G.R. No. 189440, June 18, 2014
COMMISSIONER OF INTERNAL REVENUE, Petitioner, v. MINDANAO II GEOTHERMAL PARTNERSHIP, Respondent.
D E C I S I O N
VILLARAMA, JR., J.:
Zero-rated Sales Purchases Input Vat D 1st Quarter P213, 813, 056.47 P17, 516, 718.65 P1, 751, 671.86 E 2nd Quarter 210, 379, 134.36 14, 294, 058.68 1, 429, 405.85 F 3rd Quarter 176, 468, 276.36 24, 719, 490.96 2, 471, 949.09 G 4th Quarter 168, 724, 235.04 17, 749, 385.49 1, 774, 938.57 Total P769, 384, 702. 23 P74, 279, 653.78 P7, 427, 965.37 6
WHEREFORE, the Petition for Review is hereby PARTIALLY GRANTED. Accordingly, respondent is hereby ORDERED to ISSUE a TAX CREDIT CERTIFICATE in favor of petitioner in the reduced amount of P689,313.37, representing unutilized input VAT incurred by petitioner in connection with its zero-rated sales for taxable year 2002.
WHEREFORE, premises considered, the instant petition is hereby DENIED DUE COURSE, and accordingly, DISMISSED for lack of merit.
Record shows that petitioner CIR’s argument that respondent Mindanao II failed to file its judicial claim, within 30 days after the lapse of the 120-day period provided under Section 112 (D) of the NIRC of 1997, as amended, was raised for the first time by petitioner CIR in its present Motion for Reconsideration before this Court En Banc. Said issue was never raised in petitioner CIR’s Answer and Amended Answer filed before the Court in Division. Neither was it raised by petitioner CIR in his present Petition for Review before this Court En Banc.
As a rule, no question will be entertained on appeal unless it has been raised in the court below. Points of law, theories, issues and arguments not brought to the attention of the lower court need not be, and ordinarily will not be considered by a reviewing court, as they cannot be raised for the first time at that late stage. Basic consideration of due process impels this rule (Del Rosario vs. Bonga, 350 SCRA 108).15cralawlawlibrary
[WHETHER] THE COURT OF TAX APPEALS EN BANC DECIDED A QUESTION OF SUBSTANCE WHICH IS NOT IN ACCORD WITH THE LAW AND PREVAILING JURISPRUDENCE.16cralawlawlibrary
SEC. 112. Refunds or Tax Credits of Input Tax. –
x x x x
(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 Subsection (A) 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. (Emphasis supplied.)ChanRoblesVirtualawlibrary
Section 112(D) [now Section 112(C)] of the NIRC clearly provides that the CIR has “120 days, from the date of the submission of the complete documents in support of the application [for tax refund/credit],” within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer’s recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days.
In this case, the administrative and the judicial claims were simultaneously filed on September 30, 2004. Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-day period. For this reason, we find the filing of the judicial claim with the CTA premature.
Respondent’s assertion that the non-observance of the 120-day period is not fatal to the filing of a judicial claim as long as both the administrative and the judicial claims are filed within the two-year prescriptive period has no legal basis.
There is nothing in Section 112 of the NIRC to support respondent’s view. Subsection (A) of the said provision states that “any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two 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 creditable input tax due or paid attributable to such sales.” The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund” refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA. This is apparent in the first paragraph of subsection (D) of the same provision, which states that the CIR has “120 days from the submission of complete documents in support of the application filed in accordance with Subsections (A) and (B)” within which to decide on the claim.
In fact, applying the two-year period to judicial claims would render nugatory Section 112(D) of the NIRC, which already provides for a specific period within which a taxpayer should appeal the decision or inaction of the CIR. The second paragraph of Section 112(D) of the NIRC envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-day period; and (2) when no decision is made after the 120-day period. In both instances, the taxpayer has 30 days within which to file an appeal with the CTA. As we see it then, the 120-day period is crucial in filing an appeal with the CTA.20cralawlawlibrary
When Section 112(C) states that “the taxpayer affected may, within thirty (30) days from 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 law does not make the 120+30 day periods optional just because the law uses the word “may.” The word “may” simply means that the taxpayer may or may not appeal the decision of the Commissioner within 30 days from receipt of the decision, or within 30 days from the expiration of the 120-day period. Certainly, by no stretch of the imagination can the word “may” be construed as making the 120+30 day periods optional, allowing the taxpayer to file a judicial claim one day after filing the administrative claim with the Commissioner.
1Rollo, pp. 38-61. Penned by Associate Justice Olga Palanca-Enriquez, with Presiding Justice Ernesto D. Acosta and Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, and Caesar A. Casanova, concurring.
2 Id. at 62-68.
3 Id. at 84-96. Penned by Associate Justice Lovell R. Bautista, with Presiding Justice Ernesto D. Acosta and Associate Justice Caesar A. Casanova, concurring.
4 Id. at 103-105.
5 Id. at 41.
7 Id. at 41-42.
8 Id. at 42.
9 Id. at 42-43.
10 Id. at 96.
11 Id. at 97-102.
12 Id. at 60.
13 Id. at 118-131.
14 Now Section 112(C).
15Rollo, p. 64.
16 Id. at 18.
17Commissioner of Internal Revenue v. San Roque Power Corporation, G.R. Nos. 187485, 196113 & 197156, February 12, 2013, 690 SCRA 336, 387-388.
18 G.R. No. 184823, October 6, 2010, 632 SCRA 422.
19 SEC. 112. Refunds or Tax Credits of Input Tax. –(A) Zero-Rated or Effectively Zero-Rated Sales. – 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 the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales. Provided, finally, That for a person making sales that are zero-rated under Section 108(B)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales.20 Supra note 18, at 443-444.
21 Supra note 17, at 398.
22 Id. at 390.
23Commissioner of Internal Revenue v. Bank of the Philippine Islands, G.R. No. 178490, July 7, 2009, 592 SCRA 219, 235.