TAGANITO MINING vs. CIR (Tax 2)

G.R. No. 198076               November 19, 2014

TAGANITO MINING CORPORATION, Petitioner,

vs.

COMMISSIONER OF INTERNAL REVENUE, Respondent.

FACTS:

On December 30, 2003, Taganito filed with respondent Commissioner of Internal Revenue (CIR), through its Excise Taxpayers’ Assistance Division under the Large Taxpayers Division, an application for refund of its excess input VAT paid on its domestic purchases of taxable goods and services and importation of goods amounting to 4,447,651.32 for the period January 1, 2002 to December 3, 2002.

On February 19, 2004, 51 days after the filing ofits application with the CIR, Taganito filed with the CTA a petition for review. At that time, the CIR had not yet finally acted upon Taganito’s application for refund. The CIR answered that the claim for refund was still subject to investigation.

On October 27, 2009, the CTA Division partially granted Taganito’s petition and ordered the CIR to refund the amount of ₱3,636,854.07.

The CIR moved for reconsideration, arguing that the petition for review was prematurely filed because Taganito did not wait for the lapse of 120 days mandated by Section 112(D) of the National Internal Revenue Code of 1997 (NIRC). Therefore, the CTA was bereft of jurisdiction to rule on the petition. The said motion was denied.

The CIR then filed a petition for review before the CTA En Banc, claiming that Taganito failed to exhaust administrative remedies under Section 112(D) of the NIRC before resorting to judicial appeal, and that it failed to present concreteand convincing proof thatthe CIR did not have enough reason to deny its administrative claim for refund.

In the assailed Decision, dated April 18, 2011, the CTA En Banc granted the petition, reversed and set aside the decision and the resolution of the CTA Division, and ordered the case dismissed for being prematurely filed.

In the assailed Resolution, dated August 9, 2011, the CTA En Banc denied Taganito’s motion for reconsideration.

Hence, the present petition.

ISSUE:

The sole issue at hand is whether or not Taganito’s judicial claim for refund/credit was prematurely filed.

RULING:

No, accordingly, the general rule is that the 120+30 day period is mandatory and jurisdictional from the effectivity of the 1997 NIRC on January 1, 1998, up to the present. As an exception, judicial claims filed from December 10, 2003 to October 6, 2010 need not wait for the exhaustion of the 120-day period.12

From the foregoing, it is clear that the two-year period under Section 229 does not apply to claims for a refund or tax credit for unuti I ized creditable input VAT because it is not considered "excessively" collected. Instead, San Roque settled that Section l 12 applies to claims for a refund or tax credit for unutilized creditable input VAT, thereby making the 120+30 day period prescribed therein mandatory and jurisdictional in nature.

As an exception to the mandatory and jurisdictional nature of the 120+ 30 day period, judicial claims filed between December 10, 2003 or from the issuance of BIR Ruling No. DA-489-03, up to October 6, 2010 or the reversal of the ruling in Aichi, need not wait for the lapse of the 120+ 30 day period in consonance with the principle of equitable estoppel.

In the present case, Taganito filed its judicial claim with the CTA on February 19, 2004, clearly within the period of exception of December I 0, 2003 to October 6, 20 I 0. Its judicial claim was, therefore, not prematurely filed and should not have been dismissed by the CT A En Banc. WHEREFORE, the petition is GRANTED.