THIRD DIVISION
G.R. No. 205282, January 14, 2019
STEAG STATE POWER, INC. (FORMERLY STATE POWER DEVELOPMENT CORPORATION), PETITIONER, v. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.
R E S O L U T I O N
LEONEN, J.:
In its June 5, 2013 Minute Resolution,1 this Court denied the Petition for Review on Certiorari2 filed by Steag State Power, Inc. (Steag State Power) for its failure to show any reversible error in the July 19, 2012 Decision3 and December 20, 2012 Resolution4 of the Court of Tax Appeals in CTA EB No. 710. Thus, Steag State Power filed a Motion for Reconsideration, asking this Court to set its Minute Resolution aside and give due course to the Petition. After studying the Motion for Reconsideration, this Court still firmly believes that the Petition should be denied for lack of merit.
Steag State Power is a domestic corporation primarily engaged in power generation and sale of electricity to the National Power Corporation under a Build, Operate, Transfer Scheme.5 It is registered with the Bureau of Internal Revenue as a value-added tax taxpayer with Tax Identification No. 004-626-938-000.6
In 2003, Steag State Power started building its power plant inside the PHIVIDEC Industrial Estate-Misamis Oriental. The construction was completed on November 15, 2006.7
During the construction period, Steag State Power filed its quarterly value-added tax returns from the first to fourth quarters of 2004 on April 26, 2004, July 26, 2004, October 25, 2004, and January 25, 2005. It later filed amended value-added tax returns for the taxable quarters on December 16, 2004 and April 22, 2005.8
Likewise, for the taxable quarters of 2005, Steag State Power filed its quarterly value-added tax returns on April 22, 2005, July 26, 2005, October 25, 2005, and January 25, 2006.9
Steag State Power filed before the Bureau of Internal Revenue District Office No. 50, South Makati administrative claims for refund of its allegedly unutilized input value-added tax payments on capital goods in the total amount of P670,950,937.97:
Due to the Commissioner of Internal Revenue's (Commissioner) inaction on its administrative claims, Steag State Power filed a Petition for Review on Certiorari11 before the Court of Tax Appeals on April 20, 2006, elevating its claim for refund for the taxable year 2004. Through another Petition,12 filed on December 27, 2006, it sought judicial recourse involving its claim for refund for the taxable year 2005. Eventually, the Petitions were consolidated.13
Date of Application Period Covered Amount of ClaimJune 30, 2005 January 1, 2004 to May 31, 2005 P408,768,002.82 August 31, 2005 June 1, 2005 to August 31, 2005 162,274,183.32 October 28, 2005 September 1, 2005 to October 31, 2005 44,988,727.50 December 19, 2005 October 2005 54,920,024.33 TOTAL P670,950,937.9710
WHEREFORE, petitioner's Motion for Reconsideration (With Motion to Submit Supplemental Evidence) is hereby PARTIALLY GRANTED. Accordingly, let this case be set for hearing for the presentation of Annexes "A" and "A-1" (inclusive of sub-markings [Exhibits EEE to ZZZ], inclusive of sub-markings) on January 29, 2010 at 9:00 a.m.A hearing was conducted on January 29, 2010. Later, Steag State Power filed its supplemental formal offer of evidence, which was admitted by the Court of Tax Appeals Special First Division on April 26, 2010.21
Meanwhile, the resolution of petitioner's Motion for Reconsideration with regard to the issue of whether petitioner was able to substantiate its claim for a refund or tax credit in the total amount of PhP670,950,937.97, allegedly representing its unutilized input tax paid on purchases and importations of capital goods from January 1, 2004 to October 31, 2005, is HELD IN ABEYANCE pending the formal offer of said Annexes. Thereafter, the Motion shall be deemed submitted for resolution.
Furthermore, respondent's Motion to Admit/Opposition is hereby GRANTED and his Comment/Opposition is hereby ADMITTED.
SO ORDERED.20 (Emphasis in the original)
SECTION 112. Refunds or Tax Credits of Input Tax. -A plain reading of this provision reveals that a taxpayer may appeal the Commissioner's denial or inaction only within 30 days when the decision that denies the claim is received, or when the 120-day period given to the Commissioner to decide on the claim expires.
....
(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 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. (Emphasis supplied)42
SEC. 4.112-1. Claims for Refund/Tax Credit Certificate of Input Tax. -It is misleading for petitioner to raise its supposed reliance in good faith on Revenue Regulation No. 7-95, when the rule had already been superseded and revoked by the time it filed its judicial claims.
....
(d) Period within which refund or tax credit certificate/refund of input taxes shall be made
In proper cases, the Commissioner of Internal Revenue shall grant a tax credit certificate/refund 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 subparagraph (a) above.
In case of full or partial denial of the claim for tax credit certificate/refund as decided by the Commissioner of Internal Revenue, the taxpayer may appeal to the Court of Tax Appeals (CTA) within thirty (30) days from the receipt of said denial, otherwise the decision shall become final. However, if no action on the claim for tax credit certificate/refund has been taken by the Commissioner of Internal Revenue after the one hundred twenty (120) day period from the date of submission of the application with complete documents, the taxpayer may appeal to the CTA within 30 days from the lapse of the 120-day period. (Emphasis supplied)
(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[.] (Emphasis supplied)In Aichi Forging Company of Asia, Inc. and San Roque Power Corporation, the phrase "within two (2) years ... apply for the issuance of a tax credit certificate or refund" refers to administrative claims for refund or credit filed with the Commissioner of Internal Revenue, not to appeals made before the Court of Tax Appeals.
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 ... 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.In turn, Section 7(a)(2) of the Court of Tax Appeals Charter, as amended, reads:
(B) Appeal shall 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. (Emphasis supplied)
Sec. 7. Jurisdiction. - The CTA shall exercise:Under the Court of Tax Appeals Charter, the Commissioner's inaction on a claim for refund is considered a "denial" of the claim, which may be appealed before the Court of Tax Appeals within 30 days from the expiration of the period fixed by law for action.
(a) Exclusive appellate jurisdiction to review by appeal, as herein provided: .... (A) (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes, fees or other charges, penalties in relations 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 of action, in which case the inaction shall be deemed a denial[.] (Emphasis supplied)
Unlike San Roque and Taganito, Philex's case is not one of premature filing but of late filing. Philex did not file any petition with the CTA within the 120-day period. Philex did not also file any petition with the CTA within 30 days after the expiration of the 120-day period. Philex filed its judicial claim long after the expiration of the 120-day period, in fact 426 days after the lapse of the 120-day period. In any event, whether governed by jurisprudence before, during, or after the Atlas case, Philex's judicial claim will have to be rejected because of late filing. Whether the two-year prescriptive period is counted from the date of payment of the output VAT following the Atlas doctrine, or from the close of the taxable quarter when the sales attributable to the input VAT were made following the Mirant and Aichi doctrines, Philex's judicial claim was indisputably filed late.Since then, the 120+30-day periods have been applied to pending cases61 resulting in the denial of taxpayers' claims due to late filing. This Court finds no reason to make an exception here.
The Atlas doctrine cannot save Philex from the late filing of its judicial claim. The inaction of the Commissioner on Philex's claim during the 120-day period is, by express provision of law, "deemed a denial" of Philex's claim. Philex had 30 days from the expiration of the 120-day period to file its judicial claim with the CTA. Philex's failure to do so rendered the "deemed a denial" decision of the Commissioner final and inappealable. The right to appeal to the CTA from a decision or "deemed a denial" decision of the Commissioner is merely a statutory privilege, not a constitutional right. The exercise of such statutory privilege requires strict compliance with the conditions attached by the statute for its exercise. Philex failed to comply with the statutory conditions and must thus bear the consequences.60 (Emphasis in the original, citation omitted)
| Very truly yours, |
(SGD) WILFREDO V. LAPITAN | |
Division Clerk of Court |
Endnotes:
1Rollo, pp. 163-164.
2 Id. at 53-96.
3 Id. at 106-124. The Decision was penned by Associate Justice Juanito C. Castañeda, Jr. and concurred in by Presiding Justice Ernesto D. Acosta, Associate Justices Erlinda P. Uy, Caesar A. Casanova, Olga Palanca-Enriquez, Esperanza R. Pabon-Victorino, Cielito N. Mindaro-Grulla, and Amelia R. CotangcoManalastas of the En Banc, Court of Tax Appeals, Quezon City.
4 Id. at 126-130. The Resolution was penned by Associate Justice Juanito C. Castañeda, Jr. and concurred in by Associate Justices Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Pabon-Victorino, Cielito N. Mindaro-Grulla, and Amelia R. Cotangco-Manalastas of the En Banc, Court of Tax Appeals, Quezon City.
5 Id. at 107-108.
6 Id. at 107.
7 Id. at 108.
8 Id.
9 Id.
10 Id. at 109.
11 Id. at 135. Docketed as CTA Case No. 7458.
12 Id. at 135. Docketed as CTA Case No. 7554.
13 Id.
14 Id. at 132-142. The Decision was penned by Presiding Justice Ernesto D. Acosta and concurred in by Associate Justices Lovell R. Bautista and Caesar A. Casanova of the First Division, Court of Tax Appeals, Quezon City.
15 Id. at 138.
16 Id.
17 Id. at. 140-141.
18 Id. at 110.
19 Id.
20 Id. at 110-111.
21 Id. at 111.
22 Id.
23 Id.
24 Id. at 106-124.
25 646 Phil. 710 (2010) [Per J. Del Castillo, First Division].
26Rollo, pp. 116 and 120.
27 Id. at 126-130.
28 Id. at 53-96. The Petition was posted on March 7, 2013, the last day of the 30-day extended period.
29 Id. at 163-164.
30 Id. at 206-233.
31 Id. at 208.
32 703 Phil. 310 (2013) [Per J. Carpio, En Banc].
33Rollo, p. 227.
34 Id. at 214.
35 Id. at 217.
36 Id. at 223.
37 Id.
38 Id. at 214-215.
39 Id. at 220.
40 Id. at 221.
41 Id. at 223-224 and 226.
42 Now sec. 112(C), per the amendments introduced by Rep. Act No. 9337 on May 24, 2005.
43 646 Phil. 710 (2010) [Per J. Del Castillo, First Division].
44 586 Phil. 712 (2008) [Per J. Velasco, Jr., Second Division].
45 703 Phil. 310 (2013) [Per J. Carpio, En Banc].
46 Id. at 360.
47Rollo, p. 135.
48 Consolidated Value-Added Tax Regulations of 2005, November 1, 2005, available at <https://www.bir.gov.ph/images/bir_files/old_files/pdf/26116rr16-2005.pdf> (last accessed on January
16, 2019).
49See Commissioner of Internal Revenue v. San Roque Power Corporation, 703 Phil. 310 (2013) [Per J. Carpio, En Banc].
50 Amended by Rep. Act No. 9282 (2004), sec. 9.
51 Commissioner of Internal Revenue v. Villa, 130 Phil. 3, 4 (1968) [Per J. Bengzon, En Banc].
52Nippon Express (Philippine) Corporation v. Commissioner of Internal Revenue, 706 Phil. 442, 450-451 (2013) [Per J. Mendoza, Third Division].
53 Id.
54See Ker & Company., Ltd. v. Court of Tax Appeals, G.R. No. L-12396, January 31, 1962, 4 SCRA 160, 163 [Per J. Paredes, En Banc].
55Rollo, pp. 152-154.
56See Commissioner of Internal Revenue v. San Roque Power Corporation, 703 Phil. 310, 376 (2013) [Per J. Carpio, En Banc].
57Rollo, p. 153.
58 724 Phil. 534 (2014) [Per C.J. Sereno, First Division].
59See J. Leonen, Concurring and Dissenting Opinion in Commissioner of Internal Revenue v. San Roque Power Corporation, 719 Phil. 137, 167-168 (2013) [Per J. Carpio, En Banc].
60Commissioner of Internal Revenue v. San Roque Power Corporation, 703 Phil. 310, 362-363 (2013) [Per J. Carpio, En Banc].
61See Commissioner of Internal Revenue v. Toledo Power Company, 766 Phil. 20 (2015) [Per C.J. Sereno, First Division]; CE Casecnan Water and Energy Company, Inc. v. Commissioner of Internal Revenue, 764 Phil. 595 (2015) [Per J. Leonen, Second Division]; Silicon Philippines, Inc. v. Commissioner of Internal Revenue, 757 Phil. 54 (2015) [Per J. Leonardo-De Castro, First Division]; Northern Mindanao Power Corporation v. Commissioner of Internal Revenue, 754 Phil. 146 (2015) [Per C.J. Sereno, First Division]; Rohm Apollo Semiconductor Philippines v. Commissioner of Internal Revenue, 750 Phil. 624 (2015) [Per C.J. Sereno, First Division]; CBK Power Company Limited v. Commissioner of Internal Revenue, 724 Phil. 686 (2014) [Per C.J. Sereno, First Division]; Commissioner of Internal Revenue v. Dash Engineering Philippines, Inc., 723 Phil. 433 (2013) [Per J. Mendoza, Third Division]; and Mindanao II Geothermal Partnership v. Commissioner of Internal Revenue, 706 Phil. 48 (2013) [Per J. Carpio, Second Division].
62Applied Food Ingredients Company, Inc. v. Commissioner of Internal Revenue, 720 Phil. 782, 789 (2013) [Per C.J. Sereno, First Division] and Commissioner of Internal Revenue v. San Roque Power Corporation, 703 Phil. 310 (2013) (Per J. Carpio, En Banc].