Facts:
Cargill, a VAT-registered domestic corporation, filed two petitions in the Court of Tax Appeals for the refund of unutilized input taxes attributable to zero-rated sales.
On June 27, 2003, Cargill filed an administrative claim for refund of unutilized input taxes with the BIR. Three days after, on June 30, 2003, Cargill filed the first petition with the Court of Tax Appeals.
The second petition was filed on May 31, 2005, which was the same date when Cargill filed an administrative claim with the BIR.
Cargill, a VAT-registered domestic corporation, filed two petitions in the Court of Tax Appeals for the refund of unutilized input taxes attributable to zero-rated sales.
On June 27, 2003, Cargill filed an administrative claim for refund of unutilized input taxes with the BIR. Three days after, on June 30, 2003, Cargill filed the first petition with the Court of Tax Appeals.
The second petition was filed on May 31, 2005, which was the same date when Cargill filed an administrative claim with the BIR.
Issue:
Whether or not Cargill’s petitions for refund
of unutilized input VAT before the CTA should be dismissed on the ground of prematurity?
Ruling:
The first petition was filed prematurely while the second
petition was properly filed because it was exempted from the mandatory 120-day
period.
Sec. 112(A) of RA 8424 provides that claims for tax credit
or tax refund of unutilized input taxes attributable to zero-rated sales can be
claimed within two years after the close of the taxable quarter when the sales
were made. Sec. 112(D) of RA 8424 also provides that the Commissioner shall
grant a refund or issue the tax credit certificate for creditable input taxes
within one hundred twenty days from the date of submission of complete
documents. Within thirty (30) days from receipt of the Commissioner’s decision
or after the expiration of the 120-day period, the taxpayer may appeal the decision
or the unacted claim with the CTA.
In the landmark case of Aichi Forging vs. CIR, it was held
that the observance of the 120-day period is a mandatory and jurisdictional
requisite to the filing of a judicial claim for refund before the CTA. As such,
its non-observance would warrant the dismissal of the dismissal of the judicial
claim for lack of jurisdiction. In Aichi, it was held that the two-year period
only applies to administrative claims, and not judicial claims. Once the
administrative claim is filed within the 2-year period, the taxpayer must wait
for the lapse of the 120-day period before filing a judicial claim for refund,
even if the 120-day period is beyond the original 2-year period abovementioned.
However, the Supreme Court held in CIR v. San Roque that a
valid claim for equitable estoppel by the taxpayer because of reliance of an
earlier ruling issued by the BIR is an exception to the mandatory nature of the
120-day period. BIR Ruling No. DA-489-03 stated that the taxpayer-claimant need
not wait for the lapse of the 120-day period before seeking judicial relief. Taxpayers
did not need to observe the stringent 120-day period for the period December
10, 2003 to October 6, 2010 because the BIR Ruling (DA-489-03) was still
effective at that time. However, for the periods BEFORE and AFTER the
abovementioned period (December 10, 2003 to October 6, 2010) the 120-day period
was mandatory and jurisdictional.
Hence, in this case, the first petition, which was filed on
June 30, 2003, was prematurely filed because Cargill did not wait for the lapse
of the 120-day period before seeking relief with the CTA. The first petition is
not covered by the exception based on estoppel because it was filed before the
BIR issued Ruling No. DA-489-03. The CTA did not have jurisdiction over the
first petition.
The second petition, however, fell within the exemption from the 120-day period because it was filed within the effectivity of BIR Ruling No. DA-489-03 (within Dec. 10, 2003 to Oct. 6, 2010). Since the second petition was timely filed, it was reinstated and remanded to the CTA for its resolution on the merits.
Note: this case applies to claims for tax credits or tax refunds of unutilized input taxes attributable to zero-rated sales of the VAT.
The second petition, however, fell within the exemption from the 120-day period because it was filed within the effectivity of BIR Ruling No. DA-489-03 (within Dec. 10, 2003 to Oct. 6, 2010). Since the second petition was timely filed, it was reinstated and remanded to the CTA for its resolution on the merits.
Note: this case applies to claims for tax credits or tax refunds of unutilized input taxes attributable to zero-rated sales of the VAT.
