CTA junks JG Summit appeal on P1.3-B tax assessment

By Benjamin Pulta

August 10, 2023, 3:51 pm

MANILA – The Court of Tax Appeals (CTA) en banc has turned down a suit filed by a local firm challenging PHP1.3 billion in tax liabilities originally assessed against it in 2014 due to lack of jurisdiction.

In a decision dated Aug. 4, the tax court affirmed the 2020 ruling of its second division denying the petition filed by JG Summit Holdings in connection with the tax liabilities assessed against it. "It is worthy to emphasize that when a court has no jurisdiction over the subject matter of a case, the only power it has is to dismiss the action," the court said.

In 2020, the court’s second division said the time for the filing of an appeal already lapsed since under the Tax Code if a protest before the Bureau of Internal Revenue (BIR) is denied or not acted upon 180 days from submission of documents, a taxpayer may appeal to the CTA within 30 days.

The tribunal explained that when the BIR denied the firm's petition in a final decision on disputed assessment (FDDA) received on Dec. 5, 2014, the firm filed a motion for reconsideration with the commissioner instead of filing a protest directly to the court.

JG Summit only brought the case to the tax court after the BIR issued a revised FDDA (RFDDA).

“With the procedure of appeal already clearly laid down, a resort to a request for reconsideration (with the CIR) did not then toll the running of the reglementary period within which petitioner’s appeal must be elevated to this Court,” the 2020 court decision said.

The court noted that more than nine months have lapsed from the petitioner’s receipt of the FDDA before it was brought on appeal to the CTA.

It also said that in the FDDA, the holding firm was already notified by the BIR of its available remedies, which is to appeal before the CTA or through a motion for reconsideration to the commissioner.

“Petitioner made its choice and could not now avoid the consequences of such choice,” the court said.

JG Summit was originally assessed for liabilities of PHP6.55 billion. After it paid the bulk of the deficiencies, the firm was appealing the RFDDA, which was protested before the court, for deficiency income tax of PHP581.9 million, value-added tax of PHP202.6 million, and documentary stamp tax of PHP555.3 million, as well as improperly accumulated income earnings tax, surcharges, and interests. (PNA)