G.R. No. 193914 - Seven Brothers Shipping Corp. vs. DMC-Construction Resources, Inc.

Dash Engineering Philippines, Inc. (DEPI) is an SEC-registered corporation, listed with PEZA as an ecozone IT export enterprise and VAT-registered for export sales of computer-aided engineering and design services.
DEPI filed its monthly and quarterly VAT returns covering January 1 to June 30, 2003.
On August 9, 2004, DEPI filed an administrative claim for credit or refund of unutilized input VAT in the amount of ₱2,149,684.88 attributable to its zero-rated sales.

The Commissioner of Internal Revenue (CIR) did not act on DEPI’s claim within the 120-day period prescribed by Section 112(D) of the NIRC.
DEPI filed a petition for review with the Court of Tax Appeals (CTA) Second Division on May 5, 2005.
On October 4, 2007, the CTA Second Division partially granted the claim, issuing a tax credit certificate for ₱1,147,683.78; its motion for reconsideration was denied on January 3, 2008.

The CIR elevated the case to the CTA En Banc, arguing (a) failure to substantiate that purchases were in the course of business, properly supported by VAT invoices/receipts, and directly attributable to zero-rated sales, and (b) that the petition was filed out of the 120+30-day prescriptive period.
On July 17, 2008, the CTA En Banc upheld the Second Division decision, holding that the 30-day period under Section 112(D) is directory, not jurisdictional, so long as the petition falls within the two-year prescriptive period; its motion for reconsideration was denied on August 12, 2008.

The CIR filed a Rule 45 petition before the Supreme Court (G.R. No. 184145), challenging the CTA En Banc’s rulings on timeliness and sufficiency of documentary proof.
The Supreme Court heard arguments on (a) the mandatory and jurisdictional nature of the Section 112(D) 120+30-day rule, (b) the inapplicability of Sections 204 and 229 to excess input VAT claims, and (c) the sufficiency of DEPI’s documentary submissions.

Whether DEPI’s judicial claim for refund, filed on May 5, 2005, complied with the 120-day CIR action period plus the 30-day judicial appeal period under Section 112(D) of the NIRC.
Whether DEPI sufficiently supported its input VAT refund claim with the required VAT invoices, official receipts, and evidence of direct attribution to zero-rated sales.