SECOND DIVISION
G.R. No. 244154, July 15, 2020
ZUELLIG-PHARMA ASIA PACIFIC LTD. PHILS. ROHQ, PETITIONER, V. COMMISSIONER OF INTERNAL REVENUE (CIR), RESPONDENT.
D E C I S I O N
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1 is the Decision2 dated January 21, 2019 of the Court of Tax Appeals En Banc (CTA En Banc) in CTA EB No. 1656, which upheld the CTA-Second Division's dismissal of petitioner Zuellig-Pharma Asia Pacific Ltd. Phils. ROHQ (Zuellig-PH)'s claim for refund or issuance of a tax credit certificate amounting to P39,931,971.21, representing its excess and unutilized input value-added tax (VAT) for calendar year (CY) 2010.
SEC. 112. Refunds or Tax Credits of Input Tax. -As may be gleaned from the above provision, the CIR has a period of 120 days from the date of submission of complete documents within which to evaluate an administrative claim for tax credit or refund of creditable input taxes (120-day period). If the CIR denies the administrative claim, or if it remains unacted upon the expiration of the said period - which is essentially considered a "denial due to inaction," the taxpayer may, within thirty (30) days from such denial or expiration, avail of the further remedy of filing a judicial claim before the CTA.44
(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. (Emphases and underscoring supplied)
The foregoing rules were further refined by the Court in Pilipinas Total Gas, which resolved the question of: "In an administrative claim for tax credit or refund of creditable input VAT, from what point does the law allow the CIR to determine when it should decide an application for refund? Or stated differently: Under present law, when should the submission of documents be deemed 'completed' for purposes of determining the running of the 120-day period?"46
Q-18: For pending claims with incomplete documents, what is the period within which to submit the supporting documents required by the investigating/processing office? When should the investigating/processing office officially receive claims for tax credit/refund and what is the period required to process such claims? A-18: For pending claims which have not been acted upon by the investigating/processing office due to incomplete documentation, the taxpayer-claimants are given thirty (30) days within which to submit the documentary requirements unless given further extension by the head of the processing unit, but such extension should not exceed thirty (30) days. For claims to be filed by claimants with the respective investigating/processing office of the administrative agency, the same shall be officially received only upon submission of complete documents. For current and future claims for tax credit/refund, the same shall be processed within one hundred twenty (120) days from receipt of the complete documents. If, in the course of the investigation and processing of the claim, additional documents are required for the proper determination of the legitimate amount of claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the investigating/processing office, which shall be construed as within the one hundred twenty [(120)-day] period. (Emphases and underscoring supplied)
(a) If the taxing authority does not make any notice requesting for additional documents or if the taxpayer manifests that he no longer wishes to submit any additional documents, the 120-day period begins from the date the administrative claim was made as it would be assumed that at that point, the taxpayer had already submitted complete documents in support of its claim;47 orNotably, there is no requirement in the Tax Code or in RMC No. 49-2003 that the taxing authority's request for additional documents should be made in a specific form. Stated differently, nowhere in the law does it require that the request for additional documents must always and absolutely be made in written form. While written requests would be preferred because it would be easier for the BIR to keep track of the documents submitted by the taxpayer in response thereto, the law does not explicitly prohibit verbal requests for additional documents as long as they are duly made by authorized BIR officials.
(b) If the taxing authority requests for additional documents, the 120-day period begins from the time the taxpayer submits the complete documents sufficient to support his claim. In this scenario, 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.48
Second, the CIR sent no written notice informing Total Gas that the documents were incomplete or required it to submit additional documents. As stated above, such notice by way of a written request is required by the CIR to be sent to Total Gas. Neither was there any decision made denying the administrative claim of Total Gas on the ground that it had failed to submit all the required documents. It was precisely the inaction of the BIR which prompted Total Gas to file the judicial claim. Thus, by failing to inform Total Gas of the need to submit any additional document, the BIR cannot now argue that the judicial claim should be dismissed because it failed to submit complete documents.50cralawlawlibraryIn contrast, it must be pointed out that the initial portions of the Court's ruling in Pilipinas Total Gas did not even qualify that the request must be in written form. As held in the same case, what is "essential" is that there must be "a request from the tax collection authority to produce the complete documents" given to the taxpayer-claimant: ChanRoblesVirtualawlibrary
Lest it be misunderstood, the benefit given to the taxpayer to determine when it should complete its submission of documents is not unbridled. Under RMC No. 49-2003, if in the course of the investigation and processing of the claim, additional documents are required for the proper determination of the legitimacy of the claim, the taxpayer-claimants shall submit such documents within thirty (30) days from request of the investigating/processing office. Again, notice, by way of a request from the tax collection authority to produce the complete documents in these cases, is essential.51Thus, the statement that "such notice by way of a written request is required by the CIR to be sent to [the taxpayer]" was only an innocuous statement of the Court which was not meant to create any doctrine on the request's required form. This is confirmed by the fact that in Pilipinas Total Gas, there was even no request - whether verbal or written - given by the BIR to the taxpayer.
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 addition documents to complete his administrative claim, the 120-day period allowed to the CIR begins to run from the date of filing.53Unlike in this case, the Court in Pilipinas Total Gas was not confronted with the issue of whether or not requests for documents should be in any particular form, for the purpose of determining the reckoning point of the 120-day period. In fact, as earlier mentioned, in Pilipinas Total Gas, there was no request - whether verbal or written - given by the BIR to the taxpayer. Thus, in view of the foregoing, Pilipinas Total Gas is not the proper basis to construe that all subsequent verbal communications made by the BIR to Zuellig-PH (or any taxpayer for that matter) are insufficient for the purpose of determining the reckoning point of the 120-day period.
Endnotes:
* Designated Additional Member per Special Order No. 2780 dated May 11, 2020.
1Rollo, pp. 12-48.
2 Id. at 54-68. Penned by Associate Justice Ma. Belen M. Ringpis-Liban with Presiding Justice Roman G. Del Rosario and Associate Justices Juanito C. Castañeda, Jr., Erlinda P. Uy, Esperanza R. Fabon-Victorino, and Cielito N. Mindaro-Grulla, concurring, and Associate Justice Catherine T. Manahan, dissenting.
3 Id. at 55.
4 CTA Division rollo, pp. 151-154.
5 Id. at 159-161.
6 Id. at 165-170.
7 Id. at 174-179.
8 Id. at 181, 185, 188, and 191-192. It appears from the records that Zuellig-PH further amended its Quarterly VAT Returns for the 4th Quarter on February 16, 2011 (see id. at 16 and 194-195).
9 See letter dated February 17, 2011 of Zuellig-PH; id. at 59.
10 Id. at 60.
11 See rollo, p. 56.
12 CTA Division rollo, p. 570.
13 See rollo, p. 56.
14 CTA Division rollo, p. 252.
15 See rollo, p. 56.
16 See letter dated July 1, 2011 of Zuellig-PH; CTA Division rollo, p. 571.
17 See letter (with attachments) dated May 7, 2012 of Zuellig-PH; id. at 572-588.
18 See letter dated July 25, 2012 of Zuellig-PH; id. at 593.
19 See letter (with attachments) dated December 6, 2012 of Zuellig-PH; id. at 594-597.
20 See letter (with attachment) dated September 11, 2013 of Zuellig-PH; id. at 598-600.
21 See letter dated March 12, 2014 of Deputy Commissioner Operations Group Nelson M. Aspe; id. at 610.
22 See Letter dated March 4, 2014; id. at 608-609.
23 Id. at 610.
24 Id.; emphasis supplied.
25 Id. at 611.
26 Id.
27 Id.; emphasis and underscoring supplied.
28 Id.
29 Dated September 25, 2014. Id. at 14-23.
30 See rollo, p. 57.
31 This appears to be an oversight since 120 days from February 17, 2011 is June 17 (not 11), 2011.
32 Based on footnote 31, this should be July 17, 2011.
33 See portions in the Answer (To the Petition for Review dated September 25, 2014) dated November 13, 2014; CTA Division rollo, pp. 77-81.
34 Id. at 722-749. Penned by Associate Justice Juanito C. Castañeda, Jr. with Associate Justice Caesar A. Casanova, concurring, and Associate Justice Catherine T. Manahan, dissenting.
35 774 Phil. 473 (2015).
36 See CTA Division rollo, p. 747.
37 See motion for reconsideration (Re: Decision dated March 9, 2017) dated March 27, 2017; id. at 755-775.
38 See id. at 766-769.
39 Id. at 785-795.
40 CTA En Banc rollo, pp. 20-47.
41Rollo, pp. 54-68.
42 See id. at 62-67.
43 Republic Act No. ( RA) 8424 as amended up to RA 9337 (July 1, 2005).
44 See Pilipinas Total Gas, supra note 35, at 487.
45 Entitled "AMENDING ANSWER TO QUESTION NUMBER 17 OF REVENUE MEMORANDUM CIRCULAR NO. 42-2003 AND PROVIDING ADDITIONAL GUIDELINES ON ISSUES RELATIVE TO THE PROCESSING OF CLAIMS FOR VALUE-ADDED TAX (VAT) CREDIT/REFUND, INCLUDING THOSE FILED WITH THE TAX AND REVENUE GROUP, ONE STOP SHOP INTER-AGENCY TAX CREDIT AND DUTY DRAWBACK CENTER, DEPARTMENT OF FINANCE (OSS-DOF) BY DIRECT EXPORTERS," issued on August 15, 2003.
46 Supra note 35 at 488 (italics in the original).
47 See id. at 495.
48 See id. at 493.
49 Id. at 502.
50 Id. at 503; emphases supplied.
51 Id. at 494; emphasis and underscoring supplied.
52 See id. at 502-505.
53 Id. at 495.
54 CTA Division rollo, p. 571.
55 Id. at 572-588.
56 Id. at 593.
57 Id. at 594-597.
58 Id. at 598-600.
59 Id. at 611.
60 Id.
61 See CIR v. Petron Corporation, 685 Phil. 119 (2012), citing Pilipinas Shell Petroleum Corporation v. CIR, 565 Phil. 613 (2007). See also CIR v. San Miguel Corporation, 804 Phil. 293 (2017) and China Banking Corporation v. CIR, 753 Phil. 58 (2015).
62 Item II. Filing and Processing of Administrative Claims of RMC No. 54-2014 (entitled "CLARIFYING ISSUES RELATIVE TO THE APPLICATION FOR VALUE ADDED TAX (VAT) REFUND/CREDIT UNDER SECTION 112 OF THE TAX CODE, AS AMENDED" issued on June 11, 2014) reads: ChanRoblesVirtualawlibraryThe 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.63 This same reminder was issued by the Court in Pilipinas Total Gas (supra note 35, at 496): ChanRoblesVirtualawlibrary
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. (Emphases and underscoring supplied)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 [(see block quotation in footnote 62)]:chanRoblesvirtualLawlibrary
x x x x
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.