Case Digest (G.R. No. 193301) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Mindanao II Geothermal Partnership vs. Commissioner of Internal Revenue (G.R. No. 193301) and Mindanao I Geothermal Partnership vs. Commissioner of Internal Revenue (G.R. No. 194637), decided on March 11, 2013, two SEC-registered partnerships engaged in geothermal power generation under Build-Operate-Transfer contracts with PNOC-Energy Development Corporation sought refunds or tax credits for unutilized input value-added tax (VAT) arising from zero-rated sales of electricity in 2003 pursuant to Republic Act No. 9136 (EPIRA) amending the 1997 Tax Code. Both filed administrative claims with the BIR in April 2005 for the first through fourth quarters of 2003, which remained unacted upon. In CTA Case Nos. 7227, 7287, and 7317 (Mindanao II) and CTA Case Nos. 7228, 7286, and 7318 (Mindanao I), the CTA Divisions rendered conflicting rulings: Mindanao II’s First Division initially granted a partial refund, then amended to allow only Q3 and Q4; Mindanao I’s Second Division granted a r Case Digest (G.R. No. 193301) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Background
- Mindanao I & II Geothermal Partnerships are SEC-registered, VAT-registered block power production entities accredited under the Electric Power Industry Reform Act of 2000 (RA 9136).
- Both entered into BOT contracts with PNOC-EDC to build, operate, and transfer geothermal plants, converting steam into electric energy delivered to NPC on behalf of PNOC-EDC.
- VAT Zero-Rating and Refund Claims
- RA 9136 amended the 1997 Tax Code to zero-rate sales of power by generation companies.
- For 2003, Mindanao I & II filed quarterly VAT returns adopting the zero rate, resulting in unutilized input VAT credits.
- In April 2005 they filed administrative refund/tax-credit claims with the CIR for all four quarters of 2003.
- Proceedings Below
- Mindanao II: CTA First Division (Sept 22, 2008) granted refund for Q3–Q4, denied Q1–Q2; Amended Decision (June 26, 2009) denied Q1–Q2 and maintained grant for Q3–Q4; CTA En Banc (Mar 10, 2010) affirmed in full.
- Mindanao I: CTA Second Division (Oct 24, 2008) granted reduced refund for all four quarters; Resolution (Mar 10, 2009) denied reconsideration; CTA En Banc (May 31, 2010) affirmed in toto; Amended Decision (Nov 24, 2010) reversed and denied all claims.
Issues:
- Prescriptive Period
- Whether the two-year period to file an administrative VAT refund claim under Section 112(A) is counted from the close of the taxable quarter (Mirant) or from VAT return filing (Atlas).
- Whether the 120 + 30-day mandatory waiting and appeal periods under Section 112(C) are jurisdictional, and the effect of BIR Ruling DA-489-03.
- Incidental Transaction
- Whether the sale of a fully depreciated Nissan Patrol was an isolated transaction (VAT-exempt) or incidental to zero-rated business (VATable) under Section 105.
- Substantiation Requirements
- Whether disallowed input taxes complied with invoicing and accounting rules (Sections 113(A), 237; RR 7-95).
- Tax-Exemption Doctrine
- Applicability of the strictissimi juris principle to tax refunds and exemptions.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)