Case Summary (G.R. No. L-29485)
Factual Background
VGPC, a limited partnership engaged in geothermal power generation, sought a tax refund for unutilized input VAT payments from the Bureau of Internal Revenue (BIR), amounting to P14,160,807.95 for the taxable year 2005. The company filed its original quarterly VAT returns and subsequently an administrative claim for refund on December 6, 2006. While this claim was pending, VGPC also filed a judicial claim with the Court of Tax Appeals (CTA) on January 3, 2007.
Initial Ruling of the CTA
On April 17, 2009, the CTA’s Second Division partially granted VGPC's petition, awarding a reduced refund of P7,699,366.37. The CTA found that VGPC had adequately substantiated claims for this amount and determined the claims were timely filed within the two-year prescriptive period defined by Section 112 of the NIRC. However, this decision was later appealed by both VGPC and the CIR to the CTA En Banc.
CTA En Banc Decision
The CTA En Banc, in a decision dated February 7, 2011, set aside the previous ruling of the CTA Second Division, dismissing VGPC's petition for being prematurely filed. It affirmed that while VGPC's administrative claim was timely, its judicial claim filed 28 days thereafter violated Section 112(D) of the NIRC, which mandated waiting for the expiration of the 120-day resolution period before filing a judicial claim. Consequently, it ruled that the CTA lacked jurisdiction over the matter due to this procedural misstep.
Assignments of Errors by VGPC
VGPC raised multiple assignments of error against the CTA En Banc's decision, contesting the jurisdictional nature of the 120-day period under Section 112(D), the precedence of the Aichi doctrine over Atlas regarding the two-year timeline, and alleging that the CIR should be estopped from questioning the CTA’s jurisdiction based on prior conduct.
Ruling of the Supreme Court
The Supreme Court analyzed the issue of whether VGPC's judicial claim was indeed premature. The Court reaffirmed that Section 112 of the NIRC governs claims for tax refunds related to unutilized input VAT and emphasized the mandatory nature of the 120-plus-30 days rule established in prior cases such as Aichi and San Roque. The judicial claims must follow the exhaustion of the administrative remedies as prescribed.
Clarifications on the Atlas Doctrine
The Court noted that the Atlas doctrine, which previously posited the primacy of the two-year prescriptive period under Section 229, was strictly applicable to its temporal reckoning and not to procedural requirements like the mandatory nature of the 120+30 day periods established in Section 112(D). Therefore, the Atlas doctrine did not hold relevance in determining the timing of judicial claims when construed against the 120-day requirement.
Application of Aichi and Judicial Decisions
The Court rejected VGPC’s assertion that the ruling in Aichi should apply prospectively, asserting that interpretations by the Court become part of P
...continue readingCase Syllabus (G.R. No. L-29485)
Case Background
- The case involves a petition for review on certiorari filed by Visayas Geothermal Power Company (VGPC), challenging the February 7, 2011 Decision and June 27, 2011 Resolution of the Court of Tax Appeals En Banc (CTA En Banc).
- The CTA En Banc reversed the April 17, 2009 decision of the CTA Second Division in CTA Case No. 7559, which had partially granted VGPC's claim for refund of excess input VAT.
- VGPC is a special limited partnership engaged in power generation through geothermal energy and sells generated power to the Philippine National Oil Company (PNOC) under an Energy Conversion Agreement.
Procedural History
- VGPC filed its Original Quarterly VAT Returns for 2005 and subsequently filed an administrative claim for refund of P14,160,807.95 with the Bureau of Internal Revenue (BIR) on December 6, 2006.
- VGPC's judicial claim was filed on January 3, 2007, while the administrative claim was still pending.
- The CTA Second Division partially granted VGPC's claim, ordering a refund of P7,699,366.37 for unutilized input VAT.
- Both VGPC and the Commissioner of Internal Revenue (CIR) appealed to the CTA En Banc, which ultimately dismissed VGPC's original petition for review, citing prematurity.
Key Issues
- Whether VGPC’s judicial claim for refund was prematurely filed, given that it was submitted before the expiration of the 120-day period for the CIR to act on the administrative claim.
- The interpretation of Sections 112 and 229 of the National Internal Revenue Code (NIRC) regarding the procedural requirements fo