• This landmark case clarifies the rules on the prescription of tax offenses under the National Internal Revenue Code (NIRC). The Supreme Court re-examined its old ruling in *Lim, Sr. v. CA* and established that for tax violations not known at the time of commission, the five-year prescriptive period begins from the date of discovery, and is interrupted by the filing of a complaint for preliminary investigation. However, the Court still affirmed the dismissal of the case against the taxpayer, Ulysses Consebido, finding that the "Discovery Rule" did not apply because the BIR had reasonable means to know of the violation much earlier. Thus, the offense had already prescribed.

• The Accused: Ulysses Consebido, a VAT-registered individual doing business as Seven Digit Construction and Supplies.
• The Offense: The BIR charged him with willful failure to file his quarterly VAT return for the 3rd quarter of 2008, which was due on October 25, 2008.
• Discovery and Filing: The BIR claimed to have "discovered" the violation on January 30, 2014, when it filed a complaint with the Department of Justice (DOJ). The Information was formally filed in the Court of Tax Appeals (CTA) on March 18, 2019.

• CTA Division Ruling: The CTA Division dismissed the case on the ground of prescription. It ruled that the five-year period started on the date of discovery (January 30, 2014) and ended on January 30, 2019. The Information filed on March 18, 2019, was therefore late.
• CTA En Banc Ruling: The CTA *En Banc* affirmed the dismissal, relying on the old doctrine in *Lim, Sr. v. CA*, which held that the preliminary investigation period is included in the five-year count.

• How should Section 281 of the 1997 NIRC on the prescription of tax offenses be interpreted, particularly the phrase "from the discovery thereof and the institution of judicial proceedings"?
• Does the filing of a complaint with the prosecutor's office for preliminary investigation interrupt the prescriptive period for tax crimes?

The Supreme Court DENIED the petition and AFFIRMED the dismissal of the case on the ground of prescription, but based on a different reasoning and a new interpretation of the law.

• New Interpretation of Section 281: The Court clarified that for tax violations not known at the time of commission, the five-year prescriptive period begins to run from the date of discovery. The filing of a complaint for preliminary investigation *interrupts* this period. This harmonizes the conflicting paragraphs of Section 281 and abandons the confusing interpretation in *Lim, Sr.*
• Discovery Rule Does Not Apply: The Court ruled that the "Discovery Rule" was not applicable in this specific case. The BIR had reasonable means to know about Consebido's failure to file his 2008 VAT return much earlier, as he was a VAT-registered government contractor required to file electronically.
• Crime Had Prescribed: Since the Discovery Rule did not apply, the prescriptive period began to run from the deadline for filing the return, which was October 25, 2008. The five-year period ended on October 25, 2013. Therefore, the complaint filed with the DOJ in January 2014 was already out of time.

• Prescription of Tax Offenses (Sec. 281, NIRC): The five-year prescriptive period begins from the day of commission. If unknown, it begins from the date of discovery.
• Interruption of Prescriptive Period: The filing of a complaint with the prosecutor's office for preliminary investigation interrupts the running of the prescriptive period for NIRC violations. This clarifies previous conflicting doctrines.
• Discovery Rule (Blameless Ignorance Doctrine): This rule, which starts the prescriptive period from the date of discovery, does not apply if the authorities had reasonable means to be aware of the commission of the offense earlier (e.g., through electronic filing systems and withholding tax requirements).