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    CIR V Mindanao II Geothermal Partnership

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    Gwynneth Grace Lasay
    Mindanao II filed administrative claims for refund of input VAT from 2004 but later filed a judicial claim with the Court of Tax Appeals (CTA). The Commissioner of Internal Revenue argued the judicial claim was untimely. The CTA ruled in favor of Mindanao II but the Supreme Court reversed, finding that while the administrative claims were timely, the judicial claim filed with the CTA was beyond the 30-day period allowed. The Supreme Court concluded the CTA lost jurisdiction and denied Mindanao II's claim for a tax refund.

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    CIR V Mindanao II Geothermal Partnership

    Uploaded by

    Gwynneth Grace Lasay
    95 views2 pages
    Mindanao II filed administrative claims for refund of input VAT from 2004 but later filed a judicial claim with the Court of Tax Appeals (CTA). The Commissioner of Internal Revenue argued the judicial claim was untimely. The CTA ruled in favor of Mindanao II but the Supreme Court reversed, finding that while the administrative claims were timely, the judicial claim filed with the CTA was beyond the 30-day period allowed. The Supreme Court concluded the CTA lost jurisdiction and denied Mindanao II's claim for a tax refund.

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    Mindanao II filed administrative claims for refund of input VAT from 2004 but later filed a judicial claim with the Court of Tax Appeals (CTA). The Commissioner of Internal Revenue argued the judicial claim was untimely. The CTA ruled in favor of Mindanao II but the Supreme Court reversed, finding that while the administrative claims were timely, the judicial claim filed with the CTA was beyond the 30-day period allowed. The Supreme Court concluded the CTA lost jurisdiction and denied Mindanao II's claim for a tax refund.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    95 views2 pages

    CIR V Mindanao II Geothermal Partnership

    Uploaded by

    Gwynneth Grace Lasay
    Mindanao II filed administrative claims for refund of input VAT from 2004 but later filed a judicial claim with the Court of Tax Appeals (CTA). The Commissioner of Internal Revenue argued the judicial claim was untimely. The CTA ruled in favor of Mindanao II but the Supreme Court reversed, finding that while the administrative claims were timely, the judicial claim filed with the CTA was beyond the 30-day period allowed. The Supreme Court concluded the CTA lost jurisdiction and denied Mindanao II's claim for a tax refund.

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    of 2

    G.R. No. 191498.

    January 15, 2014

    COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. MINDANAO II GEOTHERMAL PARTNERSHIP,


    respondent

    FACTS:

    On October 6, 2005, Mindanao II, a partnership registered with the Securities and Exchange Commission
    filed with the Bureau of Internal Revenue (BIR) an application for the refund or credit of accumulated
    unutilized creditable input taxes. It further stated that for the second, third, and fourth quarters of
    taxable year 2004, it paid input VAT in the aggregate amount of P7,167,005.84, which were directly
    attributable to the zero-rated sales.

    Mindanao II filed its Quarterly VAT Returns for the second, third and fourth quarters of taxable year
    2004 as follows:

    July 26, 2004 – 2nd quarter, October 22, 2004 – 3rd Quarter, January 25, 2005 4th quarter

    The Commissioner of Internal Revenue did not act on the claim, thus, on 21 July 2006, Mindanao II,
    claiming inaction on the part of the CIR and that the two-year prescriptive period was about to expire,
    filed a Petition for Review with the CTA.

    On August 12, 2008, the CTA Second Division rendered a Decision ordering the CIR to grant a refund or a
    tax credit certificate, but only in the reduced amount of P6,791,845.24, representing unutilized input
    VAT incurred for the second, third and fourth quarters of taxable year 2004

    On 1 September 2008, the CIR filed a Motion for Partial Reconsideration, pointing out that prescription
    had already set in, since the appeal to the CTA was way beyond the last day to appeal. The CTA Second
    Division denied the CIR’s Motion for Partial Reconsideration.

    On 7 January 2009, the CIR elevated the matter to the CTA En Banc via a Petition for Review, however,
    the CTA En Banc rendered its decision denying the CIR’s Petition for Review.

    Dissatisfied, the CIR filed this Rule 45 Petition.

    ISSUE:

    WON Mindanao II’s Judicial Claim was timely filed?

    RULING

    No.

    In this case, the facts are not up for debate. Mindanao II filed its administrative claim for refund or credit
    for the second, third, and fourth quarters of 2004 on 6 October 2005. The CIR, therefore, had a period of
    120 days, or until 3 February 2006, to act on the claim. The CIR, however, failed to do so. Mindanao II
    then could treat the inaction as a denial and appeal it to the CTA within 30 days from 3 February 2006,
    or until 5 March 2006. Mindanao II, however, filed a Petition for Review only on 21 July 2006, 138 days
    after the lapse of the 30-day period on 669 5 March 2006. The judicial claim was therefore filed late.
    Section 112(C) also expressly grants the taxpayer a 30- day period to appeal to the CTA the decision or
    inaction of the Commissioner, thus: 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.

    This law is clear, plain, and unequivocal. Following the well-settled verba legis doctrine, this law should
    be applied exactly as worded since it is clear, plain, and unequivocal. As this law states, the taxpayer
    may, if he wishes, appeal the decision of the Commissioner to the CTA within 30 days from receipt of the
    Commissioner’s decision, or if the Commissioner does not act on the taxpayer’s claim within the 120-day
    period, the taxpayer may appeal to the CTA within 30 days from the expiration of the 120-day period.

    Section 112(A) and (C) must be interpreted according to its clear, plain, and unequivocal language. The
    taxpayer can file his administrative claim for refund or credit at anytime within the two-year prescriptive
    period. If he files his claim on the last day of the two-year prescriptive period, his claim is still filed on
    time. The Commissioner will have 120 days from such filing to decide the claim. If the Commissioner
    decides the claim on the 120th day, or does not decide it on that day, the taxpayer still has 30 days to
    file his judicial claim with the CTA. This is not only the plain meaning but also the only logical
    interpretation of Section 112(A) and (C). x x x x When Section 112(C) states that “the taxpayer affected
    may, within thirty (30) days from 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,” the law does not make the 120+30 day periods optional just because the law uses the word
    “may.” The word “may” simply means that the taxpayer may or may not appeal the decision of the
    Commissioner within 30 days from receipt of the decision, or within 30 days from the expiration of the
    120-day period.

    In sum, our finding is that the three administrative claims for the refund or credit of unutilized input VAT
    were all timely filed, while the corresponding judicial claims were belatedly filed. The foregoing
    considered, the CTA lost jurisdiction over Mindanao II’s claims for refund or credit. The CTA EB erred in
    granting these claims. WHEREFORE, we GRANT the Petition. The assailed Court of Tax Appeals En Banc
    Decision dated 11 November 2009 and Resolution dated 3 March 2010 of the CTA EB Case No. 448 (CTA
    Case No. 7507) are hereby REVERSED and SET ASIDE. A new ruling is entered DENYING respondent’s
    claim for a tax refund or credit of P6,791,845.24.

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