GR 187485; (February, 2013) (Digest)
G.R. No. 187485 , 196113, & 197156. February 12, 2013.
COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. SAN ROQUE POWER CORPORATION, Respondent. TAGANITO MINING CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent. PHILEX MINING CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.
FACTS
These consolidated petitions involve claims for refund or tax credit of unutilized input Value-Added Tax (VAT) by three corporations. San Roque Power Corporation filed its administrative claim with the Bureau of Internal Revenue (BIR) on March 28, 2003, and its judicial claim with the Court of Tax Appeals (CTA) on April 10, 2003, waiting only 13 days. Taganito Mining Corporation filed its judicial claim 30 days after its administrative claim. Philex Mining Corporation filed its judicial claim 128 days after its administrative claim. The CTA Division and En Banc rendered conflicting decisions on the timeliness of these claims, leading to these appeals.
ISSUE
Whether the taxpayers’ judicial claims for VAT refund were filed in accordance with the mandatory and jurisdictional 120+30 day periods under Section 112 of the National Internal Revenue Code (NIRC).
RULING
The Supreme Court, applying the principles established in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., denied the claims of San Roque and Taganito but granted Philex’s claim. The Court held that compliance with the two-tiered process under Section 112 of the NIRC is mandatory and jurisdictional. The taxpayer must first file an administrative claim with the Commissioner within two years from the close of the taxable quarter. The Commissioner then has 120 days to decide. Only after the expiration of this 120-day period, or after a denial by the Commissioner, may the taxpayer appeal to the CTA within 30 days.
The Court clarified that the 30-day period to appeal is counted from the expiry of the 120-day period if the Commissioner does not act, not from the filing of the administrative claim. Therefore, filing a judicial claim before the expiration of the 120-day period is premature and deprives the CTA of jurisdiction. San Roque (13 days) and Taganito (30 days) filed prematurely. In contrast, Philex filed after 128 days, which was after the 120-day period had lapsed and within the 30-day window, thus its claim was timely. The Court emphasized that the Aichi ruling, which crystallized this interpretation, is prospective in application. However, it noted an exception: claims filed from December 10, 2003 (the date of the BIR Ruling No. DA-489-03 which erroneously advised taxpayers they could file judicial claims immediately) until October 6, 2010 (the date of the Aichi decision), are not subject to dismissal for prematurity, as the government was estopped from questioning the period due to its own misleading ruling. This exception did not save San Roque, however, as its claim was filed in April 2003, prior to the BIR Ruling.