KIDAPAWAN CITY -- The revenue district office has issued a warrant of garnishment to a government bank so it could seize some P119.9 million cash or property owned by Metro Kidapawan Water District (MKWD).

The warrant, issued late last month by BIR Revenue District 108 officer Bagro Saramsamum, has given the branch manager of the Land Bank of the Philippines an order to transfer, surrender, transmit, and remit to the BIR any of MKWD's cash or property, which is in the bank's possession.

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"[The bank's] failure to honor this warrant shall make you criminally liable under Section 276 of the National Revenue Code, as amended," the order stated.

Data from BIR Revenue District 108 showed that from 1997 up to 2002, the MKWD incurred mandatory tax obligations that amounted to P47.09 million.

The interest, surcharges, and other compromise penalties of such obligations amounted to P72.8 million, or a total of P119.9 million.

Saramsamum said his office has sent three notices of delinquent tax obligations to MKWD since August this year.

The water district was given 15 to 30 days to settle the account. "It, however, failed to pay their obligation, that's why we decided to issue a warrant of garnishment to the bank to put on hold MKWD's funds," said Saransamum.

He said a garnishment is a means of collecting a monetary judgment against a defendant by ordering a third party (the garnishee) to pay money, otherwise owed to the defendant, directly to the plaintiff.

After it received a copy of the warrant, the MKWD, through its legal department, has filed a case against the BIR at a local court here.

On November 6, the Regional Trial Court (RTC) Branch 23 here has denied the ex-parte motion for status quo order the MKWD has filed.

Judge Rogelio Naresma of RTC Branch 23 has set on Nov 13 a hearing for the motion filed by the MKWD.

MKWD general manager Stella Gonzales-Anima said since 2002, they already filed protests at the Court of Tax Appeal in Manila, which is still pending as of Thursday.

The liability, she explained, was incurred by the old management.

The water district argued that as a government-owned-and-controlled corporation (Gocc) that provides basic service to the public should be exempted from paying income taxes.

In 2007, when the tax amnesty was promulgated, the MKWD applied for the amnesty at the BIR central office.

Such petition was granted and the water district paid on Feb 18, 2008 a compromise penalty of about P503,000.

On June 1 this year, the district received a letter from the Tax Amnesty Task Force of the BIR Central Office which requested for a transmittal of certain documents as additional requirements for tax amnesty for period covering 1997 up to 2002. (MCM)