The Office of the Solicitor General (OSG), representing the Department of Justice (DOJ) and the Bureau of Internal Revenue (BIR), asked the Supreme Court (SC) "to reinstate before the Marikina City Metropolitan Trial Court the tax fraud suit and to relax the rules on procedures."
Solicitor General Ricardo Galvez urged the high court to set aside the technicality on which the court of Appeals (CA) based its Aug. 29 ruling in favor of the taipan, who is a close friend and supporter of President Estrada.
The CA upheld the dismissal of the suit against Tan’s flagship company,
Fortune Tobacco Corp., because of a fatal procedural lapse that saw the OSG filing the case 11 days late.
Fortune was accused of failing to pay some P25.272 billion in ad valorem and value-added taxes from 1990 to 1992. The case was filed in December 1998 but was dismissed a year later by the Marikina court after the BIR refused to prosecute the case.
A BIR re-investigation had concluded that no fraud was committed.
"It is respectfully prayed that the rules be relaxed in this case to give way to a just and full determination of the merits of the case, especially since the dismissal was attended with serious errors and grave abuse of discretion," the OSG said.
Government lawyers argued that such procedures are "mere tools designed to facilitate, rather than frustrate, the attainment of justice, especially where the right of the State to prosecute big tax evasion cases is at stake."
The OSG warned that a repetition of the "serious infinities" committed by trial court Judge Alex Ruiz when he junked the case in March 1999 would "only result in manifest failure or miscarriage of justice."
Another point raised by the government in its petition include the BIR’s lack of authority to withdraw the case, saying the bureau was a mere witness of the DOJ.
Galvez also said the BIR had invoked the Tax Reform Act of 1997 which requires pursuit of all tax suits to receive the go-signal of the bureau chief. He explained, however, that the law, which took effect in January 1998, cannot have any retroactive effect since the Tan tax case was referred by the BIR to the DOJ as early as 1993.
"It would clearly be absurd for them (DOJ) to seek the approval of the BIR commissioner before filing the information in court, which they did file in December 1998 after the bureau had previously endorsed the cases to them for determination of probable cause way back in 1993," the 61-page petition for review stated.
The records of the DOJ-BIR task force revealed that the approval was no longer needed since the bureau "had continued endorsing nine tax cases for preliminary investigation, with six already filed in court, all without the commissioner’s approval and all done after the law took effect on January 1998."
On the subject of the withdrawal, the OSG pointed out that once a criminal information is filed in court it is the prosecutor who must call the shots.
"The BIR had no personality to move for dismissal/revival or take a stand inconsistent with the prosecutor. Its only function should have been to testify," Galvez said.
Government lawyers also assailed the judge’s assertions that the case was junked because of the withdrawal and "Tan’s motion’s to quash, which turned out to be a farce."
"Records showed that the respondent filed no such motion. The basis to justify the dismissal was but illusionary as it was based in an imaginary and non-existent motion," the OSG said.
The government also claimed that the case against Tan can be reinstated because it was dismissed with "precipitate haste," and that the lower court never had jurisdiction over the person of Tan, having issued no warrant for his arrest and having no arraignment for the respondent.
"This deprived the people of due process of law. The court’s action is null and void, having been rendered in excess if its jurisdiction. The rules require that the accused must be present at the arraignment and must personally enter his plea. These requirements are mandatory," the OSG said.