G.R. No. 203351 January 21, 2015
PANAY POWER CORPORATION (formerly AVON RIVER POWER HOLDINGS CORPORATION), Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

Petitioner Panay Power Corporation, a VAT-registered domestic corporation engaged in power generation and wholesale, filed its quarterly VAT return for the fourth quarter of 2003 on January 26, 2004, and subsequently filed two amendments. The final amendment reflected an unutilized input VAT of ₱14,122,347.21 paid on purchases of capital goods and services (power generation assets) which was not applied against any output VAT liability. On December 29, 2005, petitioner filed an administrative claim for refund/credit of this amount with the BIR. On January 20, 2006, or 22 days later, petitioner filed a judicial claim for refund/credit before the Court of Tax Appeals (CTA). The CTA Special First Division initially denied the claim for lack of corroborative evidence but, upon reconsideration and presentation of supplemental evidence, dismissed the claim outright on the ground that the judicial claim was prematurely filed for not observing the mandatory 120-day waiting period under Section 112(D) of the National Internal Revenue Code (NIRC), citing CIR v. Aichi Forging Company of Asia, Inc. The CTA En Banc affirmed this dismissal. Petitioner appealed to the Supreme Court.

ISSUE

Whether the CTA En Banc correctly affirmed the dismissal of petitioner’s claim for tax refund/credit on the ground of prematurity for filing the judicial claim only 22 days after the administrative claim, without waiting for the 120-day period.

RULING

No, the CTA En Banc erred in dismissing the claim on the ground of prematurity. The Supreme Court held that during the period from December 10, 2003 (the date of BIR Ruling No. DA-489-03) to October 6, 2010 (the date of the Aichi promulgation), taxpayers-claimants need not observe the 120-day period before filing a judicial claim for refund of excess input VAT before the CTA, as established in CIR v. San Roque Power Corporation. Since petitioner filed its administrative claim on December 29, 2005 and its judicial claim on January 20, 2006, both within this period, it was not required to wait for the expiration of the 120-day period, and its judicial claim was timely filed. However, the Supreme Court did not grant the refund outright. The determination of petitioner’s entitlement to the refund involves questions of fact not reviewable under a Rule 45 petition. Therefore, the case was remanded to the CTA Special First Division for resolution on the merits. The petition was partly granted, and the CTA En Banc’s decision and resolution were set aside.