GR NO.
144707, July 2004
PEOPLE OF THE PHILIPPINES, petitioner,
vs.
LUCIO C. TAN, FORTUNE TOBACCO CORPORATION, ANTONIO P. ABAYA, HARRY
C. TAN, CARMEN KHAO TAN, FLORENCIO C. SANTOS, SALVADOR F. MISON,
ROXAS CHUA, MARIANO TANENGLIAN and JUANITA TAN LEE (c/o Fortune Tobacco
Corporation, Parang, Marikina City). TOWNSMAN COMMERCIAL, INC., WILLIAM YU,
LETICIA LIM, GLORIA LOPEZ, ROBERT TANTAMPO, JOSE TIU, FELIPE LOY, LUIS
SEE (c/o 4th Floor, Allied Bank Center, Ayala Avenue, Makati City)LANDMARK SALES
AND MARKETING INC., ROLANDO CHUA, HONORINA TAN, MILLIE TANTAMCO,
HENRY WECHEE, JESUS LIM, TEODORO TAN, ANTONIO APOSTOL, DOMINGO TENG
(c/o 4th Floor, Allied Bank Center, Ayala Avenue, Makati City)CRIMSON CROKER
DISTRIBUTORS, INC., CANDELARIO LI, TEODORO TAN, ERLINDA CRUZ, CARLOS
TUMPALAN, LARRY JOHN SY, ERNESTO ONG, WILFREDO MACROHON (4th Floor,
Allied Bank Center, Ayala Avenue, Makati City)DAGUPAN COMBINED COMMODITIES,
INC., NEMESIO TAN, QUINTIN CALALEJA, YOLANDA MANALILI, CARLOS CHAN,
ROMEO TAN, JOHN UY, VICENTE CO (4th Floor, Allied Bank Center, Ayala Avenue,
Makati City)FIRST UNION TRADING CORPORATION, HENRY CHOA, LOPE LIM GUAN,
EMILIO TAN, FELIPE TAN SHE CHUAN, ANDRES CO (4th Floor, Allied Bank Center,
Ayala Avenue, Makati City)CARLSBURG & SONS, INC., FELIPE KEE, HENRY GO CO,
NARCISO GO, ADOLFO LIM, MAXIMO TAN, CO SHU, DANIEL YAO (c/o 112 Aguirre
Street, Legaspi Village, Makati City)OMAR ALI DISTRIBUTORS, INC., GABRIEL
QUIENTELLA, NELSON TE, EMILIO GO, EDWIN LEE, CESAR LEDESMA, JR., JAO
CHEP SENG (c/o 112 Aguirre Street, Legaspi Village, Makati cityoriel & CO., INC.,
FRANCISCO J. ORIEL, JR., BENJAMIN T. HONG, PHILIP P. JAO, JOSE P. YU and
EDISON M. QUE (c/o 112 Aguirre Street, Legaspi Village, Makati City)MT. MATUTUM
MARKETING CORPORATION, ANTONIO TIU, FELIPE LOY, ROSARIO LESTOR,
WILFREDO ONG, ROLANDO CHUA, BONIFACIO CHUA, GO CHING CHUAN (4th Floor,
Becogan Bldg., 112 Aguirre Street, Legaspi Village, Makati City), respondents.
FACTS OF THE CASE
On September 7, 1993, the Commissioner of Internal Revenue filed a
Complaint with the Department of Justice (DOJ), charging Fortune Tobacco
Corporation (hereafter "Fortune"), its corporate officers, nine (9) other
corporations and their respective corporate officers, with fraudulent tax
evasion for supposed non-payment of the correct ad valorem, income and
value-added taxes for the year 1992.
On October 26, 1993, Commissioner Liwayway Vinzons-Chato filed with the
DOJ, the 2nd Criminal Complaint against respondents, alleging the same acts
of tax evasion, this time for taxable year 1991.
The trial court and the Court of Appeals maintained that at that stage of the
preliminary investigation, where the complaint and the accompanying
affidavits and supporting documents did not show any violation of the Tax
Code providing penal sanctions
On July 24, 1998, the New DOJ Panel ruled that: 1) There was substantial
compliance by the BIR with the order to produce documents; 2) on the basis
of the evidence submitted by the BIR, the panel finds sufficient ground to
proceed with the preliminary investigation... of the cases; and 3) in view of
the foregoing findings, the respondents were directed to file their counter-
affidavits within 15 days from receipt of the order.
On December 1, 1998, for nine (9) counts of tax evasion (Taxable Years
1990, 1991 and 1992 were filed by the New DOJ Panel with the Metropolitan
Trial Court (MeTC), Marikina City, Branch 75
On March 22, 1999, Judge Ruiz issued an Order dismissing the criminal case
ISSUE OF THE CASE
Whether or not the Fortune Tobacco Corporation and its corporate
officers; nine other corporations are guilty of fraudulent tax evasion and as
such be dismissed by the METC.
COURT RULINGS
The Fortune Tobacco Corporation and its corporate officers; nine other
corporations are found guilty of fraudulent tax evasion. That during the taxable
year 1990, within the jurisdiction of the Honorable Court, conspiracy was found,
with willful intent to evade and defeat payment of the tax due to the government,
they unlawfully, feloniously, file with the Bureau of Internal Revenue (BIR) a false
and fraudulent ad valorem tax returns for the taxable year 1990, purposely and
maliciously creating, organizing and incorporating the said dummy corporations
and employing individual "ghost" buyers to effect/perpetrate fictitious and
simulated sales of FTC's cigarette products at a price higher than that of the
wholesale price registered with the BIR, thereby facilitating the commission of tax
evasion by willfully suppressing the true and accurate sales of FTC.
Legal Basis
SEC. 130. Filing of return and payment of excise tax on domestic products
(A) Persons liable to file a return on removal and payment of tax
(1) Persons liable to file a return
(2) Time for filing of return and payment of the tax
(3) Place for filing of return and payment of tax
(4) Exceptions
(B) Determination of gross selling price of goods subject to ad valorem tax
(C) Manufacturer's or producer's sworn statement
(D) Credit for excise tax on goods actually exported
SEC. 253. General provisions
SEC. 255. Failure to file return, supply correct and accurate information, pay tax,
withhold and remit tax and refund excess taxes withheld on compensation
