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    CIR v. Hedcor Sibulan, Inc.

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    SophiaFrancescaEspinosa
    R filed a judicial claim for VAT refund with the CTA one day after filing an administrative claim with the BIR. The CIR argued R's judicial claim was premature. While the case was pending, the SC ruled in Aichi that compliance with the 120-day period for the BIR to act on administrative claims is mandatory for filing judicial claims. However, the SC later ruled in San Roque that BIR Ruling No. DA-489-03, which allowed early filing of judicial claims, was a valid exception. The SC upheld the validity of the BIR ruling and denied the CIR's petition, finding a Deputy Commissioner has authority to issue interpretative rules and the ruling was not repealed.

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    CIR v. Hedcor Sibulan, Inc.

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    SophiaFrancescaEspinosa
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    R filed a judicial claim for VAT refund with the CTA one day after filing an administrative claim with the BIR. The CIR argued R's judicial claim was premature. While the case was pending, the SC ruled in Aichi that compliance with the 120-day period for the BIR to act on administrative claims is mandatory for filing judicial claims. However, the SC later ruled in San Roque that BIR Ruling No. DA-489-03, which allowed early filing of judicial claims, was a valid exception. The SC upheld the validity of the BIR ruling and denied the CIR's petition, finding a Deputy Commissioner has authority to issue interpretative rules and the ruling was not repealed.

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    10. CIR v. Hedcor Sibulan, Inc.

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    R filed a judicial claim for VAT refund with the CTA one day after filing an administrative claim with the BIR. The CIR argued R's judicial claim was premature. While the case was pending, the SC ruled in Aichi that compliance with the 120-day period for the BIR to act on administrative claims is mandatory for filing judicial claims. However, the SC later ruled in San Roque that BIR Ruling No. DA-489-03, which allowed early filing of judicial claims, was a valid exception. The SC upheld the validity of the BIR ruling and denied the CIR's petition, finding a Deputy Commissioner has authority to issue interpretative rules and the ruling was not repealed.

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    412 views2 pages

    CIR v. Hedcor Sibulan, Inc.

    Uploaded by

    SophiaFrancescaEspinosa
    R filed a judicial claim for VAT refund with the CTA one day after filing an administrative claim with the BIR. The CIR argued R's judicial claim was premature. While the case was pending, the SC ruled in Aichi that compliance with the 120-day period for the BIR to act on administrative claims is mandatory for filing judicial claims. However, the SC later ruled in San Roque that BIR Ruling No. DA-489-03, which allowed early filing of judicial claims, was a valid exception. The SC upheld the validity of the BIR ruling and denied the CIR's petition, finding a Deputy Commissioner has authority to issue interpretative rules and the ruling was not repealed.

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    University of the Philippines College of Law

    CJSE D2021
    Case Name CIR v. Hedcor Sibulan, Inc.
    Topic Organization and Functions of the BIR
    Case No. | Date GR No. 209306 | Sept 27, 2017
    Ponente Caguioa, J.

    RELEVANT FACTS
     R is a domestic corporation, duly organized and existing under Philippine laws and is principally engaged in
    the business of power generation through hydropower and subsequent sale of generated power to the Davao
    Light and Power Company, Inc.
     R filed its Oirginal Quarterly VAT Returns with the BIR. Later filed an Amended Return. R then filed its
    administrative claim for refund of unutilized input VAT, and 1 day after, filed its judicial claim for refund with
    the CTA.
    o CIR argues that R’s judicial claim was prematurely filed and there was likewise no proof of compliance
    with the prescribed requirements for VAT refund pursuant to Revenue Memorandum Order (RMO)
    No. 53-98.
     While R’s claim for refund was pending before the CTA, the SC promulgated CIR v. Aichi Forging Company of
    Asia, Inc. where it held that compliance with the 120-day period granted to the CIR, within which to act on an
    administrative claim for refund or credit of unutilized input VAT is mandatory and jurisdictional in filing an
    appeal with the CTA.
    o Hence, CTA dismissed R’s claim. MR & PFR denied.
     However, SC promulgated CIR v. San Roque Power Corp., where it held that BIR Ruling No. DA-489- 03 was
    recognized as an exception to the mandatory and jurisdictional nature of the 120-day waiting period.
    o CTA en banc then reversed, and remanded R’s claim to the CTA Division.
    ISSUE AND RATIO DECIDENDI
    Issue Ratio
    WON R’s  Under Section 112(C) of the NIRC of 1997, as amended, the CIR is given a period of 120
    judicial claim days within which to grant or deny a claim for refund. Upon receipt of the CIR’s decision
    was timey or ruling denying the said claim, or upon the expiration of the 120-day period without
    filed – YES. action from the CIR, the taxpayer has thirty (30) days within which to file a petition for
    review with the CTA.
     The SC clarified in the Aichi case that the 120+30-day periods are mandatory and
    jurisdictional, the nonobservance of which is fatal to the filing of a judicial claim with the
    CTA. Subsequently, however, the Court, in San Roque, recognized an exception to the
    mandatory and jurisdictional nature of the 120+30- day periods. The Court held that BIR
    Ruling No. DA-489-03, issued prior to the promulgation of Aichi, which explicitly 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,” furnishes a valid
    basis to hold the CIR in estoppel because the CIR had misled taxpayers into prematurely
    filing their judicial claims with the CTA.
    o “There is no dispute that the 120-day period is mandatory and jurisdictional, and
    that the CTA does not acquire jurisdiction over a judicial claim that is filed before
    the expiration of the 120-day period. There are, however, two exceptions to this
    rule.
     The first exception is if the Commissioner, through a specific ruling,
    misleads a particular taxpayer to prematurely file a judicial claim with the
    CTA. Such specific ruling is applicable only to such particular taxpayer.
    University of the Philippines College of Law
    CJSE D2021
     The second exception is where the Commissioner, through a general
    interpretative rule issued under Section 4 of the Tax Code, misleads all
    taxpayers into filing prematurely judicial claims with the CTA.
     In these cases, the Commissioner cannot be allowed to later on question
    the CTA’s assumption of jurisdiction over such claim since equitable
    estoppel has set in as expressly authorized under Section 246 of the Tax
    Code.”
    [RELEVANT]
    P however impugns the validity of BIR Ruling No. DA- 489-03 asserting that:
    (1) it was merely issued by a Deputy Commissioner, and not the CIR, who is exclusively authorized
    by law to interpret tax matters; and
    (2) it was already repealed and superseded on November 1, 2005 by Revenue Regulations No. 16-
    2005 (RR 16-2005), which echoed the mandatory and jurisdictional nature of the 120-day period
    under Section 112(C) of the NIRC.
    SC DOES NOT AGREE. A Deputy Commissioner has authority to issue interpretative rules.
     The NIRC does not prohibit the delegation of the CIR’s power under Section 4 thereof. The
    CIR may delegate the powers vested in him under the pertinent provisions of the NIRC
    to any or such subordinate officials with the rank equivalent to a division chief or higher,
    subject to such limitations and restrictions as may be imposed under rules and
    regulations to be promulgated by the Secretary of Finance, upon recommendation of
    the CIR..

    RULING: Petition denied.

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