HEDCOR, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SECOND DIVISION HEDCOR, INC., CTA CASE NO. 8964 Petitioner, -versus- Members: COMMISSIONER OF INTERNAL CASTANEDA, JR., Chairperson REVENU E, CASANOVA, and MANAHAN, JJ. Respondent. Promulgated: DEC 11 20~ . r7 ': t� or- Ia � x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x DECISION CASTANEDA, JR., J.: THE CASE This Petition for Review filed by Hedcor, Inc. seeks the refund or issuance of tax credit certificate (TCC) in the amount of Twenty-Two Million Six Hundred Ten Thousand Five Hundred Five Pesos and One Centavo (P22,610,505.01), allegedly representing excess and unutilized input value-added tax (VAT) attributable to its zero-rated sales for the four quarters of calendar year (CY) 2010. Ttt E FACTS Petitioner Hedcor, Inc. is a corporation duly organized and existing under the laws of the Republic of the Philippines, with principal p office at No. 214 Ambuclao Road, Obulan, Beckel, La Trinidad, Benguet

DECISION CTA Case No. 8964 Province, Philippines. 1 It is ~gistered with the Bureau of Internal Revenue (BIR) as a VAT taxJ)pyer, with Taxpayer Identification No. (TIN) 001-946-873-000,2 as evidenced by its Certificate of Registration No. 4RC00006708423. 1 Petitioner is primarily ngaged in the business of owning, developing, constructing, operating, repairing, and maintaining of hydro-electric power plant sys ems, renewable and indigenous power generation plants and other types of power generation and/or converting stations, and to ac as holding company or joint venture partners or investors in the bu iness of developing, operating and/or owning power generation plan~s and/or converting stations.4 On the other hand, ~~respondent is the duly appointed Commissioner of the Bureau o Internal Revenue who has the power to decide disputed assessmen s, refunds of internal revenue taxes, fees or other charges, penalti s imposed in relation thereto or other matters arising under the Nati nal Internal Revenue Code (NIRC) or other laws or portions thereof a ministered by the BIR. He holds office at the BIR National Office Buildi g, Agham Road, Diliman, Quezon City. I I On June 22, 2011, petiti~ner filed its applications for tax credit or refund of unutilized input ~axes incurred in the four quarters of calendar year 2010 in the tot~l amount of P22,610,505.01 with BIR Revenue District Office (RDO) ~o. 09.5 I On November 26, 2014) Ms. Christine M. Cardona, Revenue District Officer of RDO No. 09, informed petitioner that the processing 1 of its four claims could not b~ pursued in line with the issuance of Revenue Memorandum Circular! (RMC) No. 54-2014.6 ! r- Hence, this instant Petitidn for Review filed before the Court on January 7, 2015. ! 1 Exhibits "P-1" and "P-2". Facts, Join~, Stipulation of Facts and Issues (JSFI), docket, vol. I, 2 Par. 2, Summary of Stipulated p, 344, I 3 Exhibit "P-15". 4 Exhibit "P-2". 5 Exhibits "P-24" to "P-31". 6 Exhibit "P-45".

DECISION CTA Case No. 8964 Respondent filed his An$wer7 on April 6, 2015, interposing the following special and affirmati~e defenses: 4. She reiterat$s and re-pleads the preceding paragraphs of this Ansf.Jer as part of her Special and Affirmative Defenses. ' i 5. In a claim fpr tax refund or tax credit, the applicant must prove no~ only entitlement to the claim but also compliance with all lthe documentary and evidentiary requirements therefor. 6. To support I its claim, it is imperative for petitioner to prove the fqllowing, viz: ! a. The re ' istration requirements of a value-a ded taxpayer in compli nee with section 6 (a) and (b) of evenue Regulations No. 6- 97 in relation to Section 4.107-1 (a) of Rev*nue Regulations No. 7-95, and Se tion 236 of the Tax Code, as arne ded; b. The i~voicing and accounting I requiretnents for VAT-registered person~, as well as the filing and payment of VAT in compliance with I the prqvisions of Section 113 and 114 of the Tax Code, as amended; ' c. Proof lof compliance with the prescri~ed checklist of require~ents to be submitted involvinlg claims for VAT refund pursua~t to Revenue Memorandum Order ~o. 53-98, otherwise there would ~e no sufficient compliance with th~ filing of an administrative claim lfor refund which is a 1-e- ! 7 Docket, vol. I, pp. 140-146.

DECISION CTA Case No. 8964 condition sine qua non prior to the filing lof a judicial claim in accord~nce with Section 112 of the Tax Oode as amended. This requires the submission of comple~e documents in support of the a~plication filed with the Bureauj of Internal Revenue before the 140-day audit period shall apply; ; d. That the input taxes in the aggreg~te amount of P21,12~,702.96 allegedly paid by petitio~er on its purchases of goods and s~rvices for the 1st to 4th quarte~s of calendar year 2010 were a ributable to its zero-rated sales nd such have not been applied against any output tax and were ot carried over to the succee~ing taxable quarter or quarte~s; i I e. That p$titioner's administrative and judicial! claims for tax credit or refund I of the unutilized input tax (VAT) tere filed within the periods provid d in Sections 112 (A) and (D) of, he Tax Code as amended; f. That petitioner's domestic 1 purcha~es of goods and services were ~ade in the course of its trade : or business, properly I supported by VAT invoices and/or official! receipts and other docum~nts, such as subsidiary purcha~e Journal showing that it actually paid VAT in accordance with S~ctions 110 (A) (2) and 113 of the ~ax Code, as amended, and pursualnt to Section 4.104-5 (a) J't-

DECISION CTA case No. 8964 and (b)I of Revenue Regulations No. 7-95 (~e: Substantiation of Claims for Inp~t Tax Credits); g. The reRuirements as enumerated under $ection 4.104-5 of Revenue Regulations No. 7-95. (Re: Substa~tiation of Claims for Input Tax Cr~dits). I h. The reRuirements as enumerated under i Revenue Memorandum Circula~ 54-2014 (Re: Clarifying Issues IRelative to the Application for Val~e Added Tax Refund/Credit under $ection 112 of the Tax Code, as am~nded) 7. Petitioner ~ust prove that the aggregate amount of P21,121,702~96 allegedly representing excess and unutilized input V4T for the 1st to 4th quarters of taxable year 2012 are prpperly documented. 8. In Revenue :Memorandum Circular 54-2014, the administrative claiml for VAT refund or TCC must be filed within two (2) ye~rs from the close of the taxable quarter when the zero-r~ted sales and/or effectively zero- rated sales were made~ The application for VAT refund must be accompanied b complete supporting documents as specifically enumera ed in Annex "A" of the RMC. In addition, the taxpay r should attach a sworn statement/affidavit (i) a esting to the completeness of the submitted documents; (ii) stating that the attached 1 supporting documents a1re the only documents which the taxpayer will present to support the claim; and, 1 additionally, (iii) in th~ case of corporations or other juridical persons, there �hould be a sworn statement that the officer signing the affidavit (which should at the very least be the Chief Finan e Officer) has been authorized by the company's Board of Directors. ~

DECISION CTA Case No. 8964 i 9. Corollary thereto, Section 112 (C) provides as follows, to wit: XXX XXX XXX I 10. Pursuant to the aforequoted provision of law, the application for tax r~fund must be filed within two (2) years after the close of t~e taxable quarter when the sales were made and the CIR ~as a 120-day period within which to decide whether to grant the claim. It logically follows that a taxpayer must fir t submit the complete supporting documents before the 1 0-day period should commence. If the claim is not acte u on b res ondent within the 120-da eriod such in ction shall be deemed a denial of the claim. i 11. In the prese t case, petitioner failed to elevate the claim for refund wit in the period prescribed by law. Even without the issu nee of Revenue Memorandum Circular No. 54-2014, th law is clear that in case of full or partial denial of the cia~� for tax refund or tax credit, or the failure on the part f the respondent to act on the application within the eriod prescribed, the taxpayer affected may, withi thirty (30) days from the receipt of the decisio denying the claim or after the expiration of the one hu dred twenty-day period, appeal the decision or the u acted claim with the Court of Tax Appeals. Accordin I etitioner failed to do so. 12. All in all, the urden of proof is on the taxpayer to establish its right to efund, and failure to sustain the burden is fatal to the cl im for refund. Hence, a taxpayer is charged with the hea burden of proving that he has complied with and s'tisfied all the statutory and administrative requirem~nts to be entitled to the tax refund. Failure to complY! therewith warrants a dismissal of I the taxpayer's claim fpr refund. Respondent humbly submits that petitioner fa,led to establish its right to refund. 11. It can never ~e emphasized enough that in this jurisdiction tax refunds/tredits are in the nature of tax exemptions, hence, law~ relating to them call for a strict;L

DECISION CTA Case No. 8964 application against the dlaimant. As held by the Honorable Supreme Court: "Tax refund~ are in the nature of tax exemptions, i and are to be construed 1 strictissimi! juris against the entity claiming the I same. Thus, the burden of proof rests upon the taxpayer to establish by sufficient ~nd competent evidence, its entitlement tb a claim for refund." I 12. Taxes colle�ted are presumed to be in accordance with laws an~ regulations. 13. Claims for refund are construed strictly against the claimant for the ~arne partake of the nature of exemption from taxation land as such, they are looked upon with disfavor. Basic is i the rule that tax refunds are regarded as tax exemptipns that are in derogation of the sovereign authority and ~re to be construed in strictissimi juris against the person br entity claiming the exemption. The law does not look vVith favor on tax exemptions and that he who would seek Ito be thus privileged must justify it by words too plain to ~e mistaken and too categorical to be misinterpreted. 13. Based on th~ foregoing, petitioner's claim for refund has no basis in f~ct and in law. Thus, the instant petition should be dismis~ed for lack of jurisdiction and/or for lack of merit. A Notice of Pre-Trial Con~rence was issued by the Court, setting the case for pre-trial confer~nce on May 28, 2015.8 Accordingly, petitioner filed its Pre-Trial Brie on May 25, 2015; while Respondent's Pre-Trial Brief1� was filed on Ju e 25, 2015. 1 The parties submitted th~ir Joint Stipulation of Facts and Issues11 on July 29, 2015. On August 110, 2015, the Court issued a Pre-Trial jk- 1 8 Docket, vol. I, pp. 148-149. 9 Docket, vol. I, pp. 156-163. to Docket, vol. I, pp. 331-334. 11 Docket, vol. I, pp. 343-346.

DECISION CTA case No. 8964 i Order adopting the parties' joint stipulations and the pre-trial was deemed terminated. 1 On August 24, 2015, ~pan motion12 of petitioner, this Court commissioned Mr. Emmanuel! Y. Mendoza as Independent Certified Public Accountant (ICPA). 13 ' During trial, petitioner ~resented (1) Arazeli Malapad14, AVP- Controller of petitioner; (2) Emmanuel Y. Mendoza15, the ICPA; and (3) Ada Santiago-Aquino16, petitioner's tax supervisor, as its witnesses. i Petitioner filed its Form~l Offer of Documentary Exhibits17 on June 1, 2016 and an Amended~ Formal Offer of Documentary Exhibits18 on August 22, 2016. All of p titioner's formally offered exhibits were admitted by the Court, excep for Exhibits "P-53-1", "P-54-1 to P-54- 1 2", "P-55-1 to P-55-20", "P-56~ 1 to P-56-6", "P-57-1 to P-57-3", "P-58- 1 to P-58-18", "P-59-1 to P-59~43", "P-60-1 to P-60-17", "P-61-1 to P- 61-38", "P-62-1 to P-62-14", 'tP-63-1 to P-63-2", "P-64-1 to P-64-4", "P-65-1 to P-65-4"I "P-66-1 toi P-66-14"I "P-73-1 to P-73-13"I "P-74-1 I to P-74-5" "P-75-1 to P-75-17r' "P-76-1 to P-76-3" "P-77-1" "P-78-1 I I jI I to P-78-6", "P-79-1 to P-79-4"/i''P-80-1 to P-80-4", "P-81-1 to P-81-4", "P-82-1 to P-82-2" "P-83-1 to II.P-83-2"I "P-84-1 to P-84-2" "P-85-1 to I I P-85-74", "P-86-1 to P-86-105r', "P-114-1 to P-114-5", "P-115-1 to P- 115-32" "P-118-1 to P-118-14f' "P-119-1 to P-119-28" "P-120-1 toP- I ' II 120-2"I "P-121-1"I "P-122-1"1 i1 "P-123-1 to P-123-3"I and "P-112-1"I , pursuant to Resolutions19 date~ July 26, 2016 and October 20, 2016. On the other hand, re~pondent manifested that he has no witness to present.20 }t- , 12 Motion for Appointment of an Indepen~ent Certified Public Accountant (ICPA), docket, vol. I, pp, 341-342, I 13 Minutes of the Hearing dated August 24~ 2015, docket, vol. I, p. 362. 14 Minutes of the Hearing dated Septembe~ 16, 2015, docket, vol. I, p. 367. 15 Minutes of the Hearing dated December 12, 2015, docket, vol. I, p. 398. 16 Minutes of the Hearing dated April 27, 2~16, docket, vol. II, p. 516. 17 Docket, vol. II, pp. 546 and 559-581. I 18 Docket, vol. II, pp. 604-623. I, 19 Docket, vol. II, pp. 585-587; Docket, volf II, pp. 627-628, respectively. 20 Minutes of the Hearing dated July 27, 2Ql7, docket, vol. II, p. 588.

DECISION CTA case No. 8964 The case was submitte~ for decision on December 27, 2016,21 considering petitioner's Memotandum22 filed on December 5, 2016 and respondent's failure to file a rnemorandum23 � T!HEISSUE The parties submitted i the following issue24 for this Court's resolution: 1. Whether petitioher is entitled for a VAT refund or tax credit, as follow: 1 2010 2 2010 3 2010 4 2010 DISCU$SION/RULING Pertinent to the resoluti<J)n of the instant case is Section 112(A) and (C) of the National Internal Revenue Code of 1997, as amended, which provides: � SEC. 112. Refund~ or Tax Credits ofInput Tax.- (A) Zero-Rated or fffectively Zero-Rated Sales. -Any VAT-registered person, I whose sales are zero-rated or effectively zero-rated m~y, within two (2) years after the close of the taxable qu~rter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax ~ue or paid attributable to such sales, except transitional! input tax, to the extent that such input tax has not be n applied against output tax: Provided, however, Tha in the case of zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section 108 P- (8)(1) and (2), the acce table foreign currency exchange 21 Resolution dated December 27, 2016, d~.cket, vol. II, p. 665. Docket, vol. II, pp. 634-662. n 23 Records Verification dated December 21~ 2016, docket, vol. II, p. 663. 24 JSFI, docket, vol. I, p. 344. .

DECISION CTA Case No. 8964 proceeds thereof hadl been duly accounted for in I accordance with the rul~s and regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engage~ in zero-rated or effectively zero- rated sale and also in t~xable or exempt sale of goods of properties or services, a'lnd the amount of creditable input tax due or paid cannot lbe directly and entirely attributed to any one of the tr~msactions, it shall be allocated proportionately on theil basis of the volume of sales: Provided, finally, That f~r a person making sales that are zero-rated under Sectio~ 108 (8)(6), the input taxes shall be allocated ratably be~een his zero-rated and non-zero- rated sales. XXX XXX XXX (C) Period within which Refund or Tax Credit ofInput rh Taxes shall be Made. - proper cases, the Commissioner shall grant a refund or ~ssue the tax credit certificate for creditable input taxes 0ithin one hundred twenty (120) days from the date of s~bmission of complete documents in support of the appllication filed in accordance with Subsection (A) hereof. In case of full or partial denial of the claim for tax refund or tax credit, o~ the failure on the part of the Commissioner to act on I the application within the period prescribed above, the ta~payer affected may, within thirty (30) days from the rect1pt of the decision denying the claim or after the expir tion of the one hundred twenty day-period, appeal the d cision or the unacted claim with the Court of Tax Appeal~. Before addressing the ~tipulated issue, the Court shall first determine whether the Court ~as jurisdiction to entertain the present appeal. The administrative claim was timely filed Pursuant to Section 112~A) of the Tax Code, the application for refund or tax credit of unutilizetl excess input VAT must be filed within fo--

DECISION erA Case No. 8964 two (2) years after the closel of the taxable quarter when the zero- rated or effectively zero-rated!, sales were made. The present claim cov$rs the first, second, third and fourth quarters of CY 2010, which cl~sed on March 31, 2010, June 30, 2010, September 30, 2010, and Dec mber 31, 2010, respectively. Counting two years from the said date , petitioner had until March 31, 2012, June 30, 2012, September 3Q, 2012, and December 31, 2012 within which to file its administrative! claim for refund/tax credit of unutilized input VAT for the said qu~rters, respectively. Thus, petitioner's administrative claims coverin the four quarters of CY 2010 were seasonably filed on June 22, 2 11.25 The judicial claim is barred byprescription Section 112(C) of theTa' Code states the time requirements for filing a judicial claim for the r fund or tax credit of input VAT. The legal provision speaks of two eriods: the period of 120 days, which serves as a waiting period to ive time for the BIR Commissioner to act on the administrative claim for a refund or credit; and the period of 30 days, which refers to the '!period for filing a judicial claim with the CTA. . I In Rohm Apollo Semicorl(:luctor Philippines vs. Commissioner of Internal Revenuc!-6, citing th~ landmark case of Commissioner of Internal Revenue vs. San Roqur Power Corporatioti7 (San Roque), the Supreme Court held that thet~xpayer can file an appeal in one of two ways: (1) file the judicial laim within 30 days after the BIR Commissioner denies the clai within the 120-day waiting period, or po (2) file the judicial claim within days from the expiration of the 120- day period if the BIR Commissi~ner does not act within that period. It bears stressing that th~ 120-day period begins to run from the date of submission of com lete documents in support of the administrative claim.28 As to when should the submission of supporting .r-- documents deemed "complet d" for purposes of determining the running of the 120-day period, .the Supreme Court's ruling in Pilipinas 25 Exhibits "P-24" to "P-31". . 26 G.R. No. 168950, January 14, 2015, 745 SCRA 663. 27 G.R. Nos. 187485, 196113, and 197156, Rebruary 12, 2013, 690 SCRA 336. 28 Silicon Philippines, Inc. (Formerly Intel fhilippines Manufacturing, Inc.) vs. Commissioner of Internal Revenue, G.R. No. 182737, Marc~ 2, 2016, 785 SCRA 351.

DECISION CTA Case No. 8964 Total Gas, Inc. vs. Commissiqner of Internal Revenue (Pilipinas Total GasJ9 is instructive. The releyant portion of the case reads: Ideally, upon filing his administrative claim, a taxpayer should compl~te the necessary documents to support his claim for t+x credit or refund or for excess utilized VAT. After all, shpuld the taxpayer decide to submit additional documents a~d effectively extend the 120-day period, it grants the CIR more time to decide the claim. Moreover, it would be i prejudicial to the interest of a 1 taxpayer to prolong t~e period of processing of his application before he m~y reap the benefits of his claim. Therefore, ideally, the OIR has a period of 120 days from the date an administra~ive claim is filed within which to decide if a claim for tax credit or refund of excess unutilized VAT has merit. XXX XXX XXX Aware that not al~ taxpayers were able to file the complete documents to $11ow the CIR to properly evaluate an administrative claim fci>r tax credit or refund of creditable input taxes, the CIR i$sued RMC No. 49-2003, which provided: ' Q-18: For! pending claims with incomplete docunients, what is the period within which td submit the supporting1 documents ~quired by the investigating/proc~sing office? When should the investigating/processing office officially receive claims for t~x credit/refund and what is the period requireq to process such claims? A-18: For p~nding claims which have not been a ed upon by the investigating/proce sing office due to incomplete docum~ntation, the taxpayer- claimants are ~�iven thirty (30) days within which to ubmit the documentary ;e- requirements .nless given further 29 G.R. No. 207112, December 8, 2015, 7761. SCRA 395.

DECISION CTA Case No. 8964 extension by th~ head of the processing unit, but suchl extension should not 1 exceed thirty (3p) days. For claims t~ be filed by claimants with the respective in estigating/processing office of the administrati e agency, the same shall be officially receiv~d only upon submission of complete documeryts. For current I and future claims for tax credit/refund, th~ same shall be processed within one hundr d twenty (120) days from receipt of the co plete documents. If, in the course of the inv~tigation and processing of the claim, additio al documents are required for the proper det rmination of the legitimate amount of claim, ~he taxpayer-claimants shall submit such documents within thirtv (30) da s from ' re uest of the investigating/pr cessing office, which shall be constr ed as within the one hundred twen 120 da eriod. [Emphases Supplied] Consequently, updn filing of his application for tax credit or refund for ex~ess creditable input taxes, the taxpayer-claimant is giv~n thirty (30) days within which to complete the required ~ocuments, unless given further extension by the head ~f the processing unit. If, in the course of the investigat~on and processing of the claim, additional documents lare required for the proper determination of the 14gitimate amount of claim, the taxpayer-claimants shalll, submit such documents within thirty (30) days ! from request of the investigating/processing ffice. Notice, by way of a request from the tax collection a thority to produce the complete documents in these ca s, became essential. It is only upon the submission oft ese documents that the 120-day period would begin to ruh. XXX XXX XXX~

DECISION CTA Case No. 8964 With the amendm~nts only with respect to its place under Section 112, the ~ourt finds that RMC No. 49-2003 should still be observ~d. Thus, taking the foregoing changes to the law altogether, it becomes apparent that, for purposes of detEfrmining when the supporting documents have been cpmpleted- it is the taxpayer who ultimately determines f'vhen complete documents have been submitted for tlfe purpose of commencing and continuing the running ~f the 120-day period. After all, he may have already completed the necessary documents the moment he filed his ad~inistrative claim, in which case, the 120-day period is reqkoned from the date of filing. The taxpayer may have alsol, filed the complete documents on the 30th day from filing f his application, pursuant to RMC No. 49-2003. He may v ry well have filed his supporting documents on the first ay he was notified by the BIR of the lack of the necessa documents. In such cases, the 120-day period is comp~ted from the date the taxpayer is able to submit the complete documents in support of his application. � XXX XXX XXX Lest it be misund~rstood, the benefit given to the taxpayer to determine 1 when it should complete its ! submission of document~ is not unbridled. Under RMC No. 49-2003, if in the c~urse of the investigation and processing of the claim, ~dditional documents are required for the proper determinabon of the legitimacy of the claim, the taxpayer-claimants shall submit such documents within thirty (30) days ! from request of the investigating/processing !office. Again, notice, by way of a request from t~e tax collection authority to produce the complet~ documents in these cases, is essential. Moreover, under ~ection 112(A) of the NIRC, as amended by R.A. No. 93~7, a taxpayer has two (2) years, after the close of the ta~ble quarter when the sales were made, to apply for the i~suance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales. Thus, before lthe administrative claim is barred ?z- ,

DECISION CTA Case No. 8964 by prescription, the taxpayer must be able to submit his complete documents id support of the application filed. 1 This is because, it is uppn the complete submission of his documents in support of his application that it can be said that the application wa~, "officially received" as provided under RMC No. 49-20031. To summarize, for! the just disposition of the subject controversy, the rule1 is that from the date an 1 administrative claim fori excess unutilized VAT is filed, a taxpayer has thirty (30) days within which to submit the documentary requireme ts sufficient to support his claim, unless given further ext nsion by the CIR. Then, upon filing by the taxpayer of his c mplete documents to support his application, or expiratio of the period given, the CIR has 120 days within which tt decide the claim for tax credit or refund. Should the tax ayer, on the date of his filing, manifest that he no lo ger wishes to submit any other addition documents to �omplete his administrative claim, the 120-day period allo~ed to the CIR begins to run from the date of filing. In all cases, what~ver documents a taxpayer intends I to file to support his cl~im must be completed within the two-year period under S~ction 112(A) of the NIRC. The 30- day period from denial ~f the claim or from the expiration of the 120-day period within which to appeal the denial or inaction of the CIR to th~ erA must also be respected. I It bears mentioning at this point that the foregoing summation of the rules hould on/ be made a 1icab/e to those claims for tax ere it or refund filed rior to June 11 2014, such as the claim1 at bench. As it now stands, RMC I 54-2014 dated June 11, !2014 mandates that: The applicati~n for VAT refund/tax credit must be acco~panied by complete supporting doc~n:-ents as enumerated in Annex "A" hereofl In addition, the taxpayer shall attach a !statement under oath attesting to the completeness of the submitted documents (Ann~xI B). The affidavit shall further state that the said documents are the ?t--

DECISION CTA Case No. 8964 only documents wbich the taxpayer will present to support the ~Iaim. If the taxpayer is a juridical person, !there should be a sworn statement that th~ officer signing the affidavit (i.e., at the ve~ least, the Chief Financial Officer) has been'! authorized by the Board of Directors of the cqmpany. Upon submilssion of the administrative claim and its supRorting documents, the claim shall be processer and no other documents shall be accepted required from the taxpayer in the course of it evaluation. A decision shall be rendered by t~e Commissioner based only on the documents! submitted by the taxpayer. The application ~ r tax refund/tax credit shall be denied where he taxpayer/claimant failed to submit the com lete supporting documents. For this pu pose, the concerned processing/investi91ating office shall prepare and issue the corresponding Denial Letter to the taxpayer/claimant. Thus, under the ~'urrent rule, the reckoning of the 120-day period has bee withdrawn from the taxpayer by RMC No. 54-2014, since it requires him at the time he files 1 his claim to complete hix�supporting documents and attest that he will no longer su mit any other document to prove his claim. Further, the t xpayer is barred from submitting additional documents after he has filed his administrative claim. (Citations omittedj To be sure, it is the taxlpayer who ultimately determines when complete documents have ~een submitted for the purpose of commencing and continuing the running of the 120-day period. 1 1 Nevertheless, the Supreme Cqurt also emphasized that the foregoing benefit given to taxpayer is n~t unbridled and, as such, is subject to limitations. Hence, based on the perjtinent portion of Pilipinas Total Gas, for claims filed before June 11, 20~4, or prior to the effectivity of RMC No. 54-14, the rules under RMC Nq. 49-03 in relation to Section 112 of the Tax Code shall apply.r

DECISION CTA Case No. 8964 In sum, the rule is that ftom the date that an administrative claim for refund/tax credit of exces~ unutilized input VAT is filed, a taxpayer only has thirty (30) days witHin which to submit all the documentary I requirements that would sub$tantiate his claim, unless the CIR gives further extension through a ~ritten notice. In the instant case, p~titioner filed its administrative claims covering the four quarters I of CY 2010 on June 22, 2011.30 Consequently, petitioner had '!thirty (30) days therefrom or until July 22, 2011 within which to subrflit all pertinent supporting documents. Subsequent to the filin~ _of its administrative claim on June 22, 2011, petitioner submitted a~ditional supporting documents on the following dates: � DATE OF SUBMIS$ION EXHIBIT TO THE BIR REFERENCE September 301 21Pl1 "P-34" April 12, 201~ "P-32" April 10, 20121 "P-36" June 6, 2012 "P-37" June 11, 2012 "P-38" June 11, 2012 "P-39" June 26, 2012 "P-35" "P-40" August 17, 201 2 "P-41 II December 18_L 2_C 13 "P-42" Julyl4, 2014: ' Since the foregoing subo/lissions were made beyond the 30-day period required by fRuMrtCheNr oe.x',~4en9s-i0o3n and there is no evidence that petitioner was given by the CIR to submit documents in support of its administrativ~ claim for refund, it is presumed that complete documents accompapied the claim when it was filed. Thus, the 120-day perio~ shall be reckoned from June 22, 2011 and shall run until October 2b, 2011. Considering that respondent failed to act on the subject cla'lim, petitioner had thirty (30) days after the lapse of the 120-day period on October 20, 2011 or until November I 19, 2011 within which to fil~ a judicial appeal before this Court. However, the present Petition ifor Review was filed only on January 7, fo--- 30 Exhibits "P-24" to "P-31".

DECISION CTA Case No. 8964 2015. Hence, it is clear that! petitioner's judicial claim was belatedly filed. For its part, petitioner ~rgues that for the correct application of the 120+30 day period unde~ Section 112(C) of the Tax Code, either of the following events mus~ occur: (1) respondent's issuance of a decision denying a taxpayer'~ claim; or (2) inaction on the part of respondent within 120 days from the date of submission of complete documents in support of the dlaim. I I Petitioner further states I that respondent and his agents "acted" on petitioner's administrativej claim before the lapse of the 120-day period through the issuance yf Letters of Authority (LOAs) on various dates, and even after the laps~ of the 120-day period, by continuously acting on petitioner's agministrative claim and issuing a Recommendation Letter date~ March 14, 2014,31 which proposed a partial grant of the administrative claim for refund/tax credit. According to petitioner~ the issuance of the LOAs and the Recommendation Letter are "~cts" which preclude the operation of the 120+30 day period stated in ~ection 112 of the Tax Code. Further, petitioner asserts that respondent's issuance of the Denial Letter dated November 26, 2014 means t ,at the 30-day period to appeal should run from the date such Deni$1 Letter was received by petitioner on December 9, 2014. Thus, p~titioner maintains that its Petition for Review was timely filed on Jariuary 7, 2015. The Court is not convinced. We refer to Section 112jC) of the Tax Code which provides the period within which refund of nput taxes shall be made, to wit: SEC. 112. Refund~ or Tax Credits ofInput Tax.- XXX XXX XXX (C) Period within W/lich Refund or Tax Credit ofInput Taxes shall be Mad~. - In proper cases, the Commissioner shall gtant a refund or issue the taxr- 31 Exhibit "P-43".

DECISION CTA case No. 8964 credit certificate for I creditable input taxes within one hundred twentvl (120) days from the date of submission of compl~te documents in support of the application filed in acco~dance with Subsection (A) hereof. In case of full o partial denial of the claim for tax refund or tax ere it, or the failure on the part of the Commissioner to act on the application within the period prescribe above, the taxpayer affected may, within thirty (30) d~ys from the receipt of the decision denying the claim or lafter the expiration of the one I hundred twenty day-p~riod, appeal the decision or the unacted claim with the I Court of Tax Appeals. (Emphasis supplied) If the second paragraph Iabove stands alone, then the Court may perhaps subscribe to petiti~ner's understanding of the provision. However, the rule laid down ~herein must be read in relation to the first paragraph which gives it ~ts context. The first paragraph of th~ above-quoted provision states that the Commissioner shall grant a r~fund or issue the TCC within 120 days from the submission of compl~te documents. Consequently, the CIR cannot grant a refund or iss~e the TCC beyond the 120-day period provided by law. Hence, after the lapse of 120 days, the application will be deemed unacted, ther~by granting the taxpayer-claimant the option to appeal the claim with this Court. Clearly therefore, the "full I or partial denial" stated in tHe second paragraph of Section 112(C) bY contemplates a denial made the CIR within 120 days from the date of submission of complete doduments. I Hence, in Silicon PhiliPpines, Inc. (Formerly Intel Philippines Manufacturing, Inc.) vs. CoJrmissioner of Internal Revenu�?2, the Supreme Court clarified: Whether respondelnt rules in favor of or against the taxpayer- or does not a~t at all on the administrative claim - within the period offT120 days from the submission of complete documen s, the taxpayer may resort to a judicial claim befor. the CTA. Jz- 32 G.R. No. 182737, March 2, 2016, 785 SqRA 351. i

DECISION erA Case No. 8964 XXX XXX XXX The judicial claim shall be filed within a period of 30 days after the receipt off respondent's decision or ruling or after the expiration of the 120-day period, whichever is sooner. Aside from a specific exception to the mandatory and jurisdictional nature of ~he periods provided by the law, any claim filed in a ~eriod less than or beyond the 120+30 days provid~d by the NIRC is outside the jurisdiction of the CT~. (Emphasis supplied) I i In this case, petitioner's I claim was not granted within 120 days. Since the 120-day period laid down by law has ended, petitioner, in effect, can no longer expect t at a refund will be granted by the CIR. Petitioner then should have fil d its judicial claim within 30 days from the expiration of the 120-day eriod. In Rohm Apollo Semico(lductor Philippines vs. Commissioner of Internal Revenue33, the Sup~eme Court reminded all taxpayers as follows: A final note, the t'xpayers are reminded that when the 120-day period laps~s and there is inaction on the part of the CIR, they must nq longer wait for it to come up with a decision thereafter. ~he CIR's inaction is the decision itself. It is already a deti'al of the refund claim. Thus, the taxpayer must file an ap eal within 30 days from the lapse of the 120-day waiting p riod. Moreover, even assum~ng that petitioner's interpretation is correct, its petition still fails~ As indicated in respondent's Denial Letter34 dated November 26, 2~14, the LOAs were dated March 6, 2012 and June 15, 2012. Thus, bef~re the expiration of the 120-day period on October 20, 2011, respond~nt could not have acted on petitioner's administrative claim. ~ 33 G.R. No. 168950, January 14, 2015, 745 SCRA 663. 34 Exhibit "P-45".

DECISION CTA case No. 8964 It bears stressing that a tlaim for tax refund or credit, like a claim for tax exemption, is construed strictly against the taxpayer. One of the conditions for a judicial dlaim of refund or credit under the VAT System is compliance wit~ the 120+30 day mandatory and jurisdictional periods. Thus, ~trict compliance with the 120+30 day periods is necessary for such~ claim to prosper.35 Accordingly, herein peti~ioner's belated filing of its judicial claim or failure to observe the man~atory 120+30 day periods is fatal to its claim and rendered the Cou devoid of jurisdiction over petitioner's claim. Thus, the dismissal oft e instant Petition for Review is in order. WHEREFORE, in view pf the foregoing, the instant Petition for Review is DISMISSED for la~k of jurisdiction. SO ORDERED. a~�,t; c c. C. AST~ ANEI>QA.~ JR. .fuANITO Associate Justice WE CONCUR: CAESAR A. CASANOVA ~~-~ Associate Justice CATHERINET.MANAHAN Associate Justice 35 Commissioner of Internal Revenue v.f. San Roque Power Corporation, Taganito Mining Corporation vs. Commissioner ofIntern� Revenue, Phi/ex Mining Corporation vs. Commissioner ofInternal Revenue, G.R. Nos. 187485, t96113, and 197156, February 12, 2013, 690 SCRA 336.

DECISION CTA case No. 8964 ArrESTATION I attest that the conclusions in the above Decision were reached in consultation before the c~se was assigned to the writer of the I opinion of the Court's Division 1!. ~~c.~~~~ JifANITO c. CASTANEDA, JR. Associate Justice Chairperson CE~TIFICATION Pursuant to Article VIII, I Section 13 of the Constitution, and the Division Chairperson's Attest~tion, it is hereby certified that the conclusions in the above Deci$ion were reached in consultation before the case was assigned to the writer of the opinion of the Court.