Republic of the Philippines v CA and Nielson & Co., Inc.; G.R. No. L-38540; 30 Apr 1987

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In a demand letter dated 16 July 1955, the CIR assessed private respondent with deficiency taxes for years 1949 to 1952. Several follow-up letters were sent reiterating its demand upon private respondent for payment of said deficiency tax. One such follow-up letter dated 19 September 1956 was duly received but private respondent did not contest the assessment before the CTA. On the theory that the assessment had become final and executory, a complaint for collection was filed with the CFI of Manila. However, due to petitioner’s failure to serve summons, the complaint was dismissed. Another complaint was filed on 26 November 1963 where a decision was rendered against private respondent. On appeal, the decision was reversed.

Whether or not private respondent’s right to dispute the merits of the assessment has already prescribed.

YES. The 19 September 1956 follow-up letter is considered a notice of assessment and is appealable to the CTA within thirty days from receipt. The taxpayer’s failure to appeal in due time, as in the case at bar, makes the assessment in question final, executory and demandable. Thus, private respondent is now barred from disputing the correctness of the assessment or from invoking any defense that would reopen the question of its liability on the merits.

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