G.R. No. 200841-42, August 26, 2015
CE LUZON GEOTHERMAL POWER COMPANY, INC., PETITIONER, VS. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

FACTS

Petitioner CE Luzon Geothermal Power Company, Inc. (CE Luzon), a VAT-registered domestic corporation engaged in power generation, filed its quarterly VAT returns for 2005 reflecting an overpayment of P20,546,004.87. It attributed this overpayment to domestic purchases of non-capital goods and services, services from non-residents, and importation of non-capital goods. On November 30, 2006, CE Luzon filed an administrative claim for refund of this unutilized input VAT with the Bureau of Internal Revenue (BIR). Subsequently, on January 3, 2007, it filed a judicial claim for refund via a petition for review before the Court of Tax Appeals (CTA), docketed as CTA Case No. 7558. The CIR opposed the claim, arguing, among others, that the judicial claim was prematurely filed. The CTA Former Second Division partially granted the claim, ordering a tax credit for P17,277,938.47. Both parties appealed to the CTA En Banc, which consolidated the cases. The CTA En Banc set aside the Division’s decision and dismissed the judicial claim outright, ruling it was filed prematurely because CE Luzon filed its petition only 34 days after its administrative claim, without waiting for the expiration of the 120-day period for the CIR to act. CE Luzon moved for reconsideration, which was denied, prompting this petition.

ISSUE

Whether the CTA En Banc correctly dismissed CE Luzon’s judicial claim for tax refund of unutilized input VAT on the ground of prematurity.

RULING

No, the CTA En Banc erred in dismissing the claim on the ground of prematurity. The Supreme Court held that CE Luzon’s judicial claim, filed on January 3, 2007, fell within the “window period” established in the case of CIR v. San Roque Power Corporation. This period, from December 10, 2003 (when BIR Ruling No. DA-489-03 was issued) to October 6, 2010 (when the Aichi case was promulgated), exempted taxpayer-claimants from the mandatory observance of the 120-day waiting period before filing a judicial claim. Since CE Luzon filed both its administrative claim (November 30, 2006) and judicial claim (January 3, 2007) within this window, it was not required to wait for the lapse of the 120-day period. Therefore, the dismissal for prematurity was incorrect. However, the Supreme Court did not grant the refund outright. It remanded the case to the CTA En Banc for resolution on the merits, as the determination of CE Luzon’s entitlement to the refund involves factual and evidentiary matters beyond the scope of a Rule 45 petition, which is limited to questions of law. The petition was partly granted; the CTA En Banc’s decision and resolution were set aside, and the case was remanded for further proceedings.