G.R. No. 197591, June 18, 2014
TAGANITO MINING CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

Petitioner Taganito Mining Corporation, a VAT-registered entity engaged in mining and exporting, filed its Quarterly VAT Returns for 2004 and subsequently filed Amended Quarterly VAT Returns. On December 28, 2005, it filed an administrative claim with the BIR for a refund of input VAT amounting to ₱1,885,140.22 for the period January 1 to December 31, 2004. On March 31, 2006, fearing the expiration of the prescriptive period, Taganito filed a judicial claim for refund before the CTA Division. The CTA Division partially granted the claim, ordering a refund of ₱537,645.43 for unutilized input VAT for the period January 1 to March 9, 2004, but disallowed the rest, partly because from March 10, 2004, Taganito’s local suppliers could avail of zero-rating benefits for sales to it (a BOI-registered entity with 100% exports), and Taganito failed to prove these suppliers did not avail of such benefits. The CIR appealed to the CTA En Banc, which reversed the CTA Division, dismissing the entire claim on the ground that the judicial claim was filed prematurely—only 93 days after the administrative claim, in violation of the mandatory 120-day waiting period under Section 112(D) of the NIRC as established in the Aichi case.

ISSUE

Whether the CTA En Banc correctly dismissed Taganito’s judicial claim for refund of excess input VAT for having been prematurely filed.

RULING

No, the CTA En Banc erred in dismissing the claim on the ground of prematurity. The Supreme Court ruled that during the period from December 10, 2003 (when BIR Ruling No. DA-489-03 was issued) to October 6, 2010 (when the Aichi case was promulgated), taxpayers need not observe the 120-day waiting period before filing a judicial claim for refund, as they could rely on the BIR ruling which stated that waiting for the 120-day period was not necessary. This ruling provided a valid basis for equitable estoppel under Section 246 of the NIRC. Since Taganito filed its administrative claim on December 28, 2005 and its judicial claim on March 31, 2006—both within the period when BIR Ruling No. DA-489-03 was in effect—it was not required to wait for the 120-day period to lapse. Therefore, the filing was not premature, and the CTA Division properly acquired jurisdiction over the judicial claim. However, the Supreme Court did not grant Taganito’s claim for the full amount of ₱1,885,140.22, as the partial denial by the CTA Division (limiting the refund to ₱537,645.43 for the period January 1 to March 9, 2004) had already lapsed into finality due to Taganito’s failure to appeal that partial denial.