Case Digest (G.R. No. 115624) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
On June 5, 1997, Solidbank Corporation extended to Luzon Hydro Corporation a foreign-currency loan of US$123,780,000. Under the loan agreement, LHC agreed to withhold and remit all required internal revenue taxes to the Bureau of Internal Revenue and to file the corresponding returns. On September 1, 2000, Metropolitan Bank & Trust Company (Metrobank) acquired Solidbank and assumed its rights and obligations. In March and October 2001, LHC paid Metrobank interest and principal totalling US$2,871,390.48, withheld ten percent final tax amounting to US$106,178.69 (P5,296,773.05), and remitted these sums to the BIR. Metrobank inadvertently included the same tax amounts in its own monthly withholding tax returns and paid them to the BIR on April 25, 2001 (March 2001 tax) and November 24, 2001 (October 2001 tax). On December 27, 2002, Metrobank filed an administrative claim for refund. When the Commissioner of Internal Revenue failed to act, Metrobank filed a judicial claim before the... Case Digest (G.R. No. 115624) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Loan Agreement and Tax Obligations
- On June 5, 1997, Solidbank Corporation extended a US$123,780,000 foreign-currency loan to Luzon Hydro Corporation (LHC).
- Under the Agreement, LHC was to withhold and remit all required internal revenue taxes on the loan interest and file corresponding returns.
- Acquisition by Metrobank and Payment Transactions
- On September 1, 2000, Metropolitan Bank & Trust Company (Metrobank) acquired Solidbank, assuming its rights and obligations under the loan Agreement.
- LHC made two payments to Metrobank:
- March 2, 2001 – US$1,538,122.17 (interest and principal)
- October 31, 2001 – US$1,333,268.31 (interest and principal)
- LHC withheld 10% final tax on the interest portions—totaling US$106,178.69 (P5,296,773.05)—and remitted this to the BIR in March and October 2001.
- Double Remittance and Refund Claim
- Metrobank inadvertently included the same withheld amounts in its own Monthly Remittance Returns for March and October 2001, thereby paying the tax twice.
- On December 27, 2002, Metrobank filed an administrative claim for refund with the Commissioner of Internal Revenue (CIR).
- Receiving no resolution, Metrobank filed a judicial claim before the Court of Tax Appeals (CTA) on September 10, 2003 (CTA Case No. 6765).
- CTA Division and En Banc Proceedings
- CTA First Division Decision (August 13, 2007):
- Denied March 2001 refund for prescription—tax paid April 25, 2001; judicial claim filed after April 25, 2003 deadline.
- Denied October 2001 refund for insufficiency of evidence.
- CTA First Division Resolution (November 14, 2007): partially granted reconsideration to allow additional evidence on the October 2001 claim; upheld dismissal of March 2001 claim.
- CTA En Banc Decision (April 21, 2008): affirmed CTA Division’s ruling that the March 2001 claim had prescribed.
Issues:
- Whether the CTA En Banc correctly held that Metrobank’s claim for refund of the March 2001 final withholding tax had prescribed.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)