CIR v. BPI

In two notices dated October 28, 1988, the CIR assessed BPI for deficiency percentage and documentary stamp taxes for 1986, totalling P129,488,656.63. The notices contained only the computation and a demand for payment. On December 10, 1988, BPI replied that these were 'no assessments at all' because they did not say why it was being assessed. It stated that it would decide whether to pay or protest once a proper assessment was issued. On June 27, 1991, BPI received a letter from the CIR dated May 8, 1991. The letter explained the basis of the assessments and declared that it was the CIR's final decision. BPI asked for reconsideration, which was denied in a letter it received on January 21, 1992. BPI then filed a petition with the CTA on February 18, 1992. The CTA dismissed it for lack of jurisdiction because the assessments had become final. The Court of Appeals reversed, holding that the 1988 notices were not valid assessments.

1. 1Whether the October 28, 1988 notices were valid assessments although they did not inform BPI of the law and facts on which they were based.
2. 2Whether the assessments had become final and unappealable, barring BPI's appeal to the CTA.

The petition was granted. The notices were valid, and the assessments had become final. Under former Section 270 of the NIRC, the CIR only had to 'notify' the taxpayer of his 'findings.' Jurisprudence required only a computation of the tax, the amount to be paid and a demand for payment within a set period, and the 1988 notices met these requirements. The sentence in Section 228 requiring that the taxpayer 'be informed in writing of the law and the facts on which the assessment is made' was inserted only by RA 8424 in 1997. It was a new rule, not a confirmation of the old law, and reading it into former Section 270 would be judicial legislation. Due process was not violated either. The CTA found that BPI had known the nature and basis of the assessments and had ignored a pre-assessment notice. BPI's December 10, 1988 letter was not a protest, since BPI itself said it had not yet decided whether to protest. Having no protest filed within 30 days, the assessments became final and unappealable, and the CTA correctly dismissed the appeal. Even treating the letter as a protest, BPI failed to appeal within 30 days after receiving the May 8, 1991 final decision on June 27, 1991. It instead sought reconsideration and filed with the CTA only on February 18, 1992. The Court closed by quoting the lifeblood and necessity rationale for taxation: without taxes, government cannot fulfill its mandate of promoting the general welfare. The CA decision was reversed and set aside.