Case Digest (G.R. No. 196415)
Facts:
The consolidated cases Commissioner of Internal Revenue v. Toledo Power Company (G.R. No. 196415) and Toledo Power Company v. Commissioner of Internal Revenue (G.R. No. 196451) were decided by the Supreme Court on December 2, 2015 under the 1987 Constitution. Toledo Power Company (TPC), a general partnership engaged in generating and selling electricity to the National Power Corporation (NPC), Cebu Electric Cooperative III (CEBECO), Atlas Consolidated Mining and Development Corporation (ACMDC), and Atlas Fertilizer Corporation (AFC), filed on December 22, 2003 with BIR RDO No. 83 an administrative claim for refund or credit of unutilized input VAT for taxable year 2002 amounting ₱14,254,013.27 under Republic Act No. 9136 (EPIRA) and the 1997 NIRC. After the Commissioner of Internal Revenue (CIR) took no action within 120 days, TPC petitioned the Court of Tax Appeals (CTA) on April 22, 2004 (CTA Case No. 6961). On November 11, 2009, the CTA First Division partially granted TPC’s
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Case Digest (G.R. No. 196415)
Facts:
- Parties and Nature of Business
- Commissioner of Internal Revenue (CIR) filed consolidated petitions against Toledo Power Company (TPC).
- TPC is a general partnership engaged in power generation and sale of electricity to NPC, CEBECO, ACMDC, and AFC.
- Administrative and Judicial Claims
- On December 22, 2003, TPC filed an administrative claim with BIR RDO No. 83 for refund/credit of unutilized input VAT for 2002, amounting to ₱14,254,013.27, under EPIRA and the NIRC.
- Due to CIR inaction, on April 22, 2004, TPC filed a Petition for Review with the CTA (CTA Case No. 6961).
- CTA First Division Decision
- On November 11, 2009, the CTA Division partially granted TPC’s claim in the reduced amount of ₱7,598,279.29.
- The Division held that:
- Zero-rated sales to NPC were valid.
- Sales to CEBECO, ACMDC, and AFC were not zero-rated because TPC failed to present an ERC Certificate of Compliance (COC).
- It computed substantiated input VAT at ₱12,220,600.29, attributing ₱7,598,279.29 to zero-rated NPC sales.
- Motions for Reconsideration
- TPC argued it was an existing generation company not required to secure COC; attached its 2002 ERC application and 2004 COC.
- CIR contended the claim was pro forma for failure to submit documents under RMO No. 53-98.
- On April 13, 2010, the CTA Division denied both motions.
- CTA En Banc Decision
- On November 22, 2010, the CTA En Banc dismissed both petitions, affirming that TPC’s 2002 sales to CEBECO, ACMDC, and AFC were not zero-rated absent COC.
- On April 6, 2011, the CTA En Banc denied motions for reconsideration.
Issues:
- Timeliness and Validity of Claims
- Whether TPC complied with administrative-remedies rules and submitted required documents under RMO No. 53-98.
- Whether the administrative and judicial claims were timely filed under Section 112(A) and (D) of the NIRC.
- Entitlement to Full Refund Amount
- Whether TPC was a generation company under EPIRA during the claim period and derived sales from power generation.
- Whether sales to CEBECO, ACMDC, and AFC qualify for VAT zero-rating without an ERC COC.
- Whether VAT Ruling No. 011-5 applied to TPC’s circumstances.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)