COMMISSIONER vs. CE CASECNAN WATER AND ENERGY COMPANY, INC (Tax 2)

COMMISSIONER OF INTERNAL REVENUE vs. CE CASECNAN WATER AND ENERGY COMPANY, INC., CTA EB No. 1072 

April 28,2014

FACTS:

Invoking the provision under Section 108(B)(7) of the 1997 NIRC, as amended by Republic Act No. 9337, sales by power generating companies of electricity produced through renewable sources of energy, such as hydropower, are classified as zero-rated. The input VAT on power generating companies' purchases of goods and services attributable to zero-rated sales are refundable in accordance with Section 112 of the Tax Code, on  November 10, 2010, respondent filed before the BIR an administrative refund claim of P16,702,501.38 attributable to zero-rated sales of power to NIA for taxable year 2009. 

Petitioner's inaction has prompted respondent to file a Petition for Review docketed as CTA Case No. 8245 with the CTA's Special Third Division on March 30, 2011. 

In ruling for the respondent, the Court in Division issued a Decision dated May 10, 2013 partially granting its refund claim in the reduced amount of P16,101,029.44 representing its unutilized input VAT attributable to its zero-rated sales to NIA for taxable year 2009. The refundable amount resulted by deducting input VAT attributable to zero-rated sales of P16,250,159.04 from net output VAT payable of P149,129.60.

Dissatisfied, petitioner moved for partial reconsideration of the assailed Decision; however, in the Resolution dated September 19, 2013, the Court in Division denied the same for lack of merit. Petitioner seeks recourse before the Court en banc.

ISSUE:

WHETHER THE RESPONDENT TIMELY FILED AN APPEAL TO THE CTA AND COMPLIED WITH THE ADMINISTRATIVE PROCESS UNDER SECTION 112 OF THE TAX CODE. THUS, THIS COURT HAS JURISDICTION TO RULE ON THE REFUND CLAIM. 

RULING:

Yes, considering that respondent has submitted supporting documents together with its administrative claim before the BIR pursuant to Section 112 of the 1997 NIRC, as amended, the 120-day period should be reckoned from November 10, 2010. Despite of the petitioner's inaction on the refund claim, respondent may appeal to this Court 

within thirty (30) days from expiry of the 120-day period on March 10, 2011, or until April 11, 2011. 17 Hence, respondent's appeal on March 30, 2011 was within the reglementary period. 

Clearly, the Court in Division correctly ordered petitioner to grant the refund or the issuance of the tax credit certificate in favor of the respondent in the amount of P16,101,029.44 representing unutilized input VAT attributable to its zero-rated sales to NIA for taxable year 2009. 

WHEREFORE, premises considered, the Petition for Review is hereby DISMISSED. The assailed Decision dated May 10, 2013 and the Resolution dated September 19, 2013 are AFFIRMED.