COMMISSIONER OF INTERNAL REVENUE v. MSCI HONG KONG LIMITED

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY EN BANC COMMISSIONER OF CTA EB No. 2147 INTERNAL REVENUE, (CTA Case No. 9392) Petitioner, Present: -versus - Del Rosario, P.J. Castaneda, Jr., Uy, Ringpis-Liban, Manahan, Bacorro-Villena, and Modesto-San Pedro, JJ MSCI HONG KONG LIMITED, Promulgated: Respondent. X-------------------------------------------------------------------~~~---~~~~~~-~. RESOLUTION CASTANEDA, JR., J.: For resolution of the Court En Bane is petitioner Commissioner of Internal Revenue's (CIR) Motion for Reconsideration1 filed via registered mail on June 30, 2020. The CIR's Motion seeks reconsideration of the Court En Bane's Decision promulgated on February 27, 20202 (the "Assailed Decision") denying his Petition for Review for lack of merit. Petitioner moves for reconsideration of the Assailed Decision based on the following grounds: ?-<- 1 Court En Bane's Docket, pp. 95-103. 2 /d.. pp. 8 1-94.

RESOLUTION CTA EB No. 2147 (CTA Case No. 9392) Page2of4 GROUNDS A MSCI FAILED TO PRESENT VALID AUTHORITY TO PRINT (ATP) IN RELATION TO ITS TAX REFUND. THE SUBJECT OF THIS INSTANT TAX REFUND WAS TAXABLE PERIOD FROM 1sT TO 4TH QUARTER OF CALENDAR YEAR 2014 BUT MSCI SUBMITTED AN ATP ISSUED ONLY ON SEPTEMBER 3, 2014 BY BIR; B. RESPONDENT'S SALE OF SERVICES THAT DOES NOT QUALIFY AS ZERO-RATED SALES AND THEREFORE IS SUBJECT TO VAT In its Comment (Re: Motion for Reconsideration dated June 22, 2020) filed on September 10, 2020, respondent MSCI Hong Kong Limited maintains that it satisfied the invoicing requirements under Section 113 of the National Internal Revenue Code of 1997, as amended (1997 NIRC).3 Respondent also claims that this Court correctly declared that the zero-rated sales disallowed by the CTA-Division should not be subjected to 12% output VAT.4 The Court En Bane resolves to deny the Motion for Reconsideration for lack of merit. At the outset, it bears noting that petitioner's arguments in his Motion for Reconsideration are mere restatements of the arguments he raised in his previous pleadings. Needless to say, these matters had already been thoroughly discussed and resolved by the Court En Bane in the Assailed Decision. To put it bluntly, there is nothing in his Motion for Reconsideration that was not sufficiently passed upon by the Court En Bane in the Assailed Decision. Petitioner utterly failed to raise any new or substantial matter let alone any compelling reason to warrant the modification much less reversal of the Court En Bane's findings. At any rate, the Court En Bane stands by its ruling that the cases of Air Canada v. Commissioner ofInternal Revenue5 and SMI-ED Philippines Technology, Inc. v. Commissioner of Internal Revenue6 do not apply as precedents to the present case. As explained in the Assailed Decision, this Court is required to determine the proper category of tax to be paid by the taxpayer in refund cases only when such claims for refund are grounded on the theory of erroneous tax payments for the wrong category of tax, i.e., that 8&-- J !d.. pp. 96-98. 4 /d., pp. 98-102. 5 G.R. No. 169507, January II, 2016,778 SCRA 177. 6 G.R. No. 175410, November 12,2014,739 SCRA 704.

RESOLUTION CTA EB No. 2I47 (CTA Case No. 9392) the taxpayer has paid a certain kind of tax that he or she is not subject to. In such instances, the issue of claim for tax refund is intertwined with the issue of proper taxes that are due from the taxpayer. The claim for refund subject of the present case, however, is not based on the theory of erroneous payment but is filed to recover excess and unutilized input value-added tax under Section 112(A) and (C) of the 1997 NIRC. Excess input tax or creditable input tax is not an erroneously, excessively, or illegally collected tax.7 Thus, the fact that respondent have sales that were disallowed as zero- rated sales does not necessarily follow that the said disallowed sales should be subject to 12% VAT. The Court En Bane likewise finds no merit in petitioner's contention concerning the alleged non-presentation of the Authority to Print (ATP) by the respondent. Notably, the foregoing issue was only raised in the present Motion for Reconsideration. It is a settled rule that points of law, theories, issues and arguments not adequately brought to the attention of the lower court need not be considered by the reviewing court as they cannot be raised for the first time on appeal because to allow the same would be offensive to the basic rules of fair play, justice and due process.8 Petitioner should have raised the same at the earliest opportunity, i.e., when he filed his Answer before the Court in Division, and not later on when the Court in Division and even the Court En Bane had already ruled against him. In sum, the Court En Bane finds no plausible reason to deviate from its ruling in the Assailed Decision. WHEREFORE, petitioners' Motion for Reconsideration is DENIED for lack of merit. SO ORDERED. .9z.a-...."Z;C. Q:r~--c;l.. .'J,., IDANITO c. CASTANEDR. .iR. Associate Justice 7 Coca~Cola Bottlers Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 222428, February 19,2018,856 SCRA 76; CE Luzon Geothermal Power Company. Inc. v. Commissioner of Internal Revenue, G.R. No. 197526, G.R. Nos. 199676-77, July 26, 2017, 832 SCRA 604; Commissioner of Internal Revenue v. San Roque Power Corporation. G.R. No. I87485, February I2, 2013. G.R. No. I87485, February I2, 20I 3, 703 Phil. 3 IO, 365. 8 Rizal Commercial Banking Corporation vs. Commissioner of Internal Revenue, (Resolution) G.R. No. I68498, April 24, 2007, 522 SCRA 144; Hubert Nunez vs. SLTEAS Phoenix Solutions, Inc., G.R. No. I80542, April I2, 20IO, 6I8 SCRA I34; American Home Insurance Co. of New York vs. F. F. Cruz & Co., Inc., G.R. No. I74926, August IO, 20I I, 655 SCRA 248; Padilla Mercado et. a/. vs. Sps. �spina, G.R. No. 173987, February 25,2013,691 SCRA 545; Mo. Consolacion M. Nahas vs. Juanita L. 0/arte, G.R. No. 169247, June 2, 2014, 724 SCRA 224; Luzviminda Apron Can/as vs. Republic of the Philippines, G.R. No. 200894, November 10, 2014; Cheryl/ Santos Leus vs. St. Scholastica's College Westgrove and/or Sr. Edna Quiambao, OSB, G.R. No. 187226, January 28,2015.

RESOLUTION CTA EB No. 2147 (CTA Case No. 9392) Page 4 of4 WE CONCUR: ROMAN G. DEL ROSARIO ERL~P.UY Presiding Justice Associate Justice ~. ~ _4'--...___ MA. BELEN M. RINGPIS-LIBAN Associate Justice tJvfk,w..i ;: ~.,.u,.---- CATHERINE T. MANAHAN Associate Justice t stice