People v. Mallari
REITERATIONFacts
The Antecedents: The case originated from a criminal complaint filed by the Bureau of Internal Revenue (BIR) against Benedicta Mallari and Chi Wei-Neng, President and General Manager of Topsun Int'l., Inc., respectively. The complaint alleged violation of Section 255 in relation to Sections 253 and 256 of the 1997 National Internal Revenue Code (NIRC) due to Topsun's outstanding Value Added-Tax (VAT) deficiency for January to June 2000, amounting to P3,827,564.64, plus a compromise penalty of P25,000.00. Despite demands and a warrant of distraint and/or levy, Topsun failed to pay its obligations. Mallari, however, denied the liability, presenting a Certificate of No Tax Liability. Procedural History: The Office of the City Prosecutor found probable cause and recommended the filing of an Information before the Court of Tax Appeals (CTA). The CTA First Division noted discrepancies in the Information regarding the type of tax deficiency and the lack of the Commissioner of Internal Revenue's (CIR) written approval for the prosecution, as required by the NIRC and CTA Rules. The CTA ordered compliance with these deficiencies, but the Assistant City Prosecutor failed to fully comply. Consequently, the CTA First Division dismissed the case for failure to obey lawful orders. A motion for reconsideration was filed but was denied by the CTA Special First Division for being filed out of time. The People then filed a Petition for Review with the CTA En Banc, which affirmed the dismissal, holding that the December 14, 2009 resolution had become final due to the belated filing of the motion for reconsideration. The Petition: The People filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CTA En Banc's decision. The petition argued that the December 14, 2009 resolution had not become final and that the negligence of the special counsel should not be imputed against the State. The People also questioned whether a Regional Director could authorize the institution of criminal actions without the CIR's explicit approval. The Supreme Court denied the petition, holding that the motion for reconsideration was filed 14 days late, rendering the CTA First Division's resolution final and immutable. The Court also affirmed that the negligence of the counsel binds the client, and the notice of the resolution was properly served.
Issue(s)
Whether the Resolution dated December 14, 2009, has already become final, considering the timeliness of the motion for reconsideration and the propriety of the service of notice. Whether a Regional Director can sign approvals and referral letters to authorize the institution of criminal actions/cases from the regional office without the approval of the CIR, and the implications of counsel's negligence on the client.
Ruling
The Supreme Court denied the petition. It affirmed the CTA En Banc's decision, holding that the December 14, 2009 Resolution of the CTA First Division had attained finality due to the belated filing of the Motion for Reconsideration. Consequently, the resolution could no longer be reviewed or modified.
Ratio Decidendi
On the finality of the December 14, 2009 Resolution: The Court reiterated that under Section 1, Rule 15 of the Revised Rules of the CTA, an aggrieved party must file a motion for reconsideration within 15 days from receipt of notice. The records showed the motion was filed beyond the prescribed period, rendering the judgment final and immutable. The Court also found the service of notice to the Office of the City Prosecutor through ACP Mendoza and the BIR Main Office proper. The negligence and mistakes of a counsel are binding on the client, and the petitioner failed to exercise due diligence in communicating with its counsel. On the authority of a Regional Director to file criminal actions: While the Court did not directly rule on the merits due to the procedural bar of finality, it affirmed the CTA First Division's reasoning that RDAO No. 2-2007 was insufficient. The CTA distinguished RDAO No. 2-2007, which empowers the signatory to sign approval and referral letters, from the written approval of the CIR to institute the case required under Sections 220 and 221 of the NIRC and Section 2, Rule 9 of the Revised Rules of the CTA.
Main Doctrine
The negligence of counsel binds the client, and failure to file a motion for reconsideration within the reglementary period results in the finality of the judgment, which becomes immutable and unalterable.