Title
Atlas Consolidated Mining and Development Corp. vs. Commissioner of Internal Revenue
Case
G.R. No. 141104
Decision Date
Jun 8, 2007
Petitioner's VAT refund claims denied due to prescription, insufficient evidence, and failure to meet 70% export sales requirement under Revenue Regulations No. 2-88.
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Case Digest (G.R. No. 141104)

Facts:

Background of the Case:

  • Petitioner Atlas Consolidated Mining and Development Corporation (petitioner corporation) is engaged in mining, production, and sale of mineral products such as gold, pyrite, and copper concentrates. It is a VAT-registered taxpayer.
  • The case involves two consolidated petitions (G.R. Nos. 141104 and 148763) concerning the petitioner's claims for refund/credit of input Value Added Tax (VAT) on its purchases of capital goods and zero-rated sales for the taxable quarters of 1990 and 1992.

G.R. No. 141104:

  • Petitioner filed a VAT Return for the first quarter of 1992 and applied for a refund/credit of input VAT amounting to P26,030,460.00.
  • When the BIR failed to act on the application, petitioner filed a Petition for Review with the Court of Tax Appeals (CTA) on 20 April 1994.
  • The CTA denied the claim on grounds of prescription, insufficiency of evidence, and failure to comply with Section 230 of the Tax Code. The Court of Appeals affirmed the CTA's decision.

G.R. No. 148763:

  • Petitioner filed VAT Returns for the second, third, and fourth quarters of 1990 and applied for refund/credit of input VAT for those periods.
  • The CTA dismissed the petitions, ruling that the claims were filed beyond the prescriptive period. The Court of Appeals affirmed the CTA's decision, finding that petitioner failed to substantiate its claims.

Key Issues Raised by Petitioner:

  1. Whether the Court of Appeals erred in affirming the requirement under Revenue Regulations No. 2-88 that 70% of sales must consist of exports for zero-rating to apply.
  2. Whether the Court of Appeals erred in ruling that petitioner failed to submit sufficient evidence.
  3. Whether the Court of Appeals erred in ruling that the judicial claim was filed beyond the prescriptive period.
  4. Whether the Court of Appeals erred in not allowing the re-opening of the case for petitioner to present additional evidence.

Issue:

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Ruling:

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Ratio:

  1. Prescription: The two-year prescriptive period for filing claims for refund/credit of input VAT is counted from the close of the quarter when the zero-rated sales were made, as provided under Section 106(b) of the Tax Code. Petitioner's claims were filed beyond this period, rendering them barred by prescription.
  2. Validity of Revenue Regulations No. 2-88: Revenue Regulations No. 2-88, which imposes a 70% export sales requirement for zero-rating, is valid and binding. Petitioner failed to prove that 70% of its sales consisted of exports, making it ineligible for zero-rating.
  3. Sufficiency of Evidence: Tax refunds are in the nature of tax exemptions and must be proven with strict compliance with the law. Petitioner failed to provide the necessary documentary evidence, such as VAT invoices and receipts, to substantiate its claims.
  4. Re-opening of the Case: A new trial or re-opening of the case is not warranted where the failure to present evidence is due to the party's own negligence. Petitioner's failure to comply with administrative regulations and tax court circulars was not excusable.

Conclusion:

The Supreme Court denied the petitions, affirming the decisions of the Court of Appeals. Petitioner's claims for refund/credit of input VAT were barred by prescription, unsupported by sufficient evidence, and failed to comply with the 70% export sales requirement under Revenue Regulations No. 2-88. Petitioner was also not entitled to a re-opening of the case or a new trial.


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