FIRST DIVISION
G.R. No. 185666, February 04, 2015
NIPPON EXPRESS (PHILIPPINES) CORP., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondents.
D E C I S I O N
PEREZ, J.:
Petitioner is a corporation duly organized and existing under the laws of the Republic of the Philippines, registered with the Securities and Exchange Commission (SEC) under Certificate of Registration No. ASO95-005669, and with principal office at U-2701 Yuchengco Tower, RCBC Plaza, 6819 Ayala Ave., Salcedo Village, Makati City.
Likewise, petitioner is registered with the Large Taxpayers District Office of the Bureau of Internal Revenue in Makati City as, among others, a Value-Added Tax (VAT) taxpayer rendering freight forwarding services.
Respondent, on the other hand, is the duly appointed Commissioner of Internal Revenue vested with power to decide, approve, and grant refunds or tax credits of overpaid internal revenue taxes as provided by law and holds office and may be served with summons, orders, pleadings, and other processes at BIR Revenue Region 8, 5/F Atrium Bldg., Makati Ave., Makati City.
The precedent facts, as culled from the records are as follows:chanRoblesvirtualLawlibrary
For the calendar year 2000, petitioner’s gross receipts were primarily derived from rendering its services to Philippine Economic Zone Authority (PEZA)-registered clients. Likewise, it incurred total sales of P1,063,357,608.74, which as shown in petitioner’s Amended Quarterly VAT Return, is made up of the following:chanRoblesvirtualLawlibrary
Taxable Sales 1st quarter (Annex B, Petition for Review) P19,416,405.90 2nd quarter (Annex C, Petition for Review) 21,727,369.30 3rd quarter (Annex D, Petition for Review) 25,478,221.80 4th quarter (Annex E, Petition for Review) 19,106,829.00 P85,728,826.00 Zero-Rated Sales 1st quarter (Annex B, Petition for Review) 163,837,757.11 2nd quarter (Annex C, Petition for Review) 189,237,849.49 3rd quarter (Annex D, Petition for Review) 228,507,608.58 4th quarter (Annex E, Petition for Review) 247,387,949.22 828,971,164.40 Exempt Sales 1st quarter (Annex B, Petition for Review) 45,234,485.51 2nd quarter (Annex C, Petition for Review) 27,632,934.35 3rd quarter (Annex D, Petition for Review) 49,971,632.54 4th quarter (Annex E, Petition for Review) 25,818,565.94 148,657,618.34 Grand Total P1,063,357,608.74
Also, for the same year, petitioner paid input taxes amounting to P31,846,253.57 and apportioning this amount with its total sales above in accordance with Section 112 of the 1997 Tax Code, as amended; the amount of total sales attributable to zero-rated sales would be P24,826,667.61.
Under the premise that it is entitled to a refund of the amount of P24,826,667.61, petitioner filed four separate applications for tax credit/refund with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the Department of Finance (OSSAC-DOF) on September 24, 2001.
Receiving no resolution from OSSAC-DOF, petitioner filed the instant petition for review on April 24, 2002 pursuant to Section 112 in relation to Section 229 of the 1997 Tax Code, as amended.6
Section 7. Jurisdiction. - The Court of Tax Appeals shall exercise 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 imposed in relation thereto, or other matters arising under the National Internal Revenue Code or other law or part of law administered by the Bureau of Internal Revenue;chanrobleslaw
x x x.23 (Emphasis supplied)
Section 11. Who may appeal; effect of appeal. – Any person, association or corporation adversely affected by a decision or ruling of the Collector of Internal Revenue, the Collector of Customs or any provincial or city Board of Assessment Appeals may file an appeal in the Court of Tax Appeals within thirty days after the receipt of such decision or ruling.24 x x x (Emphasis and underscoring supplied)
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: x x x.
x x x x
(D)25Period 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) 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.
x x x x. (Emphasis and underscoring supplied)
To repeat, a claim for tax refund or credit, like a claim for tax refund exemption, is construed strictly against the taxpayer. One of the conditions for a judicial claim of refund or credit under the VAT System is compliance with the 120+30 day mandatory and jurisdictional periods. Thus, strict compliance with the 120+30 day periods is necessary for such a claim to prosper, whether before, during, or after the effectivity of the Atlas doctrine, except for the period from the issuance of BIR Ruling No. DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine was adopted, which again reinstated the 120+30 day periods as mandatory and jurisdictional.27 (Emphasis supplied)
We summarize the rules on the determination of the prescriptive period for filing a tax refund or credit of unutilized input VAT as provided in Section 112 of the 1997 Tax Code, as follows:chanRoblesvirtualLawlibrary
(1) An administrative claim must be filed with the CIR within two years after the close of the taxable quarter when the zero-rated or effectively zero-rated sales were made.
(2) The CIR has 120 days from the date of submission of complete documents in support of the administrative claim within which to decide whether to grant a refund or issue a tax credit certificate. The 120-day period may extend beyond the two-year period from the filing of the administrative claim if the claim is filed in the later part of the two-year period. If the 120-day period expires without any decision from the CIR, then the administrative claim may be considered to be denied by inaction.
(3) A judicial claim must be filed with the CTA within 30 days from the receipt of the CIR’s decision denying the administrative claim or from the expiration of the 120-day period without any action from the CIR.
(4) All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by this Court in Aichi on October 6, 2010, as an exception to the mandatory and jurisdictional 120+30 day periods.29 (Emphasis supplied)
Taxable year 2000 (close of taxable quarters) | Filing date of the administrative claim (within the 2-year period) | Last day of the 120-day period under Section 112(D) from the date of submission of complete documents in support of its application | Last day of the 30-day period to judicially appeal said inaction | Filing date of the Petition for Review |
1st Quarter (31 March 2000) 2nd Quarter (30 June 2000) 3rd Quarter (30 September 2000) 4th Quarter (31 December 2000) | 24 September 2001 | 22 September 2001 | 21 February 2002 | 24 April 2002 |
Endnotes:
1Rollo, pp. 110-134; Penned by Associate Justice Erlinda P. Uy with Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Caesar A. Casanova and Olga Palanca-Enriquez concurring; while Presiding Justice Ernesto D. Acosta issued a Dissenting Opinion thereto.
2 Id. at 135-142.
3 Id. at 85-101.
4 Id. at 102-109.
5 Chaired by Presiding Justice Ernesto D. Acosta, with Associate Justices Lovell R. Bautista and Caesar A. Casanova as members.
6Rollo, pp. 85-87; CTA in Division Decision dated 15 June 2007.
7 Id. at 85-101.
8 Sec. 113. Invoicing and Accounting Requirements for VAT-Registered Persons. –
(A) Invoicing Requirements. — A VAT-registered person shall, for every sale, issue an invoice or receipt. In addition to the information required under Section 237, the following information shall be indicated in the invoice or receipt:chanRoblesvirtualLawlibrary
(1) A statement that the seller is a VAT-registered person, followed by his taxpayer's identification number; and
(2) The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax.
(B) Accounting Requirements. — Notwithstanding the provisions of Section 233, all persons subject to the value-added tax under Sections 106 and 108 shall, in addition to the regular accounting records required, maintain a subsidiary sales journal and subsidiary purchase journal on which the daily sales and purchases are recorded. The subsidiary journals shall contain such information as may be required by the Secretary of Finance.
9 Rollo, pp. 102-109; CTA in Division Resolution dated 13 November 2007.
10 R.A. No. 1125, otherwise known as “An Act Creating the Court of Tax Appeals”, as amended by R.A. No. 9282, also known as “An Act Expanding the Jurisdiction of the Court of Tax Appeals (CTA), Elevating its Rank to the Level of a Collegiate Court with Special Jurisdiction and Enlarging its Membership, Amending for the Purpose Certain Sections of Republic Act No. 1125, As Amended, Otherwise known as the Law Creating the Court of Tax Appeals, and for Other Purposes”, which took effect on 23 April 2004.
11 Rollo, p. 123; CTA En Banc Decision dated 20 August 2008.
12 Id. at 125.
13 Id. at 135-142; CTA En Banc Resolution dated 16 December 2008.
14 Id. at 44-83; Petition.
15Salcedo v. People, 400 Phil. 1302, 1304 (2000).
16The Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, 28 April 2004, 428 SCRA 79, 85-86.
17Borromeo v. Sun, 375 Phil. 595, 602 (1999).
18Rollo, pp. 135-142; CTA En Banc Resolution dated 16 December 2008.
19 G.R. Nos. 187485, 196113, and 197156, 12 February 2013, 690 SCRA 336.
20Rollo, pp. 110-134.
21 “AN ACT CREATING THE COURT OF TAX APPEALS” which took effect on 16 June 1954.
22 “AN ACT EXPANDING THE JURISDICTION OF THE COURT OF TAX APPEALS (CTA), ELEVATING ITS RANK TO THE LEVEL OF A COLLEGIATE COURT WITH SPECIAL JURISDICTION AND ENLARGING ITS MEMBERSHIP AMENDING FOR THE PURPOSE CERTAIN SECTIONS OF REPUBLIC ACT NO.1125, AS AMENDED, OTHERWISE KNOWN AS THE LAW CREATING THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES” which took effect on 23 April 2004. This Act was a consolidation of Senate No. 2712 and House Bill No. 6673 finally passed by the Senate and the House of Representatives on 8 December 2003 and 2 February 2004, respectively.
23 R.A. 9282 amended this provision as follows:chanRoblesvirtualLawlibrary
SEC. 7. Jurisdiction. – The CTA shall exercise:chanRoblesvirtualLawlibrary
a) Exclusive appellate jurisdiction to review by appeal, as herein provided:chanRoblesvirtualLawlibrary
(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;chanrobleslaw
(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; x x x (Emphasis supplied)
24 R.A. No. 9282 amended this provision as follows:chanRoblesvirtualLawlibrary
SEC. 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 CTA 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.
Appeal should be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon. x x x (Emphasis supplied)
25 Presently Section 112(C) upon the effectivity of Republic Act No. 9337 on 1 November 2005.
26Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of Internal Revenue, supra note 19.
27 Id. at 398-399.
28 G.R. Nos. 193301 and 194637, 11 March 2013, 693 SCRA 49.
29 Id. at 89.
30 “BIR Ruling No. DA-489-03 does provide a valid claim for equitable estoppel under Section 246 of the Tax Code. BIR Ruling No. DA-489-03 ezpressly states 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.’” See Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of Internal Revenue, supra note 19 at 401.
31 It shall be presumed that the complete documents in support of its application was likewise submitted on the date petitioner filed all the administrative claims. Thus, the reckoning of the 120-day period commenced from 24 September 2001.
32 More than two (2) months had lapsed since the last day allowed by law to file the appropriate judicial claim.
33Commissioner of Internal Revenue v. Villa, et al., 130 Phil. 3, 4 (1968).
34Laresma v. Abellana, 484 Phil. 766, 778 (2004).
35Lt. Col. De Guzman v. Judge Escalona, 186 Phil. 431, 437-438 (1980).
36Ker & Company, Ltd. v. Court of Tax Appeals, et al., G.R. No. L-12396, 31 January 1962, 4 SCRA 160, 163.
37 Section 1, Rule 9, Rules of Court.
38 G.R. No. 181858, 24 November 2010, 636 SCRA 166, 182.
39 Now Section 112(C) of the NIRC of 1997, as amended by RA No. 9337.