CE Luzon Geothermal Power v. Commissioner of Internal Revenue
REITERATIONFacts
The Antecedents: CE Luzon Geothermal Power Company, Inc. (CE Luzon), a VAT-registered domestic corporation engaged in power generation, filed its quarterly VAT returns for 2005, reflecting an overpayment of P20,546,004.87. CE Luzon attributed this overpayment to domestic purchases of non-capital goods and services, services rendered by non-residents, and importation of non-capital goods. Procedural History: CE Luzon filed an administrative claim for refund of unutilized input VAT with the Bureau of Internal Revenue (BIR) on November 30, 2006, and subsequently filed a judicial claim with the Court of Tax Appeals (CTA) on January 3, 2007. The CTA Division initially granted a partial refund, which was later amended to increase the refund amount. The Commissioner of Internal Revenue (CIR) appealed to the CTA En Banc, which set aside the CTA Division's decision, dismissing CE Luzon's claim for being prematurely filed. CE Luzon then filed the instant petition for review on certiorari. The Petition: CE Luzon seeks review of the CTA En Banc's decision and resolution, arguing that the dismissal of its claim for refund due to prematurity was erroneous. The core issue is whether the CTA En Banc correctly dismissed the claim, considering the prevailing BIR Ruling No. DA-489-03 which allowed the filing of judicial claims without waiting for the 120-day period to lapse. The petition is filed under Rule 45 of the Rules of Court, seeking a reversal of the CTA En Banc's ruling and a remand for resolution on the merits.
Issue(s)
Whether the CIR's motions for reconsideration constituted a prohibited second motion, rendering the CTA Division's June 24, 2009 Decision final and executory. Whether the CTA En Banc correctly ordered the outright dismissal of CE Luzon's claims for tax refund of unutilized input VAT on the ground of prematurity; and if not, whether CE Luzon is entitled to the claimed refund.
Ruling
The petition is partly meritorious. The Decision and Resolution of the CTA En Banc are set aside, and the case is remanded to the CTA En Banc for resolution on the merits.
Ratio Decidendi
On the issue of the CIR's motions for reconsideration: The Court ruled that the CIR's motions for partial reconsideration did not constitute a prohibited second motion. The CTA Division's Amended Decision dated January 19, 2010, modified and increased CE Luzon's refund entitlement, thereby constituting a different decision from the June 24, 2009 Decision. As such, it was a proper subject for a motion for reconsideration. Therefore, CE Luzon's procedural objection that the June 24, 2009 Decision had become final and executory due to a prohibited second motion for reconsideration was dismissed. On the issue of prematurity of the judicial claim and the merits of the refund claim: The Court held that the CTA En Banc erred in dismissing CE Luzon's petition on the ground of prematurity. The rule, as clarified in CIR v. San Roque Power Corporation and reconciled in Taganito Mining Corporation v. CIR, provides an exception to the mandatory 120-day period for filing a judicial claim. This exception applies to claims filed during the period of effectivity of BIR Ruling No. DA-489-03, which was from December 10, 2003, to October 6, 2010. CE Luzon filed its administrative claim on November 30, 2006, and its judicial claim on January 3, 2007. These dates fall within the aforementioned window period, meaning CE Luzon was not required to wait for the 120-day period to lapse before filing its judicial claim. Consequently, the CTA En Banc's dismissal for prematurity was erroneous. Despite finding the dismissal for prematurity erroneous, the Court did not grant CE Luzon's refund claim outright. The determination of CE Luzon's entitlement to the P20,546,004.87 refund involves factual issues and evidentiary matters, which are beyond the scope of a Rule 45 petition for review on certiorari, as this remedy is limited to pure questions of law. Therefore, the Court deemed it prudent to remand the case to the CTA En Banc for a proper resolution on the merits, consistent with the ruling in Panay Power Corporation v. CIR.
Main Doctrine
The filing of a judicial claim for refund of unutilized input VAT must be made within thirty (30) days from the receipt of the Commissioner of Internal Revenue's decision or after the expiration of the 120-day period for the Commissioner to act. However, an exception exists for claims filed during the period of effectivity of BIR Ruling No. DA-489-03 (December 10, 2003 to October 6, 2010), wherein taxpayers need not wait for the 120-day period to lapse before seeking judicial relief.