CIR v.

HANTEX

FACTS:
Hantex is a corporation duly organized and existing under the laws of the Philippines engaged in the sale
of plastic products, it imports synthetic resin and other chemicals for the manufacture of its products.

An informant informed the Counter-Intelligence Division of the Economic Intelligence and Investigation
Bureau that Hantex Trading Co., Inc. underdeclared its importations in the year 1987. The said informant
based its report from another informant and the photocopied documents provided to him. It was stated
that Hantex’s importations amounted to Php 115 M. Hantex only declared Php 45 M.
The original copies of Consumption Entries cannot be produced because the copies in the possession of
the Collection Division were eaten by termites.
The Investigation Division, in determining Hantex’s alleged tax deficiency, relied on the photocopied
(xerox) copies submitted to them by their informant. It was found that Hantex’s importations amounted to
Php 105 M.
Hantex contested the findings as it averred that the same was based on incompetent evidence considering
that it was based merely on xerox copies which were not even authenticated or certified.
The Commissioner however argued that under the NIRC, under the best evidence rule, if the taxpayer
does not want to provide the required documents for taxation purposes, the taxing authorities can rely on
other evidences, in this case, the xerox copies, to determine tax liabilities.
Hantex averred that the best evidence rule was not complied with or was erroneously availed of because
the said xerox copies were not properly authenticated. The Commissioner argued that the BIR is not
bound by the technical rules of evidence.
ISSUE:
Whether or not it is proper to use the xerox copies of the Consumption Entries of Hantex Trading Co.,
Inc. as proof of its tax liabilities.
HELD:
No. It is true that the BIR is not bound by strict rules of evidence. It is also true that the best evidence rule
under the NIRC should not be equated to the best evidence rule under the Rules of Court. That being, the
best evidence rule under the NIRC may even mean that the best evidence obtainable may consist of
hearsay evidence, such as the testimony of third parties or accounts or other records of other taxpayers
similarly circumstanced as the taxpayer subject of the investigation – which are inadmissible in a regular
proceeding in the regular courts.
However, in this case, the xerox copies are not the best evidence obtainable. The official copies of the
Consumption Entries are not solely kept in the Collection Division (where such records were destroyed
by termites). The NSO (National Statistics Office) also keep such records. In fact, there are at least four
copies of such Consumption Entries. There was no showing that BIR tried to obtain the copies held by
NSO.