G.R. No. 236325 - Commissioner of Internal Revenue vs. Filminera Resources Corp.

The case involves a Petition for Review on Certiorari under Rule 45 filed by the Commissioner of Internal Revenue (CIR) seeking to set aside the decision of the Court of Tax Appeals (CTA) En Banc.
The CTA En Banc affirmed the CTA Division’s ruling ordering the refund of P51,734,898.99 to Philex Mining Corporation for its unutilized input VAT attributable to zero-rated sales for the second and third quarters of taxable year (TY) 2010.

Philex Mining Corporation (Philex Mining) is a VAT-registered domestic corporation engaged in the mining business with approved zero-rating status effective April 12, 1998.
During the second and third quarters of TY 2010, Philex Mining exported mineral products to foreign buyers and filed amended quarterly VAT returns reflecting excess input tax.
On June 7 and 22, 2012, Philex Mining filed claims for refund with the Department of Finance’s One-Stop Shop Center (DOF-OSS), supporting its claims with the required documents.
Subsequently, Philex Mining filed two petitions for review with the CTA Division, which were consolidated. An Independent Certified Public Accountant (ICPA) was commissioned to review the claim.

On March 31, 2015, the CTA Division partly granted Philex Mining’s petitions, ruling that the taxpayer timely filed claims for refund and submitted adequate documentary evidence supporting the existence of valid input VAT attributable to zero-rated sales.
The CIR moved for reconsideration, arguing premature filing of the judicial claim, incomplete submission of required documents to DOF-OSS, and failure to comply with accounting requirements such as maintaining subsidiary sales and purchase journals and filing monthly VAT declarations.
On June 24, 2015, the CTA Division denied the motion, emphasizing that no law required submission of subsidiary journals or monthly VAT declarations as a condition for refund entitlement.
The CIR appealed to the CTA En Banc, which on October 19, 2016, denied the appeal and affirmed the CTA Division’s decision.

The CIR contended that tax declarations and subsidiary journals form part of the requisites for tax credit/refund and that Philex Mining failed to prove compliance therewith.

Whether or not the failure of Philex Mining to maintain subsidiary sales and purchase journals and to file monthly VAT declarations constitutes a valid ground to deny its claim for refund of unutilized input VAT attributable to zero-rated sales.
Whether tax declarations and subsidiary journals are statutory requirements for entitlement to a refund or issuance of tax credit certificates under the Tax Code and the relevant Revenue Regulations.