G.R. No. 205045 : January 25, 2017

FACTS: Virgilio S. De Guzman, San Miguel Corporation’s Former Assistant Vice President for Finance, wrote the Bureau of Internal Revenue to request the registration of and authority to manufacture “San Mig Light.” This request was granted. Alfredo R. Villacorte, San Miguel Corporation’s Vice President and Manager of the Group Tax Services, wrote the Bureau of Internal Revenue to request information on the tax rate and classification of “San Mig Light” and another beer product named “Gold Eagle King.” The BIR confirmed that based on the submitted documents, San Miguel Corporation was allowed to register, manufacture, and sell “San Mig Light” as a new brand, had been paying its excise tax for a considerable length of time, and that the tax classification and rate of “San Mig Light” as a new brand were in order. However, issued a Notice of Discrepancy against San Miguel Corporation. The Notice stated that “San Mig Light” was a variant of its existing beer products, the San Miguel Pale Pilsen, and must, therefore, be subjected to the higher excise tax rate for variants. San Miguel filed a Protest/Request for Reconsideration but they were denied. San Miguel Corporation filed before the Court of Tax Appeals Petitions for Review, docketed as CTA Case Nos. 7052 and 7053, assailing the denials of its Protest/Request for Reconsiderations of the deficiency excise tax assessments. The Court of Tax Appeals granted the motion. Thereafter, the Commissioner filed a Motion for Reconsideration with Motion for Production of Documents praying that San Miguel Corporation be compelled to produce the following: (a) “Kaunlaran” publication for the months of October 1999 and January 2000; (b) 1999 Annual Report to stockholders; and (c) copies of the video footage of two (2) San Mig Light commercials as seen in its website. The Commissioner claimed “that the admission of said documents would lead to a better illumination of the outcome of the case but said motion was denied.

ISSUE: Whether the motion for production of documents and objects filed by the Commissioner of Internal Revenue may be availed of after the court has rendered judgment? No.

HELD: NO. The scope of discovery must be liberally construed, as a general rule, to serve its purpose of providing the parties with essential information to reach an amicable settlement or to expedite trial. Rule 27, Section 1 of the Rules of Court does not provide when the motion may be used. Hence, the allowance of a motion for production of document rests on the sound discretion of the court where the case is pending, with due regard to the rights of the parties and the demands of equity and justice. In this case, petitioner filed its Motion for Production of Documents after the Court of Tax Appeals Division had rendered its judgment. According to the Court of Tax Appeals Division, the documents sought to be produced were already discussed in the Commissioner’s Memorandum dated October 21, 2010 and were already considered by the tax court when it rendered its Decision. Under these circumstances, there was indeed no further need for the production of documents and objects desired by petitioner. These pieces of evidence could have served no useful purpose. On the contrary, the production of those documents after judgment defeats the purpose of modes of discovery in expediting case preparation and shortening trials. The court find no reversible error on the part of the Court of Tax Appeals En Banc in affirming the Division’s denial of petitioner’s Motion for Production of Documents.

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