CTA clears 2 PNP suppliers in multi-million-peso tax evasion

The Court of Tax Appeals (CTA) has reversed the decision of one of its division regarding the multi-million tax evasion case of two contractors of the Philippine National Police (PNP).

Instead of guilty verdict, the CTA cleared Tyrone Ong and Arlene Chua, president and treasurer, respectively, of Enviroaire Corporation of Mandaluyong City, of the criminal complaints.

The reason? Their company was not included in the charge sheets as required by the Tax Code.

“The conviction of a corporate entity is a condition for the imposition of penalty upon it’s responsible officers,” the 20-page decision read.

The resolution, written by Associate Justice Maria Rowena Modesto-San Pedro, noted that there was nothing on record that Enviroaire was charged and found guilty of tax evasion.

It said the successful prosecution for tax evasion required the conviction of Enviroaire as it is the one required to pay the tax prescribed under Section 252 of the Tax Code.

It said Section 253 of the Tax Code also specifies the penal liability of a corporate taxpayer on one hand and it’s officers on the other.

Enviroaire was the subject of the congressional investigation during the previous administration for bagging PNP huge contracts for spare parts and repair of it’s light armored vehicles.

The BIR filed the case allegedly due to massive under declaration, reporting gross receipts of only P27.5 million in 2007, instead of P225.7 million received from PNP.