G.R. No. 255085 . March 29, 2023.
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, VS. VESTAS SERVICES PHILIPPINES, INC., RESPONDENT.

FACTS

Vestas Services Philippines, Inc. (VSPI), a domestic corporation registered as a VAT taxpayer, filed a claim for refund or issuance of a tax credit certificate for its alleged unutilized input VAT for the fourth quarter of calendar year 2013, amounting to PHP 41,659,221.63. This claim was based on its zero-rated sales of services to EDC Burgos Wind Power Corporation, a registered renewable energy developer. VSPI filed its administrative claim with the BIR on March 20, 2014, and submitted complete supporting documents on April 11, 2014. The BIR issued a letter denying the claim on August 4, 2014, received by VSPI on August 6, 2014. VSPI filed its judicial claim with the Court of Tax Appeals (CTA) Division on September 5, 2014. The CTA Division initially dismissed the claim for lack of jurisdiction, ruling that the judicial claim was filed late. Upon VSPI’s motion for reconsideration, where it presented additional evidence (a Transmittal Letter showing submission of complete documents on April 11, 2014, and a Letter Denial from the BIR), the CTA Division admitted the supplemental evidence and partially granted the refund in the amount of PHP 4,390,198.45. The CTA En Banc affirmed this decision. The Commissioner of Internal Revenue appealed, arguing that the CTA Division should not have admitted VSPI’s supplemental evidence and that VSPI failed to prove the timeliness of its judicial claim.

ISSUE

Whether the Court of Tax Appeals correctly admitted VSPI’s supplemental evidence and correctly granted its claim for refund or tax credit for unutilized input VAT.

RULING

The Supreme Court denied the petition and affirmed the decisions of the CTA. The Court held that the CTA Division correctly admitted VSPI’s supplemental evidence. The CIR failed to timely object to VSPI’s Supplemental Formal Offer of Evidence. Furthermore, proceedings before the CTA are not governed strictly by technical rules of evidence, and the admission of such evidence served the interests of substantial justice. On the substantive issue, the Court ruled that VSPI’s administrative and judicial claims were timely filed. The 120-day period for the BIR to act on the claim commenced from April 11, 2014, the date of submission of complete documents, and expired on August 9, 2014. The BIR’s denial dated August 4, 2014, was within this period. VSPI then had 30 days from receipt of the denial on August 6, 2014, or until September 5, 2014, to file its judicial claim, which it did. The Court also affirmed that VSPI’s services to a registered renewable energy developer are zero-rated under Section 108(B)(3) of the National Internal Revenue Code in relation to Section 15(g) of the Renewable Energy Act of 2008. However, only sales supported by duly registered official receipts imprinted with “zero-rated sale” qualify. The CTA correctly computed the refundable amount by determining the proportion of substantiated zero-rated sales to total declared sales and applying it to the valid input VAT, resulting in the grant of PHP 4,390,198.45.