Court dismisses Mighty Corp’s petition to stop BOC warehouse raids in Pampanga

The Manila City Regional Trial Court (RTC) dismissed the petition for preliminary injunction filed by controversial cigarette firm Mighty Corporation to stop the Bureau of Customs (BOC) from conducting raids in its warehouse in Pampanga. (Photo: Bureau of Customs PH/ Facebook)

MANILA–The Manila City Regional Trial Court (RTC) dismissed the petition for preliminary injunction filed by controversial cigarette firm Mighty Corporation to stop the Bureau of Customs (BOC) from conducting raids in its warehouse in Pampanga.

Presiding Judge Noli C. Diaz of the Manila RTC Branch 39 issued a 13-page resolution dated March 23, 2017 that Mighty Corp.’s petition for the writ of preliminary injunction should be dismissed for lack of jurisdiction.

The case stemmed from a complaint filed by Mighty Corp. assailing the Mission Order and Letter of Authority issued by Customs Commissioner Nicanor E. Faeldon for the purpose of “inspecting the warehouse facilities of the plaintiff (Mighty Corp.) inside San Simon Industrial Park, Quezon Road, San Simon, Pampanga.”

Mighty Corp. was earlier granted with a 20-day restraining order (TRO), from March 3-23, 2017 by Manila RTC Branch 1 Judge Tita B. Alisuag, putting a halt on warehouse investigations by the BOC

The BOC then filed an administrative case against Alisuag prompting her to inhibit from the case.

The case was then re-raffled to the sala of Diaz who said that the RTC “are limited to acts committed or to be committed within its territorial jurisdiction”.

He added that Mighty should have also observed the doctrine of exhaustion of administrative remedies by going first to the Department of Finance (DOF) to question BOC’s mission order instead of going straight to the court.

“…Courts cannot or will not determine a controversy involving a question which is within the jurisdiction of the administrative tribunal where the question demands the exercise of sound administrative discretion requiring the special knowledge, experience and services of the administrative tribunal to determine technical and intricate matters of fact,” the court said.

The court pointed out “the objective of the doctrine of primary jurisdiction is to guide the court in determining whether it should refrain from exercising its jurisdiction until after an administrative agency has determined some question or some aspect of some question arising in the proceeding before the court.”

“[T]he issuance of the Mission Order (MO) by the Commissioner of Customs and the Letter of Authority issued by the Revenue Officers of the Bureau of Internal Revenue if done arbitrarily can still be reviewed by the Secretary of Finance as head of the Department of Finance where both the [BOC] and the [BIR] belong under the principle of exhaustion of administrative remedies and not necessarily to the courts,” the Court added.

Last Wednesday, the Bureau of Internal Revenue (BIR) filed a complaint before the Department of Justice against cigarette firm Mighty Corporation for its failure to pay an estimated aggregate deficiency excise tax liability in the total amount of PHP9.564 billion.

In its complaint affidavit, among those who were charged by the BIR were retired AFP deputy chief of staff Edilberto Adan who is now the company’s president; retired Judge Oscar Barrientos, executive vice president; Alexander Wongchuking, vice president for external affairs and assistant corporate secretary and Ernesto Victa, treasurer.

The complaints of unlawful possession of articles subject to excise tax without payment of tax and of possessing false, counterfeit, restored or altered stamps in violation of Sections 263 and 265(c) of the National Internal Revenue Code of 1997 were received by Senior Assistant State Prosecutor Susan Dacanay, chairperson of the DOJ’s Run After Tax Evaders (RATE) Task Force.

The BIR said the corporation was the subject of an on-the-spot surveillance operations of untaxed cigarette products and that when investigating officers from its regional unit in Central Luzon entered four warehouses leased by the corporation and conducted random test of 10 master cases of cigarette stores in the said warehouses, it showed that the stamps used are fake and subsequently confiscated.

For his part, Wongchuking’s lawyer Atty. Philip Sigfrid Fortun said the company welcomes the BIR complaint and that they will continues to cooperate with the government.

“The company welcomes the filing by the BIR of the complaint as it provides us an opportunity to clear our names and show we violated no tax laws. We will continue to cooperate with government in its continuing effort at tax collection,” Fortun said in statement.

Earlier, Justice Secretary Vitaliano Aguirre II said Mighty Corporation gave in to President Rodrigo Duterte’s offer to pay PHP3 billion to settle its excise tax liabilities.

He noted that Mighty Corporation has accepted the challenge of President Duterte to pay at least PHP3 billion as settlement for its excise tax liabilities.

Aguirre said the Office of the President has received Wongchuking’s letter signifying his willingness to pay the amount which will be used for the construction of hospitals in Basilan and Jolo, Sulu as well as the improvement of the Mary Johnston Hospital in Manila.

Aguirre also ordered the National Bureau of Investigation to build up the case against the controversial tobacco firm.

He said the DoJ would also issue lookout bulletin order against other executives of the tobacco firm after issuing earlier a similar order against the firm’s owner Alex Wongchuking.