The Commissioner of Internal Revenue issued deficiency tax assessments against Avon. Avon protested the assessments but the Commissioner did not consider Avon's submissions and arguments. The Court of Tax Appeals found that the Commissioner failed to observe administrative due process because Avon was not given a fair opportunity to defend itself or have its defenses considered. Assessments made without due process are void. Due process in administrative proceedings requires notice of charges, a reasonable opportunity to be heard, and consideration of a party's evidence and arguments.
The Commissioner of Internal Revenue issued deficiency tax assessments against Avon. Avon protested the assessments but the Commissioner did not consider Avon's submissions and arguments. The Court of Tax Appeals found that the Commissioner failed to observe administrative due process because Avon was not given a fair opportunity to defend itself or have its defenses considered. Assessments made without due process are void. Due process in administrative proceedings requires notice of charges, a reasonable opportunity to be heard, and consideration of a party's evidence and arguments.
The Commissioner of Internal Revenue issued deficiency tax assessments against Avon. Avon protested the assessments but the Commissioner did not consider Avon's submissions and arguments. The Court of Tax Appeals found that the Commissioner failed to observe administrative due process because Avon was not given a fair opportunity to defend itself or have its defenses considered. Assessments made without due process are void. Due process in administrative proceedings requires notice of charges, a reasonable opportunity to be heard, and consideration of a party's evidence and arguments.
The Commissioner of Internal Revenue issued deficiency tax assessments against Avon. Avon protested the assessments but the Commissioner did not consider Avon's submissions and arguments. The Court of Tax Appeals found that the Commissioner failed to observe administrative due process because Avon was not given a fair opportunity to defend itself or have its defenses considered. Assessments made without due process are void. Due process in administrative proceedings requires notice of charges, a reasonable opportunity to be heard, and consideration of a party's evidence and arguments.
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Digest for Tax 2
Avon paid the portions of the Final
CIR VS AVON Assessment Notices. However, in a Memorandum, the Bureau of Internal DOCTRINE/S:. Revenue's officers recommended the enforcement and collection of the assessments on the sole justification Administrative due process is anchored that Avon failed to submit supporting on fairness and equity in procedure. It is documents within the 60-day period as satisfied if the party is properly notified required under Section 228 of the Tax of the charge against it and is given a Code. Avon asserted that the items fair and reasonable opportunity to already paid were still included in the explain or defend itself. Moreover, it deficiency tax assessments. Avon demands that the party's defenses be requested the reconsideration and considered by the administrative body in withdrawal of the Collection Letter. It making its conclusions, and that the argued that it was devoid of legal and party be sufficiently informed of the factual basis, and was premature as the reasons for its conclusions. Commissioner of Internal Revenue had not yet acted on its protest against the Final Assessment Notices. FACTS: The Commissioner did not act on Avon's Avon filed its VAT Returns and Monthly request for reconsideration. Thus, Avon Remittance Returns of Income Tax was constrained to treat the Collection Withheld for the taxable year 1999. Letter as denial of its protest. Avon filed They were served a Collection Letter a Petition for Review before the Court of requiring them to pay P80, 246,459.15. Tax Appeals. The CTA partially granted These deficiency assessments were the Avon's insofar as it ordered the same deficiency taxes covered by the cancellation of the Final Demand and Preliminary Assessment Notice. Hence, Final Assessment Notices for deficiency Avon filed a letter protesting against the excise tax, VAT, withholding tax on PAN. Without ruling on Avon's protest, compensation, and expanded the Commissioner prepared the Formal withholding tax. However, it ordered Letter of Demand and Final Assessment Avon to pay deficiency income tax. The Notices. Avon then protested by CTA also made a pronouncement that resubmitting the protest. Avon informed there was no deprivation of due process the revenue officers that all the in the issuance by the CIR of the documents necessary to support its assessment for AVON was afforded an defenses had already been submitted. opportunity to explain and present its The revenue officers allegedly evidence. expressed that they would cancel the The Court of Tax Appeals En Banc assessments resulting from the alleged further affirmed the Court of Tax discrepancy in sales if Avon would pay Appeals Special First Division's factual part of the assessments. findings with regard to the cancellation of deficiency tax assessments and disallowance of Avon's claimed tax
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credits. Finally, the Court of Tax The Commissioner exercises
Appeals En Banc rejected Avon's administrative adjudicatory power or contention regarding denial of due quasi-judicial function in adjudicating the process. It held that Avon was accorded rights and liabilities of persons. Quasi- by the Commissioner a reasonable judicial power has been described as: opportunity to explain and present the power of the administrative agency evidence. Moreover, the to adjudicate the rights of persons Commissioner's failure to appreciate before it. Avon's supporting documents and arguments did not ipso facto amount to In carrying out these quasi-judicial denial of due process absent any proof functions, the Commissioner is required of irregularity in the performance of to "investigate facts or ascertain the duties. existence of facts, hold hearings, weigh evidence, and draw conclusions from Avon argues that the assessments are them as basis for their official action and void ab initio due to the failure of the exercise of discretion in a judicial Commissioner to observe due process. nature." Tax investigation and It maintains that from the start up to the assessment necessarily demand the end of the administrative process, the observance of due process because Commissioner ignored all of its protests they affect the proprietary rights of and submissions. specific persons.
The due process requirement before
ISSUE/S: Whether or not the administrative bodies are not as strict Commissioner of Internal Revenue compared to judicial tribunals in that it failed to observe administrative due suffices that a party is given a process, and consequently, whether or reasonable opportunity to be heard. not the assessments are void. Nevertheless, such "reasonable opportunity" should not be confined to RULING: the mere submission of position papers and/or affidavits and the parties must be given the opportunity to examine the Avon's arguments are well-taken. witnesses against them. The right to a hearing is a right which may be invoked The Bureau of Internal Revenue is the by the parties to thresh out substantial primary agency tasked to assess and factual issues. It becomes even more collect proper taxes, and to administer imperative when the rules itself of the and enforce the Tax Code. However, administrative body provides for one. these powers must "be exercised While the absence of a formal hearing reasonably and [under] the prescribed does not necessarily result in the procedure." The Commissioner and deprivation of due process, it should be revenue officers must strictly comply acceptable only when the party does not with the requirements of the law, with invoke the said right or waives the the Bureau of Internal Revenue's own same. rules, and with due regard to taxpayers' "[A] fair and reasonable opportunity to constitutional rights. explain one's side" is one aspect of due
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process. Another aspect is the due
consideration given by the decision- maker to the arguments and evidence submitted by the affected party.
Administrative due process is anchored
on fairness and equity in procedure. It is satisfied if the party is properly notified of the charge against it and is given a fair and reasonable opportunity to explain or defend itself. Moreover, it demands that the party's defenses be considered by the administrative body in making its conclusions, and that the party be sufficiently informed of the reasons for its conclusions.
