KELPHIL, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES

Court of Tax Appeals

QUEZON CITY

SECOND DIVISION

KELPHIL,INC. Petitioner, CTA CASE NO.8045

Members:

-versus - MINDARO-GRULLA,JJ CASTANEDA,JR.Chairperson CASANOVA,and

REVENUE, COMMISSIONER OF INTERNAL Respondent. Promulgated: MAR 2 3 2011 3yAP

RESOLUTION

For this Court's resolution is respondent's Motion to Dismissfiled

on March 8,2011 with petitioners Comment (On Respondent's Motion to

Dismiss)" filed on March 11, 2011.

Respondent maintains that pursuant to Section 112(C of the National

Internal Revenue Code (NIRC) of 1997.as amended,the examination and

verification of documents supporting a claim for refund require 120 days from

their submission.Respondent avers that petitioner filed its administrative

claim for refund on March 24,2010 and its judicial claim on March 29,2010 or

with only an interval of five (5 dayshence,respondent claims that the instant

Petition for Review was prematurely filed and should be dismissed

Page 2 of 5 RESOLUTION CTA CASE NO.8045

Petitioner opposes the instant Molion to Dismiss and avers that it

should be denied for it was filed late on the basis of Section 1.Rule 16 of the

Rules of Court, as amended Petitioner also contends that respandent is

deemed to have waived her defense of prematurity and that even assuming

that the motion was not filed late, petitioner posits that it should still be denied

because the Petition for Review was not prematurely filed on the basis of

prevailing jurisprudence relied upon in good faith by petitioner at the time it

filed the Petition for Review.

This Court shall first determine whether or nat the instant petition was

filed within the periods prescribed by law.In relation theretoSection 112(D)

[now Section 112C)] of the NIRC of 1997,as amended,provides that

SEC.112.Refunds or Tax Credits of Input Tax.-

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from the date of submission af complete documents in support of the application filed in accordance with Subsectians (A and creditable input taxes within one hundred twenty (120 days B Taxes shall be Made.-In proper cases,the Commissioner shall grant a refund or issue the tax credit certificate for {D} Period within which Refund or Tax Credit of input

the expiration of the one hundred twenty day-period appea Commissioner to act on the application within the period prescribed abovethe taxpayer affected may,within thirty 30) days from the receipt of the decision denying the claim or after Appeals." the decision or the unacted claim with the Court of Tax refund or tax credit, or the failure on the part of the In case of full or partial denial of the claim for tax

From the foregoing, it is clear that after the filing of the administrative

claim for refund,a VAT-registered person must await the granting or denial af

such claim,whether full or partial, or the expiration of the 120-day period from

CTA CASENO.B045 RESOLUTION Page3 of 5

the submission of the complete documents in support of such claim, before

filing a petition for review with this Court within 30 days from receipt of the

said decision,or from the expiration of the said 120-day period, as the case

may be.

Significantly. in the case of Commissioner of Internal Revenue vs

Aichi Forging Company of Asia,Inc.Aichi case the Supreme Court

emphasized the mandatory nature of the periods provided in Section 112(D)

[now Section 112 C] of the NIRC of 1997, as amended, and the

consequence of failure to abide thereto, to wit

inaction of the CIR to CTA within 30 days the CIR has 120 days,from the date of the submission of the complete documents in support of the application [for tax refund/credit], within which to grant or deny the claim. In recourse is to file an appeal before the CTA within 30 days refund/credit. the remedy of the taxpayer is to appeal the case of full or partial denial by the CIR the taxpayer's from receipt of the decision of the CIR. However,if after the 120-day period the CIR fails to act on the application for tax Section 112(D of the NIRC clearly provides that

xX

would render nugatory Section 112(D) of the NIRC, which already provides for a specific period within which a taxpayer paragraph of Section 112(D of the NIRC envisions two scenarios1 when a decision is issued by the CIR before the after the 120-day period. In both instances, the taxpayer has see it then, the 120-day period is crucial in filing an appeal with the CTA. should appeal the decision or inaction of the CIR. The second 30 days within which to file an appeal with the CTA. As we lapse of the 120-day period;and (2) when no decision is made In fact, applying the two-year period to judicial claims

XXX

for refund/credit of input VAT before the CTA warrants a In fine, the premature filing of respondent's claim

G.R No 184823, October 6,2010

Page 4 of 5 RESOLUTION CTACASE NO.8045

dismissal inasmuch as no jurisdiction was acquired by the CTA.(Emphases supplied)

In view of the mandatory nature of the periods provided under Section

112D[now Section 112C] of the NIRC of 1997,as amended,and the

ruling of the Supreme Court in the aforesaid case that the premature filing of

respondent's claim for refund/credit of input VAT before this Court would

warrant a dismissal in as much as no jurisdiction is acquired; this Court has

no recourse but to strictly apply the said provision in this case

As jointly stipulated by the parties, petitioner filed the administrative

claim for refund on March 24,2010,2 which presumably is the date when

petitioner submitted the compiete documents in support of its application for

refund. Thereafter, petitioner immediately filed the instant Petition for Review

on March 29,2010,barely five 5 days from the filing of its administrafive

claim for refund. Obviouslypetitioner filed its judicial appeal before this Court

without waiting for the lapse of the 120-day period provided for under Section

112(D)[now Section 112C)] of the NIRC of 1997as amended

This Court is mindful of the fact that in our system of judicial

administration, the Supreme Court has the last word on what the law is,and

that its decisions applying or interpreting the laws or the Constitution form part

of the legal system of the country, all other courts should take their bearings

from the decisions of the Supreme Court. It is the duty of lower courts to obey

2 Summary ofFacts Admitted, Stipulation of Facts, Par.7, docket, p. 58 3 Caram Resources Corp.vs. Manila,A.M.No.MTJ-93-849October 26,1994 S. Judge Maximo C.Contreras,Metc, Branch 61, Makati,Metro

RESOLUTION CTA CASE NO.8045 Page5 of 5

the decisions of the Supreme Court and render obeisance to its status as the

apex of hierarchy of courts.

The Supreme Court in the Aichi case clearly established the

significance of Section 112D[now Section 112C] of the NIRC of 1997,as

amended, in the ascertainment of the timeliness of an appeal filed before this

Court. Hence, it is but proper for this Court to sternly apply the said

jurisprudence and provisions of law to the facts of the instant case

With all the foregoing, petitioner's failure to observe the periods

provided under Section 112(C of the NIRC of 1997 as amended, by

prematurely filing the Petition for Review on March 29, 2010, effectively

removes the instant Petition for Review from the ambit of this Court's

jurisdiction.

WHEREFORE, the respondent's Motion to Dismiss is hereby

GRANTED. Accordingly,the instant Petition for Review is DISMISSED on the

ground for having been prematurely filed

SO ORDERED

SUANITO C.CASTANEDA,JR. QaCadaala Associate Justice

CAESAR A.CASANOVA Associate Justice ailtN.Mew:Gwl CIELITO N.MINDARO-GRULLA Associate Justice

Commission on Higher Education vs.Atty.Felina S.DasigG.R.No.172776.December 17,2008