Period for claiming tax refunds
Section 112. Refunds or Tax Credits of Input Tax. —
C. Period within which Refund or Tax Credit of Input Taxes shall be Made. — In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof.
In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, 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. (Emphasis supplied)
There is no room for any other interpretation of the text. Resort to an appeal
before the Court of Tax Appeals should be made only within thirty (30) days
either from receipt of the decision denying the claim or the expiration of the
one hundred twenty (120)-day period given to the Commissioner to decide the
claim.This is consistent with Section 11 of Republic Act No. 1125, as amended by Section 9 of Republic Act No. 9282, which provides a thirty (30)-day period of appeal either from receipt of the adverse decision of the Commissioner or from the lapse of the period fixed by law for action:
SEC. 11. Who May Appeal; Mode of Appeal; Effect of Appeal. - Any party adversely affected by a decision, ruling or inaction of the Commissioner of Internal Revenue . . . may file an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein.
Appeal shall be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon[.] (Emphasis supplied)
In San Roque, the Supreme Court held that compliance with the one
hundred twenty (120)-day and the thirty (30)-day periods under Section 112 of
the Tax Code is mandatory and jurisdictional, save for VAT refund cases that
were prematurely filed—i.e., before the lapse of the one hundred twenty
(120)-day period—before the Court of Tax Appeals between December 10,
2003 (when the BIR Ruling was issued) and October 6, 2010.[1]
The Supreme Court also declared that, following Commissioner of Internal Revenue v. Mirant Pagbilao Corporation,[2] claims for refund or tax credit of excess input tax are governed
not by Section 229 but only by Section 112 of the Tax Code.
San
Roque filed a motion for reconsideration and supplemental motion for
reconsideration in G.R. No. 187485 arguing for the prospective application of
the one hundred twenty (120)-day and thirty (30)-day mandatory and
jurisdictional periods. The Supreme Court denied this with finality in the Resolution
dated October 8, 2013.[3]
In CE Casecnan Water v. CIR,[4] the petitioner claims that
the BIR Ruling should cover both prematurely and belatedly filed claims for
tax refund is not supported by the text of the law or the doctrine in our
latest cases. The query interposed in the BIR Ruling specifically pertained to
what to do in cases where the taxpayer did not wait for the lapse of the one
hundred twenty (120)-day period.[5] There is nothing in the BIR Ruling
that states, expressly or impliedly, that late filings of judicial claims are
acceptable.
In Commissioner of Internal Revenue v. Mindanao II Geothermal Partnership,[6] Mindanao II filed its claim 138 days after the lapse of the thirty
(30)-day period. The Supreme Court held that while the BIR Ruling was in effect when
Mindanao II filed its claim, the rule cannot be properly invoked because the
ruling contemplates premature filing and
not late filing. The High Court further emphasized that late
filing—i.e., filing beyond the thirty (30)-day period—is
absolutely prohibited, even during the time the BIR Ruling was in force.
Similarly,
the Supreme Court rejects the petitioner's claim in CE Casecnan Water v. CIR[7] that Aichi and San Roque should not be
applied retroactively as it would be unjust to the other claimants who relied
on the old doctrine (that both administrative and judicial claims should be
filed before the lapse of the two-year period).
The claims
in Aichi and San Roque were filed before
this case. In Aichi, the Supreme Court first squarely addressed the
particular issue on prematurity of a judicial claim based on its
interpretation of the language of the Tax Code. In that case, the Supreme Court did
not defer application of the rule laid down. Rather, it ordered the Court of
Tax Appeals to dismiss Aichi's appeal due to the premature
filing of its claim for refund or credit of input VAT.
On the other
hand, Philex Mining Corporation v. Commissioner of Internal Revenue, one of the cases consolidated in San Roque, involved the
filing of a judicial claim beyond the thirty (30)-day period to appeal, as in
this case. The Supreme Court rejected Philex Mining Corporation's judicial claim
because of late filing:
Unlike San Roque and Taganito, Philex's case is not one of premature filing but of late filing. Philex did not file any petition with the CTA within the 120-day period. Philex did not also file any petition with the CTA within 30 days after the expiration of the 120-day period. Philex filed its judicial claim long after the expiration of the 120-day period, in fact 426 days after the lapse of the 120-day period. In any event, whether governed by jurisprudence before, during, or after the Atlas case, Philex's judicial claim will have to be rejected because of late filing. Whether the two-year prescriptive period is counted from the date of payment of the output VAT following the Atlas doctrine, or from the close of the taxable quarter when the sales attributable to the input VAT were made following the Mirant and Aichi doctrines, Philex's judicial claim was indisputably filed late.
The Atlas doctrine cannot save Philex from the late filing of its judicial claim. The inaction of the Commissioner on Philex's claim during the 120-day period is, by express provision of law, "deemed a denial" of Philex's claim. Philex had 30 days from the expiration of the 120-day period to file its judicial claim with the CTA. Philex's failure to do so rendered the "deemed a denial" decision of the Commissioner final and inappealable. The right to appeal to the CTA from a decision or "deemed a denial" decision of the Commissioner is merely a statutory privilege, not a constitutional right. The exercise of such statutory privilege requires strict compliance with the conditions attached by the statute for its exercise. Philex failed to comply with the statutory conditions and must thus bear the consequences.[8] (Emphasis supplied, citations omitted)
Reliance on administrative interpretation of an otherwise clear and plain provision of our tax statutes has a tendency to encourage regulatory capture. In this case, there is even no rule, regulation, or doctrine to support petitioner's stance. Clearly, the thirty (30)-day statutory period within which to file a petition for review is jurisdictional. Non-compliance bars the Court of Tax Appeals from taking cognizance of the appeal and determining the veracity of the tax refund or credit claim.[9]
[1] Commissioner of Internal Revenue v. San Roque Power Corporation, G.R. No. 187485, February 12, 2013, 690 SCRA 336, 398-399 [Per J. Carpio, En Banc].
