Mindanao I Geothermal Partnership v. Commissioner of Internal Revenue
REITERATIONFacts
The Antecedents: Petitioner Mindanao I Geothermal Partnership (M1) entered into a Build-Operate-Transfer (BOT) contract with Philippine National Oil Company-Energy Development Corporation (PNOC-EDC) for the construction and operation of a geothermal power plant. Under this agreement, PNOC-EDC was to supply steam at no cost to M1, which would then convert it into electric capacity and energy for delivery to the National Power Corporation (NPC). M1's project was accredited by the Department of Energy. For operational management, M1 entered into an agreement with Marubeni Energy Services Corporation (MESC). Procedural History: M1 filed its Quarterly Value-Added Tax (VAT) Returns for the second to fourth quarters of 2004. Subsequently, M1 filed a letter-request with the Bureau of Internal Revenue (BIR) for a Tax Credit Certificate (TCC) due to excess and unutilized creditable input taxes. When the BIR did not act on the request within the prescribed period, M1 filed a Petition for Review with the Court of Tax Appeals (CTA) seeking a TCC. The CTA First Division initially granted M1's claim in part, ordering the issuance of a TCC for the third and fourth quarters of 2004, but denied the claim for the second quarter as filed out of time. Upon motions for reconsideration, the CTA First Division amended its decision to include the second quarter. The Commissioner of Internal Revenue (CIR) appealed this amended decision to the CTA En Banc. The CTA En Banc reversed the First Division's amended decision, dismissing M1's petition for review as having been filed late. M1's subsequent motion for reconsideration was denied. M1 then filed the present Petition for Review on Certiorari with the Supreme Court. The Petition: This case is a Petition for Review on Certiorari filed under Rule 45 of the Rules of Court. M1 seeks to overturn the Decision and Resolution of the CTA En Banc, which dismissed its judicial claim for a Tax Credit Certificate (TCC) as having been filed out of time. The core issue is whether the CTA En Banc erred in dismissing M1's claim based on the procedural periods prescribed under Section 112 of the National Internal Revenue Code (NIRC), specifically the 120-day period for the Commissioner to act and the subsequent 30-day period for the taxpayer to file a judicial claim if the administrative claim is denied or not acted upon. M1 argues that its judicial claim was timely filed, while the CIR contends it was filed beyond the statutory periods.
Issue(s)
Whether the CTA En Banc erred when it dismissed Ml's judicial claim for being filed out of time. Whether the two (2)-year period under Section 112(A) of the National Internal Revenue Code (NIRC) applies to judicial claims. Whether the one hundred twenty (120) and thirty (30)-day periods under Section 112(C) of the NIRC are mandatory and jurisdictional. Whether BIR Ruling No. DA-489-03 provides an exception to the 120+30 day rule for claims filed beyond the prescribed period.
Ruling
The Petition is denied. The Decision and Resolution of the CTA En Banc are affirmed. Ml's judicial claim was filed out of time.
Ratio Decidendi
On the timeliness of the judicial claim: The Court reiterated the principles established in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. (Aichi) and Commissioner of Internal Revenue v. San Roque Power Corporation (San Roque). The two-year period under Section 112(A) of the NIRC applies only to administrative claims and does not extend to judicial claims. Judicial claims are governed by the one hundred twenty (120)-day period for the Commissioner to act on the administrative claim, followed by a thirty (30)-day period for the taxpayer to appeal to the CTA if the claim is denied or if the Commissioner fails to act within the 120-day period. These periods under Section 112(C) are mandatory and jurisdictional. On the application of Section 112(C) periods: The Court noted the relevant dates. The CIR's period to act expired on October 20, 2005. The 30-day period to file a judicial claim expired on November 21, 2005. Ml filed its judicial claim on July 21, 2006, which was over seven months beyond the prescribed 30-day period. Therefore, the CTA En Banc correctly dismissed the claim as filed out of time. On the exception under BIR Ruling No. DA-489-03: The Court clarified that BIR Ruling No. DA-489-03, which allowed taxpayers to seek judicial relief before the lapse of the 120-day period, only provides an exception for premature judicial claims. It does not extend to claims filed beyond the 120+30 day periods. Since Ml's claim was filed beyond the 30-day period after the CIR's inaction, the equitable estoppel under the said ruling was not applicable. On the applicability of Atlas and Mirant: The Court found Ml's argument that Atlas was controlling at the time of filing to be erroneous. Both Atlas and Mirant were promulgated after Ml filed its administrative and judicial claims. The applicable law at the time of filing was the 1997 Tax Code. The Court's ruling in the 2013 Consolidated Cases involving Ml's claim for 2003 input VAT also affirmed this interpretation of the periods under Section 112.
Main Doctrine
A judicial claim for refund or tax credit of input taxes must be filed within thirty (30) days from the receipt of the Commissioner's decision denying the administrative claim or from the expiration of the one hundred twenty (120)-day period without action from the Commissioner. Claims filed beyond this period are considered filed out of time, and the exception for equitable estoppel under BIR Ruling No. DA-489-03 applies only to premature judicial claims, not to those filed beyond the prescribed periods.