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    CASE #104 Bureau of Internal Revenue, Et. Al. vs. Lepanto Ceramics, Inc. G.R. No. 224764, April 24, 2017 Facts

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    Harlene
    The Bureau of Internal Revenue (BIR) sent a notice of informal conference and formal letter of demand to Lepanto Ceramics, Inc. (LCI) requiring payment of deficiency taxes, despite LCI being under corporate rehabilitation with a commencement order suspending enforcement actions. LCI filed for indirect contempt against BIR officials. Both trial and appellate courts found the BIR officials guilty, finding that the actions taken were for enforcement of a claim and in defiance of the commencement order, as the rehabilitation law suspends all actions to enforce claims against a debtor under rehabilitation. The Supreme Court affirmed, noting that under the rehabilitation law, claims include taxes and the actions taken were part of tax assessment and collection, which should

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    CASE #104 Bureau of Internal Revenue, Et. Al. vs. Lepanto Ceramics, Inc. G.R. No. 224764, April 24, 2017 Facts

    Uploaded by

    Harlene
    73 views2 pages
    The Bureau of Internal Revenue (BIR) sent a notice of informal conference and formal letter of demand to Lepanto Ceramics, Inc. (LCI) requiring payment of deficiency taxes, despite LCI being under corporate rehabilitation with a commencement order suspending enforcement actions. LCI filed for indirect contempt against BIR officials. Both trial and appellate courts found the BIR officials guilty, finding that the actions taken were for enforcement of a claim and in defiance of the commencement order, as the rehabilitation law suspends all actions to enforce claims against a debtor under rehabilitation. The Supreme Court affirmed, noting that under the rehabilitation law, claims include taxes and the actions taken were part of tax assessment and collection, which should

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    104. 302 2017

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    The Bureau of Internal Revenue (BIR) sent a notice of informal conference and formal letter of demand to Lepanto Ceramics, Inc. (LCI) requiring payment of deficiency taxes, despite LCI being under corporate rehabilitation with a commencement order suspending enforcement actions. LCI filed for indirect contempt against BIR officials. Both trial and appellate courts found the BIR officials guilty, finding that the actions taken were for enforcement of a claim and in defiance of the commencement order, as the rehabilitation law suspends all actions to enforce claims against a debtor under rehabilitation. The Supreme Court affirmed, noting that under the rehabilitation law, claims include taxes and the actions taken were part of tax assessment and collection, which should

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    73 views2 pages

    CASE #104 Bureau of Internal Revenue, Et. Al. vs. Lepanto Ceramics, Inc. G.R. No. 224764, April 24, 2017 Facts

    Uploaded by

    Harlene
    The Bureau of Internal Revenue (BIR) sent a notice of informal conference and formal letter of demand to Lepanto Ceramics, Inc. (LCI) requiring payment of deficiency taxes, despite LCI being under corporate rehabilitation with a commencement order suspending enforcement actions. LCI filed for indirect contempt against BIR officials. Both trial and appellate courts found the BIR officials guilty, finding that the actions taken were for enforcement of a claim and in defiance of the commencement order, as the rehabilitation law suspends all actions to enforce claims against a debtor under rehabilitation. The Supreme Court affirmed, noting that under the rehabilitation law, claims include taxes and the actions taken were part of tax assessment and collection, which should

    Copyright:

    © All Rights Reserved
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    CASE #104

    BUREAU OF INTERNAL REVENUE, et. al. vs. LEPANTO CERAMICS, INC.


    G.R. No. 224764, April 24, 2017

    FACTS:
    Respondent Lepanto Ceramics, Inc. (LCI) filed a petition for corporate rehabilitation pursuant
    to Republic Act No. 10142. Finding the same to be sufficient in form and substance, the Rehabilitation
    Court issued a Commencement Order dated January 13, 2012 which: (a) declared LCI to be under
    corporate rehabilitation; (b) suspended all actions or proceedings, in court or otherwise, for the
    enforcement of claims against LCI; (c) prohibited LCI from making any payment of its outstanding
    liabilities as of even date, except as may be provided under RA 10142; and (d) directed the BIR to file
    and serve on LCI its comment or opposition to the petition, or its claims against LCI. The BIR -
    personally and by publication - was notified of the rehabilitation proceedings involving LCI and the
    issuance of the Commencement Order related thereto. Despite the foregoing, the BIR, through
    Misajon, et al., still opted to send LCI: (a) a notice of informal conference dated May 27, 2013,
    informing the latter of its deficiency internal tax liabilities for the Fiscal Year ending June 30, 2010;
    and (b) a Formal Letter of Demand dated May 9, 2014, requiring LCI to pay deficiency taxes in the
    amount of P567,5 l 9,348.39, notwithstanding the written reminder coming from LCI's court-appointed
    receiver of the pendency of rehabilitation proceedings concerning LCI and the issuance of a
    commencement order.
    This prompted LCI to file a petition for indirect contempt dated August 13, 2014 against
    petitioners before RTC Br. 35. Both trial and appellate courts found Misajon, et al. guilty of indirect
    contempt and, accordingly, ordered them to pay a fine of ₱5,000.00 each. Petitioners insisted that: (a)
    Misajon, et al. only performed such acts to toll the prescriptive period for the collection of deficiency
    taxes; and (b) to cite them in indirect contempt would unduly interfere with their function of collecting
    taxes due to the government.

    ISSUE:
    Whether the RTC Br. 35 correctly found Misajon, et al. to have defied the Commencement
    Order and, accordingly, cited them for indirect contempt.

    HELD:
    Yes. Section 16 of RA 10142 provides, inter alia, that upon the issuance of a Commencement
    Order - which includes a Stay or Suspension Order - all actions or proceedings, in court or otherwise,
    for the enforcement of "claims" against the distressed company shall be suspended. Under the same
    law, claim "shall refer to all claims or demands of whatever nature or character against the debtor or
    its property, whether for money or otherwise, liquidated or unliquidated, fixed or contingent, matured
    or unmatured, disputed or undisputed, including, but not limited to: (1) all claims of the government,
    whether national or local, including taxes, tariffs and customs duties; and (2) claims against directors
    and officers of the debtor arising from acts done in the discharge of their functions falling within the
    scope of their authority: Provided, That, this inclusion does not prohibit the creditors or third parties
    from filing cases against the directors and officers acting in their personal capacities."
    The acts of sending a notice of informal conference and a Formal Letter of Demand are part
    and parcel of entire process for assessment and collection of deficiency taxes from a delinquent
    taxpayer, an action or proceeding for the enforcement of a claim which should have been suspended
    pursuant to Commencement Order. These acts are in clear defiance of Commencement Order.

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