G.R. No. 196907; March 13, 2013
NIPPON EXPRESS (PHILIPPINES) CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

Petitioner Nippon Express, a VAT-registered entity, filed an administrative claim for a refund of excess input VAT amounting to ₱20,345,824.29 for the year 2001, attributable to its effectively zero-rated sales. The following day, without awaiting the Commissioner of Internal Revenue’s (CIR) decision, it filed a judicial claim with the Court of Tax Appeals (CTA). The CTA First Division initially denied the claim but later, in an Amended Decision, granted a reduced amount, ruling that while the judicial claim was prematurely filed, the CIR had waived the jurisdictional defect by failing to object in his Answer.
The CTA En Banc, in a series of reversals, ultimately dismissed the petition for lack of jurisdiction. It held that compliance with the 120-day waiting period under Section 112(D) of the National Internal Revenue Code (NIRC)—during which the CIR is given time to act on an administrative claim—is mandatory and jurisdictional. Since Nippon Express filed its judicial claim only one day after its administrative claim, it failed to observe this crucial period, rendering its petition prematurely filed. The CTA En Banc also revisited the evidentiary issue, ruling that VAT invoices alone were insufficient to prove zero-rated sales of services without corresponding VAT official receipts.

ISSUE

The core issues are: (1) whether the CTA acquired jurisdiction over the petition despite its premature filing, and (2) whether the petitioner’s VAT invoices were sufficient proof to support its claim for refund of input VAT on zero-rated sales.

RULING

The Supreme Court denied the petition, upholding the CTA En Banc’s dismissal. On jurisdiction, the Court affirmed that the 120-day period is a mandatory and jurisdictional precondition for filing a judicial claim for tax refund or credit. This rule, established in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., requires the taxpayer to wait either for the CIR’s decision or for the expiration of the 120-day period before appealing to the CTA. Nippon Express’s filing after only one day constituted a fatal violation of this condition, depriving the CTA of jurisdiction. The Court rejected the argument that the CIR’s failure to object constituted a waiver, as jurisdiction conferred by law cannot be waived by the parties.
On the evidentiary issue, the Court clarified that for the sale of services, a VAT official receipt—not merely a sales invoice—is the primary evidence required to prove the transaction for VAT purposes, as held in Kepco Philippines Corporation v. Commissioner of Internal Revenue. A sales invoice proves the sale of goods or properties, while an official receipt proves the sale of services and the payment received. Therefore, Nippon Express’s submission of sales invoices, without the requisite official receipts for its services, was insufficient to substantiate its zero-rated sales and its corresponding claim for refund of input VAT.