Taxation, 2011 Bar — Question 27

MULTIPLE CHOICE

In January 2011, the BIR issued a ruling that Clemen's vodka imports were not subject to increased excise tax based on his claim that his net retail price was only P200 per 750 milliliter bottle. This ruling was applied to his imports for May, June, and July 2011. In September 2011, the BIR revoked its ruling and assessed him for deficiency taxes respecting his May, June and July 2011 vodka imports because it discovered that his net retail price for the vodka was P250 per bottle from January to September 2011. Does the retroactive application of the revocation violate Clemen's right to due process as a taxpayer? (A) Yes, since the presumption is that the BIR ascertained the facts before it made its ruling. (B) No, because he acted in bad faith when he claimed a lower net retail price than what he actually used. (C) No, since he could avail of remedies available for disputing the assessment. (D) Yes, since he had already acquired a vested right in the favorable BIR ruling.

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