Amending Part II of the Rules and Regulations to Implement Republic Act No. 6948, as Amended by Republic Act No. 7696, Entitled "An Act Standardizing And Upgrading The Benefits Of Military Veterans And Their Dependents", Thereby Amending Department Order Number A-049 Dated May 20, 1990, As Amended By Department Order No. 157 Dated October 8, 2002

EN BANC [C.T.A. EB CASE NO. 516 . May 16, 2011.] (C.T.A. Case No. 7473) KEPCO ILIJAN CORPORATION , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . [C.T.A. EB CASE NO. 518 . May 16, 2011.] (C.T.A. Case No. 7473) COMMISSIONER OF INTERNAL REVENUE , petitioner , vs . KEPCO ILIJAN CORPORATION , respondent . RESOLUTION FABON-VICTORINO , J p : In its Motion for Reconsideration filed on February 22, 2011, Kepco Ilijan Corporation's ("Kepco") seeks for a reconsideration of the Court En Banc's Decision promulgated on January 27, 2011, the dispositive portion of which reads as follows: DAaEIc WHEREFORE , the Petition for Review filed by Kepco Ilijan Corporation docketed as C.T.A. EB No. 516 is hereby DENIED , for lack of merit. On the other hand, the Petition for Review filed by the Commissioner of Internal Revenue docketed as C.T.A. EB No. 518, is GRANTED . The assailed Decision dated January 5, 2009 and the Resolution dated July 21, 2009 are REVERSED and SET ASIDE . Accordingly, the claim for refund or issuance of Tax Credit Certificate filed by Kepco Ilijan Corporation is DENIED , for lack of jurisdiction. SO ORDERED . Despite notice, the Commissioner of Internal Revenue (CIR) did not interpose any objection. Kepco argues that: 1) it filed its Petition for Review with the CTA within the two-year prescriptive period reckoned from the filing of the quarterly VAT returns in accordance with CTA 1 and SC 2 Decisions; 2) the case of Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc. 3 ( "Aichi" ) decided by a Division of the Supreme Court cannot overrule the Supreme Court Decision in Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue 4 ( "Atlas" ); and 3) the ruling in Aichi Case can only be applied prospectively. In addition to the foregoing, Kepco repleads its arguments in its Memorandum dated January 12, 2010, claiming that in determining the instant petition, the Court En Banc only discussed the application of Aichi case in the instant case without "further discussion on the other points raised" in the Memorandum, to wit: 1) the Court in Division erred when it applied to the present petition the doctrine in Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (formerly Southern Energy Quezon, Inc.) ; and 2) the Court in Division erred in disallowing the claim for tax credit/refund on the sole ground that Kepco's invoices/official receipts contained the imprinted words "TIN-V" instead of "TIN-VAT". The motion lacks merit. Section 112 of the National Internal Revenue Code of 1997 ("1997 Tax Code"), as amended, provides: "SEC. 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: Provided, however, That in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(B)(1) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportionately on the basis of the volume of sales: Provided, finally, That for a person making sales that are zero-rated under Section 108(B)(6), the input taxes shall be allocated ratably between his zero-rated and non-zero-rated sales. ECDaAc "(B) Cancellation of VAT Registration. A person whose registration has been cancelled due to retirement from or cessation of business, or due to changes in or cessation of status under Section 106(C) of this Code may, within two (2) years from the date of cancellation, apply for the issuance of a tax credit certificate for any unused input tax which may be used in payment of his other internal revenue taxes. "(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. "(D) Manner of Giving Refund. Refunds shall be made upon warrants drawn by the Commissioner or by his duly authorized representative without the necessity of being countersigned by the Chairman, Commission on Audit, the provisions of the Administrative Code of 1987 to the contrary notwithstanding: Provided, That refunds under this paragraph shall be subject to post audit by the Commission on Audit." (Emphasis Supplied) The foregoing clearly and unequivocally states that respondent CIR has 120 days from the submission of complete documents by the taxpayer in support of its claim for refund, to act on the claim. On the other hand, the taxpayer has thirty (30) days from notice of the denial or expiration of the 120-day period without any action, within which to appeal before this Court. Under the verba legis rule, if the words of the law are clear, plain, and free from ambiguity, it must be given its literal meaning and applied without any interpretation. 5 It is not for this Court to inquire into the wisdom of the law, for indeed, it is bound by the words of the statute. 6 In the case at bar, Kepco was not able to file its appeal before this Court within the period provided under Section 112 (C) of the 1997 Tax Code, as amended, effectively depriving the Court of competence or authority to determine the same. Thus, applying Section 112 (C) of the 1997 Tax Code, as amended, the Court En Banc ruled that it has no jurisdiction to entertain the Petition for Review. Anent the application of the principle laid down in the Aichi case, it is well to recall that the said case made an outright application of the literal terms of Section 112 (A) and (C) of the 1997 Tax Code, as amended. The same is in accord with the doctrine that where a provision of law speaks categorically, the need for interpretation is obviated, no plausible pretense being entertained to justify non-compliance. All that has to be done is to apply it in every case that falls within its terms. 7 For obvious reason, the Court will not reverse a current pronouncement of the Highest Tribunal on the alleged ground that the new ruling or doctrine violates a constitutional provision absent any pronouncement declaring its previous ruling as such. By tradition and in our system of judicial administration, the Supreme Court has the last word on what the law is and that its decisions applying or interpreting the laws or even the Constitution form part of the legal system of the Country, all other courts should take their bearings from the said decisions. 8 The same mandate was declared in Gregorio Castillo v. Sandiganbayan , 9 where the Supreme Court unequivocally instructed all courts of the land to follow past precedents in subsequent cases. It must as well be noted that laws take effect from the time of their effectivity and not from the date of the decision applying or interpreting them. cDCIHT Finally, in the very recent case of Microsoft Philippines, Inc. v. Commissioner of Internal Revenue , 10 the Supreme Court once again ruled that a tax credit or refund, like tax exemption, is strictly construed against a taxpayer. This is simply because refund represents a loss of revenue to the government. 11 Thus a taxpayer claiming the tax credit or refund has the burden of proving that he is entitled to the refund or credit. 12 In the instant case however, the obtaining circumstances show that Kepco failed to comply with the requirements laid down in the Tax Code. With the foregoing discussions, the other arguments raised in the subject Motion for Reconsideration are deemed moot and academic. WHEREFORE , finding no cogent reason to reverse, amend or modify the Decision of the Court En Banc dated January 27, 2011, Kepco's Motion for Reconsideration is hereby DENIED , for lack of merit. SO ORDERED . (SGD.) ESPERANZA R. FABON-VICTORINO Associate Justice Ernesto D. Acosta, P.J., Juanito C. Castaeda, Jr., Erlinda P. Uy, Olga Palanca-Enriquez, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, JJ., concur. Lovell R. Bautista, J., I maintain my dissenting opinion in the decision dated January 27, 2011. Caesar A. Casanova, J., is on leave. Footnotes 1. Taganito Mining Corporation v. CIR , C.T.A. Case No. 6384, January 12, 2004; San Roque Power Corporation v. CIR , C.T.A. Case No. 6213, December 23, 2004; Kepco Philippines Corporation v. CIR, C.T.A. Case No. 6100, February 9, 2005; Bonifacio Vivendi Water Corporation [Formerly: Bonifacio Water Corporation] v. CIR , C.T.A. Case No. 6380, March 29, 2005; San Roque Power Corporation v. CIR , C.T.A. Case No. 6427, October 19, 2005; Kepco Philippines Corporation v. CIR , C.T.A. Case No. 6679, October 26, 2005; Ironcon Builders and Development Corporation v. CIR , C.T.A. Case No. 6502, January 5, 2006; Panay Power Corporation v. CIR , C.T.A. Case No. 6807, October 30, 2006. 2. CIR v. American Express International, Inc. (Phil. Branch) , G.R. No. 152609, June 29, 2005; CIR v. Sekisui Jushi Philippines, Inc. , G.R. No. 149671, July 21, 2006; Atlas Consolidated Mining and Development Corporation v. CIR , G.R. Nos. 141104 & 148763, June 8, 2007. 3. G.R. No. 184823, October 6, 2010. 4. G.R. Nos. 141104 & 148763, June 8, 2007, 524 SCRA 73. 5. Commissioner of Internal Revenue vs. Central Luzon Drug Corporation , G.R. No. 159610, June 12, 2008, 554 SCRA 398. 6. Commissioner of Customs vs. Manila Star Ferry, Inc. , G.R. Nos. L-31776-78, October 21, 1993, 227 SCRA 317. 7. Carmelino F. Pansacola vs. Commissioner of Internal Revenue , G.R. No. 159991, November 16, 2006. 8. Commissioner of Internal Revenue vs. Michel J. Lhuillier Pawnshop, Inc. , G.R. No. 150947, July 15, 2003. 9. 377 SCRA 509. 10. G.R. No. 180173, April 6, 2011. 11. Commissioner of Internal Revenue v. Solidbank Corporation , 462 Phil. 96 (2003). 12. Commissioner of Internal Revenue vs. Acesite (Philippines) Hotel Corporation , G.R. No. 147295, February 16, 2007.