FACTS:
On 28 February 2014, petitioner received a Final Decision on Disputed Assessment worth PhP 4,473,228,667.87. It protested against the same through a request for reconsideration but was denied by the CIR in its decision dated 26 May 2014.
On 13 June 2014, petitioner appealed the CIR’s decision to the CTA through a petition for review with Motion to Suspend Collection of Tax. The CTA granted the motion; however, it required petitioner to deposit a surety bond equivalent to 150% of the assessment.
ISSUE(S):
Whether or not the CTA may suspend the collection of taxes.
HELD:
YES. The CTA may order the suspension of the collection of taxes provided that the taxpayer either: (1) deposits the amount claimed; or (2) files a surety bond for not more than double the amount.
In this case, however, the CTA in Division gravely abused its discretion under Section 11 because it fixed the amount of the bond at nearly five times the net worth of the petitioner without conducting a preliminary hearing to ascertain whether there were grounds to suspend the collection of the deficiency assessment on the ground that such collection would jeopardize the interest of the taxpayer. Simply prescribing such high amount of the bond or later on even reducing the amount of the bond to equal the deficiency assessment would practically deny to the petitioner the meaningful opportunity to contest the validity of the assessments, and would likely even impoverish it as to force it out of business.
