G.R. No. 198076 , November 19, 2014
TAGANITO MINING CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

Petitioner Taganito Mining Corporation, a VAT-registered exporter, filed its VAT returns for the year 2002. On December 30, 2003, it filed an administrative claim for refund of unutilized input VAT amounting to ₱4,447,651.32 for the period January 1 to December 31, 2002. Without waiting for the Commissioner of Internal Revenue’s (CIR) decision, Taganito filed a petition for review with the Court of Tax Appeals (CTA) on February 19, 2004, only 51 days after filing its administrative claim. The CTA Division partially granted the refund. The CIR moved for reconsideration, arguing the judicial claim was prematurely filed for not waiting the 120-day period under Section 112(D) of the National Internal Revenue Code (NIRC). The motion was denied. On appeal, the CTA En Banc reversed the Division, applying the doctrine in CIR v. Aichi Forging Company of Asia, Inc., and dismissed the case for prematurity and lack of jurisdiction, as Taganito did not exhaust administrative remedies by filing the judicial claim only 51 days after the administrative claim. Taganito filed the present petition, arguing, among others, that the Aichi doctrine should not apply and that, pursuant to the later case of CIR v. San Roque Power Corporation, its judicial claim filed after BIR Ruling No. DA-489-03 but before the Aichi ruling was not premature.

ISSUE

Whether or not Taganito Mining Corporation’s judicial claim for refund/credit of unutilized input VAT was prematurely filed.

RULING

No. The Supreme Court granted the petition, reversing the CTA En Banc and reinstating the CTA Division’s decision. The Court held that Taganito’s judicial claim was not prematurely filed. Applying the doctrine established in the consolidated cases of Commissioner of Internal Revenue v. San Roque Power Corporation, et al., the Court ruled that Section 112 of the NIRC specifically governs claims for refund or credit of unutilized input VAT. While Section 112(D) mandates a 120-day period for the CIR to act on an administrative claim and allows a judicial appeal within 30 days after the CIR’s decision or after the expiration of the 120-day period, the Court recognized BIR Ruling No. DA-489-03, which stated a taxpayer need not wait for the lapse of the 120-day period before seeking judicial relief. The Court held that taxpayers who filed their judicial claims after the issuance of BIR Ruling No. DA-489-03 on December 10, 2003, but before the promulgation of the Aichi doctrine on October 6, 2010, could rely on the BIR ruling. Since Taganito filed its judicial claim on February 19, 2004, which falls within this period, it was not premature. The CTA En Banc erred in dismissing the case based on Aichi. The CIR was ordered to refund or issue a tax credit certificate for ₱3,636,854.07 to Taganito.