Practice question
After surveillance, the BIR threatens closure unless a gas station pays a disputed deficiency VAT amount. It has issued no valid formal assessment and uses the compliance notices as substitutes for that process. Following the February 2026 Elric Auxiliary main decision, what is the strongest conclusion?
- Closure power always permits collection without assessment
- A demand becomes valid merely because it mentions Section 115
- Every surveillance result conclusively proves tax liability
- Section 115 cannot be used to bypass the valid assessment requirements when collecting the disputed deficiency in this manner
- The gas station can never owe VAT
Legal references
- CIR v. Elric Auxiliary Services/Sacred Heart Gas Station, G.R. 226945, February 19, 2026: https://lawphil.net/judjuris/juri2026/feb2026/gr_226945_2026.html
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