G.R. Nos.

L-48134-37October 18, 1990

EMILIO E. LIM, SR. and AN ONIA S!N LIM, "et#t#oners, $s. %O!R O& A''EALS and 'EO'LE O& (E '(ILI''INES, res"ondents.

Sant#a)o, &orn#er, #n)a * Assoc#ates +or "et#t#oners.

&ERNAN, %.,.-

.e #nstant "et#t#on +or re$#e/ on cert#orar# see0s t.e re$ersa1 o+ t.e %o2rt o+ A""ea1s dec#s#on dated Se"te3ber 1, 1977 /.#c. a++#r3ed #n toto t.e 42d)3ents o+ t.e t.en %o2rt o+ &#rst Instance o+ Man#1a, 5ranc. 6I #n +o2r 748 %r#3#na1 cases const#t2ted b9 t.e 52rea2 o+ Interna1 Re$en2e a)a#nst "et#t#oners. 1

.e +acts as +o2nd b9 t.e tr#a1 co2rt and a++#r3ed b9 t.e A""e11ate %o2rt are s2bstant#a119 as +o11o/s-

'et#t#oner s"o2ses E3#1#o E. L#3, Sr. and Anton#a S2n L#3, /#t. b2s#ness address at No. 33: N2e$a Street, Man#1a, /ere en)a)ed #n t.e dea1ers.#" o+ $ar#o2s .o2se.o1d a""1#ances .e9 +#1ed #nco3e ta; ret2rns +or t.e 9ears 19<8 and 19<9.

On October <, 19<9, a ra#d /as cond2cted at t.e#r b2s#ness address b9 t.e Nat#ona1 52rea2 o+ In$est#)at#on b9 $#rt2e o+ a searc. /arrant #ss2ed b9 ,2d)e =ences1ao L. %orne4o o+ t.e %#t9 %o2rt o+ Man#1a. A s#3#1ar ra#d /as 3ade on "et#t#oners> "re3#ses at 111 1?t. Street, @2eAon %#t9. Se#Aed +ro3 t.e L#3 co2"1e /ere b2s#ness and acco2nt#n) records /.#c. ser$ed as bases +or an #n$est#)at#on 2nderta0en b9 t.e 52rea2 o+ Interna1 Re$en2e 75IR8.

On October 14, 19:0, t.e %.#e+ o+ t.e In$est#)at#on B#$#s#on o+ t.e 5IR #n+or3ed "et#t#oners t.at re$en2e e;a3#ners .ad been a2t.or#Aed to e;a3#ne t.e#r boo0s o+ acco2nt.

On Se"te3ber 30, 19:4 Sen#or Re$en2e E;a3#ner Ra".ae1 S. Baet s2b3#tted a 3e3orand23 /#t. t.e +#nd#n)s t.at t.e #nco3e ta; ret2rns +#1ed b9 "et#t#oners +or t.e 9ears 19<8 and 19<9 /ere +a1se or +ra2d21ent. Baet reco33ended t.at an assess3ent o+ '83<,1?7.00 be 3ade a)a#nst t.e "et#t#oners.

Accord#n)19, on A"r#1 7, 19:<, t.en Act#n) %o33#ss#oner o+ t.e 5IR, 5en4a3#n M. ab#os #n+or3ed "et#t#oners t.at t.ere /as d2e +ro3 t.e3 t.e a3o2nt o+ '9??,913.04 as de+#c#enc9 #nco3e ta;es +or 19<8 and 19<9, )#$#n) t.e3 2nt#1 Ma9 7, 19:< to "a9 t.e a3o2nt.

On A"r#1 10, 19:<, "et#t#oner E3#1#o E. L#3, Sr., reC2ested +or a re#n$est#)at#on. .e 5IR e;"ressed /#11#n)ness to )rant s2c. reC2est b2t on cond#t#on t.at /#t.#n ten da9s +ro3 not#ce, L#3 /o21d acco3"1#s. a /a#$er o+ de+ense o+ "rescr#"t#on 2nder t.e Stat2te o+ L#3#tat#ons and t.at one .a1+ o+ t.e de+#c#enc9 #nco3e ta; /o21d be de"os#ted /#t. t.e 5IR and t.e ot.er .a1+ sec2red b9 a s2ret9 bond. I+ /#t.#n t.e ten-da9 "er#od t.e 5IR d#d not .ear +ro3 "et#t#oners, t.en #t /o21d be "res23ed t.at t.e reC2est +or re#n$est#)at#on .ad been abandoned.

'et#t#oner E3#1#o E. L#3, Sr. re+2sed to co3"19 /#t. t.e abo$e cond#t#ons and re#terated .#s reC2est +or anot.er #n$est#)at#on.

On ,an2ar9 31, 19:7, t.e 5IR %o33#ss#oner #n+or3ed "et#t#oners t.at t.e#r de+#c#enc9 #nco3e ta; 1#ab#1#t#es +or 19<8 and 19<9 .ad been assessed at '934,000.<4 #nc12d#n) #nterest and co3"ro3#se "ena1t9 +or 1ate "a93ent. 'et#t#oners /ere )#$en 2nt#1 Marc. 7, 19:7 to s2b3#t t.e#r ob4ect#ons /#t. t.e ad3on#t#on t.at #+ t.e9 +a#1ed to do so, #t /o21d be ass23ed t.at t.e9 /ere a)reeab1e to t.e assess3ent and a +or3a1 de3and /o21d #ss2e.

On Marc. 1<, 19:7, "et#t#oners /rote t.e 5IR to "rotest t.e 1atest assess3ent and re"eated t.e#r reC2est +or a re#n$est#)at#on.

On October 10, 19:7, t.e 5IR rendered a +#na1 dec#s#on .o1d#n) t.at t.ere /as no ca2se +or re$ersa1 o+ t.e assess3ent a)a#nst t.e L#3 co2"1e. 'et#t#oners /ere reC2#red to "a9 de+#c#enc9 #nco3e ta;es +or 19<8 and 19<9 a3o2nt#n) to '1,?37,190.<< #nc12s#$e o+ #nterest, s2rc.ar)es

and co3"ro3#se "ena1t9 +or 1ate "a93ent. .e +#na1 not#ce and de3and +or "a93ent /as ser$ed on "et#t#oners t.ro2). t.e#r da2).ter-#n-1a/ on ,219 3, 19:8.

St#11, no "a93ent /as +ort.co3#n) +ro3 t.e de1#nC2ent ta;"a9ers. Accord#n)19 on Se"te3ber 1, 19:9, t.e 3atter /as re+erred b9 t.e 5IR to t.e Man#1a &#sca1>s O++#ce +or #n$est#)at#on and "rosec2t#on. On ,2ne ?3, 1970, +o2r 748 se"arate cr#3#na1 #n+or3at#ons /ere +#1ed a)a#nst "et#t#oners #n t.e t.en %o2rt o+ &#rst Instance o+ Man#1a, 5ranc. 6I +or $#o1at#on o+ Sect#ons 4< and <1 #n re1at#on to Sect#on 73 o+ t.e Nat#ona1 Interna1 Re$en2e %ode. ? r#a1 ens2ed. On A2)2st 19, 197<, t.e tr#a1 co2rt rendered t/o 7?8 4o#nt dec#s#ons +#nd#n) "et#t#oners )2#1t9 as c.ar)ed. .e d#s"os#t#$e "ort#ons read-

In %r#3#na1 %ases Nos. 1789 and 1788-

=(ERE&ORE, #n $#e/ o+ t.e +ore)o#n) cons#derat#ons, t.e %o2rt +#nds t.e acc2sed E3#1#o E. L#3, Sr. and Anton#a S2n L#3 )2#1t9 o+ a $#o1at#on o+ Sect#on <1 "ena1#Aed 2nder Sect#on 73 o+ t.e Nat#ona1 Interna1 Re$en2e %ode and eac. #s .ereb9 sentenced #n eac. case to "a9 a +#ne o+ '?,000.00 and to "a9 t.e )o$ern3ent "2rs2ant to 'res#dent#a1 No. :9 t.e a3o2nts o+ '<80,<88.7< and ':<:,:01.80 as de+#c#enc9 #nco3e ta;es +or t.e 9ears 19<8 and 19<9, res"ect#$e19, and t.e costs o+ t.e "roceed#n)s. 3

In %r#3#na1 %ases Nos. 1790 and 1791-

=(ERE&ORE, #n $#e/ o+ t.e +ore)o#n) cons#derat#ons, t.e %o2rt +#nds t.e acc2sed E3#1#o E. L#3, Sr. and Anton#a S2n L#3 )2#1t9 o+ a $#o1at#on o+ Sect#on 4< #n re1at#on to Sect#on 33? o+ t.e Nat#ona1 Interna1 Re$en2e %ode as a3ended, "ena1#Aed 2nder Sect#on 73 o+ t.e sa3e %ode and .ereb9 sentences eac. to "a9 a +#ne o+ '4,000.00 #n eac. case and t.e costs o+ t.e "roceed#n)s. 4

'et#t#oners a""ea1ed t.e +ore)o#n) dec#s#ons to t.e %o2rt o+ A""ea1s. < In #ts 42d)3ent dated Se"te3ber 1, 1977, t.e %o2rt o+ A""ea1s a++#r3ed #n toto t.e t/#n dec#s#ons o+ t.e 1o/er co2rt. /ent9-t.ree da9s 7?38 1ater or on Se"te3ber ?4, 1977, "et#t#oner E3#1#o E. L#3, Sr. d#ed.

On Se"te3ber ?:, 1977, "et#t#oners 3o$ed +or a recons#derat#on o+ t.e dec#s#on dated Se"te3ber 1, 1977. On A"r#1 4, 1978, t.e %o2rt o+ A""ea1s "ro321)ated a reso12t#on as +o11o/s-

=(ERE&ORE, "2rs2ant to Art#c1e 89 o+ t.e Re$#sed 'ena1 %ode, b9 t.e deat. o+ a""e11ant E3#1#o E. L#3, Sr. .#s cr#3#na1 1#ab#1#t9 #s tota119 e;t#n)2#s.ed b2t .#s co2nse1 #s .ereb9 reC2#red to #n+or3 t.e %o2rt as to /.o are t.e .e#rs o+ t.e deceased +o11o/#n) /.#c. t.e ca"t#on s.o21d be 3od#+#ed so as to re+1ect t.e c#$#1 as"ect and s2bst#t2t#on o+ t.e .e#rs, as de+endants. In a11 ot.er res"ects, t.e dec#s#on o+ t.#s %o2rt "ro321)ated Se"te3ber 1, 1977, stands. :

(ence t.e "resent "et#t#on +or re$#e/ b9 cert#orar#.

In t.e#r 5r#e+, "et#t#oners contend t.at t.e A""e11ate %o2rt erred #n .o1d#n) t.at t.e o++enses c.ar)ed #n %r#3#na1 %ase Nos. 1790 and 1791 "rescr#bed #n ten 7108 9ears, #nstead o+ +#$e 7<8 9earsD t.at t.e "rescr#"t#$e "er#od #n %r#3#na1 %ases Nos. 1788 and 1789 co33enced to r2n on19 +ro3 ,219 3, 19:8, t.e date o+ t.e +#na1 assess3entD t.at Sect#on 31: o+ t.e a; %ode as a3ended b9 'res#dent#a1 Becree No. :9 /as a""1#cab1e to t.e case at barD and t.at t.e c#$#1 ob1#)at#on o+ "et#t#oner E3#1#o E. L#3, Sr. ar#s#n) +ro3 t.e cr#3es c.ar)ed /as not e;t#n)2#s.ed b9 .#s deat.. 7

're1#3#nar#19, #t 32st be 3ade c1ear t.at /.at /e are dea1#n) .ere are cr#3#na1 "rosec2t#ons +or +#1#n) +ra2d21ent #nco3e ta; ret2rns and +or re+2s#n) to "a9 de+#c#enc9 ta;es. .e )o$ern#n) "ena1 "ro$#s#on o+ t.e Nat#ona1 Interna1 Re$en2e %odes 8 #s Sect#on 73 #n con42nct#on /#t. Sect#on 3<4. .e d#s"2te centers on t.e #nter"retat#on o+ Sect#on 3<4 beca2se #n an e++ort to e;c21"ate t.e3se1$es, "et#t#oners .a$e ra#sed t.e de+ense o+ "rescr#"t#on. On t.e +#$e-9ear "rescr#"t#$e "er#od, bot. "art#es are #n a)ree3ent. .e9 d#++er .o/e$er #n t.e 3anner o+ co3"2tat#on, s"ec#+#ca119 as to /.en t.e "er#od s.o21d co33ence. .2s-

Sect#on 73. 'ena1t9 +or +a#12re to +#1e ret2rn or to "a9 ta;. E An9one 1#ab1e to "a9 t.e ta;, to 3a0e a ret2rn or to s2""19 #n+or3at#on reC2#red 2nder t.#s %ode, /.o re+2ses or ne)1ects to "a9 s2c. ta;, to 3a0e s2c. ret2rn or to s2""19 s2c. #n+or3at#on at t.e t#3e or t#3es .ere#n s"ec#+#ed #n eac. 9ear, s.a11 be "2n#s.ed b9 a +#ne o+ not 3ore t.an t/o t.o2sand "esos or b9 #3"r#son3ent +or not 3ore t.an s#; 3ont.s, or bot..

An9 #nd#$#d2a1 or an9 o++#cer o+ an9 cor"orat#on, or )enera1 co-"artners.#" ..., reC2#red b9 1a/ to 3a0e, render, s#)n or $er#+9 an9 ret2rn or to s2""19 an9 #n+or3at#on, /.o 3a0es an9 +a1se or +ra2d21ent ret2rn or state3ent /#t. #ntent to de+eat or e$ade t.e assess3ent reC2#red b9 t.#s %ode to be 3ade, s.a11 be "2n#s.ed b9 a +#ne o+ not e;ceed#n) +o2r t.o2sand "esos or b9 #3"r#son3ent +or not e;ceed#n) one 9ear, or bot..

Sect#on 3<4. 'rescr#"t#on +or $#o1at#ons o+ an9 "ro$#s#ons o+ t.#s %ode. E A11 $#o1at#ons o+ an9 "ro$#s#on o+ t.#s %ode s.a11 "rescr#be a+ter +#$e 9ears.

'rescr#"t#on s.a11 been to r2n +ro3 t.e da9 o+ t.e co33#ss#on o+ t.e $#o1at#on o+ t.e 1a/, and #+ t.e sa3e be not 0no/n at t.e t#3e, +ro3 t.e d#sco$er9 t.ereo+ and t.e #nst#t2t#on o+ 42d#c#a1 "roceed#n) +or #ts #n$est#)at#on and "2n#s.3ent.

.e "res23"t#on s.a11 be #nterr2"ted /.en "roceed#n)s are #nst#t2ted a)a#nst t.e )2#1t9 "ersons and s.a3 be)#n to r2n a)a#n #+ t.e "roceed#n)s are d#s3#ssed +or reasons not const#t2t#n) 4eo"ard9.

.e ter3 o+ "rescr#"t#on s.a11 not r2n /.en t.e o++ender #s absent +ro3 t.e '.#1#""#nes. 7E3".as#s s2""1#ed8

Ind2b#tab19, "et#t#oners .ad +#1ed +a1se and +ra2d21ent #nco3e ta; ret2rns +or t.e 9ears 19<8 and 19<9 b9 nond#sc1os2re o+ sa1es #n t.e a))re)ate a3o2nt o+ '?,197,74?.9?, t.ereb9 de"r#$#n) t.e Go$ern3ent #n t.e a3o2nt o+ '1,?37,190.<<, re"resent#n) de+#c#enc9 #nco3e ta;es #nc12s#$e o+ #nterest, s2rc.ar)es and co3"ro3#se "ena1t9 +or 1ate "a93ent. %ons#der#n) t.at t.#s occ2rred #n t.e 1ate 19<0>s, t.e de+ra2dat#on /as on a 3ass#$e sca1e.

Re1at#$e to %r#3#na1 %ases Nos. 1788 and 1789 /.#c. #n$o1$ed "et#t#oners> re+2sa1 to "a9 t.e de+#c#enc9 #nco3e ta;es d2e, a)a#n bot. "art#es are #n accord t.at b9 t.e#r nat2re, t.e $#o1at#ons as c.ar)ed co21d on19 be co33#tted a+ter ser$#ce o+ not#ce and de3and +or "a93ent o+ t.e de+#c#enc9 ta;es 2"on t.e ta;"a9ers. 'et#t#oners 3a#nta#n t.at t.e +#$e-9ear "er#od o+ 1#3#tat#on 2nder Sect#on 3<4 s.o21d be rec0oned +ro3 A"r#1 7, 19:<, t.e date o+ t.e or#)#na1 assess3ent /.#1e t.e Go$ern3ent #ns#sts t.at #t s.o21d be co2nted +ro3 ,219 3, 19:8 /.en t.e +#na1 not#ce and de3and /as ser$ed on "et#t#oners> da2).ter-#n-1a/.

=e .o1d +or t.e Go$ern3ent. Sect#on <1 7b8 o+ t.e a; %ode "ro$#des-

7b8 Assess3ent and "a93ent o+ de+#c#enc9 ta;. E A+ter t.e ret2rn #s +#1ed, t.e %o33#ss#oner o+ #nterna1 Re$en2e s.a11 e;a3#ne #t and assess t.e correct a3o2nt o+ t.e ta;.

.e ta; or de+#c#enc9 #n ta; so d#sco$ered s.a11 be "a#d 2"on not#ce and de3and +ro3 t.e %o33#ss#oner o+ Interna1 Re$en2e. 7E3".as#s s2""1#ed8

Inas32c. as t.e +#na1 not#ce and de3and +or "a93ent o+ t.e de+#c#enc9 ta;es /as ser$ed on "et#t#oners on ,219 3, 19:8, #t /as on19 t.en t.at t.e ca2se o+ act#on on t.e "art o+ t.e 5IR accr2ed. .#s #s so beca2se "r#or to t.e rece#"t o+ t.e 1etter-assess3ent, no $#o1at#on .as 9et been co33#tted b9 t.e ta;"a9ers. .e o++ense /as co33#tted on19 a+ter rece#"t /as co2"1ed /#t. t.e /#1+21 re+2sa1 to "a9 t.e ta;es d2e /#t.#n t.e a11oted "er#od. .e t/o cr#3#na1 #n+or3at#ons, .a$#n) been +#1ed on ,2ne ?3, 1970, are /e11-/#t.#n t.e +#$e-9ear "rescr#"t#$e "er#od and are not t#3e-barred.

=#t. re)ard to %r#3#na1 %ases Nos. 1790 and 1791 /.#c. dea1t /#t. "et#t#oners> +#1#n) o+ +ra2d21ent conso1#dated #nco3e ta; ret2rns /#t. #ntent to e$ade t.e assess3ent decreed b9 1a/, "et#t#oners contend t.at t.e sa#d cr#3es .a$e 1#0e/#se "rescr#bed. .e9 ad$ance t.e $#e/ t.at t.e +#$e-9ear "er#od s.o21d be co2nted +ro3 t.e date o+ d#sco$er9 o+ t.e a11e)ed +ra2d /.#c., at t.e 1atest, s.o21d .a$e been October 1<, 19:4, t.e date stated b9 t.e A""e11ate %o2rt #n #ts reso12t#on o+ A"r#1 4, 1978 as t.e date t.e +ra2d21ent nat2re o+ t.e ret2rns /as 2neart.ed. 9

On be.a1+ o+ t.e Go$ern3ent, t.e So1#c#tor Genera1 co2nters t.at t.e cr#3e o+ +#1#n) +a1se ret2rns can be cons#dered Fd#sco$eredF on19 a+ter t.e 3anner o+ co33#ss#on, and t.e nat2re and e;tent o+ t.e +ra2d .a$e been de+#n#te19 ascerta#ned. It /as on19 on October 10, 19:7 /.en t.e 5IR rendered #ts +#na1 dec#s#on .o1d#n) t.at t.ere /as no )ro2nd +or t.e re$ersa1 o+ t.e assess3ent and t.ere+ore reC2#red t.e "et#t#oners to "a9 '1,?37,190.<< #n de+#c#enc9 ta;es t.at t.e ta; #n+ract#ons /ere d#sco$ered.

Not on19 t.at. .e So1#c#tor Genera1 stresses t.at Sect#on 3<4 s"ea0s not on19 o+ d#sco$er9 o+ t.e +ra2d b2t a1so #nst#t2t#on o+ 42d#c#a1 "roceed#n)s. Note t.e con42nct#$e /ord FandF bet/een t.e ".rases Ft.e d#sco$er9 t.ereo+F and Ft.e #nst#t2t#on o+ 42d#c#a1 "roceed#n)s +or #ts #n$est#)at#on and "roceed#n)s.F In ot.er /ords, #n add#t#on to t.e +act o+ d#sco$er9, t.ere 32st be a 42d#c#a1 "roceed#n) +or t.e #n$est#)at#on and "2n#s.3ent o+ t.e ta; o++ense be+ore t.e +#$e9ear 1#3#t#n) "er#od be)#ns to r2n. It /as on Se"te3ber 1, 19:9 t.at t.e o++enses s2b4ect o+ %r#3#na1 %ases Nos. 1790 and 1791 /ere #ndorsed to t.e &#sca1>s O++#ce +or "re1#3#nar9 #n$est#)at#on. Inas32c. as a "re1#3#nar9 #n$est#)at#on #s a "roceed#n) +or #n$est#)at#on and "2n#s.3ent o+ a cr#3e, #t /as on19 on Se"te3ber 1, 19:9 t.at t.e "rescr#"t#$e "er#od co33enced.

52t accord#n) to t.e L#3 s"o2ses, t.at ar)23ent .ad "rec#se19 been ra#sed, cons#dered and +o2nd /#t.o2t 3er#t #n t.e case o+ 'eo"1e $s. %.#n) La0 10 /.#c. .ad "er+2nctor#19 d#s3#ssed t.e Go$ern3ent>s "os#t#on #n t.#s /#se-

Anent t.e t.eor9 t.at #n t.e "resent case t.e "er#od o+ "rescr#"t#on s.o21d co33ence +ro3 t.e t#3e t.e case /as re+erred to t.e &#sca1>s O++#ce, s2++#ce #t to state t.at t.e t.eor9 #s not s2""orted b9 an9 "ro$#s#on o+ 1a/ and /e need not e12c#date t.ereon. 7E3".as#s s2""1#ed8.

.e %o2rt #s #nc1#ned to ado"t t.e $#e/ o+ t.e So1#c#tor Genera1. &or /.#1e t.at "art#c21ar "o#nt 3#).t .a$e been ra#sed #n t.e %.#n) La0 case, t.e %o2rt, at t.at t#3e, d#d not )#$e a de+#n#t#$e r21#n) /.#c. /o21d .a$e sett1ed t.e C2est#on once and +or a11. As Sect#on 3<4 stands #n t.e stat2te boo0 7and to t.#s da9 #t .as re3a#ned 2nc.an)ed8 #t /o21d #ndeed see3 t.at ta; cases, s2c. as t.e "resent ones, are "ract#ca119 #3"rescr#"t#b1e +or as 1on) as t.e "er#od +ro3 t.e d#sco$er9 and #nst#t2t#on o+ 42d#c#a1 "roceed#n)s +or #ts #n$est#)at#on and "2n#s.3ent, 2" to t.e +#1#n) o+ t.e #n+or3at#on #n co2rt does not e;ceed +#$e 7<8 9ears.

In t.e case o+ 'eo"1e $s. #erra, 11 t.e sa3e ar)23ent ca3e 2" be+ore t.e %o2rt b2t #ts conc12s#ons on t.e #ss2e o+ "rescr#"t#on d#d not br#n) 2s an9 c1oser to a cate)or#ca1 r21#n). It o"#ned-

E$#dence /as add2ced to s.o/, and t.e tr#a1 co2rt so +o2nd, t.at t.e +a1s#t9 o+ t.e ret2rns +#1ed b9 t.e a""e11ant and .#s +a#12re to "reser$e .#s boo0s o+ acco2nts +or at 1east +#$e 9ears +ro3 t.e date o+ t.e 1ast entr9 #n eac. boo0 /ere a11 d#sco$ered on19 on Bece3ber 1:, 19<0. S#nce t.e #n+or3at#ons /ere +#1ed on Bece3ber 1?, 19<<, t.e tr#a1 co2rt correct19 r21ed t.at t.e act#ons /ere a11 /#t.#n t.e +#$e-9ear "er#od o+ 1#3#tat#on.

A""e11ant ar)2es, .o/e$er, t.at s#nce t.e #n+or3at#ons 3a0e no a11e)at#on t.at t.e o++enses /ere not 0no/n at t.e t#3e o+ t.e co33#ss#on as to br#n) t.e3 /#t.#n t.e e;ce"t#on to t.e stat2te o+ 1#3#tat#ons, t.en t.e #n+or3at#ons /ere necessar#19 de+ect#$e +or t.at reason, and t.#s +ata1 de+ect cannot be c2red b9 t.e #ntrod2ct#on o+ e$#dence. 'rescr#"t#on #s a 3atter o+ de+ense and t.e #n+or3at#on does not need to ant#c#"ate and 3eet #t. .e de+endant co21d, at 3ost, ob4ect to t.e #ntrod2ct#on o+ e$#dence to de+eat .#s c1a#3 o+ "rescr#"t#onD b2t .e d#d not. An9/a9, t.e 1a/ sa9s t.at "rescr#"t#on be)#ns to r2n +ro3 ... Ft.e #nst#t2t#on o+ 42d#c#a1 "roceed#n)s +or #ts ... "2n#s.3ent.F 1? 7E3".as#s s2""1#ed8.

!n1ess a3ended b9 t.e 1e)#s1at2re, Sect#on 3<4 sta9s #n t.e a; %ode as #t /as /r#tten d2r#n) t.e da9s o+ t.e %o33on/ea1t.. And as #t #s, 32st be a""1#ed re)ard1ess o+ #ts a""arent ones#dedness #n +a$or o+ t.e Go$ern3ent. In cr#3#na1 cases, stat2tes o+ 1#3#tat#ons are acts o+ )race, a s2rrender#n) b9 t.e so$ere#)n o+ #ts r#).t to "rosec2te. .e9 rece#$e a str#ct constr2ct#on #n +a$or o+ t.e Go$ern3ent and 1#3#tat#ons #n s2c. cases /#11 not be "res23ed #n t.e absence o+ c1ear 1e)#s1at#on. 13

.e "et#t#on, .o/e$er, #s #3"ressed /#t. 3er#t #nso+ar as #t assa#1s t.e #nc12s#on #n t.e 42d)3ent o+ t.e "a93ent o+ de+#c#enc9 ta;es #n %r#3#na1 %ases Nos. 1788-1789. .e tr#a1 co2rt .ad abso12te19 no 42r#sd#ct#on #n sentenc#n) t.e L#3 co2"1e to #nde3n#+9 t.e Go$ern3ent +or t.e ta;es 2n"a#d. .e 1o/er co2rt erred #n a""19#n) 'res#dent#a1 Becree No. :9, "art#c21ar19 Sect#on 31: t.ereo+, /.#c. "ro$#des t.at F42d)3ent #n t.e cr#3#na1 case s.a11 not on19 #3"ose t.e "ena1t9 b2t s.a11 order "a93ent o+ t.e ta;es s2b4ect o+ t.e cr#3#na1 caseF, beca2se t.at decree too0 e++ect on19 on ,an2ar9 1, 1973 /.ereas t.e cr#3#na1 cases s2b4ect o+ t.#s a""ea1 /ere #nst#t2ted on ,2ne ?3, 1970. Sa$e #n t.e t/o s"ec#+#c #nstances, 'res#dent#a1 Becree No. :9 .as no retroact#$e a""1#cat#on.

In t.e case o+ 'eo"1e $s. #erra, 14 /e re#terated t.e r21#n) #n 'eo"1e $s. Arna21t, 1< t.at t.ere #s no 1e)a1 sanct#on +or t.e #3"os#t#on o+ "a93ent o+ t.e c#$#1 #nde3n#t9 to t.e Go$ern3ent #n a cr#3#na1 "roceed#n) +or $#o1at#on o+ #nco3e ta; 1a/s. .2s-

... =.#1e Sect#on 73 o+ t.e Nat#ona1 Interna1 Re$en2e %ode "ro$#des +or t.e #3"os#t#on o+ t.e "ena1t9 +or re+2sa1 or ne)1ect to "a9 #nco3e ta; or to 3a0e a ret2rn t.ereo+, b9 #3"r#son3ent or +#ne, or bot., #t +a#1s to "ro$#de +or t.e co11ect#on o+ sa#d ta; #n cr#3#na1 "roceed#n)s. As /e11 contended b9 co2nse1 +or a""e11ant, %.a"ters I and II o+ #t1e IG o+ t.e Nat#ona1 Interna1 Re$en2e %ode "ro$#des on19 +or c#$#1 re3ed#es +or t.e co11ect#on o+ t.e #nco3e ta;, and 2nder Sect#on 31:, t.e c#$#1 re3ed9 #s e#t.er b9 d#stra#nt o+ )oods, c.atte1s, etc., or b9 42d#c#a1 act#on. It #s a co33on19 acce"ted "r#nc#"1e o+ 1a/ t.at t.e 3et.od "rescr#bed b9 stat2te +or t.e co11ect#on o+ ta;es #s )enera119 e;c12s#$e, and 2n1ess a contrar9 #ntent be )at.ered +ro3 t.e stat2te, #t s.o21d be +o11o/ed str#ct19. 73 %oo1e9, La/ on a;at#on, Sect#on 13?:, "". :?1-:?38.

!nder t.e c#ted #erra and Arna21t cases, #t #s c1ear t.at cr#3#na1 con$#ct#on +or a $#o1at#on o+ an9 "ena1 "ro$#s#on #n t.e a; %ode does not a3o2nt at t.e sa3e t#3e to a dec#s#on +or t.e "a93ent o+ t.e 2n"a#d ta;es #nas32c. as t.ere #s no s"ec#+#c "ro$#s#on #n t.e a; %ode to t.at e++ect. 1:

%ons#der#n) t.at 2nder Sect#on 31: o+ t.e a; %ode "r#or to #ts a3end3ent t.e tr#a1 co21d not order t.e "a93ent o+ t.e 2n"a#d ta;es as "art o+ t.e sentence, t.e C2est#on o+ /.et.er or not t.e s2"er$en#n) deat. o+ "et#t#oner E3#1#o E. L#3, Sr. .as e;t#n)2#s.ed .#s ta; 1#ab#1#t9 need not concern 2s. (o/e$er, /#t. re)ard to t.e "ec2n#ar9 "ena1t9 o+ +#ne #3"osed on t.e deceased L#3, t.#s #s necessar#19 e;t#n)2#s.ed b9 .#s deat. #n accordance /#t. Sect#on 89 o+ t.e Re$#sed 'ena1 %ode.

In res23e /e t.ere+ore r21e-

1. %r#3#na1 %ases Nos. 1788-1789 and 1790-1791, .a$#n) been #nst#t2ted b9 t.e Go$ern3ent on ,2ne ?3, 1970, are not t#3e-barred "2rs2ant to Sect#on 3<4 o+ t.e Nat#ona1 Interna1 Re$en2e %odeD

?. .e t.en %o2rt o+ &#rst Instance o+ Man#1a, 5ranc. : #s de$o#d o+ 42r#sd#ct#on to d#rect t.e co11ect#on and "a93ent o+ t.e 2n"a#d de+#c#enc9 ta;es #n %r#3#na1 %ase Nos. 1788-1789 beca2se "r#or to t.e a3end3ent #ntrod2ced b9 'res#dent#a1 Becree No. :9, s2c. #3"os#t#on /as not sanct#oned 2nder Sect#on 31:D

3. .e +#ne #3"osed #n t.e +o2r 748 a+ore3ent#oned cr#3#na1 cases #s .ereb9 a++#r3ed #n t.e case o+ "et#t#oner Anton#a S2n L#3 #n accordance /#t. t.e "ro$#s#on o+ Sect#on 73 o+ t.e a; %ode. .e +#ne #s dee3ed e;t#n)2#s.ed #n t.e ease o+ t.e deceased "et#t#oner E3#1#o E. L#3, Sr. "2rs2ant to Sect#on 89 o+ t.e Re$#sed 'ena1 %ode.

=(ERE&ORE, con+or3ab19 /#t. t.e abo$estated r21#n), t.e dec#s#on o+ t.e %o2rt o+ A""ea1s 2nder re$#e/ #s dee3ed MOBI&IEB. No costs