Code.
9
In Ongson v. People, we held
that interest began to run from the time
of the extrajudicial demand, as duly
proved by the creditor. Thus, petitioner
should also be held liable for the amount
of the dishonored check, which
is P1,500,000, plus 12% legal interest
covering the period from the date of the
receipt of the demand letter on 14 May
1999 to the finality of this Decision. The
total amount due in the dispositive por-
tion of the CAs Decision, inclusive of in-
terest, shall further earn 12% interest per
annum from the finality of this Decision
until fully paid.

G.R. No. 171251 March 5, 2012
LASCONA LAND CO., INC., Petitioner,
vs.
COMMISSIONER OF INTERNAL REVE-
NUE, Respondent.

FACTS:

On March 27, 1998, the Commission-
er of Internal Revenue (CIR) issued Assess-
ment Notice No. 0000047-93-407
5
against
Lascona Land Co., Inc. (Lascona) informing
the latter of its alleged deficiency income tax
for the year 1993 in the amount
of P753,266.56.
Consequently, on April 20, 1998, Lascona
filed a letter protest, but was denied by
Norberto R. Odulio, Officer-in-Charge (OIC),
Regional Director, Bureau of Internal Reve-
nue, Revenue Region No. 8, Makati City, in
his Letter
6
dated March 3, 1999

Anent the 1993 tax case of subject
taxpayer, please be informed that while we
agree with the arguments advanced in your
letter protest, we regret, however, that we
cannot give due course to your request to
cancel or set aside the assessment notice
issued to your client for the reason that the
case was not elevated to the Court of Tax
Appeals as mandated by the provisions of
the last paragraph of Section 228 of the Tax
Code. By virtue thereof, the said assess-
ment notice has become final, executory
and demandable.
In view of the foregoing, please ad-
vise your client to pay its 1993 deficiency
income tax liability in the amount
of P753,266.56.

ISSUE:
WHETHER OR NOT THE FAILURE OF
THE PETITIONER TO ELEVATE THE MAT-
TER TO THE COURT OF TAX APPEAL 30
DAYS AFTER THE INACTION OF THE
COMMISSIONER ON INTERNAL REVE-
NUE CAUSED THE ASSESSMENT TO BE-
COME FINAL.

HELD:
the taxpayer has two options, either: (1)
file a petition for review with the CTA within
30 days after the expiration of the 180-day
period; or (2) await the final decision of the
Commissioner on the disputed assessment
and appeal such final decision to the CTA
within 30 days after the receipt of a copy of
such decision, these options are mutually
exclusive and resort to one bars the ap-
plication of the other
the CIR should be reminded that taxpayers
Volume IV Issue No. 3 M A R C H 2012
7
JURISPRUDENCE
cannot be left in quandary by its inaction on
the protested assessment. It is imperative
that the taxpayers are informed of its action
in order that the taxpayer should then at
least be able to take recourse to the tax
court at the opportune time. As correctly
pointed out by the tax court:

x x x to adopt the interpretation of the re-
spondent will not only sanction inefficiency,
but will likewise condone the Bureau's inac-
tion. This is especially true in the instant
case when despite the fact that respondent
found petitioner's arguments to be in order,
the assessment will become final, executory
and demandable for petitioner's failure to
appeal before us within the thirty (30) day
period.


G.R. No. 187073 March 14, 2012
PEOPLE OF THE PHILIPPINES, Appellee,
vs.
EDUARDO CASTRO y PERALTA and
RENERIO DELOS REYES y BO-
NUS, Appellants.

FACTS:

On 9 September 2002, [around] sev-
en oclock in the evening, [the] victim Ricar-
do Pacheco Benedicto ("Benedicto"), a mer-
chant and owner of a store selling bakery
supplies and pastries in Bagong Silang,
Caloocan City, was tending his store along
with his helpers, one of whom was Emily
Austria ("Austria"), when four (4) armed men
entered the store and announced a hold-up.
Two (2) of the armed men proceeded to the
table of Benedicto asking the latter to bring
out his gun. One (1) of the armed men
stayed outside the store while the other one
(1) guarded Austria. Since Benedicto resist-
ed the assault, a commotion ensued prompt-
ing the armed man guarding Austria and the
lookout stationed outside the store to join
and help their other companions. Taking ad-
vantage of said commotion, Austria ran out-
side the store and crossed the street. Imme-
diately after crossing the street, Austria
heard three (3) gunshots and saw the four
(4) assailants walking out of the store, one
of them carrying Benedictos belt bag.

Austria then returned to the store and
saw Benedicto lying in a pool of blood. She
immediately sought the help of their neigh-
bors and the Barangay Captain, who re-
sponded to the scene, and summoned the
police authorities. When the police officers
arrived at the store, they checked the body
of Benedicto. Sadly though, Benedicto was
already dead.

RTC found the defendants guilty, decision
was affirmed by the COURT OF APPEALS

ISSUE:
WHETHER OR NOT THE TRIAL COURT
ERRED IN NOT ADMITTING THE DE-
FENSE OF ALIBI.

HELD:

We concur with the trial and appellate
courts in rejecting appellants defenses of
denial and alibi. Time and again this Court
has ruled that alibi is the weakest of all de-
fenses, for it is easy to fabricate and difficult
to prove; it cannot prevail over the positive
identification of the accused by the witness-
es.
9
Moreover, for the defense of alibi to
prosper, the requirements of time and place
must be strictly met. It is not enough to
prove that the accused was somewhere else
when the crime was committed, but he must
also demonstrate by clear and convincing
evidence that it was physically impossible
for him to have been at the scene of the
crime at the time the same was commit-
ted.
10
Such physical impossibility was not
shown to have existed in this case where
appellants testimonies confirmed they were
in the same locality (Bagong Silang) when
the robbery-killing took place.

G.R. No. 185255 March 14, 2012
NORKIS DISTRIBUTORS, INC. AND ALEX
Volume IV Issue No. 3 M A R C H 2012
8
JURISPRUDENCE
D. BUAT, Petitioners,
vs.
DELFIN S. DESCALLAR, Respondent

FACTS:
On April 26, 1993, respondent Delfin
S. Descallar was assigned at the Iligan City
Branch of petitioner Norkis Distributors, Inc.,
a distributor of Yamaha motorcycles. He be-
came a regular employee on February 1,
1994 and was promoted as Branch Manager
on June 30, 1997. He acted as branch ad-
ministrator and had supervision and control
of all the employees. Respondent was also
responsible for sales and collection.
On August 12, 2002, petitioners issued a
"Notice to Show Cause" to respondent. The
notice reads:

It has been reported that during the
audit of your branch last July 2002, serious
adverse findings were noted against you as
follows:
a) Refusal to accept redemption pay-
ment made by customer Gamboa on
their deposited motorcycle unit which
was traced later sold to one Marvin
Joseph Gealon allegedly your neph-
ew;
b) Unauthorized use of deposited mo-
torcycle unit owned by Ludy Gamboa;
c) Requiring customer Amy Pastor to
pay excessive amount over her ac-
count balance;
d) Disbursement of sales commis-
sions to unauthorized persons;
e) Doing personal business of selling
safety helmets using the facility of the
branch.

Further, it is so disappointing to note
that despite management support and coop-
eration, your branch performance continu-
ously failed to reach to an acceptable level
as illustrated below:

On August 21, 2002, petitioners terminated
respondents services for loss of trust and
confidence and gross inefficiency

ISSUE:

WHETHER OR NOT THE FAILURE OF
THE RESPONDENT TO MEET THE SALES
QUOTA CONSTITUTES A GROUND FOR
TERMINATION UNDER LOSS OF CONFI-
DENCE AND GROSS INEFFICIENCY.

HELD:

Loss of trust and confidence as a
ground for termination of an employee under
Article 282 of the Labor Coderequires that
the breach of trust be willful, meaning it must
be done intentionally, knowingly, and pur-
posely, without justifiable excuse. The basic
premise for dismissal on the ground of loss
of confidence is that the employees con-
cerned holds a position of trust and confi-
dence. It is the breach of this trust that re-
sults in the employers loss of confidence in
the employee.

To our mind, the failure to
reach the monthly sales quota can-
not be considered an intentional and
unjustified act of respondent amount-
ing to a willful breach of trust on his
part that would call for his termina-
tion based on loss of confidence.
This is simply not the willful breach of
trust and confidence contemplated in
Article 282(c) of the Labor Code. In-
deed, the low sales performance could be
attributed to several factors which are be-
yond respondents control. To be a valid
Volume IV Issue No. 3 M A R C H 2012
9
YEAR
SALES
QUOTA
ACTUAL
AVERAGE
SALES
ACCEPTA-
BLE COL-
LEX
ACTUAL
AVERAGE
COLLEX
2001
(Jan-Dec)
13 units 5 only 70% 43% only
2002
(Jan-Jun)
13 units 5 only 70% 39% only
JURISPRUDENCE
SECOND DIVISION
G.R. No. 186030 March 21, 2012
NORMA DELOS REYES VDA. DEL PRA-
DO, EULOGIA R. DEL PRADO, NORMITA
R. DEL PRADO and RODELIA R. DEL
PRADO, Petitioners,
vs.
PEOPLE OF THE PHILIP-
PINES, Respondent.
FACTS:
The late Rafael died on July 12, 1978.
On October 29, 1979, Corazon, as a daugh-
ter of the late Rafael, and Norma, as the late
Rafaels surviving spouse and representative
of their five minor children, executed a "Deed
of Extra-Judicial Partition of the Estate of Ra-
fael Del Prado" to cover the distribution of
several properties owned by the late Rafael.

Corazon, however, later discovered
that her right over the subject parcel of land
was never registered by Norma, contrary to
the latters undertaking. The petitioners in-
stead executed on July 19, 1991 a Deed of
Succession wherein they, together with Ra-
fael, Jr. and Antonio, partitioned and adjudi-
cated unto themselves the property covered
by OCT No. P-22848, to the exclusion of Co-
razon. The deed was notarized by Loreto L.
Fernando.

When Corazon discovered this, she
filed a criminal complaint against now peti-
tioners Norma, Eulogia, Normita and Rodel-
ia. Antonio and Rafael, Jr. had both died be-
fore the filing of said complaint.

Among the witnesses presented dur-
ing the trial was Loreto, who confirmed that
upon the request of Norma and Antonio, he
prepared and notarized the deed of succes-
sion. He claimed that the petitioners ap-
peared and signed the document before him.
For their defense, the petitioners de-
nied having signed the Deed of Succession,
or having appeared before notary public
Loreto. They also claimed that Corazon was
not a daughter, but a niece, of the late Ra-
fael. Norma claimed that she only later knew
that a deed of succession was prepared by
her son Antonio, although she admitted hav-
ing executed a deed of real estate mortgage
in favor of mortgagee Prudential Bank over
portions of the subject parcel of land already
covered by the new titles.

ISSUE:
Whether or not the CA erred in
affirming the petitioners conviction for
falsification, notwithstanding the said
petitioners defense that they never
intended to exclude private complain-
ant Corazon from the estate of the late
Rafael.

HELD:
Only questions of law may be
raised in petitions for review on certio-
rari under Rule 45 of the Rules of
Court.

First, the questions being
raised by the petitioners refer to factu-
al matters that are not proper subjects
of a petition for review under Rule 45.
Settled is the rule that in a petition for
review under Rule 45, only questions
of law may be raised. It is not this
Courts function to analyze or weigh
all over again evidence already con-
sidered in the proceedings below, our
jurisdiction being limited to reviewing
only errors of law that may have been
committed by the lower court. The res-
olution of factual issues is the function
of the lower courts, whose findings on
these matters are received with re-
spect. A question of law which we
may pass upon must not involve an
examination of the probative value of
the evidence presented by the liti-
gants. This is clear under Section 1,
Rule 45 of the Rules of Court, as
amended, which provides:

Section 1. Filing of petition with Supreme
Court. A party desiring to appeal by
certiorari from a judgment, final order or
Volume IV Issue No. 3 M A R C H 2012
10
JURISPRUDENCE
resolution of the Court of Appeals, the
Sandiganbayan, the Court of Tax Ap-
peals, the Regional Trial Court or other
courts, whenever authorized by law, may
file with the Supreme Court a verified pe-
tition for review on certiorari. The petition
may include an application for a writ of
preliminary injunction or other provisional
remedies and shall raise only questions
of law, which must be distinctly set forth.
The petitioner may seek the same provi-
sional remedies by verified motion filed
in the same action or proceeding at any
time during its pendency.

Contrary to these rules, the petition-
ers ask us to review the lower courts factu-
al finding on Corazons exclusion in the
subject deed of succession, to reconsider
its contents and those of the other docu-
mentary evidence which they have submit-
ted with the court a quo, all of which involve
questions of fact rather than questions of
law. In their assignment of errors, petition-
ers even fully question the factual basis for
the courts finding of their guilt.

Even granting that the present peti-
tion may be admitted, we find no cogent rea-
son to reverse the CA decision appealed
from, considering that the elements of the
crime of falsification under Art. 171, par. 4 of
the Revised Penal Code, in relation to Art.
172 thereof, were duly proved during the
proceedings below. Said elements are as
follows:
(a) The offender makes in a
public document untruthful
statements in a narration of
facts;
(b) The offender has a legal
obligation to disclose the truth
of the facts narrated by him;
and
(c) The facts narrated by the
offender are absolutely false.
There can be no good faith on
the part of the petitioners since they
knew of the untruthful character of
statements contained in their deed of
succession.



SECOND DIVISION
G.R. No. 185568 March 21, 2012
COMMISSIONER OF INTERNAL REVE-
NUE, Petitioner,
vs.
PETRON CORPORATION, Respondent.

FACTS:
Respondent Petron is a corporation
engaged in the production of petroleum
products and is a Board of Investment (BOI)
registered enterprise in accordance with
the provisions of the Omnibus Investments
Code of 1987 (E.O. 226) under Certificate of
Registration Nos. 89-1037 and D95-136.

During the period covering the taxa-
ble years 1995 to 1998, petitioner (herein
respondent Petron) had been an assignee of
several Tax Credit Certificates (TCCs) from
various BOI-registered entities for which pe-
titioner utilized in the payment of its excise
tax liabilities for the taxable years 1995 to
1998. The transfers and assignments of the
said TCCs were approved by the Depart-
ment of Finances One Stop Shop Inter-
Agency Tax Credit and Duty Drawback Cen-
ter (DOF Center), composed of representa-
tives from the appropriate government agen-
cies, namely, the Department of Finance
(DOF), the Board of Investments (BOI), the
Bureau of Customs (BOC) and the Bureau
of Internal Revenue (BIR).

Taking ground on a BOI letter issued
on 15 May 1998 which states that hydraulic
oil, penetrating oil, diesel fuels and industrial
gases are classified as supplies and consid-
ered the suppliers thereof as qualified trans-
ferees of tax credit, petitioner acknowledged
and accepted the transfers of the TCCs from
the various BOI-registered entities.

Petitioners acceptance and use of
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JURISPRUDENCE
the TCCs as payment of its excise tax liabili-
ties for the taxable years 1995 to 1998, had
been continuously approved by the DOF as
well as the BIRs Collection Program Divi-
sion through its surrender and subsequent
issuance by the Assistant Commissioner of
the Collection Service of the BIR of the Tax
Debit Memos (TDMs).

On January 30, 2002, respondent
[herein petitioner CIR] issued the assailed
Assessment against petitioner for deficiency
excise taxes for the taxable years 1995 to
1998, in the total amount
of P 739,003,036.32, inclusive of surcharges
and interests, based on the ground that the
TCCs utilized by petitioner in its payment of
excise taxes have been cancelled by the
DOF for having been fraudulently issued
and transferred.

Respondent, on February 27, 2002,
petitioner filed its protest letter to the
Assessment.

On 27 March 2002, respondent,
through Assistant Commissioner Edwin R.
Abella served a Warrant of Distraint and/or
Levy on petitioner to enforce payment of the
tax deficiencies.

On 03 December 2008, the CTA En
Banc promulgated a Decision, which re-
versed and set aside the CTA Second Divi-
sion on 04 May 2007. The former absolved
Petron from any deficiency excise tax liabil-
ity for taxable years 1995 to 1998.

ISSUES:
Whether or not Petron had participation
or knowledge on the fraudulent issu-
ance or transfer of the subject Tax
Credit Certificates hence liable for the
payment of excise taxes from 1995-
1998.

Whether or not the petitioner is correct in
asserting that the non-applicanility of
the principle of estoppel in the instant
case.

HELD:

None. The processing of a TCC is en-
trusted to a specialized agency called
the "One-Stop-Shop Inter-Agency
Tax Credit and Duty Drawback Cen-
ter" ("Center"), created on 07 Febru-
ary 1992 under Administrative Order
(A.O.) No. 226. Its purpose is to ex-
pedite the processing and approval of
tax credits and duty drawbacks. The
Center is composed of a representa-
tive from the DOF as its chairperson;
and the members thereof are repre-
sentatives of the Bureau of Invest-
ment (BOI), Bureau of Customs
(BOC) and Bureau of Internal Reve-
nue (BIR), who are tasked to process
the TCC and approve its application
as payment of an assignees tax lia-
bility.
A TCC may be assigned through a
Deed of Assignment, which the as-
signee submits to the Center for its
approval. Upon approval of the deed,
the Center will issue a DOF Tax Debit
Memo (DOF-TDM), which will be uti-
lized by the assignee to pay the lat-
ters tax liabilities for a specified peri-
od. Upon surrender of the TCC and
the DOF-TDM, the corresponding Au-
thority to Accept Payment of Excise
Taxes (ATAPET) will be issued by the
BIR Collection Program Division and
will be submitted to the issuing office
of the BIR for acceptance by the As-
sistant Commissioner of Collection
Service. This act of the BIR signifies
its acceptance of the TCC as pay-
ment of the assignees excise taxes.
Thus, it is apparent that a TCC under-
goes a stringent process of verifica-
tion by various specialized govern-
ment agencies before it is accepted
as payment of an assignees tax lia-
bility.

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We agree with the pronounce-
ment of the CTA En Banc that Petron
has not been shown or proven to
have participated in the alleged fraud-
ulent acts involved in the transfer and
utilization of the subject TCCs. Petron
had the right to rely on the joint stipu-
lation that absolved it from any partic-
ipation in the alleged fraud pertaining
to the issuance and procurement of
the subject TCCs. The joint stipula-
tion made by the parties consequent-
ly obviated the opportunity of the CIR
to present evidence on this matter, as
no proof is required for an admission
made by a party in the course of the
proceedings. Thus, the CIR cannot
now be allowed to change its stand
and renege on that admission.

No, the Petitioner is not correct.

While we agree with petitioner
that the State in the performance of
government function is not estopped
by the neglect or omission of its
agents, and nowhere is this truer than
in the field of taxation, yet this princi-
ple cannot be applied to work injus-
tice against an innocent party.
Petron, in this case, was not
proven to have had any participation
in or knowledge of the CIRs allega-
tion of the fraudulent transfer and uti-
lization of the subject TCCs. Re-
spondents status as a transferee in
good faith and for value of these
TCCs has been established and even
stipulated upon by petition-
er. Respondent was thereby provided
ample protection from the adverse
findings subsequently made by the
Center. Given the circumstances, the
CIRs invocation of the non-
applicability of estoppel in this case is
misplaced.

WHEREFORE, the CIRs Peti-
tion is DENIED for lack of merit.

EN BANC
G.R. No. 190293 March 20, 2012
PHILIP SIGFRID A. FORTUN and ALBERT
LEE G. ANGELES, Petitioners,
vs.
GLORIA MACAPAGAL-ARROYO, as
Commander-in-Chief and President of the
Republic of the Philippines, EDUARDO
ERMITA, Executive Secretary, ARMED
FORCES OF THE PHILIPPINES (AFP), or
any of their units, PHILIPPINE NATIONAL
POLICE (PNP), or any of their units,
JOHN DOES and JANE DOES acting un-
der their direction and con-
trol, Respondents.

FACTS:
On November 23, 2009 heavily
armed men, believed led by the ruling Am-
patuan family, gunned down and buried un-
der shoveled dirt 57 innocent civilians on a
highway in Maguindanao. In response to this
carnage, on November 24 President Arroyo
issued Presidential Proclamation 1946, de-
claring a state of emergency in Maguinda-
nao, Sultan Kudarat, and Cotabato City to
prevent and suppress similar lawless vio-
lence in Central Mindanao.

Believing that she needed greater au-
thority to put order in Maguindanao and se-
cure it from large groups of persons that
have taken up arms against the constituted
authorities in the province, on December 4,
2009 President Arroyo issued Presidential
Proclamation 1959 declaring martial law and
suspending the privilege of the writ of habe-
as corpus in that province except for identi-
fied areas of the Moro Islamic Liberation
Front.

Two days later or on December 6,
2009 President Arroyo submitted her report
to Congress in accordance with Section 18,
Article VII of the 1987 Constitution which re-
quired her, within 48 hours from the procla-
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JURISPRUDENCE
mation of martial law or the suspension of the
privilege of the writ of habeas corpus, to sub-
mit to that body a report in person or in writing
of her action.

In her report, President Arroyo said that
she acted based on her finding that lawless
men have taken up arms in Maguindanao and
risen against the government. The President
described the scope of the uprising, the na-
ture, quantity, and quality of the rebels wea-
ponry, the movement of their heavily armed
units in strategic positions, the closure of the
Maguindanao Provincial Capitol, Ampatuan
Municipal Hall, Datu Unsay Municipal Hall,
and 14 other municipal halls, and the use of
armored vehicles, tanks, and patrol cars with
unauthorized "PNP/Police" markings.

On December 9, 2009 Congress, in
joint session, convened pursuant to Section
18, Article VII of the 1987 Constitution to re-
view the validity of the Presidents action. But,
two days later or on December 12 before Con-
gress could act, the President issued Presi-
dential Proclamation 1963, lifting martial law
and restoring the privilege of the writ of habe-
as corpus in Maguindanao.

ISSUE:
Whether or not Presidential Proclama-
tion No 1959 is constitutional.

HELD:
The issue of the constitutionality
of Proclamation 1959 is not unavoida-
ble for two reasons:
One. President Arroyo withdrew
her proclamation of martial law and
suspension of the privilege of the writ of
habeas corpus before the joint houses
of Congress could fulfill their automatic
duty to review and validate or invalidate
the same.

Here, President Arroyo withdrew
Proclamation 1959 before the joint
houses of Congress, which had in fact
convened, could act on the same. Con-
sequently, the petitions in these cases
have become moot and the Court has
nothing to review. The lifting of martial
law and restoration of the privilege of
the writ of habeas corpus in Maguinda-
nao was a supervening event that oblit-
erated any justiciable controversy.

Two. Since President Arroyo
withdrew her proclamation of martial
law and suspension of the privilege of
the writ of habeas corpus in just eight
days, they have not been meaningfully
implemented. The military did not take
over the operation and control of local
government units in Maguindanao. The
President did not issue any law or de-
cree affecting Maguindanao that should
ordinarily be enacted by Congress. No
indiscriminate mass arrest had been
reported. Those who were arrested dur-
ing the period were either released or
promptly charged in court. Indeed, no
petition for habeas corpus had been
filed with the Court respecting arrests
made in those eight days. The point is
that the President intended by her ac-
tion to address an uprising in a relative-
ly small and sparsely populated prov-
ince. In her judgment, the rebellion was
localized and swiftly disintegrated in the
face of a determined and amply armed
government presence.

The problem in this case is that
the President aborted the proclamation
of martial law and the suspension of the


privilege of the writ of habeas corpus in
Maguindanao in just eight days. In a
real sense, the proclamation and the
suspension never took off. The Con-
gress itself adjourned without touching
the matter, it having become moot and
academic.

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Volume IV Issue No. 3 M A R C H 2012
15
JLs Corner



There is a higher court than
courts of justce and that is
the court of conscience. It
supercedes all other courts.


Mahatma Gandhi
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