GR 203367; (March, 2021) (Digest)
G.R. No. 203367 , March 17, 2021
Energy Development Corporation, Petitioner, vs. Commissioner of Internal Revenue, Respondent.
FACTS
Petitioner Energy Development Corporation (EDC), a VAT-registered domestic corporation, filed its quarterly VAT returns for 2007. On March 30, 2009, EDC filed an administrative claim with the BIR for a tax credit or refund of unutilized input VAT amounting to P89,103,931.29 attributable to its zero-rated sales for the taxable year 2007. Without waiting for the Commissioner of Internal Revenue’s (CIR) decision, EDC filed a Petition for Review with the Court of Tax Appeals (CTA) on April 24, 2009. The CIR moved to dismiss the petition, citing the Supreme Court’s ruling in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. (Aichi), which held that a judicial claim filed before the expiration of the 120-day period for the CIR to act on the administrative claim is premature. The CTA Second Division granted the motion and dismissed EDC’s petition. The CTA En Banc affirmed the dismissal, modifying the ground to lack of cause of action. EDC appealed to the Supreme Court, arguing that the Aichi ruling should not be applied retroactively to its case, which was filed prior to Aichi’s promulgation.
ISSUE
Whether EDC timely filed its judicial claim for tax credit or refund of unutilized input VAT.
RULING
No. The Supreme Court denied the petition and affirmed the CTA En Banc’s decision. The Court held that the ruling in Aichi, which interpreted Section 112(C) of the National Internal Revenue Code (NIRC), is a procedural doctrine that applies retroactively. Aichi established that a taxpayer must wait for either the CIR’s decision on the administrative claim or the lapse of the 120-day period from the submission of complete documents before filing a judicial claim with the CTA within the next 30 days. EDC filed its judicial claim on April 24, 2009, only 25 days after filing its administrative claim on March 30, 2009, without waiting for the CIR’s action or the expiration of the 120-day period. This premature filing violated the doctrine of exhaustion of administrative remedies, resulting in a lack of cause of action. The Court further ruled that the two-year prescriptive period under Section 112(A) of the NIRC applies only to the filing of the administrative claim, not the judicial claim. The defense of prematurity, being jurisdictional, can be raised at any stage of the proceedings. Therefore, EDC’s judicial claim was correctly dismissed.