FIRST DIVISION

[G.R. Nos. 200841-42. August 26, 2015.]

CE LUZON GEOTHERMAL POWER COMPANY, INC., petitioner,

vs. COMMISSIONER OF INTERNAL REVENUE, respondent.

DECISION

PERLAS-BERNABE, J : p

Assailed in this petition for review on certiorari 1 are the Decision 2 dated
October 4, 2011 and the Resolution 3 dated February 22, 2012 of the Court of
Tax Appeals (CTA) En Banc in CTA EB Case Nos. 591 and 628, which set aside
the Amended Decision 4 dated January 19, 2010 of the CTA Former Second
Division (CTA Division) in C.T.A. Case No. 7558 and dismissed petitioner CE
Luzon Geothermal Power Company, Inc.'s (CE Luzon) claim for refund of
unutilized input value-added tax (VAT) for being prematurely filed.
The Facts
CE Luzon is a domestic corporation duly organized and existing under
Philippine laws engaged in the business of power generation. It is a VAT-
registered entity with Tax Identification No. 003-924-356-000. 5 As such, it
filed its quarterly VAT returns for the year 2005 on April 25, 2005, July 25,
2005, October 25, 2005, and January 25, 2006, which reflected an
overpayment of P20,546,004.87. CE Luzon maintained that its overpayment
was due to its domestic purchases of non-capital goods and services, services
rendered by non-residents, and importation of non-capital goods. 6
On November 30, 2006, CE Luzon filed an administrative claim for
refund of its unutilized input VAT in the amount of P20,546,004.87 before the
Bureau of Internal Revenue (BIR). Thereafter, or on January 3, 2007, it filed
a judicial claim for refund, by way of a petition for review, before the CTA,
docketed as CTA Case No. 7558. 7
For its part, respondent Commissioner of Internal Revenue (CIR)
claimed, inter alia, that the amount being claimed by CE Luzon as unutilized
input VAT was not properly documented and that the filing of its petition for
review was premature and, hence, should be denied. 8
The CTA Division Ruling
In a Decision 9 dated June 24, 2009 (June 24, 2009 Decision), the CTA
Division partially granted CE Luzon's claim for tax refund, and thereby ordered
the CIR to issue a tax credit certificate in the reduced amount of
P14,879,312.65, representing its unutilized input VAT which was attributable
to its VAT zero-rated sales for the year 2005. 10 It found that while CE Luzon
timely filed its administrative and judicial claims within the two (2)-year
prescriptive period, it, however, failed to duly substantiate the remainder of
its claim for unutilized input VAT, resulting in the partial denial thereof. 11
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 Dissatisfied, both parties moved for partial reconsideration. 12 The
CIR maintained that CE Luzon failed to show that its purchases were made in
the regular course of its trade and business, and that they were not supported
by VAT invoices and official receipts. Meanwhile, CE Luzon claimed that the
CTA Division erred in disallowing the rest of its refund claim. 13
In an Amended Decision 14 dated January 19, 2010 (January 19, 2010
Amended Decision), the CTA Division partially granted CE Luzon's motion for
reconsideration, and consequently directed the CIR to issue a tax credit
certificate in the reduced amount of P17,277,938.47, 15 finding that CE Luzon
has sufficiently proven that it is entitled to an additional input VAT in the
amount of P2,398,625.82. 16 On the other hand, the CTA Division denied the
CIR's motion for reconsideration for lack of merit. 17
The CIR again moved for partial reconsideration, 18 which was, however,
denied in a Resolution 19 dated April 22, 2010.
Thereafter, CE Luzon and the CIR respectively appealed to the CTA En
Banc, docketed as CTA EB No. 591 20 and CTA EB No. 628, 21 which were
ordered consolidated in a Resolution 22 dated May 20, 2010 for having
common questions of fact and law. 23
The CTA En Banc Ruling
In a Decision 24 dated October 4, 2011, the CTA En Banc set aside the
CTA Division's findings, holding that CE Luzon's premature filing of its claim
divested the CTA of jurisdiction. It ruled that the filing of a judicial claim must
be made within thirty (30) days to be computed from either: (a) the receipt of
the CIR's decision; or (b) after the expiration of the 120-day period for the CIR
to act. It noted that CE Luzon's petition was filed on January 3, 2007, or only
after the lapse of 34 days from the time it filed its administrative claim with
the BIR on November 30, 2006. Thus, considering that CE Luzon hastily filed
its petition, its judicial claim must be dismissed for being filed prematurely. 25
Aggrieved, CE Luzon moved for reconsideration 26 which was denied in a
Resolution 27 dated February 22, 2012; hence the instant petition.
The Issue Before the Court
The core issue in this case is whether or not 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.
The Court's Ruling
The petition is partly meritorious.
I.
At the outset, the Court deems it proper to address CE Luzon's claim
that the CIR filed a "second" motion for reconsideration of the CTA Division's
January 19, 2010 Amended Decision. Considering that a second motion for
reconsideration is a prohibited pleading and, thus, did not toll the period to file
an appeal, CE Luzon maintained that the June 24, 2009 Decision had long
become final and executory. 28
Under Section 3, Rule 14 of the Revised Rules of the Court of Tax
Appeals, an amended decision is issued when there is any action modifying
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 or reversing a decision of the CTA En Banc or in Division. Pursuant to these
parameters, it is clear that the CIR's motions for partial reconsideration — i.e.,
(a) motion for partial reconsideration 29 of the June 24, 2009 Decision; and (b)
motion for partial reconsideration 30 of the January 19, 2010 Amended
Decision — assailed separate and distinct decisions that were rendered by the
CTA Division. Notably, its amended decision modified and increased CE
Luzon's entitlement to a refund or tax credit certificate in the amount of
P17,277,938.47. Essentially, it was therefore a different decision and, hence,
the proper subject of a motion for reconsideration anew on the part of the CIR.
Thus, CE Luzon's procedural objection must fail.
II.
On the substantive aspect, it should be first pointed out that the rule
governing a taxpayer's claim for refund of unutilized input VAT is found in
Section 112 of the National Internal Revenue Code (NIRC), as amended by
Republic Act No. 9337, 31 the pertinent portion of which reads:
SEC. 112. Refunds or Tax Credits of Input Tax . —
(A) Zero-rated or Effectively Zero-rated Sales. — any VAT-registered
person, whose sales are zero-rated or effectively zero-rated may,
within two (2) years after the close of the taxable quarter
when the sales were made, apply for the issuance of a tax credit
certificate or refund of creditable input tax due or paid attributable to
such sales, except transitional input tax, to the extent that such input
tax has not been applied against output tax: . . . .
xxx xxx xxx
(C) Period within which Refund or Tax Credit of Input Taxes shall be
Made. — In proper cases, the Commissioner shall grant a refund or
issue the tax credit certificate for creditable input taxes within one
hundred twenty (120) days from the date of submission of
complete documents in support of the application filed in accordance
with Subsection (A) hereof.
In case of full or partial denial of the claim for tax refund or tax credit,
or the failure on the part of the Commissioner to act on the application
within the period prescribed above, the taxpayer affected may, within
thirty (30) days from the receipt of the decision denying the
claim or after the expiration of the one hundred twenty day-
period, appeal the decision or the unacted claim with the Court
of Tax Appeals.
xxx xxx xxx (Emphases and underscoring supplied)
In the case of CIR v. Aichi Forging Company of Asia, Inc. (Aichi), 32 it was
held that the observance of the 120-day period is a mandatory and
jurisdictional requisite to the filing of a judicial claim for refund before the CTA.
As such, its non-observance would warrant the dismissal of the judicial claim
for lack of jurisdiction. Withal, it was clarified in Aichi that the two (2)-year
prescriptive period is only applicable to administrative claims, and not to
judicial claims. 33 Accordingly, once the administrative claim is filed within the
two (2)-year prescriptive period, the taxpayer-claimant must wait for the lapse
of the 120-day period and, thereafter, he has a 30-day period within which to
file his judicial claim before the CTA, even if said 120-day and 30-day periods
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 would exceed the aforementioned two (2)-year prescriptive period. 34
Nevertheless, the Court, in the seminal case of CIR v. San Roque Power
Corporation (San Roque), 35 recognized an exception to the mandatory and
jurisdictional nature of the 120-day period. San Roque enunciated that BIR
Ruling No. DA-489-03 dated December 10, 2003 — which expressly declared
that the "taxpayer-claimant need not wait for the lapse of the 120-day period
before it could seek judicial relief with the CTA by way of Petition for Review"
36 — provided a valid claim for equitable estoppel under Section 246 37 of the
NIRC.
In the more recent case of Taganito Mining Corporation v. CIR, 38 the
Court reconciled the pronouncements in Aichi and San Roque, holding that
f r o m December 10, 2003 to October 6, 2010 which refers to the
interregnum when BIR Ruling No. DA-489-03 was issued until the date of
promulgation of Aichi, taxpayer-claimants need not observe the stringent 120-
day period; but before and after said window period, the mandatory and
jurisdictional nature of the 120-day period remained in force, viz.:
Reconciling the pronouncements in the Aichi and San Roque
cases, the rule must therefore, be that during the period December
10, 2003 (when BIR Ruling No. DA-489-03 was issued) to October 6,
2010 (when the Aichi case was promulgated), taxpayers-claimants
need not observe the 120-day period before it could file a judicial
claim for refund of excess input VAT before the CTA. Before and after
the aforementioned period (i.e., December 10, 2003 to
October 6, 2010), the observance of the 120-day period is
mandatory and jurisdictional to the filing of such claim. 39
(Emphases and underscoring supplied)
Here, records show that CE Luzon's administrative and judicial claims
were filed on November 30, 2006 and January 3, 2007, respectively, or during
the period of effectivity of BIR Ruling No. DA-489-03 and, thus, fell
within the window period stated in San Roque, i.e., when taxpayer-claimants
need not wait for the expiration of the 120-day period before seeking judicial
relief. Verily, the CTA En Banc erred when it outrightly dismissed CE Luzon's
petition on the ground of prematurity.
This notwithstanding, the Court is not wont to instantly grant CE
Luzon's refund claim in the amount of P20,546,004.87 which allegedly
represented unutilized input VAT for the year 2005. This is because the
determination of CE Luzon's entitlement to such claim, if any, would
necessarily involve factual issues and, thus, are evidentiary in nature which
are beyond the pale of judicial review under a Rule 45 petition where only
pure questions of law, not of fact, may be resolved. 40 Accordingly, the prudent
course of action is to remand the case to the CTA En Banc for resolution on the
merits, consistent with the Court's ruling in Panay Power Corporation v. CIR. 41
WHEREFORE, the petition is PARTLY GRANTED. Accordingly, the
Decision dated October 4, 2011 and the Resolution dated February 22, 2012 of
the Court of Tax Appeals En Banc in CTA EB Case Nos. 591 and 628 are hereby
SET ASIDE. The case is REMANDED to the CTA En Banc for its resolution on
the merits as stated in this Decision.
SO ORDERED.
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 Sereno, C.J., Leonardo-de Castro, Bersamin and Perez, JJ., concur.
Footnotes
1. Rollo, pp. 20-81.
2. Id. at 155-176. Penned by Associate Justice Cielito N. Mindaro-Grulla with
Associate Justices Juanito C. Castañeda, Jr., Erlinda P. Uy, Caesar A.
Casanova, and Olga Palanca-Enriquez concurring; Presiding Justice Ernesto
D. Acosta and Associate Justices Esperanza R. Fabon-Victorino and Amelia R.
Cotangco-Manalastas concurring and dissenting; and Associate Justice Lovell
R. Bautista with Separate Opinion.
3. Id. at 196-203. Penned by Associate Justice Cielito N. Mindaro-Grulla with
Associate Justices Juanito C. Castañeda, Jr., Erlinda P. Uy, Caesar A.
Casanova, and Olga Palanca-Enriquez concurring; Presiding Justice Ernesto
D. Acosta and Associate Justices Esperanza R. Fabon-Victorino concurring
and dissenting; and Associate Justice Lovell R. Bautista with Separate
Opinion. Associate Justice Amelia R. Cotangco-Manalastas on wellness leave.

4. Id. at 117-135. Penned by Associate Justice Olga Palanca-Enriquez with Associate

Justices Juanito C. Castañeda, Jr. and Erlina P. Uy concurring.

5. See id. at 90-91.

6. Id. at 91.
7. See id. at 92.

8. See id. at 92-94.

9. Id. at 89-113.

10. Id. at 111-112.

11. See id. at 101-111.

12. See the CIR's motion for reconsideration dated July 14, 2009; id. at 207-225. CE
Luzon filed its motion for reconsideration (not attached to the rollo) on July
16, 2009; see id. at 117.

13. See id. at 118-119 and 131-132.

14. Id. at 117-135.

15. Id. at 134.

16. See id. at 130-131.

17. Id. at 134.

18. Dated February 9, 2010. Id. at 227-245.
19. Not attached in the rollo. See id. at 136.

20. Not attached to the rollo. See id. at 29.

21. See petition for review dated May 11, 2010; id. at 136-152C.

22. Not attached in the rollo. See id. at 29.

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 23. Id.

24. Id. at 155-176.

25. See id. at 165-175.
26. Not attached to the rollo.

27. Id. at 196-203.

28. See id. at 32-40.

29. Id. at 207-225.

30. Id. at 227-245.

31. Entitled "AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107, 108, 109, 110,
111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 AND 288 OF
THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND
FOR OTHER PURPOSES." Its effectivity clause provides that it shall take effect
on July 1, 2005 but due to a Temporary Restraining Order filed by some
taxpayers, the law took effect on November 1, 2005 when the TRO was
finally lifted by the Court. (Republic of the Philippines, Bureau of Internal
Revenue: Tax Code <http://www.bir.gov.ph/index.php/tax-code.html> [visited
August 18, 2015].)
32. 646 Phil. 710 (2010).
33. See id. at 713-714 and 723-732.
34. See id.
35. G.R. Nos. 187485, 196113, and 197156, February 12, 2013, 690 SCRA 336.

36. Id. at 401.

37. Section 246 of the NIRC provides:
SEC. 246. Non-Retroactivity of Rulings. — Any revocation, modification or reversal
of any of the rules and regulations promulgated in accordance with the
preceding Sections or any of the rulings or circulars promulgated by the
Commissioner shall not be given retroactive application if the
revocation, modification or reversal will be prejudicial to the
taxpayers, except in the following cases:
(a) Where the taxpayer deliberately misstates or omits material facts from his
return or any document required of him by the Bureau of Internal Revenue;
(b) Where the facts subsequently gathered by the Bureau of Internal Revenue are
materially different from the facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith. (Emphases and underscoring supplied)
38. G.R. No. 197591, June 18, 2014, 726 SCRA 637.
39. Id. at 648.
40. See Atlas Consolidated Mining and Dev't. Corp. v. CIR, 655 Phil. 499, 5120-511
(2011), citing Atlas Consolidated Mining and Dev't. Corp. v. CIR, 551 Phil.
519, 558-560 (2007).
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 41. In said case, an amended decision was likewise issued by the CTA Special First
Division dismissing Panay Power Corporation's (PPC) claim for refund for
being prematurely filed. Considering, however, that PPC filed its
administrative and judicial claims during the effectivity of BIR Ruling No. DA-
489-03, i.e., the exemption window period, the Court, thus, ordered the
remand of the case to the CTA Special First Division to determine PPC's
entitlement, if any, to a tax refund since this matter involves questions of
fact. (See G.R. No. 203351, January 21, 2015).

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