BIR lawyers side with Shell on inhibition of CTA justice in tax case

MANILA, Philippines - In a sudden move that left officials of the Bureau of Internal Revenue (BIR), the Bureau of Customs (BOC), and the Office of the Presidential Adviser on Revenue Enhancement (OPARE) reeling with shock, two lawyers of the BIR committed a volte-face, and reversed the BIR’s earlier position on the voluntary inhibition of Court of Tax Appeals (CTA) Presiding Justice Ernesto D. Acosta in the tax case involving the government and Pilipinas Shell Petroleum Corp. The shift in position was without the knowledge and consent of BIR Commissioner Joel Tan-Torres.

The government, through the BOC, wants Shell to pay P7.34 billion in unpaid excise taxes and VAT on its unleaded gas importations from 2004 to 2009. Tan-Torres upheld the position of the BOC in a Dec. 15, 2009 ruling. The case is now pending with the CTA.

It will be recalled that in April of this year, the BOC, the BIR, and the OPARE called for Acosta’s voluntary inhibition from the Shell case, based on the latter’s professional relationship with Shell. Acosta served as tax counsel for Shell from 1975 to 1981.

Thus, in April 7, 2010, the BOC, through the Office of the Solicitor General (OSG), filed with the CTA a motion for voluntary inhibition of Acosta.

On the same date, a joint press conference was even held at the BIR Regional Office No. 8 in Makati City by officials of the BIR, the BOC, and the OPARE. BIR officials reiterated their calls for Acosta’s voluntary inhibition from the case during the press conference.

Acosta voluntarily inhibited himself from the Shell case on April 30, 2010.

However, in a move that shocked officials of the BIR, the BOC, and the OPARE, BIR special attorneys Felix Paul R. Velasco III and Jason C. Torres filed a manifestation with motion for reconsideration praying for Acosta to reconsider his voluntary inhibition. This was done without the knowledge and authority of Tan-Torres.

According to the BIR lawyers, “the Honourable Presiding Justice, in an act of sacrifice, inhibited himself where there was no reason to do so.”

The motion included the names of Solicitor General Alberto C. Agra and BIR Special Attorney Claro B. Ortiz as unsigned signatory. The motion was filed without the knowledge and consent of Agra. It appears that he was included in the motion, even though he did not sign it, to make it appear that the motion was filed with his consent.