Bar Matter No. 1922

EN BANC [C.T.A. EB CASE NO. 759. June 26, 2013.] (C.T.A. Case Nos. 8043 and 8116) CBK POWER COMPANY LIMITED , petitioner , vs . COMMISSIONER OF INTERNAL REVENUE , respondent . RESOLUTION BAUTISTA , J p : On February 5, 2013, petitioner filed a "Motion for Reconsideration," praying that the Court En Banc reconsider, reverse and set aside the Decision dated December 20, 2012, and to order respondent to issue tax credit certificates amounting to Php14,078,028.68 and Php47,425,306.79, representing its unutilized input taxes on its local purchases and/or importation of goods and services, capital goods and payments for services rendered by non residents for the periods January 1, 2008 to March 31, 2008 and April 1, 2008 to December 31, 2008. Petitioner raises three main arguments to support its "Motion for Reconsideration." First, petitioner claims that no doctrine or principle of law may be modified or reversed except by the Supreme Court sitting En Banc. 1 Thus, petitioner believes that this Court erred in applying the case of Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc. ("Aichi case") , 2 since this case did not overturn the case of Atlas Consolidated Mining and Development Corporation v. Commissioner of Internal Revenue ("Atlas case") , 3 or that of the Commissioner of Internal Revenue v. Mirant Pagbilao Corporation ("Mirant case") . 4 Second, petitioner maintains that it has timely and duly filed its administrative and judicial claim for the issuance of tax credit certificates for unutilized input taxes for the period April 1, 2008 to December 31, 2008, since the prevailing jurisprudence at that time dictated that a taxpayer has two (2) years from the date of filing of the Quarterly VAT return to file the same. 5 Third, petitioner emphasizes that the Civil Code of the Philippines mandates that judicial decisions applying or interpreting laws or the Constitution form part of the legal system, thus, relied on the prevailing doctrine at the time it filed its administrative and judicial claim. 6 On March 12, 2013, respondent filed her "Comment (Re: Motion for Reconsideration dated 05 February 2013)," 7 stating that the arguments have already been discussed and decided upon. Respondent also states that only three (3) days has passed between the filing of the administrative and judicial claim, which did not give the respondent enough time to consider the claim before petitioner filed a claim with the Court. Thus, it violated the very essence of the doctrine of exhaustion of administrative remedies. 8 HaTDAE After careful consideration, the Court En Banc finds that the "Motion for Reconsideration" filed by petitioner has merit. In the recent consolidated cases of Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue , and Philex Mining Corporation v. Commissioner of Internal Revenue ("San Roque case") , 9 the Supreme Court extensively discussed the periods wherein a taxpayer may file his administrative and judicial claims for tax refund or issuance of tax credit certificates of unutilized input VAT. Included in this discussion was the applicability of the 120-30 day period, prescriptive periods under Section 112 (A) and (C) of the National Internal Revenue Code, as well the effect of the Atlas, Mirant and Aichi cases . It is also relevant to include BIR Ruling No. DA-489-03 dated 10 December 2003. In the San Roque case , the Supreme Court has stated that compliance with the 120-day period is mandatory and jurisdictional, when it said that: "It is indisputable that compliance with the 120-day waiting period is mandatory and jurisdictional. The waiting period, originally fixed at 60 days only, as part of the provisions of the first VAT law, Executive Order No. 273, which took effect on 1 January 1988. The waiting period was extended to 120 days effective 1 January 1998 under RA 8424 or the Tax Reform Act of 1997. Thus, the waiting period has been in our statute books for more than fifteen (15) years before San Roque filed its judicial claim. Failure to comply with the 120-day waiting period violates a mandatory provision of law. It violates the doctrine of exhaustion of administrative remedies and renders the petition premature and thus without a cause of action, with the effect that the CTA does not acquire jurisdiction over the taxpayer's petition. Philippine jurisprudence is replete with cases upholding and reiterating these doctrinal principles." 10 However, this rule admits an exemption, which is the period from the issuance of BIR Ruling No. DA-489-03 on December 10, 2003 until the adoption of the doctrine laid out in the Aichi case on October 6, 2010. Taxpayers who filed their judicial claim for refund or credit of unutilized input VAT within this period may opt not to wait for the expiration of the 120-day period. As discussed in the San Roque case : "To repeat, a claim for tax refund or credit, like a claim for tax exemption, is construed strictly against the taxpayer. One of the conditions or a judicial claim of refund or credit under the VAT System is compliance with the 120+30 day mandatory and jurisdictional periods. Thus, strict compliance with the 120+30 day periods is necessary for such a claim to prosper, whether before, during, or after the effectivity of the Atlas doctrine, except for the period from the issuance of BIR Ruling No. DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine was adopted, which again reinstated the 120+30 day periods as mandatory and jurisdictional. xxx xxx xxx BIR Ruling No. DA-489-03 does provide a valid claim for equitable estoppel under Section 246 of the Tax Code. BIR Ruling No. DA-489-03 expressly states that the "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." Prior to this ruling, the BIR held, as shown by its position in the Court of Appeals, that the expiration of the 120-day period is mandatory and jurisdictional before a judicial claim can be filed. IADCES There is no dispute that the 120-day period is mandatory and jurisdictional, and that the CTA does not acquire jurisdiction over a judicial claim that is filed before the expiration of the 120-day period. There are, however, two exceptions to this rule. The first exception is if the Commissioner, through a specific ruling, misleads a particular taxpayer to prematurely file a judicial claim with the CTA. Such specific ruling is applicable only to such particular taxpayer. The second exception is where the Commissioner, through a general interpretative rule issued under Section 4 of the Tax Code, misleads all taxpayers into filing prematurely judicial claims with the CTA. In these cases, the Commissioner cannot be allowed to later on question the CTA's assumption of jurisdiction over such claim since equitable estoppel has set in as expressly authorized under Section 246 of the Tax Code. xxx xxx xxx BIR Ruling No. DA-489-03 is a general interpretative rule because it was a response to a query made, not by a particular taxpayer, but by a government agency tasked with processing tax refunds and credits, that is, the One Stop Shop Inter-Agency Tax Credit and Drawback Center of the Department of Finance. This government agency is also the addressee, or the entity responded to, in BIR Ruling No. DA-489-03." 11 In this case, petitioner filed its administrative claim for refund or tax credit for taxable period covering April 1, 2008 to December 31, 2008 on June 25, 2010. On June 28, 2010, a mere three (3) days later, it filed its judicial claim. While petitioner was unable to follow the 120-30 day rule, it filed its claim within the period covered by BIR Ruling No. DA-489-03, and thus, can claim the benefit of being shielded from the vice of prematurity. Given these circumstances, the judicial claim must prosper and must be given due course. WHEREFORE , the Motion for Reconsideration filed by petitioner is hereby GRANTED . The assailed Decision promulgated on December 20, 2012 is hereby REVERSED and SET ASIDE . The cases docketed as CTA Case Nos. 8043 and 8116 is REMANDED to the Second Division of the Court for further proceedings. SO ORDERED . (SGD.) LOVELL R. BAUTISTA Associate Justice Juanito C. Castaeda, Jr., Erlinda P. Uy, Caesar A. Casanova, Esperanza R. Fabon-Victorino, Cielito N. Mindaro-Grulla and Amelia R. Cotangco-Manalastas, JJ., concur. Roman G. del Rosario, P.J. and Ma. Belen M. Ringpis-Liban, J. , took no part. Footnotes 1. Rollo , pp. 170-176. 2. G.R. No. 184823, October 6, 2010, 632 SCRA 422. 3. G.R. Nos. 141104 and 148763, June 8, 2007, 524 SCRA 73. 4. G.R. No. 172129, September 12, 2008, 565 SCRA 154. 5. Rollo , p. 177. 6. Id. , pp. 178-179. 7. Id. , pp. 194-198. 8. Id. , p. 196. 9. G.R. No. 187485, G.R. No. 196113, and G.R. No. 197156, February 12, 2013. 10. See Note 9. 11. Id.