G.R. No. 197663 - Team Energy Corp. vs. Commissioner of Internal Revenue

Team Energy Corporation (formerly Mirant Pagbilao Corporation and Southern Energy Quezon, Inc.), a VAT-registered power generation company engaged in supplying electricity to the National Power Corporation (NPC) under a Build, Operate, and Transfer scheme, filed a claim for refund/credit of unutilized input VAT for the taxable year 2003.
The Commissioner of Internal Revenue (CIR) opposed the claim, disputing the authenticity and timeliness of the VAT refund claims.
The main issue involves the validity and entitlement of Team Energy's claim for tax refund/credit of input VAT attributable to their zero-rated sales to NPC.

On November 13, 2002, Team Energy filed an Application for Effective Zero-Rate of its supply of electricity to NPC, which the BIR approved.
For 2003, Team Energy filed both original and amended quarterly VAT returns reporting zero-rated sales totaling approximately ₱12.2 billion with input VAT amounting to ₱83.5 million.
On December 17, 2004, Team Energy filed an administrative claim for refund of unutilized input VAT amounting to ₱83,465,353.50 covering all four quarters of 2003.
Team Energy appealed to the CTA the denial or inaction on their claims, with appeals docketed as CTA Case Nos. 7229 and 7298 for the first quarter and the remaining quarters respectively; these were consolidated on October 12, 2005.
The CIR contested the claims, alleging lack of proper documentation, non-compliance with VAT registration, invoicing, and accounting requirements, and questioned the timeliness of the filings.

The CTA First Division partially granted the refund, recognizing the zero-rated sales to NPC based on prior Supreme Court rulings affirming NPC’s tax-exempt status, but disallowed portions amounting to approximately ₱12.6 million for failure to submit proper VAT invoices or official receipts.
The CTA First Division held that the refund claims were timely filed within the two-year prescriptive period calculated from the date of filing the quarterly VAT returns.
Subsequently, the CIR sought reconsideration, and upon denial, elevated the case to the CTA En Banc.
The CTA En Banc modified the decision, denying refund claims for the second to fourth quarters for lack of jurisdiction due to late filing beyond the mandatory 30-day period to appeal the CIR’s decision or inaction after the 120-day period. Only the refund claim for the first quarter of 2003 was allowed, amounting to ₱11,161,392.67.
Motions for reconsideration filed by both parties were denied by the CTA En Banc.

Both Team Energy and the CIR filed separate Petitions for Review with the Supreme Court seeking to reverse the CTA En Banc decision.
The issues raised involved the timeliness of the judicial claims, the substantiation requirements for input VAT refund claims including the interchangeability of VAT invoices and official receipts, and the necessity of an ERC Registration and Certificate of Compliance under the EPIRA Law to qualify for VAT zero-rating.

Whether the CTA erred in denying Team Energy’s refund claims for the second to fourth quarters of 2003 due to lack of jurisdiction based on non-compliance with the mandatory 120+30-day periods for judicial claims under Section 112(D) of the 1997 NIRC.

Whether the CTA erred in disallowing ₱258,874.55 of input VAT claims due to failure to recognize the interchangeability of VAT invoices and VAT official receipts as valid substantiation under Sections 110 and 113 of the 1997 NIRC.

Whether Team Energy’s failure to submit the Registration and Certificate of Compliance issued by the Energy Regulatory Commission (ERC) under the EPIRA Law disqualifies it from claiming tax refund/credit as a VAT zero-rated power generation entity.