Marubeni Philippines Corp. v. Commissioner of Internal Revenue
REITERATIONFacts
The Antecedents: Marubeni Philippines Corporation (Marubeni), a domestic corporation registered as a Value-Added Tax (VAT) taxpayer, sought a refund or tax credit certificate for its alleged excess input VAT for the first quarter of Calendar Year 2000. Marubeni filed its quarterly VAT return on April 25, 2000. Procedural History: Marubeni filed an administrative claim for refund with the Bureau of Internal Revenue (BIR) on March 27, 2002, later amending it to P3,887,419.31 on April 25, 2002. On the same date, Marubeni filed a judicial claim with the Court of Tax Appeals (CTA) Second Division. The CTA Second Division dismissed the claim, ruling it was filed beyond the two-year prescriptive period. The CTA En Banc affirmed this dismissal but on the ground that the judicial claim was premature, citing the mandatory 120-day period for the Commissioner of Internal Revenue (CIR) to act on the administrative claim before a judicial appeal can be filed. The Petition: Marubeni filed a Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the CTA En Banc's decision. Marubeni argued that the ruling in Commissioner of Internal Revenue v. Atlas Consolidated Mining and Development Corporation should apply, not Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc., and that Aichi should be applied prospectively. Marubeni also contended that the CIR waived the defense of non-exhaustion of administrative remedies by not raising it in its Answer. The core of the petition revolves around the interpretation and application of Section 112(C) of the National Internal Revenue Code concerning the periods for claiming refunds of input VAT.
Issue(s)
Whether the ruling in Aichi is applicable to Marubeni's claim for refund and whether the ruling in Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue (Atlas) controls. Whether the ruling in Aichi should only be applied prospectively. Whether the Commissioner of Internal Revenue (CIR) waived the defense of non-exhaustion of administrative remedies, considering the mandatory 120+30 day periods and the CIR's failure to raise the issue of prematurity in its Answer.
Ruling
The Supreme Court denied the petition for review and affirmed the Decision and Resolution of the CTA En Banc. The Court held that Marubeni's judicial claim for refund was premature due to its failure to comply with the mandatory 120+30 day periods prescribed by Section 112(C) of the 1997 NIRC.
Ratio Decidendi
On the applicability of Aichi and Atlas: The Court ruled that the 1997 NIRC, specifically Section 112(C), applies to Marubeni's claim. The Court clarified that the ruling in Atlas, which Marubeni invoked, could not control because Atlas was promulgated after Marubeni filed its claims. The Court reiterated its pronouncements in Mindanao II Geothermal Partnership v. Commissioner of Internal Revenue (Mindanao II) and Commissioner of Internal Revenue v. San Roque Power Corp. (San Roque) that the 120+30 day periods in Section 112(C) are mandatory and jurisdictional. Marubeni filed its judicial claim on April 25, 2002, only 29 days after filing its administrative claim on March 27, 2002, thus failing to wait for the 120-day period for the CIR to act or deny the claim, and subsequently the 30-day period to appeal. The Court emphasized that the taxpayer cannot escape compliance with these periods, as they are essential for the CTA to acquire jurisdiction. On the prospective application of Aichi: The Court ruled that the 1997 NIRC, specifically Section 112(C), applies to Marubeni's claim. On the waiver of objection to non-exhaustion of administrative remedies: The Court held that the failure to comply with the 120+30 day periods is not a mere non-exhaustion of administrative remedies but is jurisdictional in nature. Citing Applied Food Ingredients Company, Inc. v. Commissioner of Internal Revenue (Applied Food), the Court stated that the 120-day period is a prerequisite for the commencement of the 30-day period to appeal to the CTA. Therefore, the CIR's failure to raise the issue of prematurity in its Answer did not constitute a waiver, as issues of jurisdiction can be raised at any time. Marubeni's failure to observe these mandatory periods was fatal to its judicial claim for refund.
Main Doctrine
The 120+30 day periods under Section 112(C) of the National Internal Revenue Code are mandatory and jurisdictional. Failure to strictly comply with these periods renders the judicial claim for refund premature and deprives the Court of Tax Appeals of jurisdiction.