G.R. No. 202093, September 15, 2021
HEDCOR SIBULAN, INC., PETITIONER, VS. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
FACTS
Petitioner Hedcor Sibulan, Inc., a VAT-registered domestic corporation engaged in hydroelectric power generation, filed its Original Quarterly VAT Return for the 2nd quarter of 2008 on July 21, 2008. On June 23, 2010, it filed an Amended Quarterly VAT Return for the same period. Subsequently, on June 25, 2010, petitioner filed with the BIR a written application for refund or issuance of a tax credit certificate (TCC) for unutilized input VAT amounting to P29,299,077.37. Merely four days later, on June 29, 2010, and while its administrative claim was still pending, petitioner filed a petition for review before the CTA Division to seek the refund or TCC, alleging it did so to suspend the running of the two-year prescriptive period. The CIR, in its answer, sought the dismissal of the petition on the ground of prematurity, arguing petitioner did not observe the 120-day period for the CIR to act on the claim and failed to exhaust administrative remedies. The CTA Division treated the CIR’s affirmative defense as a motion to dismiss and dismissed the petition for having been prematurely filed. The CTA En Banc affirmed this dismissal. Petitioner elevated the case to the Supreme Court.
ISSUE
Whether petitioner’s judicial claim was prematurely filed.
RULING
No, the petition is impressed with merit. While Section 112(C) of the National Internal Revenue Code mandates that the CIR has 120 days from the submission of complete documents to act on an administrative claim, and the taxpayer must await the expiration of this period or a denial before filing a judicial appeal within 30 days, there are recognized exceptions to this mandatory and jurisdictional rule. One exception is when the CIR issues a general interpretative rule that misleads taxpayers into prematurely filing judicial claims. BIR Ruling No. DA-489-03, issued on December 10, 2003, expressly allowed taxpayers to seek judicial relief without waiting for the 120-day period to lapse. This ruling was recognized in Commissioner of Internal Revenue v. San Roque Power Corp. as a general interpretative rule that created an exception for the period from its issuance on December 10, 2003, until its reversal in Commissioner of Internal Revenue v. Aichi Forging Co. of Asia, Inc. on October 6, 2010. Since petitioner filed its judicial claim on June 29, 2010, which falls within the period when BIR Ruling No. DA-489-03 was still in effect, its filing was not premature. The principle of equitable estoppel under Section 246 of the Tax Code prevents the CIR from questioning the CTA’s assumption of jurisdiction under these circumstances.
