Commissioner of Internal Revenue v. Wintelecom
REITERATIONFacts
The Antecedents: The Commissioner of Internal Revenue (CIR) assessed Wintelecom, Inc. (Wintelecom) for deficiency internal revenue taxes for taxable years 2000 and 2001, totaling Php 553,344,468.98. Wintelecom protested the Final Assessment Notice (FAN), but the CIR denied the protest. This led to Wintelecom filing a Petition for Review with the Court of Tax Appeals (CTA) in Division. Procedural History: Wintelecom filed its Petition for Review with the CTA in Division, initiating CTA Case No. 7056. The CIR repeatedly sought extensions to file its Answer, which were eventually denied, and its Answer was filed belatedly. The CTA denied the CIR's subsequent motion for reconsideration and proceeded with the ex parte presentation of evidence by Wintelecom. The CIR questioned this before the Court of Appeals and then the Supreme Court, but these were dismissed. After the CTA rendered a Decision on February 20, 2008, the CIR's motion for reconsideration was denied. The CIR then appealed to the CTA en banc, which annulled the previous rulings, admitted the CIR's Answer, and remanded the case to the CTA in Division. Following remand, the CIR again failed to present its evidence despite multiple postponements and warnings, leading to it being deemed to have waived its right to present evidence. The CIR's subsequent motion for reconsideration was denied. The CIR then filed a Petition for Certiorari with the Supreme Court (G.R. No. 199071) assailing the waiver of its right to present evidence, which was denied for being filed out of time. The CTA, Third Division, subsequently rendered a Decision on June 7, 2012, partly granting Wintelecom's petition and ordering payment of reduced VAT and withholding tax liabilities. The CIR filed a Motion for Partial Reconsideration and For Leave to Re-Open Case, which was denied by the CTA in a Resolution dated July 30, 2012. The Petition: The Commissioner of Internal Revenue filed a Petition for Certiorari under Rule 65 of the 1997 Rules of Civil Procedure, seeking to nullify the CTA's Resolution dated July 30, 2012, which denied its motion for partial reconsideration and for leave to re-open the case. The CIR argued that the CTA gravely abused its discretion by denying its motion, as it would result in a miscarriage of justice and deprive the CIR of a chance to prove its case. The CIR contended that a liberal stance on procedural technicalities should have been adopted due to the substantial amount of alleged deficiency taxes and the existence of third-party information. The CIR also asserted that the State is not bound by the neglect of its agents. Wintelecom countered that the CIR was guilty of forum shopping and that the issue of presenting evidence had already been ruled upon with finality.
Issue(s)
Whether the CTA, Third Division gravely abused its discretion when it denied the petitioner's Motion for Partial Reconsideration and For Leave to Re-Open Case. Whether the petitioner committed forum shopping. Whether the petitioner properly availed of a special civil action for certiorari under Rule 65.
Ruling
The petition is dismissed for lack of merit. The Court held that the CTA did not commit grave abuse of discretion in denying the CIR's motion. The CIR's recourse to a petition for certiorari was improper as it failed to file a timely appeal to the CTA en banc. Furthermore, the grounds for reopening the case were not met, and the CIR's excuses for delay were not justifiable.
Ratio Decidendi
On whether the CTA committed grave abuse of discretion in denying the motion for reconsideration and leave to re-open: The Court found no grave abuse of discretion on the part of the CTA. The petitioner's motion was essentially seeking a new trial or re-opening of the case. The CTA correctly noted that the rules do not provide for re-opening a case under such circumstances. The grounds for a motion for new trial under the Rules of Court, which apply suppletorily, are fraud, accident, mistake, or excusable negligence, or newly discovered evidence, none of which were present. The petitioner's failure to appear was not due to excusable negligence, and no newly discovered evidence was presented. Furthermore, the motion was not supported by the required affidavits of merit. The CTA also found the petitioner's excuses of heavy workload and unavailability of witnesses unjustifiable, citing jurisprudence that such reasons are insufficient to justify the relaxation of procedural rules. The Court emphasized that the petitioner had repeatedly failed to comply with procedural rules and court orders throughout the proceedings, and granting her motion would reward negligence and lead to endless litigation. On the issue of forum shopping: The Court found that the petitioner did not engage in forum shopping. While the petitioner had filed an earlier petition for certiorari (G.R. No. 199071) assailing a different CTA resolution (June 17, 2011) which declared her to have waived her right to present evidence, the present petition assailed a later resolution (July 30, 2012) denying her motion for partial reconsideration of the main decision. The earlier petition was filed on October 26, 2011, and was denied for being out of time, with an entry of judgment made on June 8, 2012. The present petition was filed on October 1, 2012, almost a year later. The Court noted that the petitions assailed different resolutions and were not filed simultaneously or successively in a manner that would constitute forum shopping. On the propriety of the Petition for Certiorari: The Court held that the petitioner's recourse to a petition for certiorari under Rule 65 was improper. The assailed resolution denied a motion for partial reconsideration of a decision that completely disposed of the case on the merits. The proper remedy was to file an appeal before the CTA en banc via a petition for review under Rule 43 of the Rules of Court. The petitioner failed to file this appeal within the reglementary period, and instead filed the certiorari petition, which cannot be used as a substitute for a lost appeal. The Court reiterated the well-entrenched rule that a special civil action under Rule 65 will not be a cure for failure to timely file an appeal under Rule 43, as these remedies are mutually exclusive. The petitioner's argument that the issue was jurisdictional was also dismissed, as the grave abuse of discretion could have been raised on appeal.
Main Doctrine
A petition for certiorari under Rule 65 of the Rules of Court cannot be used as a substitute for a lost appeal, especially when the loss is due to the petitioner's own negligence or failure to file within the reglementary period. The denial of a motion for reconsideration of a decision that completely disposed of a case on the merits is appealable to the Court en banc via a petition for review under Rule 43, not via certiorari.