PHILEX MINING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC PHILEX MINING CORPORATION, CTA EB No. 778 P et it io n e r, (CTA Case No. 7720) -versus- Present: Acosta, PJ, Castaiieda,J r., Bautista, Uy, Casanova, Palanca-Enriquez, Fa bon-Victorino, Mindaro-Grulla, and Cotangco-Manalastas, JJ COMMISSIONER OF INTERNAL REVENUE, Promulgated: /~/;;~/~ Respondent. JUN 2 6 2012 /: ~"f1.. ~. X- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - X DECISION COTANGCO-MANALASTAS, J.: On appeal before the Court En Bane is the Amended Decision 1 and Resolution2 promulgated by the Special 151 Division on December 1, 2010 and April 15, 2011 , respectively, denying petitioner' s claim fo r VAT refund on the ground of prescription, and also denying petitioner' s motion for reconsideration. The Facts3 Petitioner is a domestic corporation organized under Philippine law with principal office at Brixton Street, Pasig City. It is principall y engaged in the mining business, which includes the exploration , development, and operation of mining~ 1 Rollo, C.T.A. EB Case No. 778, pp. 26-34. 2 Rollo, pp. 2 1-24. 3 As culled fro m the records, Rollo, pp. 2-4 .

DEC IS ION Page 2 of6 CTA EB No. 778 (C.T.A . Case No . 7720) Phi lex Mining Corporation vs. Commissioner of Internal Revenue properties for commercial production and the marketing of mineral products. It is a VAT-registered taxpayer. Respondent is the duly appointed government official charged with the administration and enforcement of national internal revenue laws, including the duty to act on claims for tax refund or tax credit as provided by law, with office at the BIR National Office Building, Agham Road, Diliman, Quezon City. On January 24, 2006, petitioner filed its original VAT return for the 4th quarter of 2005. On June 20, 2007, petitioner filed its administrative claim for refund or tax credit with the One Stop Shop Center of the Department of Finance for the excess input tax ofP10,591,686.55 for the 4th quarter of2005. On January 17, 2008, petitioner filed the corresponding Petition for Review in view of the fai lure of the respondent to act on the administrative claim. In its original decision dated July 12, 2010, the Special First Division ruled that the administrative and judicial claims were timely filed. However, upon the Motion for Partial Reconsideration by respondent, the Special First Division promulgated its assailed Amended Decision ruling that petitioner's claim for VAT refund has prescribed. Petitioner' s motion for reconsideration was likewise denied. Iss ues4 As grounds for its appeal , petitioner raises the following: I. The Special First Division erred in dismissing the petition due to prescription. The fact is that the petition was filed within the period set by prevailing court rulings when it was filed; hence, it was filed on time. II. The Special First Division erred in retroactively applying V the Aichi Ruling in deciding this instant case. 4 Rollo, p. 5.

DEC I SION Page 3 of6 CTA EB No. 778 (C.T.A. Case No. 7720) Phi lex Mining Corporation vs. Commissioner of Interna l Revenue Ruling of the Court Petitioner's mam argument is based on the alleged error of retroactively applying the Aichi Ruling to the instant case. The Court is not persuaded . It should be noted that the Atlas Case5 was decided under the 1977 Tax Code whereas the Mirant Case6 and Aichi Ruling7 were decided under the 1997 Tax Code. Furthermore, the Atlas Case and Mirant Case resolved the issue on the reckoning point of the prescriptive periods in filing the administrative claim for refund, which was resolved in the Mirant Case to be from the close of the taxable quarter. On the other hand, the Aichi Case ruled squarel y on the applicability of Section 112(A) and (D) of the 1997 Tax Code. Section 112(A) and (D) [now Section 112(A) and (C)] of the National Internal Revenue Code of 1997 (NIRC), as amended, are very clear and categorical in stating the periods for the administrative and judicial claims for refund. Thus, there is no need for a judicial interpretation of the law considering that a clear and "to the letter" application of the law is possible. In other words, 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. 8 We find no reason to reverse the conclusions made by the Special First Division, as follows: {/ 5 Atlas Consolidated Mining and Development Corporation vs. Commissioner ofInternal Revenue, G.R. Nos. 141104 and 148763 , Jun e 8, 2007. 6 Commissioner ofInternal Revenue vs. Mirant Pagbilao Corporation, G.R. No. 172129, September 12, 2008. 7 Commissioner of Internal Revenue vs. Aichi Forging Company of Asia, Inc., G.R. No . 184823, October 6, 20 I0. 8 Luzon Stevedoring Corporation vs. Court of Tax Appeals, G.R. No. 30232, July 29, 1988, citing Allied Brokerage Corporation vs. Commissioner ofCustoms, G.R. No. L-27641 , August 31 , 1971.

DECISION Page 4 of6 CTA EB No. 778 (C.T.A. Case No. 7720) Phi lex Mining Corporation vs. Commissioner of Internal Revenue "Section I 12(0) [now, Section 112(C)] of the National Interna l Revenue Code (NIRC) of 1997, as amended , exp licit ly provides: Sec. 112. Refunds or Tax Credits of Input Tax. - xxxx (D) Period within which Refund or Tax Credit of Input Taxes shall be Made. - In proper cases, the Commissioner sha ll grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submi ss ion of complete documents in support of the app li cation filed in accordance with Subsections (A) and (B) hereof. In case of full or partial denial of the c laim 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." [Emphasis and underscoring supplied] The law cannot be a ny c learer. After the expiration of the 120- day period, the taxpayer may appeal, within 30 days, the inaction of the Commiss ioner of Interna l Revenue (C IR) to the Court. It is we ll- settled that where the lan guage of the law is c lear and unequivocal , it must be g iven its literal app li cation and app li ed w ithout interpretation. Petitioner argues that the use of the word " may" in Section 11 2(0) [now, Sectio n 11 2(C)] of the NIRC of 1997, as amended , mean s ajudicial c laim is not mandatorily required to be filed within 30 days after the lapse of the 120-day period . It bears stressi ng that the use of the word " may" in the said section sim ply means that the taxpayer has the option to appeal the CIR' s decision or the CIR' s in actio n to the Co urt . It merely gives the taxpayer the option to appeal or not to appea l the adverse ruling or inaction of the respondent within the 30-day reglementary period. Again, the phrase " may appeal" does not mean that the judicial recourse within thirty days from the receipt of the decision/rulin g or from the lapse of the 120-day period is directory and permi ss ive . Section 11 2(A) and I 12(0), of the N IRC of 1997, as amended, presc ribe the periods within which certai n acts must be done, part ic ularl y, when the administrative c laim and judicial appea l may V be filed . Therefore, comp li ance with the period s provided therein is imperative and mandatory."9 (citations omilled) 9 Rollo, pp. 22-23 .

DECISION Page 5 of6 CTA EB No. 778 (C .T.A. Case No. 7720) Phi lex Mining Corporation vs . Commissioner of Internal Revenue Clearly then, even without the rulings in the Mirant and Aichi cases, a straightforward application of Section 112(A) and (D) will produce the same result. Administrative claims for refund of unutilized input VAT must be filed within two years from the close of the taxable quarter when the sales were made. Judicial claims must be filed within thirty (30) days from receipt of the CIR's decision denying the claim or after the expiration of the one hundred twenty-day period. Counting from the date of petitioner' s administrative claim for refund filed on June 20, 2007, the 120-day period expired on October 18, 2007. Petitioner should have filed its judicial claim on or before November 17, 2007. Thus, petitioner's judicial claim filed on January 17, 2008, was clearly beyond the 30-day period from the expiration of the 120-day period within which respondent should have acted on the claim, and therefore, prescribed. WHEREFORE, premises considered, the instant Petition for Review 1s hereby DISMISSED for lack of merit. SO ORDERED. ~~+J-- AMELIA R. COTANGCO-MANALASTAS Associate Justice WE CONCUR: ~~�,.-. (::~ ERNESTO D. ACOSTA Presiding Justice ~~3 [ �cc:sr~~i~R: Associate Justice

D EC I SIO N Page 6 of6 CTA EB No. 778 (C.T.A. Case No. 7720) Phi lex Mining Corporation vs. Commissioner of Internal Revenue E~. UY CAESA~NOVA Associate Justice Justice OL~ GA PA~RIQUEZ Associate Justice ~- N . I~~~~ CIELITO N. MINDARO-GRULLA Associate Justice CERTIFICATION Pursuant to Section 13 , Article VIII of the Constitution, it is hereby certified that the above Decision has been reached in consultation with the members of the Court En Bane before the case was assigned to the writer of the opinion of the Court. L-[17- o~ ERNESTO D. ACOSTA Presiding Justice