LAZARO-JAVIER, J.:
1) | Decision[2] dated July 19, 2021 affirming the dismissal on jurisdictional ground of the judicial claims for refund of petitioner Taihei Alltech Construction (Phil.) Inc. (Taihei) in the total amount of P19,345,434.54 representing unutilized excess tax credit for the 3rd and 4th quarters of calendar year 2011; and |
2) | Resolution[3] dated February 3, 2022, denying the motion for reconsideration of the Commissioner of Internal Revenue. |
a) | September 30, 2013 - For excess input VAT for the 3rd Quarter (July to September) of calendar year 2011 in the amount of P6,649,651.47.[9] |
b) | December 23, 2013 - For excess input VAT for the 4th Quarter (October to December) of calendar year 2011 in the amount of P12,695,783.07.[10] |
Taihei asserted that its pending administrative claims for refund were deemed denied by virtue of the retroactive application of RMC 54-2014.[13]REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUEJune 11, 2014REVENUE MEMORANDUM CIRCULAR NO. 54-2014
SUBJECT : Clarifying Issues Relative to the Application for Value Added Tax (VAT) Refund/Credit under Section 112 of the Tax Code, as amended TO : All Internal Revenue Officers and Others Concerned
Clarification on the issues concerning the application for VAT refund/tax credit has been made by the Supreme Court in Commissioner of Internal Revenue vs. San Roque Power Corporation and in Mindanao II Geo thermal Partnership vs. Commissioner of Internal Revenue. As such, this Circular is issued to summarize the rules on filing and processing of applications for VAT refund/tax credit.
I. Prescriptive Period within which Administrative Claim for Refund or Tax Credit of input Taxes shall be Made
Section 112 (A) of the Tax Code, as amended, provides that any VAT-registered person whose sales are zero-rated or effectively zero-rated, may within two (2) years after the close of the taxable quarter when sales were made, apply for the issuance of tax credit certificate or refund of creditable input tax due or attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax. As such, the taxpayer can file his administrative claim for VAT refund or credit at anytime within two-year prescriptive period.
The Commissioner shall have one hundred twenty (120) days from the date of submission of complete documents to decide whether or not to grant the claim for refund or issuance of the Tax Credit Certificate (TCC) for creditable input taxes. If the claim for VAT refund or credit is not acted upon by the Commissioner within 120-day period as required by law, such "inaction shall be deemed a denial" of the application for tax refund or credit.
II. Filing and Processing of Administrative Claims
The application for VAT refund/tax credit must be accompanied by complete supporting documents as enumerated in Annex "A" hereof. In addition, the taxpayer shall attach a statement under oath attesting to the completeness of the submitted documents (Annex "B"). The affidavit shall further state that the said documents are the only documents which the taxpayer will present to support the claim. If the taxpayer is a juridical person, there should be a sworn statement that the officer signing the affidavit (i.e., at the very least, the Chief Financial Officer) has been authorized by the Board of Directors of the company.
Upon submission of the administrative claim and its supporting documents, the claim shall be processed and no other documents shall be accepted/required from the taxpayer in the course of its evaluation. A decision shall be rendered by the Commissioner based only on the documents submitted by the taxpayer. The application for tax refund/tax credit shall be denied where the taxpayer/claimant failed to submit the complete supporting documents. For this purpose, the concerned processing/investigating office shall prepare and issue the corresponding Denial Letter to the taxpayer/claimant.
III. Mandatory 120+30 Day Period
In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty (120) day-period, appeal the decision or the unacted claim with the CTA. Verily, a judicial claim must be filed with the CTA within 30 days from the receipt of the Commissioner's decision denying the administrative claim or from the expiration of the 120-day period without any action from the Commissioner, as the case may be. In this regard, the taxpayer/claimant is required to observe the 120+30 day rule before lodging a petition for review with the CTA.
In sum, the taxpayer can file the appeal in one of two ways: (1) file the judicial claim within thirty days after the Commissioner denies the claim within the 120-day period, or (2) file the judicial claim within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period.
IV. Exception to the Mandatory and Jurisdictional Nature of the 120+30 day Period (BIR Ruling No. DA-489-03 dated 10 December 2003)
As an exception to the mandatory and jurisdictional 120+30 day period, it was emphasized that from the time of issuance of BIR Ruling No. DA-489-03 on December 10, 2003 up to its reversal by the Supreme Court in the Aichi case on October 6, 2010 (or a period of almost 7 years), taxpayers/claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review. This exception, however, is limited to cases of premature filing (filing of judicial claim prior to the lapse of the 120-day period) and does not extend to late filing of a judicial claim.
V. Pending Administrative Claim
In cases where the taxpayer has filed a "petition for review" with the CTA, the Commissioner loses jurisdiction over the administrative claim. However, the Processing Office of the Administrative Agency shall still evaluate internally the administrative claim for purposes of intelligently opposing the taxpayer's judicial claim.
Indubitably, failure to file a judicial claim with the CTA within thirty (30) days from the expiration of the 120-day period rendered the Commissioner's decision, or inaction "deemed a denial", final and unappealable. This applies to all currently pending administrative claim for refund/tax credit.
All other issuances inconsistent herewith are hereby repealed or modified accordingly.
All concerned are hereby enjoined to be guided accordingly and give this Circular as wide a publicity as possible.
This Circular shall take effect immediately.(SGD). KIM S. JACINTO-HENARES
Commissioner of Internal Revenue
By virtue of RR 1-2017, Taihei alleged that its administrative claim was deemed revived.[14] Subsequently, on June 10, 2019,[15] OIC-Assistant Commissioner for Assessment Service Ma. Luisa I. Belen denied Taihei's administrative claim under Letter[16] dated February 6, 2019, viz.:REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF FINANCE
BUREAU OF INTERNAL REVENUEJanuary 3, 2017REVENUE REGULATIONS NO. 1-2017
SUBJECT : Prescribing the Regulations Governing Applications for Value-Added Tax (VAT) Credit/Refund Filed Under Section 112 of the Tax Code, as Amended, Prior to Revenue Memorandum Circular No. 54-2014 dated June 11, 2014 TO: All Internal Revenue Officers and Others Concerned
SEC. 1. BACKGROUND. - On August 27, 2003, Revenue Memorandum Circular (RMC) No. 49-2003 dated August 15, 2003, was issued to allow taxpayers to file the complete documents to enable the Commissioner of Internal Revenue to properly process the administrative claims for tax credit or tax refund. It provided that upon filing of his application for tax credit/refund, the taxpayer-claimant is given thirty (30) days within which to complete the required documents unless given further extension by the head of the processing unit but such extension shall not exceed thirty (30) days. The claim shall be officially received only upon submission of complete documents. It is only upon such submission that the 120-day period would begin to run. In this sense, it is the taxpayer "who ultimately determines when complete documents have been submitted for the purpose of commencing and continuing the running of the 120-day period."
RMC No. 54-2014 dated June 11, 2014, was issued which provides that the Commissioner shall have one hundred twenty (120) days from date of submission of complete documents to decide whether or not to grant the claim for tax credit/refund. If the claim is not acted upon by the Commissioner within the statutory 120-day period, such "inaction shall be deemed a denial" of the application for tax credit or refund. Further it requires that the application or claim must already be accompanied by complete supporting documents and the taxpayer is barred from submitting additional documents after he has filed his administrative claim. This takes away from the taxpayer-claimant the reckoning of the 120-day period.
It appears that RMC No. 54-2014 was being given retroactive effect because pending claims were deemed denied upon expiration of the 120-day period from the date the claims were filed even though the taxpayer-claimants are still in the process of submitting the complete documents which was allowed under RMC No. 49-2003. It presumed that the pending claims had been filed with complete documents and the same have remained unacted upon beyond the 120-day period.
On December 8, 2016, the Supreme Court, in the case Pilipinas Total Gas, Inc. vs. The Commissioner of Internal Revenue (G.R. No. 207112), decreed that taxpayers "have every right to pursue their claims in the manner provided by existing regulations at the time it was filed," and, therefore, RMC No. 54-2014 cannot be applied retroactively as this would prejudice taxpayers whose VAT claims for tax credit or tax refund were filed and pending before June 11, 2014, the date RMC No. 54-2014 took effect. This judicial declaration compels the need to clarify the tax treatment and processing of applications for VAT tax credit/refund filed and pending prior to RMC 54-2014.
SEC. 2. SCOPE. - Pursuant to the provisions of Section 244, in relation to Section 246 and Section 112 of the Tax Code, as amended, these Regulations are issued to give effect to the doctrinal rule laid down in the aforecited Pilipinas Total Gas case and to afford fair and adequate relief to taxpayer-claimants whose claims were "deemed denied" as a result of the retroactive application of RMC No. 54-2014. For this purpose, and consistent with the judicial "summation of rules" decreed to be "made applicable to claims of tax credit/refund filed before June 11, 2014," such claims filed prior to RMC No. 54-2014 shall continue to be processed administratively.
SEC. 3 PROCESSING OF ADMINISTRATIVE CLAIMS. - VAT claims filed and pending prior to the effectivity of RMC 54-2014, the claims solely covered by these Regulations, shall be processed and approved in accordance with the following rules:SEC. 4. CLAIMS NOT COVERED. - The following claims filed and pending before the effectivity of RMC 54-2014 are not covered by these Regulations:
- The claimant-taxpayer, under Section 112 (A) of the Tax Code, as amended, has two (2) years after the close of the taxable quarter when the sales were made, to apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales. Thus, before the administrative claim is barred by prescription, the taxpayer must have submitted his complete documents in support of the application filed. This is because, it is upon the complete submission of his documents in support of his application that it can be said that the application was, "officially received" as clarified under RMC No. 49-2003.
- In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within the two-year period under Section 112 (A) of the Tax Code, as amended, and the Commissioner, or his duly authorized representative, should have decided on the claim for tax credit or refund within 120 days from the date of submission of complete documents, or from the date filing of the application, if the claimant-taxpayer did not submit additional documents.
Hence, pending administrative claims prior to the effectivity of RMC No. 54-2014 shall be processed by the concerned offices based on available documents submitted by the claimant-taxpayer within the aforesaid statutory two-year period. For this purpose, the result shall be communicated in writing by the concerned revenue official.SEC. 5. REPEALING CLAUSE. - Any revenue issuances inconsistent herewith are hereby repealed or modified accordingly.
- Those claims filed beyond the two-year statutory prescriptive period under Section 112 (A) of the Tax Code, as explained in Sec. 3 hereof;
- Those denied in writing by the approving authority;
- Those approved or granted hilly or partially by the approving authority; and
- Those already appealed to and pending with the CTA unless there is proof of withdrawal of the case filed with the CTA.
SEC. 6. EFFECTIVITY CLAUSE. – These regulations shall take effect fifteen (15) days after publication in a newspaper of general circulation.(SGD.) CARLOS G. DOMINGUEZ III
Secretary of Finance
RECOMMENDING APPROVAL:
(SGD). CAESAR R. DULAY
Commissioner of Internal Revenue
xxx xxxIn view of the mandatory rule that "[i]n case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals" prescribed under Section 112(C),[17] National Internal Revenue Code, as amended, Taihei filed a Petition for Review with the Court of Tax Appeals entitled Taihei Alltech Construction (Phil.) Inc. v. CIR docketed as CTA Case No. 10108 on July 10, 2019.
The said applications were deemed denied as a result of the retroactive application of Revenue Memorandum Circular (RMC) No. 54-2014 dated June 11, 2014. However, pursuant to Revenue Regulations No. 1-2017 dated January 3, 2017, claims filed prior to RMC No. 54-2014 shall continue to be processed administratively, to wit:"Hence, pending administrative claims prior to the effectivity of RMC No. 54-2014 shall be processed by the concerned office based on available documents submitted by the claimant-taxpayer within the xxx statutory two-year period xxx".The examination conducted by this Office on the available documents submitted supporting the said applications, resulted in excess deductions over input VAT claimed, as computed hereunder:In view of the foregoing, we regret to inform that your claims for VAT credit aggregating P19,345,434.54 are DENIED for lack of factual and legal bases.
Amount of claims P19,345,434.54 Deductions: Violation of invoicing requirements per Sec. 113 of NIRC of 1997 P17,150,738.30 Input VAT not supported
with ORs/invoices 1,333,099.23 Input VAT on importations
without proof of payment of VAT
908,065.00 Total Deductions P19,391,902.53 Excess Deductions over Input VAT Claimed (P46.467.99)
xxx xxx
1) | Were Taihei's judicial claims for refund filed out of time? |
2) | Did RMC 54-2014 retroactively invalidate Taihei's 120-day period to file a judicial claim under Section 112(C), National Internal Revenue Code, as amended? |
3) | Did RR 1-2017 revive Taihei's claims for refund? |
4) | Did RMC 54-2014 and RR 1-2017 create an exception to the 120+30-day period? |
II. Prescriptive Periods under Section 112(A) and (C)The Court had to restate this doctrinal ruling on the 120+30-day period in subsequent cases to address any perceived "loopholes" in its interpretation. In CIR v. Mindanao II Geothermal Partnership,[35] the Court ruled that the 30-day period applied not only to actual denial of claims but to the Commissioner of Internal Revenue's inaction as well. The Court even summarized the rules on prescriptive period as to what should be filed within the prescriptive period and when it should be reckoned, thus:
There are three compelling reasons why the 30-day period need not necessarily fall within the two-year prescriptive period, as long as the administrative claim is filed within the two-year prescriptive period.First, Section 112(A) clearly, plainly, and unequivocally provides that the taxpayer "may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of the creditable input tax due or paid to such sales." In short, the law states that the taxpayer may apply with the Commissioner for a refund or credit "within two (2) years," which means at anytime within two years. Thus, the application for refund or credit may be filed by the taxpayer with the Commissioner on the last day of the two-year prescriptive period and it will still strictly comply with the law. The two-year prescriptive period is a grace period in favor of the taxpayer and he can avail of the full period before his right to apply for a tax refund or credit is barred by prescription.The theory that the 30-day period must fall within the two-year prescriptive period adds a condition that is not found in the law. It results in truncating 120 days from the 730 days that the law grants the taxpayer for filing his administrative claim with the Commissioner. This Court cannot interpret a law to defeat, wholly or even partly, a remedy that the law expressly grants in clear, plain, and unequivocal language.
Second, Section 112(C) provides that the Commissioner shall decide the application for refund or credit "within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A)." The reference in Section 112(C) of the submission of documents "in support of the application filed in accordance with Subsection A" means that the application in Section 112(A) is the administrative claim that the Commissioner must decide within the 120-day period. In short, the two-year prescriptive period in Section 112(A) refers to the period within which the taxpayer can file an administrative claim for tax refund or credit. Stated otherwise, the two-year prescriptive period does not refer to the filing of the judicial claim with the CTA but to the filing of the administrative claim with the Commissioner. As held in Aichi, the "phrase 'within two years x x x apply for the issuance of a tax credit or refund' refers to applications for refund/credit with the CIR and not to appeals made to the CTA."
Third, if the 30-day period, or any part of it, is required to fall within the two-year prescriptive period (equivalent to 730 days), then the taxpayer must file his administrative claim for refund or credit within the first 610 days of the two-year prescriptive period. Otherwise, the filing of the administrative claim beyond the first 610 days will result in the appeal to the CTA being filed beyond the two-year prescriptive period. Thus, if the taxpayer files his administrative claim on the 611th day, the Commissioner, with his 120-day period, will have until the 731st day to decide the claim. If the Commissioner decides only on the 731st day, or does not decide at all, the taxpayer can no longer file his judicial claim with the CTA because the two-year prescriptive period (equivalent to 730 days) has lapsed. The 30-day period granted by law to the taxpayer to file an appeal before the CTA becomes utterly useless, even if the taxpayer complied with the law by filing his administrative claim within the two-year prescriptive period.
Section 112(A) and (C) must be interpreted according to its clear, plain, and unequivocal language. The taxpayer can file his administrative claim for refund or credit at anytime within the two-year prescriptive period. If he files his claim on the last day of the two-year prescriptive period, his claim is still filed on time. The Commissioner will have 120 days from such filing to decide the claim. If the Commissioner decides the claim on the 120th day, or does not decide it on that day, the taxpayer still has 30 days to file his judicial claim with the CTA. This is not only the plain meaning but also the only logical interpretation of Section 112(A) and (C).
A. 30-Day Period Also Applies to Appeals from InactionIn Rohm Apollo Semiconductor Phils. v. Commissioner of Internal Revenue,[38] the Court ruled that the taxpayer should not wait for the decision of the Commissioner of Internal Revenue as the 30-day period is triggered upon the expiration of the 120-day period:
Section 112(D) of the 1997 Tax Code states the time requirements for filing a judicial claim for refund or tax credit of input VAT:(D) Period within which Refund or Tax Credit of Input Taxes shall be Made. — In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) and (B) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.Section 112(D) speaks of two periods: the period of 120 days, which serves as a waiting period to give time for the CIR to act on the administrative claim for refund or credit, and the period of 30 days, which refers to the period for interposing an appeal with the CTA. It is with the 30-day period that there is an issue in this case.
The CTA En Banc's holding is that, since the word "or" – a disjunctive term that signifies dissociation and independence of one thing from another – is used in Section 112(D), the taxpayer is given two options: 1) file an appeal within 30 days from the CIR's denial of the administrative claim; or 2) file an appeal with the CTA after expiration of the 120-day period, in which case the 30-day appeal period does not apply. The judicial claim is seasonably filed so long as it is filed after the lapse of the 120-day waiting period but before the lapse of the two-year prescriptive period under Section 112(A).
We do not agree.
The 30-day period applies not only to instances of actual denial by the CIR of the claim for refund or tax credit, but to cases of inaction by the CIR as well. This is the correct interpretation of the law, as held in San Roque:Section 112(C) also expressly grants the taxpayer a 30-day period to appeal to the CTA the decision or inaction of the Commissioner, thus:This law is clear, plain, and unequivocal. Following the well-settled verba legis doctrine, this law should be applied exactly as worded since it is clear, plain, and unequivocal: As this law states, the taxpayer may, if he wishes, appeal the decision of the Commissioner to the CTA within 30 days from receipt of the Commissioner's decision, or if the Commissioner does not act on the taxpayer's claim within the 120-day period, the taxpayer may appeal to the CTA within 30 days from the expiration of the 120-day period.
x x x the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.
The San Roque pronouncement is clear. The taxpayer can file the appeal in one of two ways: (1) file the judicial claim within thirty days after the Commissioner denies the claim within the 120-day period, or (2) file the judicial claim within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period.
xxx xxx[36]
SUMMARY OF RULES ON PRESCRIPTIVE PERIODS FOR CLAIMING REFUND OR CREDIT OF INPUT VAT
The lessons of this case may be summed up as follows:
- Two-Year Prescriptive Period
- It is only the administrative claim that must be filed within the two-year prescriptive period. (Aichi)
- The proper reckoning date for the two-year prescriptive period is the close of the taxable quarter when the relevant sales were made. (San Roque)
- The only other rule is the Atlas ruling, which applied only from 8 June 2007 to 12 September 2008. Atlas states that the two-year prescriptive period for filing a claim for tax refund or credit of unutilized input VAT payments should be counted from the date of filing of the VAT return and payment of the tax. (San Roque)
- 120+30 Day Period
1. The taxpayer can file an appeal in one of two ways: (1) file the judicial claim within thirty days after the Commissioner denies the claim within the 120-day period, or (2) file the judicial claim within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period.
- The 30-day period always applies, whether there is a denial or inaction on the part of the CIR.
- As a general rule, the 30-day period to appeal is both mandatory and jurisdictional. (Aichi and San Roque)
- As an exception to the general rule, premature filing is allowed only if filed between 10 December 2003 and 5 October 2010, when BIR Ruling No. DA-489-03 was still in force. (San Roque)
- Late filing is absolutely prohibited, even during the time when BIR Ruling No. DA-489-03 was in force.[37] (San Roque) (Emphases supplied)
Section 112(D) of the 1997 Tax Code states the time requirements for filing a judicial claim for the refund or tax credit of input VAT. The legal provision speaks of two periods: the period of 120 days, which serves as a waiting period to give time for the CIR to act on the administrative claim for a refund or credit; and the period of 30 days, which refers to the period for filing a judicial claim with the CTA. It is the 30-day period that is at issue in this case.In Silicon Philippines, Inc. v. Commissioner of Internal Revenue,[40] the Court likewise ordained that a judicial claim for refund shall be filed within a period of 30 days after the receipt of Commissioner of Internal Revenue's decision/ruling or after the expiration of the 120-day period, "whichever is sooner," thus, further solidifying the rule.
The landmark case of Commissioner of Internal Revenue v. San Roque Power Corporation has interpreted Section 112 (D). The Court held that the taxpayer can file an appeal in one of two ways: (1) file the judicial claim within 30 days after the Commissioner denies the claim within the 120-day waiting period, or (2) file the judicial claim within 30 days from the expiration of the 120-day period if the Commissioner does not act within that period.
xxx xxx
xxx In other words, Rohm Apollo erroneously thought that the 30-day period does not apply to cases of the CIR's inaction after the lapse of the 120-day waiting period, and that a judicial claim is seasonably filed so long as it is done within the two year period. Thus, it filed the Petition for Review with the CTA only on 11 September 2002.
These mistaken notions have already been dispelled by Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. (Aichi) and San Roque. Aichi clarified that it is only the administrative claim that must be filed within the two-year prescriptive period. San Roque, on the other hand, has ruled that the 30-day period always applies, whether there is a denial or inaction on the part of the CIR.
Justice Antonio Carpio, writing for the Court in San Roque, explained that the 30-day period is a 1997 Tax Code innovation that does away with the old rule where the taxpayer could file a judicial claim when there is inaction on the part of the CIR and the two-year statute of limitations is about to expire. Justice Carpio stated:The old rule that the taxpayer may file the judicial claim, without waiting for the Commissioner's decision if the two-year prescriptive period is about to expire, cannot apply because that rule was adopted before the enactment of the 30-day period. The 30-day period was adopted precisely to do away with the old rule, so that under the VAT System the taxpayer will always have 30 days to file the judicial claim even if the Commissioner acts only on the 120th day, or does not act at all during the 120-day period. With the 30-day period always available to the taxpayer, the taxpayer can no longer file a judicial claim for refund or credit of input VAT without waiting for the Commissioner to decide until the expiration of the 120-day period. The 30-day period to appeal is mandatory and jurisdictional.xxx xxx
As a general rule, the 30-day period to appeal is both mandatory and jurisdictional. The only exception to the general rule is when BIR Ruling No. DA-489-03 was still in force, that is, between 10 December 2003 and 5 October 2010, [the] BIR Ruling excused premature filing, declaring that the taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review. xxx
In fine, our finding is that the judicial claim for the refund or credit of unutilized input VAT was belatedly filed. Hence, the CTA lost jurisdiction over Rohm Apollo's claim for a refund or credit. The foregoing considered, there is no need to go into the merits of this case.
xxx xxx
A final note, the taxpayers are reminded that when the 120-day period lapses and there is inaction on the part of the CIR, they must no longer wait for it to come up with a decision thereafter. The CIR's inaction is the decision itself. It is already a denial of the refund claim. Thus, the taxpayer must file an appeal within 30 days from the lapse of the 120-day waiting period.[39] (Emphases and italics supplied)
2011 | Administrative Claim Filed | End of 120-day Period | End of 30-day Period |
3rd Quarter | September 30, 2013 | January 28, 2014 | February 27, 2014 |
4th Quarter | December 23, 2013 | April 22, 2014 | May 22, 2014 |
2011 | End of 120-day Period | Judicial Claim Filed | No. of Days Late |
3rd Quarter | January 28, 2014 | July 10, 2019 | 1,989 days (or 5 yrs. and 163 days) |
4th Quarter | April 22, 2014 | July 10, 2019 | 1,905 days (or 5 yrs. and 79 days) |
With the amendments only with respect to its place under Section 112, the Court Finds that RMC No. 49-2003 should still be observed. Thus, taking the foregoing changes to the law altogether, it becomes apparent that, for purposes of determining when the supporting documents have been completed — it is the taxpayer who ultimately determines when complete documents have been submitted for the purpose of commencing and continuing the running of the 120-day period. After all, he may have already completed the necessary documents the moment he filed his administrative claim, in which case, the 120-day period is reckoned from the date of filing.Accordingly, RMC 54-2014 (requiring taxpayer to file at once complete supporting document simultaneously with its administrative claim for refund) should not be retroactively applied to administrative claims with incomplete documents pending as of June 11, 2014 as the same was deemed to have been continuously governed by the old RMC 49-2003.
x x x x
xxx After all, in a claim for tax credit or refund, it is the taxpayer who has the burden to prove his cause of action. As such, he enjoys relative freedom to submit such evidence to prove his claim.
The foregoing conclusion is but a logical consequence of the due process guarantee under the Constitution. Corollary to the guarantee that one be afforded the opportunity to be heard, it goes without saying that the applicant should be allowed reasonable freedom as to when and how to present his claim within the allowable period.
x x x x
To summarize, for the just disposition of the subject controversy, the rule is that from the date an administrative claim for excess unutilized VAT is filed, a taxpayer has thirty (30) days within which to submit the documentary requirements sufficient to support his claim, unless given further extension by the CIR. Then, upon filing by the taxpayer of his complete documents to support his application, or expiration of the period given, the CIR has 120 days within which to decide the claim for tax credit or refund. Should the taxpayer, on the date of his filing, manifest that he no longer wishes to submit any other [additional] documents to complete his administrative claim, the 120 day period allowed to the CIR begins to run from the date of filing.
In all cases, whatever documents a taxpayer intends to file to support his claim must be completed within the two-year period under Section 112(A) of the NIRC. The 30-day period from denial of the claim or from the expiration of the 120-day period within which to appeal the denial or inaction of the CIR to the CTA must also be respected.
It bears mentioning at this point that the foregoing summation of the rules should only be made applicable to those claims for tax credit or refund filed prior to June 11, 2014, such as the claim at bench. As it now stands, RMC 54- 2014 dated June 11, 2014 mandates that:The application for VAT refund/tax credit must be accompanied by complete supporting documents as enumerated in Annex "A" hereof. In addition, the taxpayer shall attach a statement under oath attesting to the completeness of the submitted documents (Annex B). The affidavit shall further state that the said documents are the only documents which the taxpayer will present to support the claim. If the taxpayer is a juridical person, there should be a sworn statement that the officer signing the affidavit (i.e., at the very least, the Chief Financial Officer) has been authorized by the Board of Directors of the company.On this score, the Court finds that the foregoing issuance cannot be applied retroactively to the case at bar since it imposes new obligations upon taxpayers in order to perfect their administrative claim, that is, [1] compliance with the mandate to submit the "supporting documents" enumerated under RMC 54-2014 under its "Annex A"; and [2] the filing of "a statement under oath attesting to the completeness of the submitted documents," referred to in RMC 54-2014 as "Annex B." This should not prejudice taxpayers who have every right to pursue their claims in the manner provided by existing regulations at the time it was filed.[44] (Emphases supplied)
Upon submission of the administrative claim and its supporting documents, the claim shall be processed and no other documents shall be accepted/required from the taxpayer in the course of its evaluation. A decision shall be rendered by the Commissioner based only on the documents submitted by the taxpayer. The application for tax refund/tax credit shall be denied where the taxpayer/claimant failed to submit the complete supporting documents. For this purpose, the concerned processing/investigating office shall prepare and issue the corresponding Denial Letter to the taxpayer/claimant.
Thus, under the current rule, the reckoning of the 120-day period has been withdrawn from the taxpayer by RMC 54- 2014, since it requires him at the time he files his claim to complete his supporting documents and attest that he will no longer submit any other document to prove his claim. Further, the taxpayer is barred from submitting additional documents after he has filed his administrative claim.
WHEREFORE, finding that the instant petition was not timely filed and therefore, the Court has no jurisdiction over the same, respondent's Motion for Early Resolution on the Issue of Jurisdiction of the Honorable Court is GRANTED. Accordingly, the instant case is DISMISSED.Taihei filed a Motion for Reconsideration,[14] arguing that Revenue Memorandum Circular No. 54-2014 was given retroactive application and all then-pending applications for tax credit and refund—including those of Taihei—were deemed denied.[15] However, its claims were allegedly revived when the commissioner issued Revenue Regulations No. 1-2017, giving Taihei a new opportunity to pursue its claims for tax credit.[16]
SO ORDERED.[13]
WHEREFORE, premises considered, the instant Petition for Review is DENIED for lack of merit. The Resolutions dated February 3, 2020 and July 14, 2020, both rendered by the Court in Division, are hereby AFFIRMED.In a February 3, 2022 Resolution,[28] the Court of Tax Appeals En Banc denied Taihei's Motion for Reconsideration for lack of merit.[29]
SO ORDERED.[27]
SECTION 112. Refunds or Tax Credits of Input Tax. —Additionally, Section 7(a) of Republic Act No. 1125, or An Act Creating the Court of Tax Appeals, as amended by Republic Act No. 9282, provides that the Court of Tax Appeals has exclusive appellate jurisdiction over decisions of, or inaction by, the commissioner of internal revenue in cases involving disputed assessments or refund of internal revenue taxes. Its pertinent portions read:
(C) Period within which Refund or Tax Credit of Input Taxes shall be Made. — In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.
SECTION 7. Jurisdiction. — The [Court of Tax Appeals] shall exercise:In this relation, Section 11 of Republic Act No. 1125, as amended, states in part:
(a) Exclusive appellate jurisdiction to review by appeal, as herein provided: (1) Decisions of the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue; (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relation thereto, or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue, where the National Internal Revenue Code provides a specific period for action, in which case the inaction shall be deemed a denial[.] (Emphasis and underscoring supplied)
SECTION 11. Who May Appeal; Mode of Appeal; Effect of Appeal. — Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue, the Commissioner of Customs, the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file an appeal with the [Court of Tax Appeals] within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein.Under these provisions, a taxpayer may resort to judicial action: (a) after a denial by the commissioner of internal revenue; or (b) after 120 days have lapsed from the date of submission of complete documents in support of the administrative claim for tax refund or credit, whichever is sooner.[39]
As I have stated in my dissent in Commissioner of Internal Revenue v. San Roque Power Corporation,[47] the 120+30-day period provided under Section 112(D) of the Tax Code is mandatory and jurisdictional.[48] A taxpayer's failure to elevate their claim to the Court of Tax Appeals within 30 days from the lapse of the 120-day period will bar any subsequent judicial claim as the Court of Tax Appeals cannot acquire jurisdiction over it.[49]
2011
Administrative
Claims Filed End of
120-day
Period End of
30-day
Period Judicial
Claims
Filed No. of
Days
Late 3rd September 30, 2013 January 28, 2014 February 27, 2014 July 10, 2019 1,989 days 4th December 23, 2013 April 22, 2014 May 22, 2014 July 10, 2019 1,905 days