GR 202071; (February, 2014) (Digest)
G.R. No. 202071 ; February 19, 2014
PROCTER & GAMBLE ASIA PTE LTD., Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.
FACTS
Petitioner Procter & Gamble Asia Pte Ltd. filed administrative claims with the Bureau of Internal Revenue (BIR) on September 26 and December 13, 2006, seeking a refund or credit of unutilized input value-added tax (VAT) for the third and fourth quarters of 2004. Subsequently, on October 2 and December 29, 2006, it filed judicial claims with the Court of Tax Appeals (CTA) for the same refund. The CTA First Division dismissed the judicial claims, ruling they were prematurely filed for not observing the mandatory 120-day waiting period under Section 112 of the National Internal Revenue Code, which requires the Commissioner of Internal Revenue to decide the administrative claim within 120 days before a judicial appeal can be made. The CTA En Banc affirmed this dismissal.
ISSUE
Whether the petitioner’s judicial claims for VAT refund were prematurely filed, thereby depriving the CTA of jurisdiction.
RULING
The Supreme Court granted the petition, reversing the CTA En Banc. The Court acknowledged the general rule, as established in CIR v. San Roque Power Corporation, that the 120-day waiting period is mandatory and jurisdictional. Failure to comply renders a judicial claim premature and deprives the CTA of jurisdiction. However, the Court applied the equitable exception recognized in San Roque. The BIR had issued Ruling No. DA-489-03 on December 10, 2003, which expressly stated that a taxpayer need not wait for the lapse of the 120-day period before seeking judicial relief. This ruling constituted a general interpretative rule that misled taxpayers. The Court held that taxpayers could rely on this ruling from its issuance until its reversal by the Court in CIR v. Aichi Forging Company of Asia, Inc. on October 6, 2010. Since the petitioner filed its judicial claims on October 2 and December 29, 2006, well within the validity period of BIR Ruling No. DA-489-03, the prematurity of its filing was excused. The defense of prematurity was thus estopped. Consequently, the case was remanded to the CTA First Division for a determination on the merits of the refund claim.