Case Summary (A.C. No. 4958)
Procedural Background
AICHI, a VAT-registered domestic corporation engaged in manufacturing steel products, filed an administrative claim for a tax refund/credit of unutilized input Value Added Tax (VAT) attributable to zero-rated sales with the Bureau of Internal Revenue (BIR) on September 26, 2002. AICHI sought a total refund of PHP 18,030,547.77 but, upon inaction from the CIR after the statutory 120-day period, filed a petition for review before the Court of Tax Appeals (CTA) on September 30, 2002. The case concerns the timely filing of both administrative and judicial claims under the provisions of the National Internal Revenue Code.
Issues for Resolution
The primary issue before the court was whether AICHI was entitled to a refund of unutilized input VAT for six consecutive taxable quarters and whether both claims (administrative and judicial) were filed within applicable statutory periods. Furthermore, the court addressed whether the CTA had jurisdiction over AICHI's claims given the alleged premature filing.
Proceedings before the CTA Division
The CTA Division acknowledged that both the administrative and judicial claims were filed within the two-year prescriptive period, thus partially granting AICHI's claim. However, it denied the refund for VAT on capital goods, citing a lack of evidence proving that the purchases were categorized as Property, Plant, and Equipment, and further denied part of the claim associated with zero-rated sales due to the absence of a required BOI Certification for certain transactions.
Proceedings before the CTA En Banc
The CIR appealed the CTA Division's partial grant, arguing that AICHI's judicial claim was premature since it was filed before the expiration of the mandatory 120-day period for the CIR to act on the administrative claim. The CTA En Banc upheld the lower court's decision, emphasizing that simultaneous filing of administrative and judicial claims is permissible as long as both are within the statutory limits.
Timeliness of Claims
The court proceeds to clarify the jurisdictional nature of the 120-day waiting period mandated by the Tax Code, determining that AICHI's judicial claim was filed four days after the administrative claim without awaiting the expiration of 120 days. The court reaffirms the necessity of exhausting administrative remedies prior to judicial intervention, highlighting the importance of correctly timing the appeal process to maintain jurisdiction.
Jurisdictional Rulings
The ruling emphasizes that the court may motu proprio dismiss claims that arise outside its jurisdiction, ruling that AICHI's claim could not be validly pursued due to premature filing. Consequently, it was indicated that any decision rendered without jurisdiction is considered void. The case reinforces the interpretation that the 120-day period is both mandatory and jurisdictional, effectively nullifying any premature appeal.
Procedural Defects and Improper Remedy
The petition for certiorari submitted by AICHI via Rule 65 was found to be procedurally flawed; the proper recourse should have been a petition for review under Rule 45. The court highlighted that this
...continue readingCase Syllabus (A.C. No. 4958)
Overview of the Case
- The case involves a petition for certiorari filed by Aichi Forging Company of Asia, Inc. (AICHI) against the Court of Tax Appeals (CTA) En Banc and the Commissioner of Internal Revenue (CIR).
- AICHI seeks to reverse the CTA En Banc's decisions which affirmed earlier rulings denying their full claim for a refund/credit of unutilized input Value Added Tax (VAT) attributable to zero-rated sales.
- The Supreme Court addressed the jurisdictional issues surrounding the timing of AICHI's claims and the procedural correctness of their appeal.
Background of the Parties
- AICHI is a domestic corporation engaged in manufacturing steel products, registered as a VAT taxpayer with the Bureau of Internal Revenue (BIR) and the Board of Investments (BOI).
- On September 26, 2002, AICHI filed a claim with the BIR for a refund/credit of unutilized input VAT from zero-rated sales, totaling PHP 18,030,547.77.
Procedural History
- Upon the BIR's inaction on the refund claim, AICHI filed a Petition for Review with the CTA on September 30, 2002, which initiated the judicial claim.
- The CTA Division partially granted AICHI's claim but denied the refund for capital goods due to insufficient evidence regarding depreciation and BOI Certification for zero-rated sales.
- The CIR appealed the CTA Division's decision to the CTA En Banc, contending that AICHI's claim was premature due to failure to observe the required statutory periods.
Key Issues
- Whether AICH