G.R. Nos. 219630-31 & 219635-36. December 07, 2021.
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. TAGANITO MINING CORPORATION, RESPONDENT. [G.R. Nos. 219635-36] TAGANITO MINING CORPORATION, PETITIONER, VS. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

FACTS

Taganito Mining Corporation (TMC), a VAT-registered exporter, filed an administrative claim on December 1, 2009, for a refund/credit of unutilized input VAT on purchases of capital goods attributable to its zero-rated sales for the calendar year 2008. When the BIR failed to act, TMC filed a judicial claim with the Court of Tax Appeals (CTA) on April 21, 2010. The CTA Second Division partially granted the petition, ordering a refund/credit of P3,981,970.05, computed by spreading the substantiated input VAT on capital goods exceeding P1 Million in acquisition cost over their useful life (60 months or shorter). Both parties appealed to the CTA En Banc, which affirmed the Division’s decision. The Commissioner of Internal Revenue (CIR) and TMC then filed separate petitions for review before the Supreme Court.

ISSUE

The core issue was whether TMC was entitled to a refund/credit of its unutilized input VAT on capital goods for 2008, and if so, the correct computation of the refundable amount. Specific sub-issues included the timeliness of the administrative and judicial claims and the proper application of the amortization rule for input VAT on capital goods under Section 110(A) of the 1997 NIRC.

RULING

The Supreme Court denied the petitions and affirmed the CTA En Banc’s decision.
1. Timeliness of Claims: The Court held both the administrative and judicial claims were timely filed. Following Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., the two-year period to file an administrative claim under Section 112(A) is counted from the close of the taxable quarter when the sales were made. TMC’s filing on December 1, 2009, was within two years from the end of each quarter of 2008. The judicial claim filed on April 21, 2010, was also timely, as it was within 30 days after the expiration of the 120-day period for the CIR to act on the administrative claim, which period began on December 1, 2009.
2. Substantiation and Computation of Refund: The Court affirmed the CTA’s factual findings that TMC sufficiently substantiated its input VAT claims and that all its sales were zero-rated. It upheld the application of the amortization rule in Section 110(A) of the NIRC. For capital goods with an aggregate acquisition cost exceeding P1 Million, the input VAT shall be spread over 60 months or the estimated useful life of the property, whichever is shorter. The CTA correctly applied this rule, spreading TMC’s substantiated input VAT over the shorter period (48 months for most assets) and computing the allowable refundable amount as of December 31, 2008, which amounted to P3,981,970.05.
3. Jurisdiction and Prescription: The Court rejected the CIR’s argument that the judicial claim was premature for being filed before the lapse of 120 days from a “complete” administrative claim. It ruled that the 120-day period begins from the submission of the administrative claim, not from a determination of completeness. The CIR’s inaction rendered the claim deemed denied, allowing TMC to seek judicial relief.
4. Finality of CTA Factual Findings: The Court emphasized that the CTA’s factual findings, when supported by substantial evidence, are accorded respect and finality. It found no compelling reason to deviate from the CTA’s well-supported conclusions on the substantiation of claims and the computation of the refund.