GR 184145; (December, 2013) (Digest)
G.R. No. 184145; December 11, 2013
COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. DASH ENGINEERING PHILIPPINES, INC., Respondent.
FACTS
Respondent Dash Engineering Philippines, Inc. (DEPI), a VAT-registered ecozone IT export enterprise, filed monthly and quarterly VAT returns for the first and second quarters of 2003. On August 9, 2004, it filed an administrative claim for refund or tax credit of unutilized input VAT attributable to its zero-rated sales. The Commissioner of Internal Revenue (CIR) failed to act on this claim. Consequently, DEPI filed a judicial petition for review with the Court of Tax Appeals (CTA) on May 5, 2005. The CTA Second Division partially granted the claim. The CIR moved for reconsideration, arguing the judicial claim was filed out of time, but the CTA En Banc upheld the Second Division, ruling the 30-day period for judicial recourse under Section 112 of the Tax Code was merely directory.
ISSUE
Whether DEPI’s judicial claim for refund was filed within the prescriptive period mandated by the National Internal Revenue Code (NIRC).
RULING
The Supreme Court granted the CIR’s petition and denied DEPI’s claim. The Court held that the periods prescribed in Section 112 of the NIRC for claiming refunds of input VAT are mandatory and jurisdictional. Section 112(A) requires the taxpayer to file an administrative claim with the CIR within two years after the close of the taxable quarter when the sales were made. Section 112(D) provides that if the CIR fails to decide the claim within 120 days, the taxpayer may appeal to the CTA within 30 days from the expiration of the 120-day period. This 30-day period is not merely permissive; it is a strict condition for invoking the CTA’s jurisdiction. DEPI filed its administrative claim on August 9, 2004. The 120-day period for CIR action lapsed on December 7, 2004. DEPI therefore had only until January 6, 2005, to file its judicial claim. By filing on May 5, 2005, DEPI violated this mandatory period. The two-year prescriptive period in Sections 204 and 229 of the NIRC, which applies to claims for erroneously or illegally collected taxes, is distinct and inapplicable to refunds of input VAT under Section 112. Consequently, the CTA did not acquire jurisdiction over the belated judicial claim.