G.R. No. 205543 , June 30, 2014
SAN ROQUE POWER CORPORATION, Petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS

San Roque Power Corporation (San Roque), a domestic corporation engaged in power generation, filed separate administrative claims for refund or tax credit of its excess/unutilized creditable input taxes for all four quarters of 2006. It argued it had no output taxes to apply these credits against because its sales of electricity, generated from hydropower (a renewable source), were subject to 0% VAT, and its exclusive buyer, the National Power Corporation (NPC), was tax-exempt, making the sales effectively zero-rated. After the Commissioner of Internal Revenue (CIR) failed to act on the claims, San Roque filed two Petitions for Review before the Court of Tax Appeals (CTA), which were consolidated. The CTA First Division dismissed the petitions for lack of jurisdiction, finding that the judicial claims were filed either prematurely or beyond the 30-day period prescribed under Section 112 of the National Internal Revenue Code (NIRC). The CTA en banc affirmed this dismissal. San Roque appealed, arguing against the retroactive application of the Supreme Court’s ruling in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., which strictly enforced the 120+30 day periods for filing claims.

ISSUE

Whether the Court of Tax Appeals correctly dismissed San Roque’s judicial claims for refund or tax credit for lack of jurisdiction due to non-compliance with the prescriptive periods under Section 112 of the NIRC.

RULING

Yes, the CTA correctly dismissed the petitions. The Supreme Court affirmed the dismissal, applying the principles established in Commissioner of Internal Revenue v. San Roque Power Corporation (the 2013 San Roque case). The Court held that compliance with the 120-day period for the CIR to act on an administrative claim and the subsequent 30-day period to file a judicial appeal is mandatory and jurisdictional. San Roque’s judicial claims were filed out of time. For the first quarter of 2006, the 120-day period for the CIR to act on the original administrative claim (filed April 11, 2007) ended on August 9, 2007. The 30-day period to appeal expired on September 10, 2007, but the judicial claim was filed only on March 28, 2008. For the second quarter, the 120-day period for the claim (filed July 10, 2007) ended on November 7, 2007, and the 30-day period expired on December 7, 2007, but the judicial claim was filed on June 27, 2008. For the third and fourth quarters, the 120-day period for the claims (filed August 31, 2007) ended on December 29, 2007, and the 30-day period expired on January 28, 2008, but the judicial claim was filed on March 28, 2008. All judicial claims were filed beyond the 30-day period. The Court also rejected San Roque’s argument on the retroactive application of Aichi, clarifying that the 120+30 day periods were statutory requirements existing before Aichi, which merely interpreted them. Furthermore, the Court ruled that the Atlas doctrine, which allowed a taxpayer to file a judicial claim within 30 days after the CIR’s denial or after the 120-day period lapsed, was only prospectively applied from June 8, 2007, to September 12, 2008. Since San Roque’s administrative claims were filed in 2007, the Atlas doctrine applied, but it still required filing the judicial claim after the 120-day period. San Roque’s judicial claims for the first and second quarters (based on amended administrative claims filed March 10, 2008) were filed before the 120-day period lapsed, violating the doctrine of exhaustion of administrative remedies. Therefore, the CTA correctly dismissed the petitions for lack of jurisdiction.