G.R. No. 201195, November 26, 2014
TAGANITO MINING CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

Petitioner Taganito Mining Corporation, a VAT and BOI-registered corporation engaged in mining and exporting, filed its Original Quarterly VAT Returns for 2006. It later filed Amended Quarterly VAT Returns for specific quarters. On March 26, 2008, Taganito filed an administrative claim with the CIR for a refund/credit of input VAT amounting to ₱22,421,260.26 for 2006. As the CIR had not acted on the claim, Taganito filed a judicial claim before the CTA Division on April 17, 2008, to toll the two-year prescriptive period under Section 229 of the NIRC. Taganito later withdrew part of its claim due to partial BIR approval, leaving a balance of ₱4,611,123.00 for input VAT on importation of capital goods. The CTA Division denied the claim, citing failure to prove actual payment via proper documents (e.g., import entry) and to establish that the importations were capital goods subject to amortization under Revenue Regulations. The CTA En Banc affirmed but dismissed the case for lack of jurisdiction, ruling that Taganito prematurely filed the judicial claim before the 120-day period under Section 112(C) of the NIRC expired, based on the Aichi doctrine. Taganito appealed, arguing Aichi was inapplicable and that it had substantiated its claim.

ISSUE

1. Whether Taganito’s judicial claim for refund was prematurely filed.
2. Whether Taganito sufficiently substantiated its claim for refund of input VAT on importations.

RULING

1. On the timeliness of the judicial claim: The Supreme Court held that Taganito’s judicial claim was not prematurely filed. Applying the doctrine in CIR v. San Roque Power Corporation, the Court ruled that Section 112 of the NIRC governs claims for refund/credit of unutilized input VAT, not Section 229. Under Section 112, the taxpayer must file an administrative claim with the CIR, which then has 120 days to decide. The taxpayer may appeal to the CTA within 30 days after the CIR’s denial or after the 120-day period lapses without action. However, the Court recognized that BIR Ruling No. DA-489-03 (issued on December 10, 2003) allowed taxpayers to file judicial claims without waiting for the 120-day period. Since Taganito filed its judicial claim on April 17, 2008—after the issuance of BIR Ruling No. DA-489-03 but before the Aichi decision (October 6, 2010)—it could invoke the BIR ruling. Thus, the CTA En Banc erred in dismissing the case for prematurity.
2. On the substantiation of the claim: The Supreme Court held that Taganito failed to substantiate its claim for refund. The official receipts submitted did not prove actual payment of input VAT, as one receipt lacked a year indication and neither receipt was supported by the required import entry or equivalent document under Revenue Regulation No. 16-05. Taganito also failed to prove that the importations were capital goods, as it did not provide evidence such as subsidiary ledgers or details showing the nature of the goods (e.g., dump trucks as capital equipment). Assuming they were capital goods, Taganito did not show that the input VAT was amortized over the estimated useful life, as required by revenue regulations. The burden of proof rests on the taxpayer, and Taganito did not meet it.
DISPOSITIVE: The petition was DENIED. The CTA En Banc’s dismissal for prematurity was set aside, but the CTA Division’s denial of the claim for lack of substantiation was reinstated.