Commissioner of Internal Revenue v. A. Soriano Corporation
REITERATIONFacts
The Antecedents: Private respondent, A. Soriano Corporation (ANSCOR), filed a petition for refund of excess tax payments with the Court of Tax Appeals (CTA) for the years 1985 and 1986, totaling P1,399,941.45. ANSCOR presented evidence to substantiate its claim, to which the Commissioner of Internal Revenue (CIR) did not interpose any objection except for the purposes for which they were offered. Procedural History: The CIR, instead of presenting its own evidence, submitted the case for decision based solely on ANSCOR's evidence and pleadings. The CTA granted the petition, ordering the CIR to issue a tax credit memorandum. The CIR filed a motion for reconsideration and a supplemental motion for reconsideration, seeking to admit a BIR report dated September 18, 1991, which was in the possession of a subordinate during the trial. The CTA denied these motions, holding that the report was "forgotten evidence" and not newly discovered evidence. The Court of Appeals affirmed the CTA's decision and resolution. The Petition: The CIR filed a Petition for Review on Certiorari with the Supreme Court, raising the sole issue of whether the CTA Case No. 4201 should be reopened to allow the CIR to present the BIR report of investigation.
Issue(s)
Whether the BIR report of September 18, 1991, constitutes newly discovered evidence warranting a new trial. Whether the Court of Tax Appeals should have allowed the reopening of the case to admit the BIR report.
Ruling
The petition is denied, and the assailed decision of the Court of Appeals is affirmed in toto.
Ratio Decidendi
On whether the BIR report constitutes newly discovered evidence: The Supreme Court affirmed the ruling of the respondent courts that the BIR report of September 18, 1991, does not qualify as newly discovered evidence. The Court reiterated the three requisites for newly discovered evidence as a ground for a new trial: (a) the evidence was discovered after the trial; (b) such evidence could not have been discovered and produced at the trial with reasonable diligence; and (c) that it is material, not merely cumulative, corroborative or impeaching, and is of such weight that, if admitted, will probably change the judgment. The petitioner failed to prove that the report could not have been discovered and produced at the trial despite reasonable diligence, especially considering the four years the case was pending before the CTA. The Court found it beyond comprehension why such a report of vital significance could not have been prepared and presented during that period, and the petitioner did not offer any explanation for this failure. Therefore, the report was correctly classified as "forgotten evidence" rather than newly discovered evidence. On whether the CTA should have allowed the reopening of the case: The Supreme Court held that the petitioner's invocation of a liberal application of the rules, citing Section 8 of the Rules of the Court of Tax Appeals which states that the CTA shall not be governed strictly by technical rules of evidence, was a dangerous proposition that could not be countenanced. The Court agreed with the Court of Appeals that accepting such a view would set a dangerous precedent, leading to endless hearings as parties could seek to present additional evidence after an adverse decision without complying with the requirements for a new trial. The Court emphasized that Rule 13, Section 5 of the Rules of the Court of Tax Appeals should not be ignored at will, as doing so would prejudice the orderly presentation of issues and their resolution, affecting the principle of stability of judicial decisions. The Court concluded that the situation was a simple case of negligence on the part of the petitioner, and for this negligence, the petitioner could not seek refuge in a liberal application of the rules, as it would reward negligence with undeserved tolerance and pave the way for injustice.
Main Doctrine
A party seeking a new trial based on newly discovered evidence must satisfy three requisites: (a) the evidence was discovered after the trial; (b) such evidence could not have been discovered and produced at the trial with reasonable diligence; and (c) that it is material, not merely cumulative, corroborative or impeaching, and is of such weight that, if admitted, will probably change the judgment. "Forgotten evidence" does not qualify as newly discovered evidence.