G.R. No. 258791 , December 7, 2022
Taihei Alltech Construction (Phil.) Inc., Petitioner, vs. Commissioner of Internal Revenue, Respondent.

FACTS

Petitioner Taihei Alltech Construction (Phil.) Inc., a VAT-registered domestic corporation, filed administrative claims for refund of unutilized excess input VAT for the 3rd and 4th quarters of 2011. These claims, totaling ₱19,345,434.54, were filed within the two-year prescriptive period on September 30, 2013, and December 23, 2013, respectively. The Commissioner of Internal Revenue did not act on these claims within the 120-day period mandated by law. Consequently, Taihei filed a judicial claim for refund with the Court of Tax Appeals (CTA) in Division on April 30, 2015, which was beyond the 30-day period from the expiration of the 120-day period but within two years from the filing of the administrative claims.
The CTA Division dismissed the petition for lack of jurisdiction, ruling that Taihei failed to comply with the mandatory 120+30 day period for filing judicial claims as established in the San Roque Power doctrine. The CTA En Banc affirmed this dismissal. Taihei argued that its filing was timely under BIR Ruling No. DA-489-03, which was in effect from December 10, 2003, to October 6, 2010, and allowed judicial claims to be filed within two years from the administrative filing if the Commissioner did not act within 120 days. Taihei contended this ruling applied to its 2011 transactions.

ISSUE

Whether the Court of Tax Appeals correctly dismissed Taihei’s judicial claim for refund for lack of jurisdiction due to non-compliance with the 120+30 day rule.

RULING

Yes, the CTA correctly dismissed the petition. The Supreme Court affirmed that compliance with the 120+30 day period under Section 112 of the National Internal Revenue Code is mandatory and jurisdictional for filing a judicial claim for VAT refund. The 120-day period is for the Commissioner to decide the administrative claim, and the subsequent 30-day period is for the taxpayer to appeal an adverse decision or inaction to the CTA. Failure to observe this timeline deprives the CTA of jurisdiction.
The Court rejected Taihei’s reliance on BIR Ruling No. DA-489-03. The ruling created an exception, allowing a two-year period to file a judicial claim if the Commissioner did not act. However, this exception only applied from the ruling’s issuance on December 10, 2003, until its reversal by the Supreme Court in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. on October 6, 2010. Taihei’s relevant taxable quarters were in 2011, and its administrative claims were filed in 2013—well after the Aichi ruling had already invalidated BIR Ruling No. DA-489-03. Therefore, the exception was no longer in effect, and the strict 120+30 day rule was fully applicable. Taihei’s judicial claim, filed in 2015, was filed far beyond the 30-day period from the expiration of the 120-day period for its 2013 administrative claims, rendering the filing out of time and the CTA without jurisdiction.