Taxpayer’s failure to file a petition for review with the CTA within the statutory period renders the disputed assessment final, executory and demandable.

The BIR issued Formal Letter of Demand (“FLD”) and Final Assessment Notice (“FAN”), all dated March 31, 2006, assessing the taxpayer for deficiency expanded withholding tax and VAT for the taxable year 2002. Taxpayer received the said FLD and FAN on April 10, 2006. The taxpayer manifested its willingness to pay a portion of the assessment but protested the rest of the assessment, specifically the VAT assessment on the alleged disposition of its property and equipment. On November 22, 2006, a Preliminary Collection Letter was signed and issued by the Revenue District Officer (“RDO”) for the collection of taxpayer’s internal revenue tax liabilities. On December 21, 2006, a Final Notice Before Seizure signed by the RDO was issued against the taxpayer, which the latter received on January 4, 2007.

In a letter dated January 15, 2007, the taxpayer wrote the RDO requesting that the case be referred back to BIR Region No. 13. On January 29, 2007, a Warrant of Distraint and/or Levy signed by the RDO was issued against the taxpayer , which was received by the latter on February 21, 2007. After several exchanges of communication, the BIR proceeded with the auction sale of taxpayer’s M/V Philippine Dream. On October 31, 2007, taxpayer filed a petition for review with the CTA, with a prayer for the issuance of TRO and/or Preliminary Injunction, which the Court treated as motion to suspend collection of taxes. One of the issues resolved by the Court was whether the assessment in question has become final and executory. In ruling that the assessment has become final and executory, the Court noted that a Preliminary Collection Letter was issued by the RDO on November 22, 2006. However, the records do not show that the same was received by the taxpayer. However, the taxpayer received a Final Notice Before Seizure on January 4, 2007. The Court treated this as the final decision on disputed assessment. Although the tenor of the Final Notice Before Seizure signified a character of finality which is tantamount to denial of taxpayer’s protest, the taxpayer failed to file an appeal to the CTA within 30 days upon receipt. Considering that it was only on October 31, 2007 that taxpayer filed a petition for review with the CTA, the final decision on disputed assessment had become final, executory and demandable. (Philippine Dream Company, Inc. vs. Bureau of Internal Revenue, CTA Case No. 7700, December 06, 2012)