Reconciling the Aichi and San Roque doctrines
Section 112. Refunds or Tax Credits of Input Tax. –
(A) Zero-rated or Effectively Zero-rated Sales. – any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: x xx.
x x x x
(D) 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 Subsections (A) and (B) 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. (Emphases and underscoring supplied)
x x x x
In CIR v. Aichi Forging Company of Asia, Inc.[5] (Aichi), the Supreme Court
held that the observance of the 120-day period is a mandatory and
jurisdictional requisite to the filing of a judicial claim for refund before
the CTA. Consequently, its non-observance would lead to the dismissal of the
judicial claim on the ground of lack of jurisdiction. Aichi also
clarified that the two (2)-year prescriptive period applies only to
administrative claims and not to judicial claims.[6] Succinctly put,
once the administrative claim is filed within the two (2)-year prescriptive
period, the claimant must wait for the 120-day period to end and, thereafter,
he is given a 30-day period to file his judicial claim before the CTA, even if
said 120-day and 30-day periods would exceed the aforementioned two (2)-year
prescriptive period.[7]However, in CIR v. San Roque Power Corporation (San Roque),[8] the Supreme Court categorically recognized an exception to the mandatory and jurisdictional nature of the 120-day period. It ruled that BIR Ruling No. DA-489-03 dated December 10, 2003 provided a valid claim for equitable estoppel under Section 246[9] of the NIRC. In essence, the aforesaid BIR Ruling stated that “taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review.”[10]
Recently, in Taganito Mining Corporation v. CIR,[11] the Court reconciled the pronouncements in the Aichi and San Roque cases in the following manner:
Reconciling the pronouncements in the Aichi and San Roque cases, the rule must therefore be that during the period December 10, 2003 (when BIR Ruling No. DA-489-03 was issued) to October 6, 2010 (when the Aichi case was promulgated), taxpayers-claimants need not observe the 120-day period before it could file a judicial claim for refund of excess input VAT before the CTA. Before and after the aforementioned period (i.e., December 10, 2003 to October 6, 2010), the observance of the 120-day period is mandatory and jurisdictional to the filing of such claim.[12] (Emphases and underscoring supplied)
[1] Entitled “ADOPTING A VALUE-ADDED TAX, AMENDING FOR THIS PURPOSE CERTAIN PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AND FOR OTHER PURPOSES.”
[2] Entitled “AN ACT RESTRUCTURING THE VALUE ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE AND ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING AND REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES.”
[3] Entitled “AN ACT AMENDING THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES.”
[4] Entitled “AN ACT AMENDING SECTIONS 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 AND 288 OF THE NATIONAL INTERNAL REVENUE CODE OF 1997, AS AMENDED, AND FOR OTHER PURPOSES.”
[5] G.R. No. 184823, October 6, 2010, 632 SCRA 422.
[6] See id. at 435-445.
[7] See Taganito Mining Corporation v. CIR, G.R. No. 197591, June 18, 2014.
[8] G.R. Nos. 187485, 196003, and 197156, February 12, 2013, 690 SCRA 336.
[9] Section 246 of the NIRC provides:
SEC. 246. Non-Retroactivity of Rulings. – Any revocation, modification or reversal of any of the rules and regulations promulgated in accordance with the preceding Sections or any of the rulings or circulars promulgated by the Commissioner shall not be given retroactive application if the revocation, modification or reversal will be prejudicial to the taxpayers, except in the following cases:
(a) Where the taxpayer deliberately misstates or omits material facts from his return or any document required of him by the Bureau of Internal Revenue;
(b) Where the facts subsequently gathered by the Bureau of Internal Revenue are materially different from the facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith. (Emphases and underscoring supplied)
[10] CIR v. San Roque, G.R. Nos. 187485, 196003, and 197156, February 12, 2013, 690 SCRA 336, at 401.
[11] Taganito Mining Corporation v. CIR, G.R. No. 197591, June 18, 2014.
[12] See id.
