Gov’t loses P59.7-M tax credit scam cases

MANILA, Philippines - The government has lost its P59.7-million cases against importers allegedly involved in the multibillion-peso tax credit scam.

The Supreme Court (SC) affirmed the dismissal of two collection cases filed by the Bureau of Customs (BOC) with the Manila regional trial court (RTC) reportedly due to failure of the Office of the Solicitor General to attend hearings.

The high court, according to its public information office, reversed a 2008 ruling of the Court of Appeals (CA) that reversed the Manila RTC ruling dismissing the cases in July 2006.

The SC held the Manila RTC was correct in dismissing the case on technical ground.

“Despite several opportunities granted by the Manila RTC to the government lawyers, they repeatedly failed to attend the pre-trial hearings. In this jurisdiction, pre-trial is way more than simple marking of evidence. Hence, it should not be ignored or neglected, as the government lawyers had,” the SC said.

The high court stressed the CA had committed an error in entertaining the petition for certiorari filed by the government.

“Under the Rules of Court, a dismissal due to failure to appear at the pre-trial has the same effect as a judgment on the substance of the case. The proper procedure therefore would have been to file an ordinary appeal to the CA, instead of resorting to extraordinary writ of certiorari,” the SC said.

The SC, however, clarified that while the cases should be dismissed, the government may refile them in court, considering the importance of the tax cases.

The first case involved the collection of over P6 million in taxes from Chiat Sing Cardboard, Filstar Textile Corp. and Faustino and Gloria Chingkoe.

The second involved the collection of more than P53 million in taxes from Filstar Textile Corp., the Chingkoe couple, Dominador Garcia, Amalia Anunciacion, Jose Pea, Grace Chingkoe and Napoleon Viray.

The BOC accused them of using fraudulent tax credit certificates to pay customs duties and taxes.

Faustino Chingkoe is facing several cases for his alleged involvement in a multi-billion-peso tax credit scam, which involved the issuance and use of fraudulent tax credit certificates.

Such certificates are granted to export firms that are entitled to duty-free privileges or to those that have tax refunds coming and which could be used to pay tax obligations.

The Manila RTC dismissed the cases because of the failure of the OSG lawyers to appear in court for the pre-trial conference.