ELIXIR GAMING TECHNOLOGIES PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REP:...l6UC OF -r: ·;::: PH!LIPPINE:S CO~n~_-r ::f TLX APf. EALS QUEZCi i CITY EUX:IR. Gf.f•1I~·!.:; T::::Cl-lf·~CLOG 1 r:S CTft. C/\S::: f~O. 7972 PHILIPPINfS, E'!C., f"1ernbers: ACOSTA, Chairperson ··· vers11S - UY,and FASON-VICTORINO " f'Y' • 1~ g-d'...'""e u. Pr U.lii.. I ... · Befc.x~ the Court is tl·~e :-.·!otion w Dismiss dated Novernb2r 18, p _-(~it:oncr Eilx!r Ga;-ning Tec11noiogl2s Ph.lipp!nes, Inc., hinged on d:!eged inaction on its claim for VHT refu;·ld in the. arnount P28,271,548.55 1 should be d;smissed for !ack of cause of action due to petitioner's failure to exhclus~ ali administrative ;- emedies a·.rc:i!ab!e unck:- the lav; 1:1 suppcrt cf his pos:ti'Jn, respondent cited ..)(~ction 11.2 oF the ,\ai... -:1 T,..,t·"'-'13! ~1 .... '-;nn·"'' ..;1 . .~i' c~ : ·~ Dey·::>...,,·,:o, .-, __ t_!! d ..- • • Cc·,·k'\ .J\...l~:., (i']T"'! ..._... r" \.\fj-irh .. · l "'-'-) v . . I,_ ~ h'rn o'tv""c .~ ! ·- r'c: 1 • n ""'"riod 1 _, .--.f u. ...... 1 ·: (• .L.t...J u·~ c~r·~~ "'. 'c~ . fTC11.1 .l, hE' ·'-l·•·-- d.,";-> \ .... i- ''lJ r· ~..., ....... :;, '"' 1-:'1; ·; c1 i)l-, c-.r- t..~ '·' , . . [' l c.'-4 1: Cf)'T' ~ 1 r't::. Ull"~r'' ........ """Prltc 1 ) ... for ~;.Ill.~~ J the application for tax refunc1, within which to rule on the matter. After the said period, the taxpa'jer arfected by his ruling rnay, vvithin 3J ct3ys from r.o;:ice, c: ~:f~~r the exp1ratlon of the 120-day 73 7

Re=:olution C.T.A. Cas-= 1\!,-. 7972 Page 2. of 6 ~\ccording to respo:1dent, pet!tloner filed its application for '"'efuncl/or issuance of tax credit in the amount of PHP28,27l,543.55, repr·esenting VAT input t3;' :t paid for the ~·hird to ti1e fourth r:~1arte.:-s cf the ta'<able year 2007, on ft.ugu~+- '"?.4, 2J09. Thus, he hac! uiltil Deccr'Ylber 22, 2009 1 V'ithin which to act on L::he matter. ThPreafter 1 petitioner had 30 c'ays to appeal r·.b adverse r·· ·ling or ina~tion befo,..e th!s Cnv ... t. Howe i£'r, petiticn ~~- prematu;·ely filed the instiJn~ r-J,2titlon for R:-;v;!~\N on ~e.Jtember 28, 2.009 o:· before the o.-.,.o:r-att·n,· ~ \ .. , -. • \..,.. l oc! ·he 120-day period allowing h!rn to take the correspn :cliro a ·:on, renderirg ~1'1'-::! petition dis•-n;ssible fu:· iack of Ct..US~ of a:::t!o1 •. In rejecl:ing the 1n-.;ton, ~:r:;i.:itioner a:-gues that Sectio:-1 112 of theTa~< Cod~, as amended by S:-:..:ti "'~~1 ~ ~ 2 (A) of R.A. 9337 Ql!ows a Vat-registered peison whose saies are ze~CJ-ral:ed to apply for a years after d1e c!os':! oF taxab12 quarter when c 1e sales were r-1ade. fvioreover, the Supreme t--:curt, in the cas~~ of the Comrnissi:Jner or Internal R9\/ 0 '1Ue v. Victcrias , 1ffling Co. Inc., 22 SCRA 12, has rL'ied that "t~ e c!Jim for ref•md w!trl the BL•reau of Internal Revenue and the subsequent appeal to ·:he Court of Tax Appeals must be F:~ed within the two year perlor:. If, however, tr"' Ccmmissioner takes tirr.r.. in deciding the claim, and t-h~ period of two years is about to end, the suit or proceedir1g must be started in the Court of Tax Appeals before the end of the tvvo-year perlod without awaiting the decisi'ln of said col:ection". Following the above ruling, petitioner's two-year presc-iptive pe:-iod to file a judicial claim for refund with this Court wou'd end en September 30, 2009. Precisely it filed the ; .... st3nt petiti:•n .Jn September 28, 2009, with cut \·vaiting for the 120-day period allotted to ,·espondent to lapse. In Reply, respondent po::·!~s that tile two year period within which to fl!e an appeal with this CoLirt should rot be reao sepa. ate and distinct fro:n the pc:-t:x. ol Sec~ion 112 of NIRC givir,g him 120 days Nithin wl1~ch to act on the ci2im for r~fLnd. To do so wi!l a'!ow ~he tcxpaye1· the di;jcn~tlo~ Lo r- re-en:pt the period granted 73 8

R.e~r.!ution :.:.l".P-. C.:1se ~i;:.,. -;-::n2 l;:J~::>:: oi'.:: Fw-rler, ~-he jurisprudence c!· ed ir; the c<3se af Commissionel 'IS. 'i--'· .·.,- 1~1·.;. _,,,_.LO!fc,::; !l?!llj c·.0.,. 1n .. ..- 1 ,........-~~J·,. 11 .;, L, ._';..,.! e.d-un Jc:.ilUa!y - ·c.-rl'(~·d· "::! ~ .J 1 19b~·o t; or oe.fcre th:; exlstenr:E:: ...... t1-1s '/AT rnd inv':l!ved spec:lf'L:.: tax Oil ~ ..,., )•i.J''l!C.i\1 1 ...... i • ... c:onr·i• ~ ..I ,( l.....t . . 'y- ;..,li,n- !TN, ~ ··i :J2t.!':;n . ter cc ···sci\'. ri!2 \ !l?. orcsr~nt Pedtl1Jt1 for R·.::v:c: '! .,.; . . ·-·a·-;- ·~tf'li'-'1'1(' .rJ~Lat t.J,. v·•••. t. _i -=,~.,... t'·1c:. {~- ....lA·linr1) ·'lf .,.. 1.. J•·:::c:::'l" ....... l... C'r ._, ··d"'-~t- .. r-.,..llt\ ~ "·'· t::. '='Vr\'r:::.tio~, \..,..,..,1-c l. r'...) f.~-,"' ..~ Lt- ~. .::1 ""r..,::-· \f(:.:>·· :- 't• t-'h ·· r ·=>(1 =>t ·1\iP -t"'·;.c..., .~1 • .• I,;:-:, 1.,. - .t ... :Ja. ·-· "Section J 12. r{eft.Wtrl-; ur Tax Credit.:; o:= Input Tax. ( :. 'J zcr"--i',?tnc·i ....... \_ .o1 :...I .... ...t C"~ E·f-1~--~-"l•'e"t L-nro-r::-+,_,.; C;!cs (J t C-.. ....,. .. • ... o • _.\..., ... ';/ ~ I .._ t - l . - '-" ,.J ~-;r,y VYT--n~gL::h::(ed pe! scnr '.'1!·1ose :::ales Jre zero-i :;ted o:- e~fect:veiy Zt':!ro-~·a::ccJ rnoy 1 withlr• twc (2) ·;~ea:-:; r.fi:er ':he close:: of th~ t:aya~J:t: c;~B.te:- wt.en the s~le5 ;.,vere ...,.,~( • .o~•t··: .- .. . f·c··· - •.:l[)!lh/ . ;.•- .. I·.," .. •.· ·• ...:.···r .....c , c• , •..• _.. · ·-, ··av,, '·'"r~.t·tt --. •.c ..:;,, ~-~ --~' i··~~=·tcatr-- .. ~ ..;::. o~- r•:: ·,_.,·1o of cn.:d!l:.::)l:J,e :nr;·UL L"T~ due or [Bid cttr;but! bl~ ~n ~l~G'l s.::-.ics, e···~f!='t rT:.::r..;:t:onal input tcx. lo the ·:,..,h,_~,.., I· ~··L· s ' •ct~ _ _,.,,_. 1: • . . llv i, :n..-1 • ~ •• J_·, :-rl-' ' - - I·1 C.- 1)1- ;-,e'::lt"' ,,... ' 1-.~ ·• :>nr)"rerl •••· 1.01·'~·. • :.loa;nct l"_;, I ;.J. OL!'--pui_ to·• Y X X (C) r·eriOt-; '!'•!cf; ..,_'?fund or Tc.x e:-r~dit cf 1,-Vit:·lii". 1: In >Ut fc:-xes shai! tY: .V:aC:2. · In proper c~s-~s, the Corol:-r.i~·sionr-:!r sh:-•ii ~r::-1,il· ,_:, refl md or i,...-:;L•e the tax 73 9

!~eso!ui~ion cr .OIL c_rt"r.· ·;:. .:.'· • .fn- IIJC_~.e ''·' {-> ~ 1 C' :;; .1. ,0 u t tel ""'-!' •. ., •• ~e .• .=:lJi'.ou c x es v~t''-hi ~:.. .. Il 011e , hundred tv;~nty ( 120) d3y': fm~n the dat~ of submission of comp'st2 doG.tmellt<; ! : ~.Cl'pport cf tl'le app!ication filed lil ~ccorc'ance ,;·_r :::ub• cction (A 1 her'-:~;:. Inca~·-= of ft•!l o;-- ::Frt;·~! ~Jenlal of t!1e cia~m for tax r:'\tnd or tax creC:;t, or the fc-ii•J.·e O'l the pa.·t of the Comm;ss:on;::r to :: ct 0:1 ti .c appPcction within the peri -)d p:--::'scr!bed above~~ ~he taxpayer affected i nay, •t;ithin thl;·ty (30) .~:,, ·s h :.Jnl t:!e :·ec:eipt {Jf tr'-= decis1on d0nylng the cl?.in, or aft2r the expir?.t!or. of th ~ one !lund:--cd twenty-riay perioc: t:.ppeal the c!ecisisn or the ·.m3cted claim wit' i ch-: Co·Jr: cf ·rax P.p;-"'~cls. x x x . ' Cie2r!y, any VAT- ... c.g:stc--rsd ~erso:1, v.r~tose sa~es are zercs- rai:ed or eff0ctively zem-ra!:scl, .nay ;:'pply for ·::·.e is...:uance of r.: tax ··- _~ ....... \ .. ! u ~t:! Or l~ef'r ·'i'·L "erY•·ci(·':.lt··:;, ' ...-H" ... •-a· ( ..:: --c,l"-'-..,h!e .. ~.1 I I'-~ ~tL... -~.J\,.o:.. t'"''' ·1nn11"' ,._,l.,, \•Vith'l-, . -~.I • r•AJ -\! 0.1 the ....,trir""!. hand, ;es~cndcnt:, w!>o ;.:. v2st::.d with the dUtrorit'/ to aci~ on the rnat~er, has a per!od of 12.0 c~ays, within · vhich to grar.t or deny the appl!r ::. ... 'on. In c2se or ojverse decision or inaction on the pa; t of respondent vv-ithin the prescribed period, the aggrieved taxpc:yer - ttoe petitioner in tr:s c~~2 - has thereafter a period of 30 dcys to app..::?! via petitlun for :e,lic.v with th!s Court. The two-year pr·escriptiv-=: period sets the limitation only on the fii:ng of :t;e application for a tax refund or for issuance of tax credit certif!cate with respondent anc' not resc-~: to Court action. Tr~s position is illustrated in the r..:ase of Intel vs. CIR, 1 to wit: ''nder Secticns 1C'5 (t\)(2)(a)(1) :n r2!2t\on to :!.12(/) of t;1e Tax Code, a t~ .. payei' engr!:,ed :n zero- "·C~ted or effecti"~'?JJ· zero-··ated . . :·a .. sc_ct~ons may (- p[.:i ' for a r~fund or ist:uan...;e of o tax credit cer tfiic;- te f~r Fr,) :~. ::'"<:~ ·u;. r -~i.d t.n.trib rtable to such s~les upon C0""1p v~nq wH:h tMe ,f""')IIOwino re~ur~ ··es: (1) ~he t3.q"T>'er is engaged in sales whlch are z~ro-rated (!!ke e;(pcrt sales) or eff2ct!vely zero- rateJ; (2) tile t:'n~;::L'ryei· is VAT-regi~te~·ed; (3) the c'ai n &luut be 1~~rl H:t!.1in t· vo ye, r ~ afte:- the ClOSe or tte t~x;:-·t·~ '~i- d' ·.(.r W~""en SU!:h saies \1\Jere 740

Resoluticr' C.T)\. C~se ~i'), 7S72 Pc.gc 5 .:;f 6 m""de; (4) the cr::~d:tn:}:e :n;Jut t~x due cr paid l•lUSt be ·•· ·[·--t'o·Ul. c.L.! ·'·ar.,·,:) ·-' ·r·o ... ~l. s,._,.c.:., c.urh l: .... ~ a·_,..,... •J t. r· tl ··---~-t ·p~- ''2 · rd· ··1(.:iFonal I.JoLl lr'Duc· • tax.r to tbe exte:1t that su :h input tax has not been appl!ed 1gains:: tr1e c•" 1Tut t:~·-:; ? .. d (5) !n case of zer'1- ra~ed s;:;ies under ,-.ectio ·: 106(ft.)(L)(3)( 1 ) 3:ld (2), ~ect[OI1 10ftB), .:.:1d Sectiot: 108(8)(1) and (2;, the c:c.\..ep':a:--·1---: fo:eiqn r.urr•:::ncy exchange p:-cc-.3eds thereo~ : --:a beer'! dL.l~ ;. .,~cc·unt:::d f·: :-- i1 accordc;;~ -e v;!tll SSP ru~ss anrj r~._;uiations. tr.:x refur!d or ic;suanc~ Ol: ·~0x credit ce1 tif1ccte uv -::H::ro .... de,..,,t- . .._ -r-" I • 1 - Comrni:;sione;- or Ir'terrai Revenu::: may a taxpay2~- appea1 t'1e :n~:.~tter to this Co•.trt, within 3v d~ .:; f"rorn not:ce. Sl·:tt 1,::d '':; the 1·u!e t' 1ot ''l.he C)urt rr13y not construe a statt~ 1:e tha~ ls freE: from doubt. vVher2 the !a\v s:-Jeaks in c:ear and c:->· ...,goricat language, ths··e is ro room for inter;:retatlcn. There is only morn for application. The Court nas qo choice but to ~~e to it t~wt its mc.ndBte is obey~. · ."2 In this ~ase, ~he provision invoked by oetitioner is clear 2s a dey. A!so as r.orrect!y poin~ed out by respondent, a disregard of t!le pr-ovision ""o fo!:ow petiti ::>ner's interpretr:~· =on of the Section 112 Af ....,. tl"~'::> ... • 1\:~· R.,~ • ~ ·' ~ .._ 1"l'IJ \o • , .. Llntioubi-.-=:-t':v 1I '-lari - ...... .... . 1.. ..... """ ; 1-u- r... ij!1Clpr.i·r·-rln: t.. r ... ...., 1 •,r.~ l,oo.: ...... rec;li'tt~ ~ ...... - _._~ ~rtL-1. (I U11ima~1inab:e chaos. 1\ 1,~payer <~es!rous to re3ort directly to tl e Ccurt can elfectvely bypo~~s r~siJ011dent by fi!ing admin!strat1ve cla!r.1 for ref ,- on!y days bc;fl rs the expiration cf tt1e 2-year p:--cscriptive period thPn ~~-'ltlledlate!y thereafter~ on 1:he ~1retext of the "inacl:ion" of respo::clent c.nd (:~,st the prescriptive period •..viii !Jpse, file a corresponding petiUon for review with l:he Cr:urt. Such course of actlon wiii rencier r.ug;;Jtcty th~ e:uthority granted by !2 · upon respondent to act acccnJinQiy L n t11e claims for refund. VVHER cFC'R::: t-..:. 1-.; 1. the •t •• • ~--;~n fv' V.a t-r) .. ....,-,c;m;ss L J ,._,,I l ~ datec1 ... l\1JC) 1'/'{..;..,ll~o.J.._ 'L'H'V'Ih""r 18 ,.. 1 2.00:1, tl!e,..! by n.;spc•nder!t. ;s GR/\!''TP.'J. Consequently,. the PetitiOil f.Jr Pevie'N ~ia;·ed Sept~,;moer 25, 2C09, r;~::;d by petitior.2:- Elixir 74 1

Resolution C.T.A. Case No. 7972 Page 6 of:; Gaming Teclm•J!ogles r:-ili:i~>p.rK~S 1 T.nc !s t1ereby DISl\'liSSED, v'ithout prejwJ!ce. (\ r-··, I \ ·' ,.-,_ • .....-..~ .. ltJ, \ - ). __.,.,.,....__ _ f::RNf::STC D. ACOSTA Presicli!lg Jus·:ice /~.sscci ::Jts J L!stice 74 2