G.R. No. 202093 - Hedcor Sibulan, Inc. vs. Commissioner of Internal Revenue

Petitioner Hedcor Sibulan, Inc. is a domestic corporation engaged in hydroelectric power generation and the subsequent sale of power to Davao Light and Power Company, Inc.
It is registered with the Bureau of Internal Revenue (BIR) as a VAT entity.

On July 21, 2008, the petitioner filed its Original Quarterly VAT Return for the 2nd quarter of 2008 at RDO No. 115 of the BIR.
On June 23, 2010, the petitioner filed an Amended Quarterly VAT Return for the same period.
On June 25, 2010, the petitioner submitted a written application for a refund or the issuance of a Tax Credit Certificate (TCC) and an administrative claim amounting to P29,299,077.37, relating to unutilized input VAT on purchases attributable to zero-rated sales.

While the administrative claim was still pending resolution by the CIR, the petitioner filed a petition for review before the Court of Tax Appeals (CTA) Division on June 29, 2010.
The petitioner argued that the petition for review was aimed at suspending the running of the two-year prescriptive period for filing refund claims and sought either the refund or the issuance of a TCC.

In its answer, the CIR contended that the petition for review was prematurely filed because only four days had elapsed since the filing of the administrative claim.
The CIR asserted that the petitioner failed to observe the prescribed 120-day period for the CIR to rule on its claim, thus not exhausting the administrative remedies.

The CTA Division, in its January 31, 2011 Resolution, treated the CIR’s defense as a motion to dismiss and ruled that the judicial claim was premature due to the short lapse (four days) between the administrative and judicial filings.
The motion for reconsideration filed by the petitioner was denied in the CTA Division’s April 18, 2011 Resolution.
The CTA En Banc, in its March 14, 2012 Decision, affirmed the dismissal of the prior petition based on prematurity, further denying the petitioner’s subsequent motion for reconsideration in its May 29, 2012 Resolution.

The petitioner contended that its judicial claim was not premature, arguing that the early filing was permissible under an exception provided by BIR Ruling No. DA-489-03.
The petitioner maintained that the dismissal based on prematurity was erroneous, particularly since the early filing was not explicitly contemplated as a ground for dismissal under Rule 16 of the Rules of Court.

Whether the petitioner’s judicial claim for refund or tax credit of unutilized input VAT, filed just four days after submitting the administrative claim, was premature or permissible under existing exceptions.

Whether the non-observance of the mandatory 120-day period for the CIR to act on the administrative claim deprives the CTA of jurisdiction over such judicial claims.
Whether the exception under BIR Ruling No. DA-489-03, as recognized in prior jurisprudence, applies to allow the premature filing of the judicial claim.