G.R. No. 191498 - Commissioner of Internal Revenue vs. Mindanao II Geothermal Partnership

Mindanao II Geothermal Partnership (Mindanao II) is a partnership registered with the SEC engaged in power generation and sale of electricity to the National Power Corporation (NAPOCOR), accredited by the Department of Energy.
The petitioner is the Commissioner of Internal Revenue (CIR).

Mindanao II filed its Quarterly VAT Returns for the second, third, and fourth quarters of taxable year 2004 on the following dates:

On 6 October 2005, Mindanao II filed an administrative claim for refund or credit of accumulated unutilized creditable input VAT amounting to P7,167,005.84 related to the aforementioned quarters, asserting that all sales were zero-rated under the EPIRA law.
Pursuant to Section 112(D) of the 1997 Tax Code, CIR had 120 days (until 3 February 2006) to act on the claim, but did not do so. Mindanao II had 30 days thereafter (until 5 March 2006) to appeal administratively denied or unacted claims to the Court of Tax Appeals (CTA).

Mindanao II did not file an appeal within the 30-day period but filed a Petition for Review with the CTA on 21 July 2006, apparently relying on the two-year prescriptive period under Section 112(A) reckoned from the filing dates of the quarterly VAT returns.
The CTA Second Division, relying on the ruling in Atlas Consolidated Mining and Development Corporation v. CIR (Atlas), held that the two-year prescriptive period is reckoned from the filing of VAT returns, found Mindanao II’s claims timely, and ordered refund or issuance of tax credit certificate of P6,791,845.24.
CIR filed a Motion for Partial Reconsideration, contending that the judicial claim was filed beyond the 30-day period, invoking Section 112(D).
Before the motion was resolved, this Court promulgated CIR v. Mirant Pagbilao Corporation (Mirant), which held that the two-year prescriptive period is reckoned from the close of the taxable quarter of sales, not from filing of VAT returns.
The CTA denied CIR’s motion and sustained Mindanao II’s claims.
CIR elevated the case to the CTA En Banc, which affirmed the CTA Second Division in reliance on Atlas, refusing to apply Mirant retroactively and holding that the 30-day period to appeal does not apply to cases of CIR inaction.
CIR filed a Motion for Partial Reconsideration of the CTA En Banc decision, which was denied.
CIR then filed a Rule 45 Petition with this Court.

Whether the two-year prescriptive period for filing an administrative claim for refund or credit of unutilized input VAT should be reckoned from the filing of quarterly VAT returns or from the close of the taxable quarter when sales were made.

Whether the judicial claim for refund or credit filed by Mindanao II with the CTA was timely considering the 120-day period for CIR to act and the subsequent 30-day period to appeal under Section 112(D) of the 1997 Tax Code.

Whether the 30-day period to appeal the CIR's denial or inaction is mandatory and jurisdictional, including in cases of inaction.

Whether the reliance on the Atlas ruling by the CTA was proper or if Mirant should apply retroactively.