MANILA, Philippines — The Court of Tax Appeals has affirmed the dismissal of the Bureau of International Revenue's P2.9-billion tax assessment against former president and incumbent Manila Mayor Joseph Estrada in connection with his supposed Jose Velarde bank account.

In a 21-page decision promulgated on October 19, the CTA en banc junked the BIR's petition for review on the CTA Second Division's Nov. 23, 2015 ruling dismissing the bureau's assessment that Estrada and his wife Luisa “Loi” Ejercito-Estrada have tax liabilities amounting P2,905,048,539.58.

The CTA, sitting in full court, concurred with its Second Division's ruling that the BIR failed to substantiate its tax assessment against the Estrada couple with any supporting documents or evidence, thus, its enforcement would violate the taxpayer's “right to due process.”

“Between the power of the State to tax and an individual's right to due process, the scale favors the right of the taxpayer to due process,” the decision penned by Associate Justice Esperanza Fabon-Victorino read.

“To repeat, due process requires that taxpayers be informed in writing of the facts and laws on which the assessment is based in order to aid the taxpayer in making a reasonable protest,” the CTA added.

The decision had the concurrence of Associate Justices Roman del Rosario, Juanito Castañeda Jr., Lovell Bautista, Erlinda Uy, Caesar Casanova, Ma. Belen Ringpis-Liban and Catherine Manahan.

The BIR's tax assessment against the Estrada couple was made in 2001 under the bureau's then-commissioner Lilian Hefti.

It stemmed from the revelation of Equitable PCI bank representative Clarissa Ocampo during Estrada's impeachment trial in 2000 that the latter opened a bank account under the name Jose Velarde. The bank account supposedly contained about P3.2 billion at one point.

The Jose Velarde account was one of the many pieces of evidence that the government used in filing criminal charges against Estrada before the anti-graft court Sandiganbayan.

In September 2007, the Sandiganbayan special division handed down a guilty verdict against Estrada for plunder, but then President Gloria Macapagal-Arroyo pardoned him the following month and restored his “full civil and political rights.”

In its decision, the CTA en banc said the BIR's assessment was "void and without any legal effect" as instead of submitting relevant records of its supposed independent tax investigation against the Estrada couple, the BIR's assessment was “anchored solely” on the Sandiganbayan's decision.

The CTA pointed out that the Sandiganbayan decision involves different issues as what the prosecution was proving in Estrada's plunder case was his amassing of ill-gotten wealth and not his supposed tax deficiencies.

Furthermore, the CTA said the BIR did not even present the Sandiganbayan decision as evidence in its tax case against the Estrada couple.

“Let it be stressed that only evidence presented and formally offered in evidence will be considered in the resolution of the case,” the CTA said.

The tax court also found no merit in the BIR's claim that an independent tax audit investigation was conducted by its revenue officers (ROs).

The court noted that one of the witnesses BIR lawyer Jose Edimar Jaen even admitted during the trial that he did not conduct any accounting work as the bureau already “took judicial notice” of the Sandiganbayan decision.

“However, the record is bereft of any indication which could at the very least give some hints that an actual audit or investigation was conducted by the assigned ROs to determine whether respondents indeed had undeclared income which must be assessed [as] deficiency taxes and whether the said undeclared income pertain to the monies in the Velarde bank accounts,” the CTA en banc decision read.