GR 198928; (December, 2014) (Digest)
G.R. No. 198928, December 3, 2014
CBK POWER COMPANY LIMITED, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.
FACTS
Petitioner CBK Power Company Limited, a VAT-registered entity with approved zero-rate status, filed its quarterly VAT returns for 2003 and subsequently amended them to reflect unutilized/excess input VAT of ₱298,430,362.42. On March 29, 2005, CBK Power filed an administrative claim for a tax credit certificate amounting to ₱295,994,518.00 for this unutilized input VAT for 2003. On April 18, 2005, or 20 days later, it filed a judicial claim for refund/credit before the Court of Tax Appeals (CTA). The CTA Second Division initially granted a reduced tax credit. Upon reconsideration, it increased the award to ₱286,783,847.37. The Commissioner of Internal Revenue appealed to the CTA En Banc, which reversed the Second Division and dismissed the claim in its entirety. The CTA En Banc ruled that the judicial claim was prematurely filed because CBK Power did not observe the mandatory 120-day waiting period under Section 112(D) of the National Internal Revenue Code, filing its judicial claim only 20 days after its administrative claim.
ISSUE
Whether or not the CTA En Banc correctly denied CBK Power’s claim for refund for being prematurely filed.
RULING
No. The Supreme Court ruled that the petition was meritorious. It held that CBK Power’s judicial claim, filed on April 18, 2005, fell within the period from December 10, 2003, to October 6, 2010, when BIR Ruling No. DA-489-03 was in effect. This ruling, recognized in Commissioner of Internal Revenue v. San Roque Power Corporation, created an exception to the mandatory 120-day waiting period, stating that a taxpayer-claimant need not wait for its lapse before seeking judicial relief. Therefore, CBK Power was not required to observe the 120-day period, and its judicial claim was not prematurely filed. The CTA En Banc erred in dismissing the claim on procedural grounds. Consequently, the Supreme Court reversed the CTA En Banc’s decision and resolution and remanded the case to the CTA En Banc for resolution on the substantive merits of the refund claim.