Case Digest (G.R. No. 202922)
Facts:
Commissioner of Internal Revenue v. Semirara Mining Corporation, G.R. No. 202922, June 19, 2017, the Supreme Court First Division, Caguioa, J., writing for the Court. Petitioner is the Commissioner of Internal Revenue (CIR); respondent is Semirara Mining Corporation (SMC).SMC, originally Semirara Coal Corporation, entered into a Coal Operating Contract (COC) with the Ministry of Energy on June 8, 1983, under Presidential Decree No. 972 (PD No. 972), which grants operators certain incentives including exemption from national taxes except income tax. SCC changed its corporate name to SMC in 2002 and for years sold coal—notably to the National Power Corporation (NPC)—without paying value-added tax (VAT) pursuant to the exemption under PD No. 972, Section 16.
After amendments to the National Internal Revenue Code by Republic Act No. 9337 (RA No. 9337) took effect on July 1, 2005, NPC began withholding 5% final VAT on SMC’s coal billings for the period July 1, 2006 to December 31, 2006, on the view that coal sales were no longer VAT-exempt. SMC obtained BIR Ruling No. 006-2007 sustaining its position that sales under its COC remained VAT-exempt, and thereafter filed administrative claims for refund or issuance of tax credit certificates (TCCs) totaling P77,253,245.39 (filed May 21, 2007, January 21, 2008, and January 29, 2008) representing the VAT withheld by NPC.
When the CIR did not act, SMC filed petitions for review with the Court of Tax Appeals (CTA) Division (CTA Case Nos. 7822 and 7849) on August 8 and November 10, 2008; these were consolidated January 27, 2009. The CTA Division, in a Decision dated March 28, 2011 (authored by Associate Justice Esperanza R. Fabon-Victorino), granted SMC’s refund claim, finding entitlement under Section 109(K) of the NIRC, as amended by RA No. 9337, in relation to PD No. 972; the CIR’s motion for reconsideration was denied June 3, 2011.
The CIR elevated the matter to the CTA En Banc (docketed CTA EB No. 793). The CTA En Banc, in a Decision dated April 23, 2012, dismissed the CIR’s petition and affirmed the Division’s grant of refund; its July 26, 2012 Resolution denied reconsideration. The CIR filed this petition for review on certiorari under Rule 45 of the Rules of Court before the Supre...(Pro-only)
Issues:
- Was the CTA correct in ruling that SMC’s failure to submit the documents enumerated in RMO No. 53-98 at the administrative level was not fatal to its judicial claim for VAT refund?
- Did the CTA correctly hold that the sale of coal produced under SMC’s COC is exempt from VAT despite amendments effected by ...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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