G.R. No. 185969 November 19, 2014
AT&T COMMUNICATIONS SERVICES PHILIPPINES, INC., Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

Petitioner AT&T Communications Services Philippines, Inc., a domestic corporation, entered into service agreements with non-resident foreign corporations (AT&T-CSI, Mastercard International, Inc., and Lexmark International, Inc.), with compensation paid in US Dollars. For the taxable year 2003, petitioner filed its Quarterly VAT Returns and later Amended Quarterly VAT Returns. On April 13, 2005, petitioner filed an administrative claim for refund or tax credit of unutilized input VAT amounting to ₱3,003,265.14 for the period January 1 to December 31, 2003. Without waiting for action on the administrative claim, petitioner filed a judicial claim via a Petition for Review before the CTA in Division on April 20, 2005, exactly seven days after filing the administrative claim, to suspend the running of the prescriptive period. The CTA in Division dismissed the petition, ruling petitioner failed to substantiate its zero-rated sales with the required VAT official receipts for sales of services, presenting only sales invoices and bank credit advices. The CTA En Banc affirmed the dismissal. Petitioner elevated the case to the Supreme Court, arguing that the NIRC does not limit proof to a single document and that it presented substantial evidence of its zero-rated transactions.

ISSUE

Whether or not petitioner is entitled to a refund or issuance of a tax credit certificate in the amount of ₱3,003,265.14 representing unutilized input VAT attributable to its zero-rated sales for the period January 1 to December 31, 2003.

RULING

The Supreme Court denied the petition. The Court, citing Commissioner of Internal Revenue v. San Roque Power Corporation, first addressed the jurisdictional issue of the timeliness of the judicial claim. The Court found that for the first three quarters of 2003, petitioner’s judicial claims filed on April 20, 2005, were filed beyond the 30-day period from the expiration of the 120-day period for the Commissioner to act on the administrative claim, which is mandated by Section 112 of the NIRC. The Court held that the 30-day period is mandatory and jurisdictional. For the fourth quarter of 2003, the administrative claim was filed on April 13, 2005, and the judicial claim was filed seven days later on April 20, 2005, which was prematurely filed before the expiration of the 120-day period. Following San Roque, such premature filing is generally prohibited, except when done in reliance on BIR Ruling No. DA-489-03, which was issued on December 10, 2003. However, the Court noted that the claim for the fourth quarter of 2003 prescribed on April 15, 2006, and the premature filing on April 20, 2005, did not toll the two-year prescriptive period. Since petitioner did not refile its judicial claim within the prescriptive period, its claim for the fourth quarter also prescribed. Consequently, the CTA did not acquire jurisdiction over the petition. Given the lack of jurisdiction due to the untimely and premature judicial claims, the Supreme Court did not find it necessary to rule on the substantive issue regarding the substantiation requirements for the refund claim.