Introduction

A person or an organization who used illegal activities to avoid paying of taxes is

called tax evasion. Under reporting income, Falsifying income records, Willfully

underpaying taxes are one of the few examples of tax evasion. In the Philippines, there

are cases that are most likely related to this tax evasion. Those who are caught in

evading taxes are generally subject to criminal charges and substantial penalties. One of

the similar tax evasion cases here in the Philippines was the conflict between the

Commissioner of Internal Revenue, Petitioner and the Apo Cement Corporation,

Respondent.

It was careful study of the foregoing of the case of Apo Cement case which the line of

argument suffers from two infirmities. First, the cement reaches its saleable for the

minerals which it is already undergone a chemical change through manufacturing

process. This means that it wasn’t in the state of mineral products which means thaat

the law contemplates for purposes of imposing the ad valorem tax. The issue was

whether the ad valorem tax should be based on the value finished cement product or

the value of the raw materials or mineral products that are used for the finished

product.
Background of the Case

The sales tax assessments involved in these cases run to the amount of about 38.5

million. The crucial issue is whether cement is a mineral product which will be exempt

from the sales tax. Or a manufactured product which is subject to sales tax. The

petitioner commissioner of Internal Revenue had ruled that the cement is a

manufactured product which means it is a subject to sales tax. On August 3, 2006, The

Apo Cement filed a petition for review with the Court of Appeals. In the response, the

Commissioner of Internal Revenue admitted that Apo Cement had already paid

deficiency assessments reflected in the Bureau’s Final Decisions on Disputed

Assessment, except for the documentary stamp taxes. The Bureau of Internal Revenue

sent Apo cement a Final Assessment Notice (FAN) for deficiency taxes for the taxable year

1999, totaling to more than 144 million pesos. Apo Cement protested the FAN. However, BIR

denied the protest. And the Final Decision on Disputed Assessment (FDDA) was issued. The

Apo Cement petitioned for review with the CTA. The Commission of Internal Revenue

admitted that Apo Cement had already paid the deficiency assessment in the FDDA, except

the documentary stamp taxes (DST) based on several real property transactions. In the

meantime, Apo Cement availed of the tax amnesty under Republic Act No. 9480, particularly

affecting the 1999 deficiency. Hence, it filed a motion to cancel tax assessment. The CTA

granted the motion. The CIR motioned for reconsideration and appealed but it was failed.

One of the requirements for tax amnesty under said law is the submission of SALN. The CIR

wished to question the correctness of Apo Cement's SALN.

The Court decision was the Apo Cement Corporation was entitled for tax amnesty

under RA9480. The Apo Cement’s petition was denied by the court. The submission of the

documentary requirements and the payment of the amnesty tax is considered full

compliance with Republic Act No. 9480 and the taxpayer can immediately enjoy the

privileges enumerated in Section 6 of the law.

The amnesty granted under the law is revoked once the taxpayer is proven to have under-

declared his assets in his SALN by 30% or more. Pursuant to Section 1060 of the Tax

Amnesty Law, the amnesty taxpayers who willfully understate their net worth income shall

not only be liable for perjury under the Revised Penal Code, but, upon conviction, also subject

to immediate tax fraud investigation in order to collect all taxes due and to criminally

prosecute for tax evasion. The requisites to overturn the presumption of correctness of

respondent's 2005 SALN were not met. The proceedings must be initiated to question the

correctness of the Statement of Assets, Liabilities, and Net Worth (SALN) within the one-

year period stated in Section 4 of the law. There are no such action has been taken by the

Commission of Internal Revenue. This one-year period referred to in the law should be

considered only as a prescriptive period within which third parties, meaning 'parties other

than the BIR or its agents,' can question the SALN - not as a waiting period during which the

BIR may contest the SALN and the taxpayer prevented from enjoying the privileges under the

law. The Commission of Internal Revenue cannot question the correctness of Apo Cement's

SALN. Under Section 4 of the law, there is a presumption of correctness of the SALN and

only parties other than the Bureau of Internal Revenue or its agents may dispute the

correctness of the SALN. Even assuming that petitioner has the standing to question the

SALN, Republic Act No. 9480 provides that the proceeding to challenge the SALN must be

initiated within one year following the date of filing of the Tax Amnesty documents.
Reaction on the Case and the Court’s decision

In my own perspective, the case about Apo cement corporation has now revealed that

there is a failure of refuting the material points that constitutes of an implied admission. I

agree in the court’s decision, that since the Apo Cement has violates the law. The Petitioner

did not submit a correct verification despite the order of this court. This alone merits the

denial of the petition outright. I realized that this case emphasizes how it it necessary to

provide true and correct records like SALN to avoid any allegations or any violation by the

law. I agree to the court’s decision since it is important to follow the proper procedure to pay

taxes to avoid any inequalities when it comes in paying taxes to the government and

maintain the proper transactions.

Therefore, the case and the court’s decision have finally release an order to settle such an

allegations that violates tax law. From one of the foregoing cases, the Apo Cement

Corporation was clearly never considered as a mineral product within the meaning of

Section 246 of the Tax Code. It was concluded that the Apo Cement Corporation is the

product of manufacturing process. The court of Appeals judgment that has clearly

ordered that the Petitioner will not be exempted from the payment of the sales tax,

since it is considered to be manufacturing product.