Facts

• On October 25, 2008 Ulysses Palconit Consebido, a registered taxpayer, wilfully failed to file his Quarterly VAT Return for the third quarter of 2008, violating Section 255 in relation to Section 114 of the 1997 NIRC. That is both the due date and the date of commission.
• The BIR investigated his tax compliance. The records from which the violation appears were in the BIR's own custody.
• On January 30, 2014 — more than five years later — the BIR filed a Joint Complaint-Affidavit with the DOJ for preliminary investigation.
• On March 18, 2019 the Information was filed with the CTA Second Division (CTA Crim. Case No. O-701).
• On April 2, 2019 the CTA Second Division dismissed on prescription, reckoning the five-year period under Section 281 from discovery on January 30, 2014, so that it expired January 30, 2019 — before the March 18, 2019 Information. Reconsideration denied May 7, 2019.
• On January 6, 2021 the CTA En Banc affirmed, holding on Lim, Sr. v. Court of Appeals that "the prescriptive period cannot commence and be interrupted at the same time by the institution of judicial proceedings." Reconsideration denied January 5, 2022.
• The People elevated the case by Rule 45. On April 2, 2025 the Supreme Court En Banc denied the petition — and used the occasion to abandon two of its own 2023 doctrines.

Issue

Ruling

"WHEREFORE, the Petition is DENIED. Accordingly, the Decision dated January 6, 2021, and the Resolution dated January 5, 2022 … are hereby AFFIRMED. So ordered."

Ratio

• The Court first untangled the "Lim, Sr. conundrum." Section 281 — like Section 354 of the 1939 NIRC and Section 2 of Act No. 3326§ — runs prescription "from the discovery thereof and the institution of judicial proceedings for its investigation and punishment," which on a literal reading has the period begin and stop at the same moment.
• Following People v. Duque, the offending phrase is cured by construction: it "may be either disregarded as surplusage or should be deemed preceded by the word 'until'" — otherwise "the prescription period would not have effectively begun, having been rendered academic by the simultaneous interruption of that same period."
• Harmonised, the rule is: prescription "shall begin to run from its discovery," and "[t]he institution of proceedings, specifically the commencement of preliminary investigation, shall interrupt" it — "a literal interpretation of the law should be rejected if it would lead to absurd results."
• The Discovery Rule is then confined. "It must be stressed, however, that the Discovery Rule does not apply to all offenses … In cases where the information, data, or records … could be plainly discovered or were readily available to the public, or when there are reasonable means to be aware of the commission of the offense, the prescriptive period should be reckoned from the date of commission."
• Applied, the BIR had every means — tax records being "under the direct custody and control of the BIR" — so the clock ran from October 25, 2008, and "even if the commencement of preliminary investigation interrupted the running … the complaint should have been filed … not later than October 25, 2013."
• On the summary-procedure question the Court reversed itself. Desierto and Corpus, Jr. had held that for such offences only a court filing tolls, since direct filing is allowed. The En Banc rejected that as "highly unjust to penalize the injured party or the government for delays … entirely beyond their control once they have filed the complaint," and pointed to the correct remedy for delay: the constitutional right to speedy disposition under Article III, Section 16 — "and not the prescription of the offense."
• The abandonment is prospective, in line with the principle of liberal construction of prescription laws in favor of the accused.

Doctrine

• Where a statute makes prescription commence and be interrupted simultaneously, the phrase "and the institution of judicial proceedings…" is read as preceded by "until" or disregarded as surplusage: the period begins on discovery or commission and is interrupted by the institution of proceedings.
• The constructive-notice limit on the Discovery Rule: it is inapplicable where the investigating agency has "reasonable, readily available, or public means" to discover the offence — in which case prescription runs from the date of commission.
• The unified tolling rule: filing a criminal complaint with the prosecutor's office or the DOJ tolls prescription "regardless of whether the crime is covered by the 2022 Rules on Expedited Procedures," Desierto and Corpus, Jr. being abandoned.

• The abandonment operates prospectively only. For offenses covered by summary or expedited procedures committed prior to this decision, the old rule (requiring a court-filed Information to toll prescription) still applies if it is more favorable to the accused. So the syllabus needs both cases: Corpus, Jr. for acts within its effectivity, and Consebido for everything after.
• The Discovery Rule survives where discovery genuinely required investigation — what defeated the People here is that the BIR held the records itself.
• And note the irony of the outcome: the Court broadened the tolling rule in the very case it dismissed on prescription, because the complaint had been filed after the period had already run from the date of commission — no tolling rule, however generous, can interrupt a period that has already expired.
• Read with Llenes v. Dicdican, whose Olarte–Francisco line this decision finally extends across the whole field.

Full Digest — Recitation Format

Gist

1. The Discovery Rule§ Limitation: The "Discovery Rule" under Section 281 of the 1997 NIRC does not apply if the tax authorities had reasonable means or readily available records to ascertain the commission of the offense. In such cases, prescription begins to run from the date of the commission of the offense, not the date of actual discovery.
2. The Tolling of Prescription for Expedited/Summary Procedures: The En Banc expressly overruled and abandoned the doctrines in Republic v. Desierto (2023) and Corpus, Jr. v. People (2023). The Court held that, henceforth, the filing of a criminal complaint before the prosecutor's office or the Department of Justice (DOJ), even for offenses covered by the 2022 Rules on Expedited Procedures in the First Level Courts (Summary Procedure), shall successfully toll and interrupt the running of the prescriptive period§. However, in line with the principle of liberal construction of prescription laws in favor of the accused, this abandonment of previous doctrines applies prospectively only.

Facts

• October 25, 2008: Ulysses Palconit Consebido, a registered taxpayer, willfully fails to file his Quarterly Value-Added Tax (VAT) Return for the third quarter of the taxable year 2008, in violation of Section 255 in relation to Section 114 of the 1997 NIRC. This is the date of the commission of the offense.
• Subsequent Date (Exact Date NOT IN RECORD): The Bureau of Internal Revenue (BIR) conducts an investigation on Consebido's tax compliance.
• January 30, 2014: The BIR, through its officers, discovers the violation and files a Joint Complaint-Affidavit against Consebido before the Department of Justice (DOJ) for preliminary investigation.
• March 18, 2019: Following the DOJ's finding of probable cause, the prosecution files an Information for Willful Failure to File a Quarterly VAT Return against Consebido before the Court of Tax Appeals (CTA) Second Division, docketed as CTA Criminal Case No. O-701.
• April 2, 2019: The CTA Second Division issues a Resolution dismissing Criminal Case No. O-701 on the ground of prescription. It rules that the Information was filed beyond the five-year prescriptive period under Section 281 of the 1997 NIRC, as prescription began to run on the date of discovery (January 30, 2014) and expired on January 30, 2019, whereas the Information was filed only on March 18, 2019.
• Subsequent Date (Exact Date NOT IN RECORD): The People files a Motion for Reconsideration, which is denied by the CTA Second Division on May 7, 2019.
• Subsequent Date (Exact Date NOT IN RECORD): The People files a Petition for Review before the CTA En Banc, docketed as CTA EB CRIM NO. 069.
• January 6, 2021: The CTA En Banc renders a Decision affirming the dismissal of the Information. Citing Lim, Sr. v. Court of Appeals, it holds that the prescriptive period cannot commence and be interrupted at the same time by the institution of judicial proceedings, and therefore, the action has prescribed.
• January 5, 2022: The CTA En Banc issues a Resolution denying the People's Motion for Reconsideration.
• Subsequent Date (Exact Date NOT IN RECORD): The People, through the Office of the Solicitor General (OSG), elevates the matter to the Supreme Court via a Petition for Review on Certiorari under Rule 45.
• April 2, 2025: The Supreme Court En Banc promulgates its Decision denying the People's Petition and affirming the dismissal of the case.

Arguments of the Parties

• Applicability of the Discovery Rule: The OSG argued that under Section 281 of the 1997 NIRC, for tax offenses not known at the time of commission, the prescriptive period begins to run only from the date of actual discovery. Thus, prescription began on January 30, 2014, when the BIR discovered the violation.
• Tolling of Prescription by Preliminary Investigation: The petitioner contended that the filing of the Joint Complaint-Affidavit before the DOJ on January 30, 2014, successfully tolled and suspended the five-year prescriptive period under Section 281, and therefore, the Information filed on March 18, 2019, was within the prescriptive period. It argued that the state should not be penalized for administrative and prosecutorial delays beyond its control.

• Expiration of Prescriptive Period under the Lim, Sr. Doctrine: The respondent argued that according to Lim, Sr. v. Court of Appeals, a literal reading of Section 281 of the 1997 NIRC / Section 354 of the 1939 NIRC dictates that the prescriptive period begins and is interrupted by the same event (the institution of judicial proceedings), which leads to an absurdity where prescription never runs. Thus, the CTA correctly dismissed the case.
• Inapplicability of the Discovery Rule: The respondent argued that the BIR had reasonable and readily available means to discover the non-filing of the VAT return as of the filing deadline in 2008. Consequently, the prescriptive period ran from the commission date (October 25, 2008) and expired on October 25, 2013, making the January 30, 2014 filing of the complaint already prescribed.

• Key Dates of the Case: Both parties stipulated that the deadline for filing the return was October 25, 2008, the BIR's Joint Complaint-Affidavit was filed on January 30, 2014, and the Information was filed on March 18, 2019.

Issue

1. Whether the "Discovery Rule" under Section 281 of the 1997 NIRC applies to a tax offense when the tax records, data, and information from which the violation is based were readily available to or discoverable by the Bureau of Internal Revenue.
2. Whether the prescriptive period under Section 281 of the 1997 NIRC can both commence and be interrupted at the same time by the institution of proceedings, and how this "Lim, Sr. conundrum" must be harmonized.
3. Whether the filing of a criminal complaint before the prosecutor's office/DOJ tolls the running of the prescriptive period for offenses covered by the 2022 Rules on Expedited Procedures in the First Level Courts (Summary Procedure), and whether previous doctrines in Republic v. Desierto (2023) and Corpus, Jr. v. People (2023) should be maintained.

Ruling

• MAIN ISSUE: YES. The filing of a criminal complaint before the DOJ for preliminary investigation successfully tolls the running of the prescriptive period under Section 281 of the NIRC.
• SECONDARY ISSUES:
  1. NO. The Discovery Rule does not apply when the tax authorities have reasonable means, public records, or readily available information to discover the commission of the offense. Under such circumstances, the prescriptive period begins to run from the date of the commission of the offense. Since the BIR had the means to discover the non-filing in 2008, prescription ran from October 25, 2008, and expired on October 25, 2013. The complaint of January 30, 2014, was therefore filed too late.
  2. NO. A literal reading of the statute which causes prescription to begin and be interrupted simultaneously is absurd. Adopting the Duque harmonization, the prescriptive period begins from discovery (or commission, if discoverable), and is interrupted when proceedings (such as a preliminary investigation) are instituted.
  3. YES. The Court held that henceforth, the filing of the criminal complaint before the DOJ/prosecutor's office tolls the prescriptive period for all offenses, including those covered by the 2022 Rules on Expedited Procedures (Summary Procedure). Accordingly, the restrictive doctrines of Desierto and Corpus, Jr. are ABANDONED. However, this new rule applies PROSPECTIVELY only.

"WHEREFORE, the Petition for Review on Certiorari is DENIED. The Decision dated January 6, 2021, and the Resolution dated January 5, 2022, of the Court of Tax Appeals En Banc in CTA EB CRIM No. 069 are AFFIRMED.

Let copies of this Decision be furnished to the Senate of the Philippines and the House of Representatives for their information and appropriate action.

SO ORDERED." The court affirmed is the Court of Tax Appeals En Banc in CTA EB CRIM No. 069, not the Court of Appeals — and the fallo carries a second paragraph, referring the decision to both chambers of Congress, which is the Court flagging the drafting defect in Section 281 of the NIRC for legislative attention.

Ratio

1. The "Lim, Sr. Conundrum" and the Duque Harmonization: The Court addressed the apparent legal loop in Section 281 of the 1997 NIRC, which is identical to Section 354 of the 1939 NIRC and Section 2 of Act No. 3326§. A literal reading of these provisions dictates that prescription begins to run "from the discovery thereof and the institution of judicial proceedings for its investigation and punishment." This implies that the prescriptive period begins and is interrupted at the exact same moment. Citing People v. Duque and PCGG v. The Ombudsman, the Court En Banc held:

   "In People v. Duque, the Court held that the phrase 'institution of judicial proceedings for its investigation and punishment' may be either disregarded as surplusage or should be deemed preceded by the word 'until.'... the prescription period would both begin and be interrupted by the same occurrences the net effect would be that the prescription period would not have effectively begun, having been rendered academic by the simultaneous interruption of that same period."

   To avoid this absurd result and to give effect to the clear legislative intent to set a real, enforceable prescriptive period, the Court clarified:

   "under Section 281 of the 1997 NIRC, prescription for criminal offenses where the commission of the violation is not known shall begin to run from its discovery. The adoption of the interpretation in Duque is apt in order to harmonize the second and third paragraphs of Section 281 of the 1997 NIRC. The institution of proceedings, specifically the commencement of preliminary investigation, shall interrupt the prescriptive period for the offense. This clarification is necessary as a literal interpretation of the law should be rejected if it would lead to absurd results."

2. Limits of the Discovery Rule: The Court explicitly ruled that the "Discovery Rule" is not an absolute, blanket rule for all tax offenses:

   "It must be stressed, however, that the Discovery Rule does not apply to all offenses punishable under the 1997 NIRC. In cases where the information, data, or records, from which the crime is based could be plainly discovered or were readily available to the public, or when there are reasonable means to be aware of the commission of the offense, the prescriptive period should be reckoned from the date of commission of the offense."

   Applying this test to the case at bar, the Court found that the BIR had full and reasonable means to ascertain that Consebido failed to file his quarterly VAT return for the third quarter of 2008 given that tax records are under the direct custody and control of the BIR. Therefore, the prescriptive period began to run on October 25, 2008 (the commission date). Consequently:

   "even if the commencement of preliminary investigation interrupted the running of the prescriptive period, the complaint should have been filed with the DOJ within five years from October 25, 2008, or not later than October 25, 2013. Thus, the offense had already prescribed as early as when the Joint Complaint-Affidavit dated January 30, 2014, was filed."

3. Abandonment of the Desierto and Corpus, Jr. Summary Procedure Doctrines: The Court revisited the prevailing rules governing the tolling of prescriptive periods for light offenses covered by summary or expedited procedures. In Republic v. Desierto (2023) and Corpus, Jr. v. People (2023), the Court had held that for offenses subject to summary procedure, only a court filing (an Information) halts prescription, because the Rules of Court allow direct filing. The En Banc rejected this, noting that it is highly unjust to penalize the injured party or the government for delays in the investigation and prosecution that are entirely beyond their control once they have filed the complaint. If there is undue delay, the proper remedy is to invoke the right to speedy disposition of cases under Article III, Section 16 of the Constitution, and not the prescription of the offense:

   "the filing of the criminal complaint before the DOJ, even if it involves offenses that may be covered by the 2022 Rules on Expedited Procedures in the First Level Courts, shall toll the running of the prescriptive period. The ruling in Desierto and the subsequent case of Corpus, Jr. v. People of the Philippines, insofar as the tolling of the prescriptive period for crimes covered by the 2022 Rules on Expedited Procedures in the First Level Courts is concerned, is deemed abandoned."

   However, applying the principle of liberal construction of prescription laws in favor of the accused, the Court declared that this new rule shall apply prospectively only.

Doctrine

• The Duque Rule on Statutory Harmonization: In statutes where the commencement of prescription and its interruption appear to occur simultaneously (such as Section 281 of the 1997 NIRC and Section 2 of Act No. 3326§), the phrase "and the institution of judicial proceedings..." is construed to be preceded by the word "until" or disregarded as surplusage. Prescription begins on the date of discovery/commission and is interrupted by the institution of proceedings.
• The Constructive Notice Limitation on the Discovery Rule: The Discovery Rule is inapplicable if the regulatory or investigating agency (such as the BIR) has reasonable, readily available, or public means to discover the commission of the offense. Under such circumstances, prescription is reckoned from the date of the commission of the offense.
• The Unified Tolling Rule for Summary/Expited Procedures: The filing of a criminal complaint before the prosecutor's office/DOJ successfully tolls and interrupts the prescriptive period of the offense, regardless of whether the crime is covered by the 2022 Rules on Expedited Procedures (Summary Procedure) or not. This abandons the restrictive doctrines in Republic v. Desierto (2023) and Corpus, Jr. v. People (2023) prospectively.

• Prospective Application of the Abandonment: The abandonment of the Desierto and Corpus, Jr. doctrines applies prospectively only. For offenses covered by summary or expedited procedures committed prior to this decision, the old rule (requiring a court-filed Information to toll prescription) still applies if it is more favorable to the accused.

Separate Opinions

• Amnesty Character of Prescription: Chief Justice Gesmundo extensively analyzed the nature of prescription, characterizing it as a substantive amnesty granted by the State in favor of the defendant, representing a voluntary surrender of its right to prosecute. Consequently, any ambiguity or interpretation must be resolved liberally in favor of the accused.
• History of Preliminary Investigation and Tolling Rules: He reviewed the historical evolution of preliminary investigation from the time of the 1939 NIRC (when justices of the peace conducted preliminary investigations) to the present day. He concluded that the use of the phrase "complaint or information" in Article 91§ of the RPC, Section 11 of the 1991 Rules on Summary Procedure, and Rule II of the 2022 Rules on Expedited Procedures, for purposes of tolling prescription, must be construed uniformly to refer to the filing of the complaint before the prosecution office, as any other rule creates a dual, confusing standard that penalizes the state or the private complainant for systemic delays beyond their control.

• Dissenting on the Constructive Notice Rule Application: While concurring with the majority on the procedural and tolling doctrines, Associate Justice Dimaampao dissented on the majority's finding that the BIR had reasonable means to discover the non-filing of the VAT return in 2008. He argued that the BIR cannot be expected to instantly detect every single failure to file among millions of registered taxpayers, and that the "Discovery Rule" should have been applied, which would have made the January 30, 2014 complaint timely and the prosecution valid.