HEDCOR, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY FIRST DIVISION HEDCOR, INC., CTA CASE NO. 9218 Petitioner, Members: -versus- DEL ROSARIO, P.J'/ Chairperson, COMMISSIONER OF UY, and INTERNAL REVENUE, MINDARO-GRULLA, JJ. Respondent. Promulgated: N 1"1 x- - - - - - - - - - - - - - - - - - - - - - - - - - - - -1 - - - - ~ - - - - - - - - x RESOLUTION For the Court's resolution is petitioner's Motion for Reconsideration, filed by registered mail on January 19, 2017 and received by the Court on February 1, 2017, with respondent's Comment (Re: Petitioner's Motion for Reconsideration), filed by registered mail on February 10, 2017 and received by the Court on February 23, 2017, and petitioner's Reply (Re: Respondent's Comment/Opposition dated February 10, 2017), filed by registered mail on February 27, 2017 and received by the Court on March 8, 2017. Petitioner seeks reconsideration of the Court's Resolution dated December 22, 2016 (assailed Resolution), the dispositive portion of which states: WHEREFORE, respondent's Motion for Early Resolution on the Issue of Jurisdiction of the Honorable Court is GRANTED. Accordingly, Petition 1000005t!2

RESOLUTION CTA CASE NO. 9218 for Review filed on Decerjnber 10, 2015 is DISMISSED for lack of jurisdiction. The presentation of petitioner's witness Richard S. Querida set on February 7, 2017 at 9:00 a.m. is CANCELLED. SO ORDERED. Petitioner argues that Section 112(C) of the National Internal Revenue Code (NIRC) of 1997, as amended, was erroneously applied, as follows: 1. There is no inaction because there were "actions" on the part of respondent which led petitioner to believe that the I former was acting qn its administrative claim for input value-added tax (VAT) refund for the third quarter of fiscal 1 year 2006. 2. Contrary to Revenu� Memorandum Circular (RMC) No. 54-2014, respondent! is not deprived of jurisdiction to act on the administrative! claim for tax refund/credit after the lapse of the 120+30-~ay period and despite appeal to this Honorable Court, and this is shown by legislative intent. 3. The issue on the ptescription of the period to appeal involves questions of !fact that requires a full-blown trial. In his comment, responderlt avers that the Court correctly ruled that it has no jurisdiction over the petition. Respondent maintains that the petition for review, filep on December 10, 2015, was filed beyond the mandatory and juris~ictional thirty (30)-day period from the expiration of the one Hundred twenty (120)-day period. Respondent argues that petition�r's contention that a taxpayer is not precluded from waiting for1 respondent's decision at the administrative level like what pcititioner did in the present case has I no basis in law. Respondent fu~ther avers that the distinction made by petitioner between "action" ~nd "decision" is immaterial and has no basis at all. Hence, respondeht submits that if there is no decision issued within the 120-day perio~, the same shall be considered as unacted and equivalent to a "de~med denial" decision. 1 Should be calendar year. . ,. ~���, ('~ t~~ (\ L ~~- -~ �.. � ,. \.;{.... t_.,.,$L.:. ;_}.

RESOLUTION CTA CASE NO. 9218 Petitioner, in its reply, mailntains that the Court erred in ruling that it has no jurisdiction over tHe present petition. Petitioner claims that it is both incorrect and ; baseless to equate "action" with "decision" since the Supreme Court has previously interpreted "action" to mean other steps in the assessment process, including the issuance of indorsements, citing Surigao Electric Co., Inc. vs. Court of Tax Appealsl. Petitioner argue$ that the "deemed denial" doctrine applies only to cases where there are "no actions" from or there is "inaction" by the BIR. In its case, petitioner stresses that the BIR took positive actions on its cl~im. Petitioner claims that it was justified in relying on these acti~ns and wait for respondent's actual decision. Hence, petitioner has the right to appeal the Denial Letter. The Court finds no new :matters were raised in petitioner's motion which have not been qonsidered and passed upon in the assailed Resolution. We quote ~he pertinent portion of the assailed Resolution: Furthermore, the second paragraph of Section 112(C) of the NIRC of 199V, as amended, shows that the respondent is given a 1204day period from submission of complete documents in $upport of the administrative claim within which to act or claims for refund/applications for issuance of TCC. Upon denial of the claim or application, or upon expira~ion of the 120-day period, the taxpayer only has 30 day~ within which to appeal said adverse decision or unact�d claim before the Court. In the case of Team Energk Corporation (formerly Mirant Pagbilao Corporation) vs. Commissioner of Internal Revenuti, the Supreme C<t>urt elaborates on this second paragraph of Section 112(�) [previously Section 112 (D)], as follows: "xxx The second par~graph of Section 112 (D) of the NIRC envisibns two scenarios: (1) when a decision !is issued by the CIR before the Iapse df the 120-day period; and (2) when no 4ecision is made after the 120-day periqd. In both instances, the taxpayer has 130 days within which to file an appeal vtith the CTA. As we see 2 57 SCRA 523 (1974). 3 G.R. No. 197760, January 13, 2014. '6 ....... ' ~ (i f' {'), L, 0 ,'2 v >,/ v l>

RESOLUTION CTA CASE NO. 9218 it then, the 120-day i period is crucial in filing an appeal with the etA." (Emphasis supplied) From the foregoing, petitioner can file an appeal in one of two ways: (1) file t~e judicial claim within 30 days after the respondent deni~s the claim within the 120- day period, or (2) file th~ judicial claim within 30 days from the expiration of :the 120-day period if the respondent does not act within the 120-day period. Corollary thereto, the "decision" contemplated by Section 112 is a decision issued by the respondent before the lapse of the 120-day peridd within which the latter may act on petitioner's claim. "the inaction of the respondent on petitioner's claim durirhg the 120-day period is, by I express provision of law, "~eemed a denial" of the latter's claim. Petitioner had tHerefore 30 days from the expiration of the 120-day period to file its judicial claim with the Court. ! XXX XXX XXX Records show that petitioner allegedly filed its 1 administrative claim for r$fund or issuance of TCC on August 20, 2008 and $ubmitted its last additional documentary evidence on May 3, 2011. Counting 120 1 days from May 3, 2011, th~ BIR then had until August 31, 2011, within which to deci~e the claim. Petitioner had 30 days from the lapse of 12b days on August 31, 2011 or until September 30, 2011 t~ file its judicial claim. Applying the foregoi~g law and jurisprudence, it is clear that petitioner haq indeed complied with the required 2-year period wi~hin which to file a refund/tax credit claim with the BIR tjy filing its administrative claim on August 20, 2008 (withih the period after the close of I the third quarter of taxabl$ year 2006 when the relevant sales or purchases were mjade). Petitioner's judicial claim filed on December 10, 2015 was, however, filed beyond the 30-day prescriptive per~od. The Court finds that there 1 is no need for petitioner to present 1 evidence on the issue of juhsdiction considering that all the I allegations in its pleadings, inclluding documents attached thereto, ! "' IL' �- . .. (' ~'- ; <~-- ~ ..... 3f�....'i)� ~� i:. . l..�!,-,. ' ... , t .. : ......

RESOLUTION CTA CASE NO. 9218 were taken into consideration. �In fact, respondent also relied on petitioner's allegations in his atguments. Letting the petition go through a full blown trial only t01 be dismissed later on will just be a waste of the Court's time and resources. Petitioner has stated that its administrative claim for input VAT refund or issuance of tax credit certificate for the third quarter of 2006 was filed on August 20, 2Q084 and that it submitted additional documentary evidence on May 3,; 20115� Counting 120 days from May 3, 2011, the day petitioner subniitted its last additional documentary evidence, respondent had until August 31, 2011 to decide the claim. Since respondent did not issue ~ny decision on the claim within the 120-day period, petitioner had 3~ days, or until September 30, 2011, to file its judicial claim for refunp. Unfortunately, petitioner's judicial claim was filed only on December 10, 2015. The Supreme Court rule~ in the case of Commissioner of it Internal Revenue vs. Mindanao Geothermal Partnershi{}, viz. The San Roque pronouncement is clear. The taxpayer can file the appe~l in one of two ways: (1) file the judicial claim wit~in thirty days after the Commissioner denies the daim within the 120-day period, or (2) file the judicial claim within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period. Considering that petitionet's claim was not denied within the 120-day period, the second <j)ption applies to petitioner, thus, petitioner should have filed its j~dicial claim within 30 days from the expiration of the 120-day period. If we were to follow p�titioner's argument that it is not precluded from waiting for respdndent's decision even after the lapse of the 120-day period, it would lead to an incongruous situation where its claim does not fall urjlder any of the two ways to file an appeal on a claim for tax refund/credits provided under Section 112(C) of the NIRC of 1997, as amended, and as established by jurisprudence. 4 Par. 12, Petition for Review, docket, p. 1!5; Annexes "P-20" and "P-21" of the Petition for Review, docket, pp. 90-92. 5 Par. 18, petitioner's Pre-Trial Brief, docket, Jt>. 210. 6 G.R. No. 191498, January 15, 2014. ,. � rr n. n n 8 ;,�.,,q;i�-!!b i:. �. 1� ~- ~~.' '��' ---~' ......, \_,. ,.) I

RESOLUTION CTA CASE NO. 9218 The Tax Code does not provide for any other way for petitioner to appeal its case to this Court: - either he files the appeal within thirty days after the Commissio~er denies the claim within the 120- day period, or file the judicial claim within thirty days from the expiration of the 120-day periot1 if the Commissioner does not act within the 120-day period. Hence, since petitioner failled to appeal the case within thirty days from the expiration of the 1120-day period from the date when petitioner last submitted its sup~orting documents, the Court has no jurisdiction to act on the petition; WHEREFORE, premises ~onsidered, petitioner's Motion for Reconsideration is DENIED fdr lack of merit. SO ORDERED. ()\(JJJ, "R~NG Presiding Justice ERL~P-.� UY ~ t-.t.Ut..�~ ..G~ Associate Justice CIELITO N. MINDARO-GRULLA Associate Justice n":�. . ~-n i�) ... ~:�,~~(~ )\~{'>:"!L'> ./ ' ~ ~ ... _