[Highlights]: Procedural aspect of the case; RAPPLER HOLDINGS CORPORATION/ MARIA A. RESSA case.
RAPPLER HOLDINGS CORPORATION/ MARIA A. RESSA case.
[Highlights]: Procedural aspect of the case.
• Accused RHC (a corporate entity), need not be arraigned.
• If the crime is committed by a corporation or other juridical entity, the directors, officers, employees or other officers responsible for the offense shall be charged and penalized for the crime.
• Be that as it may, a corporation, as a legal entity, cannot be arrested or imprisoned for it possesses no corporeal body. In the same manner, a corporation cannot be "arraigned" in the classical sense. As an artificial being existing by legal fiat, it does not have the faculty of cognition that triggers the constitutional right to be informed of the nature and cause of the charges against it; hence, the need to prosecute the responsible officers for the corporate criminal act.
• Based on the foregoing, We rule that accused RHC need not be arraigned separately since accused Maria Ressa, its president and responsible officer, was already arraigned. The arraignment of accused Maria Ressa is sufficient to put accused RHC on notice that it is being prosecuted for a violation of the law which if proven, accused RHC may be exposed to the consequences provided under relevant laws.
• A deficiency tax assessment is not necessary before a criminal case may be filed. Thus, there was no violation of due process rights of the accused, even when no assessment has been issued, before the filing of the said criminal case.
• The crime of tax evasion is committed by the mere fact that the taxpayer knowingly and willfully filed a fraudulent return with intent to evade and defeat a part or all of the tax. It is therefore not required that a tax deficiency assessment must first be issued for a criminal prosecution for tax evasion to prosper.
• Furthermore, under Sections 254 and 255 of the 1997 NIRC, as amended, the government can file a criminal case for tax evasion against any taxpayer who willfully attempts in any manner to evade or defeat any tax imposed in the Tax Code or the payment thereof. The crime of tax evasion is committed by the mere fact that the taxpayer knowingly and willfully filed a fraudulent return with intent to evade and defeat a part or all of the tax. It is therefore not required that a tax deficiency assessment must first be issued for a criminal prosecution for tax evasion to prosper.
Court Ruling on Procedural aspect of the case.
Accused RHC (a corporate entity), need not be arraigned.
Accused argue that the Court did not acquire jurisdiction over the corporate entity of RHC as it was not properly arraigned hence, its corporate officer, Maria A. Ressa, cannot be held liable as her culpability arises only upon the valid conviction of RHC.
Arraignment is the formal mode and manner of implementing the constitutional right of an accused to be informed of the nature and cause of the accusation against him. The purpose of arraignment is to apprise the accused of the possible loss of freedom, even of his [or her] life, depending on the nature of the crime imputed to him [or her], or at the very least to inform him [or her] of why the prosecuting arm of the State is mobilized against him [or her].
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If the crime is committed by a corporation or other juridical entity, the directors, officers, employees or other officers responsible for the offense shall be charged and penalized for the crime. This is so since a corporation is a Juridical entity created by law. It can act only through its board of directors or officers, in conformity with its articles of incorporation and by-laws. Consequently, corporate officers or employees through whose act, default or omission the corporation commits a crime are themselves individually guilty of the crime.
This is consistent with Sections 253(d) and 256 of the 1997 NIRC, as amended, wherein the penalty to be imposed is on the responsible individual, not on the corporation itself. If at all, the corporation is only penalized by payment of a fine.
Be that as it may, a corporation, as a legal entity, cannot be arrested or imprisoned for it possesses no corporeal body. In the same manner, a corporation cannot be "arraigned" in the classical sense. As an artificial being existing by legal fiat, it does not have the faculty of cognition that triggers the constitutional right to be informed of the nature and cause of the charges against it; hence, the need to prosecute the responsible officers for the corporate criminal act.
In the recent Resolution of the Supreme Court in the case of Kingsam Express International and Samuel Santos vs. People of the Philippines, this principle was reiterated and declared with finality in this manner:
"With this in mind, We rule that KEI need not be arraigned separately since Santos, its president and responsible officer, was already arraigned. The arraignment of Santos is sufficient to put the corporation on notice that it is being prosecuted for violation of the law."
Based on the foregoing, We rule that accused RHC need not be arraigned separately since accused Maria Ressa, its president and responsible officer, was already arraigned. The arraignment of accused Maria Ressa is sufficient to put accused RHC on notice that it is being prosecuted for a violation of the law which if proven, accused RHC may be exposed to the consequences provided under relevant laws.
The accused contend that the ROs did not conduct a formal investigation and failed to comply with the requirements under Revenue Memorandum Order Nos. 27-2010 and 24-08, thereby violating accused's due process rights.
The accused's reasoning, however, is specious.
There is no requirement for the precise computation and assessment of the tax before there can be a criminal prosecution under the 1997 NIRC, as amended.
This was reinforced by the Supreme Court in the case of Ungab vs. Cusi, Jr., et al., and We quote:
"xxx. While there can be no civil action to enforce collection before the assessment procedures provided in the Code have been followed, there is no requirement for the precise computation and assessment of the tax before there can be a criminal prosecution under the Code.
The contention is made, and is here rejected, that an assessment of the deficiency tax due is necessary before the taxpayer can be prosecuted criminally for the charges preferred.
The crime is complete when the violator has, as in this case, knowingly and willfully filed fraudulent returns with intent to evade and defeat a part or all of the tax.
A crime is complete when the violator has knowingly and willfully filed a fraudulent return with intent to evade and defeat the tax. The perpetration of the crime is grounded upon knowledge on the part of the taxpayer that he has made an inaccurate return, and the government's failure to discover the error and promptly to assess has no connections with the commission of the crime."
Furthermore, under Sections 254 and 255 of the 1997 NIRC, as amended, the government can file a criminal case for tax evasion against any taxpayer who willfully attempts in any manner to evade or defeat any tax imposed in the Tax Code or the payment thereof.
The crime of tax evasion is committed by the mere fact that the taxpayer knowingly and willfully filed a fraudulent return with intent to evade and defeat a part or all of the tax. It is therefore not required that a tax deficiency assessment must first be issued for a criminal prosecution for tax evasion to prosper.
In Commissioner of Internal Revenue vs. Pascor Realty and Development Corporation, et al., the Supreme Court held as follows:
"Private respondents maintain that the filing of a criminal complaint must be preceded by an assessment.
This is incorrect, because Section 222 of the NIRC specifically states that in cases where a false or fraudulent return is submitted or in cases of failure to file a return such as this case, proceedings may be commenced without assessment. Furthermore, Section 205 of the same Code clearly mandates that the civil and criminal aspects of the case may be pursued simultaneously. In Ungab v. Cusi, petitioner therein sought the dismissal of the criminal Complaints for being premature, since his protest to the CTA had not yet been resolved. The Court held that such protests could not stop or suspend the criminal action which was independent of the resolution of the protest in the CTA. This was because the commissioner of internal revenue had, in such tax evasion cases, discretion on whether to issue an assessment or to file a criminal case against the taxpayer or to do both.
Furthermore, under Sections 254 and 255 of the 1997 NIRC, as amended, the government can file a criminal case for tax evasion against any taxpayer who willfully attempts in any manner to evade or defeat any tax imposed in the Tax Code or the payment thereof. The crime of tax evasion is committed by the mere fact that the taxpayer knowingly and willfully filed a fraudulent return with intent to evade and defeat a part or all of the tax. It is therefore not required that a tax deficiency assessment must first be issued for a criminal prosecution for tax evasion to prosper.
For Substantive (Due Process) aspect of the case, read full text here:
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