SUMMARY OF SIGNIFICANT SC DECISIONS (December 2010) By: Atty. Filamer D.

Miguel

1. The Philippine Fisheries Development Authority is a government instrumentality and therefore exempt from real property tax except those portions leased to private persons or entities. The Lucena Fishing Port Complex (LFPC) is managed, operated and developed by Philippine Fisheries Development Authority (PFDA). PFDA filed the instant petition for review assailing the assessment for the payment of realty taxes on the LFPC property for the period from 1993 to 2000. The Supreme Court held that the PFDA is not a GOCC but a government instrumentality, thus it is exempt from real property tax imposed on the LFPC, except those portions which are leased to private persons or entities. (Philippine Fisheries Development Authority (PFDA) vs. Central Board of Assessment Appeals, Local Board of Assessment Appeals of Lucena City, City of Lucena, Lucena City Assessor & Lucena City Treasurer G.R. No. 178030, December 15, 2010)

2. Failure to strictly comply with notice requirements prescribed under Section 228 of the National Internal Revenue Code of 1997 and Revenue Regulations (R.R.) No. 12-99 is tantamount to a denial of due process. In its petition for review, the taxpayer denied having received the PAN for alleged deficiency VAT and withholding tax for the taxable year 1999.The SC ruled that the sending of a PAN to taxpayer to inform taxpayer of the assessment made is but part of the "due process requirement in the issuance of a deficiency tax assessment," the absence of which renders nugatory any assessment made by the tax authorities. The use of the word "shall" in subsection 3.1.2 of the R.R. No. 12-99 of the BIR describes the mandatory nature of the service of a PAN. Thus, for its failure to send the PAN stating the facts and the law on which the assessment was made as required by Section 228 of R.A. No. 8424, the assessment made by the CIR is void. (Commissioner of Internal Revenue vs. Metro Star Superama, Inc., G.R. No. 185371, December 8, 2010)