MITSUBA PHILIPPINES TECHNICAL CENTER CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY THIRD DIVISION MITSUBA PHILIPPINES CTA Case No. 10675 TECHNICAL CENTER CORPORATION, Members: Petitioner, MANAHAN, Chairperson, REYES-FAJARDO, and -versus- ANGELES, JJ. COMMISSIONER OF Promulgated: INTERNAL REVENUE, .NOV 22 2024 Respondent. �_ X- - - - - - - - - - - - - - - - - - - - - - - - ?I_�~�~ -~-~ ~- -X RESOLUTION MANAHAN, J.: For the Court's resolution is respondent Commissioner of Internal Revenue ("CIR")'s Motion for Partial Reconsideration (Re: Decision promulgated on 25 June 2024) filed on July 15, 2024 ("Motion"), 1 with petitioner Mitsuba Philippines Technical Center Corporation ("Mitsuba")'s Comment and Opposition (to the Motion for Partial Reconsideration dated 15 July 2024) filed on August 16, 2024.2 The CIR's Motion assails the Court's Decision dated June 25, . 2024 ("assailed Decision"),3 which partially granted Mitsuba's tax refund claim in the amount of P3 ,348 ,276.59 representing its input value-added tax ("VAT") attributable to zero-rated sales for the period April 1, 2019 to March 31, 2020. The CIR argued as follows: T _ _ �. . First, that the Court cannot consider evidence not presented at the administrative level and should confine itself to whether the CIR's findings are consistent with law. In an unsuccessful administrative claim for tax refund, the taxpayer 1 Dock et- Vol. II , pp . 929- 9 41. 2 Dock et- Vol. II , pp. 943-949. 3 Docket- Vol. II , p p . 9 0 8-928.~

RESOLUTION CTA Case No. 10675 has to convince the Court, not just that it is entitled to the refund, but also that the CIR has no reason to deny its claim. Second, that the Court should take another look on whether the input VAT claimed by Mitsuba has not been applied against output taxes in the succeeding taxable periods. According to the CIR, Mitsuba failed to prove that it did not utilize the input VAT claimed during the taxable quarters for the period April 1, 2019 to March 31, 2020. Third, that even assuming that the Court may receive in evidence documents not presented at the administrative level, Mitsuba still failed to substantiate its claim. The following disallowances are therefore proper: Violation of invoicing requirements p 1,210,847.66 Final withholding VAT on income 3 , 142,905.80 payments to NRFCs Output VAT on miscellaneous income 5,885 .27 TOTAL p 4,359,638.73 The CIR insists that taxes paid to and collected by the government are presumed to have been made in accordance with law, and the burden to prove otherwise is on the taxpayer. We deny the Motion for lack of merit. The Court notes that the Motion is a rehash of the CIR's previous arguments which are already sufficiently addressed in the assailed Decision. In the assailed Decision, the Court dismissed the CIR's first contention in this wise: Suffice it to say, however, that while petitioner alleged that it complied with the documentary requirements and formally offered its evidence in support thereof, respondent did not refute the same. Aside from its general averment that petitioner failed to substantiate its administrative claim, respondent did not specify which documents petitioner failed to submit a nd h ad been fata l to its claim .~

RESOLUTION CTA Case No. 10675 Thus, the Court shall proceed to determine whether petitioner's submissions satisfied the requirements under the law and regulations for the successful claim of refund of its input VAT attributable to zero-rated sales. As to the CIR's contention that Mitsuba failed to prove that it did not utilize the input VAT claimed during the taxable quarters for the period April 1, 20 19 to March 3 1, 2020, the Court already established in the assailed Decision that Mitsuba has no reported taxable or exempt sales during the said period, vzz: Petitioner has no reported taxable or exempt sales during the relevant taxable year. As already established, the present claim covers the taxable period from April 1, 2019 to March 31, 2020, and in petitioner's Quarterly VAT Returns (BIR Form No. 2550Q) for the same period, it d eclared the total of P222, 139,444.53 comprising entirely of zero- rated sales/ receipts. Consequently, petitioner's substantiated input taxes are entirely attributable thereto. Lastly, the CIR's contention that Mitsuba failed to substantiate its input VAT refund claim was already exhaustively discussed in the assailed Decision. In fact, out of the amount of P1,210,847.66 disallowed by the CIR for violation of invoicing requirements, the Court found that the amount off>1,011 ,362.14 was properly disallowed. The Court additionally notes, however, that the CIR's outright disallowance of the amounts of P3,142,905.80 and P5 ,885.27 representing "Final Withholding VAT on Income Payments to NRFCs" and "Output VAT assessed 1n Miscellaneous Income," respectively, constitutes an assessment for deficiency VAT. Such assessment cannot be made without observing the proper procedure and due process requirements under the Tax Code and pertinent rules and regulations. The CIR cannot use a claim for refund as subterfuge to assess a taxpayer for deficiency tax. All told, a motion for reconsideration must not only state which parts of the decision is contrary to evidence or law; it should also point out why it is so . The purpose of a motion for-.--

RESOLUTION CTA Case No . 10675 reconsideration is precisely to convince the court that its main decision is erroneous, therefore, although the movant may dwell upon the points already raised and passed upon, there must be bona fide effort to explain why the court should be regarded as having erred.4 This respondent failed�to do. ACCORDINGLY, respondent's Motion for Partial Recon- sideration (Re: Decision promulgated on 25 June 2024) filed on July 15, 2024 is DENIED for lack of merit. SO ORDERED. c~� -~ CATHERINlT. MANAHAN Associate Justice WE CONCUR: ~ Ib~~F.r..R~ E~~S-fiJ;.A~ MARIAN Associate Justice HENR~GELES Associate Justice 4 Luzon Stevedoring Co. , I nc. v. Court ofIndustrial Relations, G.R. No." L - 16682, J uly 26, 1963 [Per J . Regala, En Ba n e] .