Implementing Rules and Regulations Governing the Operationalization of a Socialized Housing One-Stop Processing Center

THIRD DIVISION [C.T.A. CASE NO. 7798. August 8, 2011.] PHILEX MINING CORPORATION , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION PALANCA-ENRIQUEZ , J p : This resolves petitioner's "Motion for Reconsideration" filed on May 3, 2011, while respondent failed to file her comment despite due notice, as per report of the Judicial Records Division dated June 7, 2011. SEIcAD The motion is anchored on the ground that the instant petition was filed within the period set by prevailing court rulings when it was filed, hence, it was filed on time and that the Honorable Court erred in retroactively applying the Aichi ruling in deciding this instant case since decisions of the Supreme Court should have a prospective application. We find no merit in the motion. It bears stressing that the Aichi case is a mere reiteration of what Section 112 of the NIRC of 1997, as amended, clearly provides and does not establish a rule which is not familiar to petitioner, hence, it cannot claim that it is legally impossible to comply with such doctrine as the Atlas case is the prevailing doctrine when petitioner filed its Petition for Review. It cannot be mistaken that the law itself is very clear and unambiguous. Hence, we cannot disregard the letter of the law on the pretext of pursuing its spirit (Taada and Macapagal vs. Cuenco, et al., 103 Phil. 1051, 1086 [1957]) . Basic is the rule that judicial interpretation of the law retroacts to the date when the said law became effective. Thus, the ruling in the Aichi case retroacts to the date when Section 112 took effect. At any rate, the ruling in the Aichi case, partakes of the nature of a procedural rule. Elementary is the rule that one does not have a vested right in procedural rules. Furthermore, the right of petitioner to refund unutilized input VAT is a mere statutory privilege and not a vested right. It must be emphasized that recovery of excess input VAT is a refund which is in the nature of an exemption. There is parity between tax refund and tax exemption when the former is based either on a tax exemption statute or a tax refund statute. Clearly, a claim for tax refund may be based on statutes granting tax exemption or tax refund. In such case, the rule of strict interpretation against the taxpayer is applicable as the claim for refund partakes of the nature of an exemption, a legislative grace, which cannot be allowed unless granted in the most explicit and categorical language. The taxpayer must show that the legislature intended to exempt him from the tax by words too plain to be mistaken ( CIR vs. Fortune Tobacco Corporation , 559 SCRA 160, 178). To reiterate, tax refunds are in the nature of tax exemptions. As such they are regarded as in derogation of sovereign authority and to be construed strictissimi juris against the person or entity claiming the exemption (Commissioner of Internal Revenue v. S.C. Johnson & Son, Inc., 368 Phil. 388, 411, June 25, 1999; Magsaysay Lines, Inc., v. Court of Appeals, 329 Phil. 310, 324, August 12, 1996; Commissioner of Internal Revenue v. Tokyo Shipping Co., Ltd., 314 Phil. 220, 228, May 26, 1995) . SDcITH Finding no compelling reason or substantial argument to compel a reversal of our Decision dated April 13, 2011, we deny the motion. WHEREFORE , premises considered, petitioner's "Motion for Reconsideration" is hereby DENIED for lack of merit. SO ORDERED. (SGD.) OLGA PALANCA-ENRIQUEZ Associate Justice Amelia R. Cotangco-Manalastas, J., concurs. Lovell R. Bautista, J., I maintain my dissenting opinion in the Decision dated April 13, 2011.