G.R. No. 173241 - Silicon Phils., Inc. vs. Commissioner of Internal Revenue

Silicon Philippines, Inc. (SPI), formerly known as Intel Philippines Manufacturing, Inc., is the taxpayer petitioner engaged in designing, developing, manufacturing, and exporting integrated circuit components.
The respondent is the Commissioner of Internal Revenue (CIR), responsible for administering tax claims and refund/credit applications.

SPI, as a VAT-registered taxpayer and pioneer enterprise under the Board of Investments, filed an Application for Tax Credit/Refund of VAT paid on its purchases.
The application was filed on May 6, 1999, with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center covering the Third Quarter of 1998.
The claimed refund totaled PHP25,531,312.83 divided into:

PHP2,425,764.00 – input VAT on imported/locally purchased capital equipment; and
PHP23,105,548.83 – input VAT attributable to its zero-rated sales.

When the CIR failed to act, SPI filed a Petition for Review with the Court of Tax Appeals (CTA) Division, docketed as CTA Case No. 6170, on September 29, 2000.
The CTA Division issued a Decision on November 24, 2003, partially granting SPI’s claim by approving the tax credit/refund for the capital goods portion but disallowing the refund based on zero-rated sales due to noncompliance with invoicing requirements (Sections 113, 237, and 238 of the 1997 Tax Code and Revenue Regulations No. 7-95).
SPI’s subsequent motions for partial reconsideration were denied, as reaffirmed in a Resolution dated August 10, 2004.

SPI elevated the matter to the CTA en banc, filing a Petition for Review (CTA EB Case No. 24), challenging both the denial of its zero-rated sales refund and the disregard for its evidence.
The CTA en banc issued a Decision on January 27, 2006, which reiterated the earlier findings of the CTA Division.
SPI’s Motion for Reconsideration before the CTA en banc was denied in a Resolution dated June 26, 2006.
The overarching issue centered on SPI’s claim for refund/credit of input VAT, particularly the disputed refund attributable to zero-rated sales, and whether the filing complied with the mandatory administrative and judicial filing periods set by law.

While addressing the calculation of prescriptive periods for claiming tax credits/refunds, the Court discussed:

The two-year prescriptive period for filing an administrative claim (computed from the close of the taxable quarter when the sales were made).
The 120-day period for the Commissioner to decide the claim and the additional 30-day period for a judicial appeal.

The Court referenced and analyzed earlier decisions—including San Roque, Taganito, and Philex cases—highlighting the strict and jurisdictional nature of the 120+30 day periods.
SPI’s administrative claim was timely, but its subsequent judicial claim (Petition for Review) was filed well beyond the prescribed 30-day period following the expiration of the 120-day period.

Whether SPI’s Petition for Review was filed within the mandatory 120-day period for the CIR’s decision or within the additional 30-day period for appeal.
Whether the lapse of the 120+30 day periods renders any subsequent judicial claim automatically devoid of jurisdiction, regardless of the merits of the claim.

Whether SPI met the invoicing and administrative substantiation requirements under the relevant provisions of the National Internal Revenue Code and Revenue Regulations.
Whether the failure to properly attribute and document the input VAT for zero-rated sales constitutes grounds to disallow that portion of the refund/credit.

How the Court should interpret and apply the two-year prescriptive period for filing administrative claims and the mandatory 120+30 day periods for judicial appeal, including the interplay with doctrines such as Atlas and Aichi.
Whether the available administrative and judicial remedies under the 1997 Tax Code were exhausted or correctly observed by SPI.