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CIR V San Roque

San Roque Power Corporation filed a claim for tax refund with the Commissioner of Internal Revenue (CIR) for excess input VAT in tax year 2001. However, San Roque filed a petition for review with the Court of Tax Appeals only 13 days after filing an amended claim, without waiting the mandatory 120-day period for the CIR to act. The court held that San Roque was not entitled to a tax refund because it failed to comply with the mandatory requirement to wait 120 days before filing a judicial claim, depriving the CTA of jurisdiction over the petition. Compliance with the 120-day period is mandatory and jurisdictional under the Tax Reform Act of 1997, and failure to comply renders the petition void.

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142 views2 pages

CIR V San Roque

San Roque Power Corporation filed a claim for tax refund with the Commissioner of Internal Revenue (CIR) for excess input VAT in tax year 2001. However, San Roque filed a petition for review with the Court of Tax Appeals only 13 days after filing an amended claim, without waiting the mandatory 120-day period for the CIR to act. The court held that San Roque was not entitled to a tax refund because it failed to comply with the mandatory requirement to wait 120 days before filing a judicial claim, depriving the CTA of jurisdiction over the petition. Compliance with the 120-day period is mandatory and jurisdictional under the Tax Reform Act of 1997, and failure to comply renders the petition void.

Uploaded by

Charity Lasi Magtibay
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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CIR V.

San Roque

FACTS:

San Roque Power Corporation (San Roque) entered into a Power Purchase
Agreement (PPA) with the National Power Corporation (NPC) by building the San Roque
Multi-Purpose Project in San Manuel, Pangasinan. The San Roque Multi-Purpose Project
allegedly incurred, excess input VAT in the amount of P559,709,337.54 for taxable year
2001 which it declared in its Quarterly VAT Returns filed for the same year. San Roque
duly filed with the BIR separate claims for refund, amounting to P559,709,337.54,
representing unutilized input taxes as declared in its VAT returns for taxable year 2001.
However, San Roque filed amended Quarterly VAT Returns for the year 2001 since it
increased its unutilized input VAT To the amount of P560,200,283.14. San Roque filed
with the BIR on the same date, separate amended claims for refund in the aggregate
amount of P560,200,283.14.

On April 10, 2003, a mere 13 days after it filed its amended administrative claim with
the CIR on March 28, 2003, San Roque filed a Petition for Review with the CTA.

CIR alleged that the claim by San Roque was prematurely filed with the CTA.

ISSUE:

Whether or not San Roque is entitled to tax refund?

HELD:

No. San Roque is not entitled to a tax refund because it failed to comply with the
mandatory and jurisdictional requirement of waiting 120 days before filing its
judicial claim. Mere 13 days after it filed its amended administrative claim with the CIR
on March 28, 2003, San Roque filed a Petition for Review with the CTA, which showed
that San Roque did not wait for the 120-day period to lapse before filing its judicial claim.

Compliance with the 120-day waiting period is mandatory and jurisdictional, under
RA 8424 or the Tax Reform Act of 1997. Failure to comply renders the petition void.
It violates the doctrine of exhaustion of administrative remedies and renders the
petition premature and without a cause of action, with the effect that the CTA does not
acquire jurisdiction over the taxpayer’s petition.

Article 5 of the Civil Code provides, "Acts executed against provisions of mandatory
or prohibitory laws shall be void, except when the law itself authorizes their validity."

Well-settled is the rule that tax refunds or credits, just like tax exemptions, are strictly
construed against the taxpayer.

Whether the Atlas doctrine or the Mirant doctrine is applied to San Roque is
immaterial because what is at issue in the present case is San Roque’s non-
compliance with the 120-day mandatory and jurisdictional period, which is counted
from the date it filed its administrative claim with the CIR. The 120-day period may
extend beyond the two-year prescriptive period, as long as the administrative claim is
filed within the two-year prescriptive period. However, San Roque’s fatal mistake is
that it did not wait for the CIR to decide within the 120-day period, a mandatory period
whether the Atlas or the Mirant doctrine is applied.
Section 112(D) of the 1997 Tax Code is clear, unequivocal, and categorical that the
CIR has 120 days to act on an administrative claim. The taxpayer can file the judicial
claim
(1) Only within 30 days after the CIR partially or fully denies the claim within the
120- day period, or
(2) only within 30 days from the expiration of the 120- day period if the CIR does
not act within the 120-day period.
Even if, contrary to all principles of statutory construction as well as plain common sense,
we gratuitously apply now Section 4.106-2(c) of Revenue Regulations No. 7-95, still San
Roque cannot recover any refund or credit because San Roque did not wait for the 60-
day period to lapse, contrary to the express requirement in Section 4.106-2(c).

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