Title
Team Energy Corp. vs. Commissioner of Internal Revenue
Case
G.R. No. 190928
Decision Date
Jan 13, 2014
Petitioner timely filed VAT refund claims; SC ruled judicial claim within 30 days post-120-day period, reinstating P69.6M refund for 2002 input VAT.

Case Summary (G.R. No. 190928)

Relevant Dates and Filings

Team Energy Corporation filed its first to fourth quarterly VAT returns for 2002 on the following dates: April 25, July 23, October 25, and January 27, 2003. On December 22, 2003, the petitioner filed an administrative claim for refund, amounting to P79,918,002.95 at the Bureau of Internal Revenue (BIR) which was subsequently elevated to the Court of Tax Appeals (CTA) First Division on April 22, 2004, due to inaction from the respondent.

Legal Basis for Claims

The claims for refund are governed by the National Internal Revenue Code (NIRC), specifically Sections 112(A) and (C), which delineate the procedural requirements and timelines for filing tax refund claims. These provisions specify that a VAT-registered taxpayer can apply for the issuance of a tax credit certificate or refund within two years after the close of the taxable quarter when the sales were made.

Respondent's Defenses

In response, the Commissioner of Internal Revenue raised several defenses, asserting that Team Energy Corporation’s claim for refund required substantial compliance with the regulatory requirements, including proper documentation and that its claim had exceeded the prescriptive period outlined under the NIRC. The burden of proof falls on the claimant, particularly in claims for tax refund that are viewed unfavorably under tax law.

Initial CTA Findings and Subsequent Modifications

Upon reviewing the case, the CTA First Division concluded that Team Energy Corporation was entitled to a partial refund of P69,618,971.19, which reflected the unutilized input VAT paid on its zero-rated sales. However, the Commissioner’s subsequent motion for partial reconsideration led to the CTA En Banc modifying the refundable amount to P51,134,951.40 due to the determination that the claim for the first quarter had prescribed.

Petitioner’s Arguments on Timeliness

In its petition, Team Energy Corporation argued that its judicial claim for refund for the first quarter was filed within the requisite two-year prescriptive period as established in previous jurisprudence, specifically referencing the Atlas case, whereby the prescriptive period is counted from the close of the taxable quarter rather than from the payment of the tax. The petitioner contended that the reliance on the subsequent ruling in the Mirant Pagbilao case by the CTA En Banc was improper and should only apply prospectively.

Court's Resolution of the Timeliness Issue

The Supreme Court ultimately underscored that the interpretation of Sections 112(A) and (C) must adhere to their clear language, allowing taxpayers to file administrative claims within the two-year period. The claimant has 30 days to appeal the decision or inaction of the CIR. The Court agreed that Team Energy Corporation timely filed its administrative claim and judicial claim follo

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