National Power Corporation vs.

The Provincial Treasurer of Benguet, et al Supreme

Court Third Division, GR No. 209303 promulgated 14 November, 2016

Facts: In May 2000, respondent Municipal Assessor of Itogon, Benguet assessed

Petitioner National Power Corporation (NPC) for real property tax (RPT) on properties
located within the Binga Hydro-Electric Power Plant. In March 2006, Respondent
OICProvincial Treasurer of Benguet demanded payment of the RPT from NPC. On 20
April 2006, NPC challenged before the Local Board of Assessment Appeals (LBAA) the
legality of the assessment and the authority of the respondents Municipal and Provincial
Assessors and Treasurers to assess and collect RPT from it. It asserts that its properties
are exempt from RPT pursuant to Section 234 (b) and (c) of the Local Government Code
(LGC). Previously, in letters dated 3 September 2000 and 19 April 2001, NPC filed its
requests for exemption from RPT before the Municipal Treasurer, which the latter has
not acted upon. On 9 August 2006, NPC received the LBAA’s Order deferring the
proceedings conditioned upon NPC’s payment under protest of the assessed amount, or
upon filing of a surety bond to cover the disputed RPT. On 25 August 2006, NPC filed a
Motion for Reconsideration (MR) of the LBAA’s order, which was denied by the LBAA.
NPC filed a petition for review with the Central Board of Assessment Appeals (CBAA),
where it claimed that payment under protest was not required before it could challenge
the authority of respondents to assess RPT on tax-exempt properties. The CBAA
dismissed the appeal for being filed out of time. NPC then appealed to the Court of Tax
Appeals (CTA) En Banc, but the same was denied for lack of merit. The CTA ruled that
Section 252 of the LGC requires payment under protest before a written protest against
the assessment may be filed before the LBAA. NPC filed its petition for review before
the Supreme Court, and alleged that payment under protest is required when the
reasonableness of the amount assessed is being questioned, and not, as in the present
case, when the taxpayer challenges the very authority and power of the assessor to
impose the assessment.

Issues: 1. Is NPC’s payment of the RPT under protest a condition prior to appeal to
LBAA?
2. Was the appeal before the CBAA filed out of time?

Rulings: 1. Yes. When a taxpayer/real property owner questions the excessiveness or

reasonableness of the assessment, Section 252 of the LGC directs that the taxpayer
should first pay the tax due before his protest can be entertained.

It is only after the taxpayer has paid the tax due that he may file a protest in writing
within 30 days from payment of the tax to the Provincial or Municipal Treasurer, who
shall decide the protest within sixty days from receipt. The local treasurer is not obliged
to entertain the protest unless the tax due has been paid. There was nothing in the
petition before the LBAA which supports petitioner’s claim regarding the respondents’
alleged lack of authority. Instead, the petition raised a question of fact, including
whether the machineries and equipment are actually, directly and exclusively used by
NPC in the generation and transmission of electricity. Though couched in terms which
challenge the validity of the assessment and authority of the respondents, NPC
essentially anchors its petition based on a claim of exemption from RPT.
A claim for RPT exemption not actually questions the assessor’s authority to assess and
collect such taxes, but pertains to the reasonableness or correctness of the assessment by
the local assessor, a question of fact which should be resolved, at the very first instance,
by the LBAA.

Under Section 206 of the LGC, a person claiming RPT exemption shall file with the
provincial, city or municipal assessor within 30 days from the date of the declaration of
real property sufficient documentary evidence in support of such claim. If the required
evidence is not submitted within the 30-day period, the property shall be listed as
taxable in the assessment roll. However, if the property shall be proven to be tax-
exempt, it shall be dropped from the assessment roll.

There was no evidence to show that, within 30 days from the filing of its Tax
Declaration, NPC filed with the Municipal Assessor an application for exemption or any
supporting documentary evidence of the exempt status of its properties. Since the
properties were not dropped from the assessment roll upon NPC’s failure to comply
with the requirements, the Municipal Assessor assessed NPC’s properties for RPT.

NPC’s failure to comply with the mandatory requirement of payment under protest in
accordance with Section 252 of the LGC was fatal to its appeal.

2. Yes, the appeal to CBAA was filed out of time.

Under Section 229 (c) of the LGC, the taxpayer has 30 days from its receipt of the
assailed order of the LBAA to file its appeal before the CBAA. On 9 August 2006, NPC
received the LBAA’s Order postponing the hearing subject to the condition that
payment of the RPT should first be made, and on 25 August 2006, or on the sixteenth
day from its receipt of the LBAA’s Order, NPC filed a MR. When NPC received, on 17
October 2006, the Resolution of the LBAA denying its MR, it only had 14 days left within
which to appeal to the CBAA.

The filing of the appeal before the CBAA through registered mail on November 16, 2006,
which was received by the CBAA on 22 November 2006, was already late.

The “fresh period rule” which gives the appellant a fresh period within which to appeal
covers judicial proceedings and not administrative appeals, such as the present case. The
case is remanded to the LBAA for further proceedings subject to payment under protest
of the assailed assessment.

Commissioner of Internal Revenue vs. Goodyear Philippines, Inc. Supreme Court

(First Division), G.R. No. 216130 promulgated 03 August 2016

Facts: Respondent Goodyear Philippines, Inc. (Goodyear PH) is a domestic corporation

whose preferred shares were exclusively subscribed by Goodyear Tire and Rubber
Company (Goodyear US), a non-resident foreign corporation organized in the United
States. Goodyear PH redeemed a portion of Goodyear US’s preferred shares at the
redemption price equivalent to the aggregate par value of the shares plus the accrued
and unpaid dividends at the date of redemption. The redeemed shares were reclassified
as treasury shares. Before the payment of the redemption price, Goodyear PH filed an
Application for Relief on Double Taxation with the BIR, claiming exemption from
taxation on the redemption, pursuant to the Philippines-United States (PH-US) Tax
Treaty. Nonetheless, on November 3, 2008, Goodyear PH withheld and remitted to the
BIR a 15% final withholding tax (FWT) on dividends, computed on the difference
between the redemption price and the aggregate par value of the shares redeemed
(which is also Goodyear US’s acquisition cost). In the absence of a ruling from the BIR
on its treaty relief application and believing that it erroneously paid tax on the
redemption, Goodyear PH filed with the BIR a claim for refund of the 15% FWT.
Without waiting for the BIR’s final resolution of the administrative claim, Goodyear PH,
on 3 November 2010, filed a judicial claim for refund, which was granted by the Court of
Tax Appeals (CTA). The BIR appealed to the Supreme Court and claimed that Goodyear
PH failed to exhaust administrative remedies. The BIR added that while the payment of
the original subscription price to Goodyear US could not be taxed as it represented a
return of capital, the additional component of the redemption price representing the
accrued and unpaid dividends are subject to 15% FWT on dividends under Section
28(B)(5)(b) of the Tax Code.

Issues: 1. Should the judicial claim be dismissed for non-exhaustion of administrative

remedies?
2. Is Goodyear PH entitled to the refund of the erroneously paid 15% FWT?

Rulings: 1. No, the claim with the CTA should not be dismissed. Section 229 of the Tax
Code states that claims for refund of erroneously or illegally paid tax must be filed
within two (2) years from the date of payment of the tax. However, the Tax Code
requires that a claim must first be filed with the Commissioner of Internal Revenue
(CIR) before filing the claim with the CTA.

The primary purpose of filing an administrative claim is to serve as notice to the CIR
that court action will follow unless the tax alleged to have been erroneously or illegally
collected is refunded. Section 229 does not require the taxpayer to wait for the final
resolution of its administrative claim since doing so would result in the taxpayer’s
forfeiture of its right to seek judicial recourse.

2. Yes, Goodyear PH is entitled to the refund.

The PH-US Tax Treaty provides that the term “dividends” should be understood
according to the tax law of the State in which the corporation making the distribution is
a resident, in this case, the Philippines.

The Philippine Tax Code defines “dividends” as “any distribution made by a

corporation to its shareholders out of its earnings or profits and payable to its
shareholders, whether in money or in other property.”

The redemption price received by Goodyear US could not be treated as accumulated

dividends in arrears which may be subject to 15% FWT. Respondent’s Audited Financial
Statements (AFS) for 2003 to 2009 show that Goodyear PH did not have unrestricted
retained earnings, and in fact, operated from a position of deficit. Without unrestricted
retained earnings, the board of directors of Goodyear PH had no power to issue
dividends.
One of the primary features of an ordinary dividend is that the distribution should be in
the nature of a recurring return on stock. The amount received by Goodyear US did not
represent a periodic distribution of dividend but rather a payment by Goodyear PH for
the redemption of Goodyear US’s preferred shares.

A distribution in the nature of a recurring return on stock is an ordinary dividend. On

the other hand, a distribution made when the corporation is winding up its business or
recapitalizing and narrowing its activities may be treated as that in complete or partial
liquidation and as payment for the stockholder’s stock.

Banco De Oro, et al. vs. Republic of the Philippines, et al. Supreme Court En Banc,
G.R. No. 198756 promulgated 16 August 2016

Facts: In 2001, the Bureau of Treasury (BTr) announced the auction of 10-year
ZeroCoupon Bonds, which the BTr stated shall not be subject to the 20% FWT since the
issue is limited to 19 lenders. At auction date, Rizal Commercial Banking Corporation
(RCBC), on behalf of Caucus of Development NGO Networks (CODE-NGO),
participated and won the bid, and the BTr issued the bonds to RCBC. Meanwhile, RCBC
Capital entered into an underwriting agreement with CODE-NGO whereby RCBC
Capital was appointed as the Issue Manager and Lead Underwriter for the offering of
the bonds which will be called Poverty Eradication and Alleviation Certificates or
PEACe Bonds. RCBC Capital sold and distributed the government bonds, and
petitioner-banks purchased the PEACe Bonds on different dates. The CTA may rule on
cases directly challenging the constitutionality or validity of a tax law, regulation or
administrative issuance (such as a revenue order, revenue memorandum circular, and
ruling). In determining whether a debt instrument may be considered a deposit
substitute, the interest of which shall be subject to the 20% FWT, the borrowing must be
made from 20 or more lenders at any one time. The courts may grant legal interest in
cases where patent arbitrariness on the part of the revenue authorities has been shown
or where the collection of tax was illegal.

On 7 October 2011, or barely 11 days before maturity of the PEACe Bonds, the BIR
issued BIR Ruling No. 370-2011 declaring that the PEACe Bonds, being deposit
substitutes, were subject to 20% FWT, and directing the BTr to withhold the tax from the
face value of the PEACe Bonds upon their payment at maturity on 18 October 2011. On
17 October 2011, replying to an urgent query from the BTr, the BIR issued Ruling No.
DA 378-2011 clarifying that the FWT due on the discount or interest earned on the
PEACe Bonds should be imposed and withheld not only on RCBC/ CODE-NGO but
also on all subsequent holders of the bonds. On the same day, the petitioner-banks filed
before the Supreme Court a Petition for Certiorari, Prohibition, and/or Mandamus (with
urgent application for a temporary restraining order (TRO) and/or writ of preliminary
injunction). The following day, the Supreme Court issued a TRO enjoining the
implementation of BIR Ruling No. 370-2011 subject to the condition that the 20% FWT
on interest income shall be withheld by the petitioner-banks and placed in escrow
pending resolution of the petition. On 13 January 2015, the Supreme Court granted the
petition and ruled that the number of lenders/investors at every transaction determines
whether a debt instrument is a deposit substitute subject to the 20% FWT. When at any
transaction, funds are simultaneously obtained from 20 or more lenders/investors, there
is deemed to be a public borrowing and the bonds at that point are deemed deposit
substitutes. Hence, the seller is required to withhold the 20% FWT on the imputed
interest income from the bonds. The Supreme Court also declared BIR Ruling Nos. 370-
2011 and DA 378-2011 as void for having disregarded the 20-lender rule provided in
Section 22(Y) of the Tax Code. Moreover, the Court reprimanded the BTr for its
continued retention of the amount corresponding to the 20% FWT despite its directive in
the TRO to deliver the amounts to the banks, which shall be placed in escrow pending
resolution of the case, and the Court’s November 2011 Order (in response to petitioner-
banks motion to direct the BTr to comply with the TRO). Separate motions for
reconsideration and clarification were filed by both Petitioners and Respondents.

Issues: 1. Does the CTA have jurisdiction to determine the constitutionality or validity of
tax laws, rules and regulations, and other administrative issuances of the Commissioner
of Internal Revenue (CIR)?
2. May the 20-lender rule apply to the PEACe Bonds?
3. May RCBC, RCBC Capital, and CODE-NGO be held liable to pay the 20% FWT?
4. May the BTr be held liable to pay legal interest for refusal to release the withheld tax
to the banks, as ordered by the Supreme Court?

Rulings:
1. Yes, the CTA has jurisdiction and may take cognizance of cases directly
challenging the constitutionality or validity of a tax law, regulation or administrative
issuance (such as a revenue order, revenue memorandum circular, and ruling).

Section 7 of Republic Act (RA) No. 1125 (Act Creating the CTA), as amended by RA
9282, is explicit that except for local taxes, appeals from the decisions of quasi-judicial
agencies (CIR, Commissioner of Customs, Secretary of Finance, Central Board of
Assessment appeals, Secretary of Trade and Industry) on tax related problems must be
brought exclusively to the CTA.

Within the judicial system, the law intends the CTA to have exclusive jurisdiction to
resolve all tax problems. Petitions for writs of certiorari against the acts and omissions of
said quasi-judicial agencies should, thus, be filed before the CTA.

The determination of the validity of administrative issuances (such as revenue orders,

revenue memorandum circulars, or rulings issued by the CIR) falls within the exclusive
appellate jurisdiction of the CTA, subject to prior review by the Secretary of Finance.

2. Yes, the 20-lender rule may apply to the PEACe Bonds, depending on the
number of lenders “at any one time.” The definition of deposit substitutes in Section
22(Y) specifically defined “public” to mean “twenty (20) or more individual or corporate
lenders at any one time.” Hence, if there are 20 or more lenders, the debt instrument is
considered a deposit substitute which is subject to the 20% FWT.

The existence of 20 or more lenders should be reckoned at the time when the successful
Government Securities Eligible Dealer (GSED)-bidder distributes (by itself or through an
underwriter) the government securities to final holders.

When the GSED sells the government securities to 20 or more investors, the government
securities are deemed to be in the nature of a deposit substitute. In this case, the PEACe
Bonds were awarded to RCBC/CODE-NGO as the winning bidder in the primary
auction. At the same time, CODE-NGO got RCBC Capital as underwriter, to distribute
and sell the bonds to the public.

The Underwriting Agreement and RCBC Term Sheet for the sale of the PEACe Bonds
show that the settlement dates for the issuance by the BTr of the bonds to RCBC/CODE-
NGO and the distribution by RCBC Capital of the PEACe bonds to various investors fall
on the same day, 18 October 2001.

Hence, the reckoning of the phrase “20 or more lenders” should be at the time when
RCBC Capital sold the PEACe Bonds to investors. Should the number of investors to
whom RCBC Capital distributed the PEACe Bonds be found to be 20 or more, the
PEACe Bonds are considered deposit substitutes subject to 20% FWT.

3. Assuming the PEACe Bonds are considered deposit substitutes, RCBC, RCBC
Capital, and CODE-NGO may still not be held liable to pay the 20% FWT.

The Supreme Court’s interpretation in its January 2015 decision of the phrase “at any
one time” cannot be applied to the PEACe Bonds and should instead be given
prospective application.

RCBC and the rest of the investors relied on the opinions of the BIR in its Ruling Nos.
020-2011, 035-2001 dated 16 August 2001 and DA-175-01 dated 29 September 2001 which
provide that the “20 or more lenders” is to be determined at the time of the original
issuance. Under the said rulings, the PEACe bonds were not to be treated as deposit
substitutes.

4. Yes. The BTr is held liable for legal interest of 6% per annum on the 20% FWT.
The BTr made no effort to release the amount corresponding to the 20% FWT which it
had not shown to have already been remitted to the BIR. It remained obstinate in its
refusal to release the monies and exhibited utter disregard and defiance of the Supreme
Court’s order in the TRO, November 2011 Resolution and 13 January 2015 Decision.

The BTr is ordered to immediately release and pay the bondholders the 20% FWT on the
PEACe Bonds, with legal interest of 6% per annum from 19 October 2011, the day the
BTr received the TRO, until full payment.

Commissioner of Internal Revenue vs. Kepco Ilijan Corporation Supreme

Court En Banc, G.R. No. 199422 promulgated 21 June 2016

Facts: Kepco Ilijan Corporation (“KIC”) filed a claim for refund with the Bureau
of Internal Revenue (BIR) of input tax incurred in 2000 from its importation and
domestic purchases of capital goods and services preparatory to its production
and sales of electricity to the National Power Corporation. Due to the inaction of
the Commissioner of Internal Revenue (CIR) on its claim, KIC filed a Petition for
Review with the Court of Tax Appeals (CTA). While the CIR filed her Answer,
she failed to file the requisite Memorandum despite notice. The CTA First
Division rendered its decision finding KIC entitled to the refund. As the CIR did
not contest the decision, it became final and executory. The CTA issued an Entry
of Judgment on 10 October 2009 and a corresponding Writ of Execution on 16
February 2010. On 11 April 2011, the CIR filed a Petition for Annulment of
Judgment with the CTA En Banc and claimed that she only found out about the
decision and the issuance of the writ when the Office of the Deputy
Commissioner for Legal and Inspection Group received a Memorandum from
the BIR Appellate Division recommending the issuance of a Tax Credit
Certificate in favor of KIC. The CIR, in her petition, prayed that the decision of
the CTA First Division be annulled and set aside, that the Entry of Judgment and
the Writ of Execution be nullified, and that the CTA First Division be directed to
re-open the case to allow the CIR to submit her Memorandum setting forth her
substantial legal defenses. After the CTA En Banc dismissed the petition, the CIR
filed with the Supreme Court a Petition for Review on Certiorari under Rule 45
of the Rules of Court, where she asked for the reversal of the resolutions of the
CTA En Banc.

Issue: Does the CTA En Banc have jurisdiction over the CIR’s Petition for
Annulment of Judgment of the CTA First Division?

Ruling: No, the CTA En Banc does not have jurisdiction over the CIR’s petition.
Annulment of Judgment is provided for in Rule 47 of the Rules of Court and is
based solely on the grounds of extrinsic fraud and lack of jurisdiction.

It is a recourse that presupposes the filing of a separate and original action for
the purpose of annulling or avoiding a decision in another case. Annulment is a
remedy in law independent of the case where the judgment sought to be
annulled is rendered. It is unlike a motion for reconsideration, appeal or even a
petition for relief from judgment, because annulment is not a continuation or
progression of the same case as, in fact, the case it seeks to annul is already final
and executory. It is an extraordinary remedy that is equitable in character and is
permitted only in exceptional cases. Annulment of judgement involves the
exercise of original jurisdiction, as expressly conferred on the Court of Appeals
(CA) by Batas Pambansa Bilang 129. It implies power by a superior court over a
subordinate one, wherein the CA may annul a decision of the Regional Trial
Court (RTC), or where the RTC may annul a decision of the municipal or
metropolitan trial court. The laws creating the CTA and expanding its
jurisdiction and the CTA’s own rules of procedure do not provide for a scenario
where the CTA sitting en banc is asked to annul a decision of one of its divisions.
Similarly, the Supreme Court (SC) or the CA may sit and adjudicate cases in
divisions and such adjudication is regarded as the decision of the Court itself.
The divisions are not considered separate and distinct courts but are divisions of
one and the same court. There is no hierarchy of courts within the SC and the
CA. The SC sitting en banc is not an appellate court vis-à-vis its divisions and it
exercises no appellate jurisdiction over the latter. It appears contrary to the
features of a collegial court, sitting En Banc, that it may be called upon to annul a
decision of one of its Divisions which has become final and executory, for it is
tantamount to allowing a court to annul its own judgment and acknowledging
that a hierarchy exists within such court. It also betrays the principles that
judgments must attain finality as a court that can revisit its own final judgments
leaves the door open to endless reversals or modifications which is anathema to a
stable legal system. A direct petition for annulment of a judgment of the CTA to
the SC is also unavailing since there is no identical remedy with the SC to annul a
final and executory judgment of the CA. Republic Act No. 9282 puts the CTA on
the same level as the CA so that if the latter’s judgments may not be annulled
before the SC, then the CTA’s own decisions similarly may not be so annulled. A
proper remedy would have been an original action for Certiorari directly before
the SC and not before the CTA En Banc. Certiorari is availed of when there is no
appeal, or any other plain, speedy and adequate remedy in the ordinary course
of law, such as in the present case. The petition invoked the gross and palpable
negligence of CIR’s counsel which is allegedly tantamount to its being deprived
of due process and its day in court as party-litigant. As it also invokes lack of
jurisdiction of the CTA First Division to entertain the petition filed by KIC, the
proper remedy should have been a petition for certiorari under Rule 65, an
original or independent action premised on the CTA’s having acted without or in
excess of jurisdiction or with grave abuse of discretion amounting to lack or
excess of jurisdiction.

The petition could have been filed directly with the SC without any need to file a
motion for reconsideration with the CTA Division or En Banc as the case appears
to fall under some of the recognized exceptions to the rule requiring such a
motion as a prerequisite, namely, where there is an urgent necessity for the
resolution of the question and any further delay would prejudice the interests of
the Government, where petitioner was deprived of due process and there is
extreme urgency for relief, and where the proceedings in the lower court are a
nullity for lack of due process. Failure of the CIR to avail of this remedy and
mistaken filing of the wrong petition are fatal to its case and leaves the CTA First
Division’s decision as final and executory.

Commissioner of Internal Revenue vs. Liquigaz Philippines Corporation

Supreme Court (Second Division) G.R. No. 215534 and G.R. No. 215557
promulgated 18 April 2016

Facts: The BIR assessed Liquigaz Philippines Corporation (Liquigaz) for alleged
deficiency Expanded Withholding Tax (EWT), Fringe Benefit Tax (FBT) and
Withholding Tax on Compensation (WTC) for taxable year 2005. Liquigaz filed
its protest, which the Commissioner of Internal Revenue (CIR) denied in a Final
Decision on Disputed Assessment (FDDA). As the FDDA only contained a table
showing the deficiency withholding tax liabilities, Liquigaz questioned its
validity in a petition for review with the Court of Tax Appeals (CTA), and sought
the cancellation of the assessments. Liquigaz argued that a void FDDA means a
void assessment because the FDDA ultimately determines the final tax liability of
a taxpayer which is appealable to the CTA. The CIR countered that the
assessments should be upheld and the FDDA should be taken together with the
Preliminary Assessment Notice and the Formal Letter of Demand/Final
Assessment Notice (FLD/FAN), where details of the assessments were attached.
The CIR added that a void FDDA does not necessarily result in the nullification
of the assessment. While the CTA upheld the deficiency WTC, the Court ruled
that the FDDA was void with respect to the EWT and FBT liabilities since the
FDDA failed to provide the factual bases of the assessments, as required by law.
The CTA added that the taxpayer had no way of knowing what items were
considered by the CIR in computing the deficiency tax liabilities as the amounts
in the FLD/FAN were different from those in the FDDA.

Issues: 1. Is the FDDA void with respect to the EWT and FBT liabilities?
2. What is the effect of a void FDDA on the assessment?

Rulings: 1. The FDDA is void for failing to state the facts on which the EWT and
FBT assessments were made, which is a requirement under Section 228 of the Tax
Code and Revenue Regulations (RR) No. 12-99. RR No. 12-99 specifically requires
that the facts, the applicable law, rules and regulations, or jurisprudence on
which the decision is based shall be stated in both the FLD/FAN and the FDDA,
otherwise, the decision shall be void. This requirement is intended to afford the
taxpayer adequate opportunity to file a protest on the assessment and, thereafter,
file an appeal, in case of an adverse decision. It is imperative that Liquigaz be
informed of the facts because of the discrepancy in the amounts of the EWT and
FBT liabilities in the FLD/FAN and the FDDA. Failure to do so would deprive
Liquigaz adequate opportunity to prepare an intelligent appeal as it would have
no way of determining what were considered by the CIR in the defenses it had
raised in the protest to the FLD/FAN.

2. The assessment remains valid notwithstanding the nullity of the FDDA

because the assessment itself differs from a decision on a disputed assessment.
The FDDA is not the only means whereby the final tax liability of a taxpayer is
fixed, which may then be appealed by the taxpayer. Under the law, inaction on
the part of the CIR may likewise result in the finality of a taxpayer’s tax liability
as it is deemed a denial of the taxpayer’s protest, which may then be appealed to
the CTA. As the decision on the disputed assessment is void, it is as if there was
no decision by the CIR. It is tantamount to a denial by inaction of the CIR.
However, it does not follow that the assessments are likewise void. Since the
decision of the CIR on a disputed assessment differs from the assessment itself,
the invalidity of one does not necessarily result in the invalidity of the other
unless provided by law or regulations. Section 228 of the Tax Code provides that
the assessment is void if the taxpayer is not informed in writing of the law and
the facts on which it is based, but it is silent with regard to a decision on a
disputed assessment. Moreover, while RR No. 12-99 states that the failure of the
FDDA to state the facts and the law on which it is based voids the decision, it
does not extend to the nullification of the entire assessment. The portions relating
to EWT and FBT in the FDDA are void and the case is remanded to the CTA for a
discussion on the merits of the EWT and FBT assessments.

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