PHILEX MINING CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES caun al Tax Appeals QUEZONCin EKBAKC PHILEX MINING CORPORATION, CTA EB No. 808 Petitioner, (CTA Case Nos. 7859 and 7886) Present: - versus - ACOSTA, P. J. CASTANEDA, JR., COMMISSIONER OF INTERNAL BAUTISTA, REVENUE, UY, CASANOVA, Respondent. PALANCA-ENRIQUEZ, FASON-VICTORINO, MINDARO-GRULLA, and COTANGCO-MANALASTAS, JJ. Promulgated: !tJ104!d~A~ JUN 06 2012 ;,-~rpp,h--- I X------------------------------------------------------------------------------------------------------I -------------------X DECISION UY, d_.: In this Petition for Review filed on August 1I 2011 , petitioner Ph ilex Mining Corporation prays for the reversal of the Decision dated April 20 , 2011 and the Resolution dated July 14 , 2011 I 1 both rendered by the Second Division of this Court in CTA Case Nos. 7859 and 7886 entitled "Phi/ex Mining Corporation, 1 I' Petitioner, vs. Commissioner of Internal Revenue, Respondent", the dispositive portions of which respectively read : 1 Both penned by Assoc iate Justice Cie lito N. Mindaro-Gru ll a1 and concurred by Associate Justice Juanita C. Castaneda, Jr. and Associate Justice Caesar A. Casanova. Docket, pp. 22 to 42.

D EC IS IO N CTA EB No. 808 Page 2 of2 1 Decision dated April 20, 2011: "WHEREFORE, the instant consolidated Petitions for Review are hereby DISMISSED for lack of jurisdiction , considering that CTA Case No. 7859 was prematurely filed and CTA Case No. 7886 was filed out of time. SO ORDERED ." Resolution dated July 14, 2011: "WHEREFORE , premises considered , petitioner's Motion for Reconsideration is hereby DENIED for lack of merit. SO ORDERED ." THE FACTS Petitioner Philex Mining Corporation is engaged in the mining business , including the exploration and operation of mine properties and the commercial production and marketing of mine products. It is VAT-registered under VAT Registration Certificate No. 35-6-000731 effective October 29 , 1997 and BIR Form No. 7303 as of January 31 , 1997. It likewise had its Application of Zero- Rate pursuant to Section 4.100-3 of Revenue Regulations No. 7-95 approved effective April 2, 1998. On the other hand , respondent is the government official charged with the administration and enforcement of national internal revenue laws, including th e granting of refund or tax credit of taxes erroneously or illegally collected , and other refundable or creditable taxes under the National Internal Revenue Code (NIRC) . Respondent holds office at the Bureau of Internal Revenue (BIR), National Office Bu ilding , Diliman , Quezon City. Petitioner filed its original VAT Return for the fourth quarter of 2006 on January 23, 2007. It filed an Amended Return on June 20 , 2008, which reflecte~

DEC IS IO N CTA EB No. 808 Page 3 of2 1 total zero-rated sales of 12 2,709 ,703 ,123.71 , importation of goods amounting to 12 174,836,441 .67 with input tax of 12 20 ,980 ,373 .00 , and purchase of services of 12 478 ,859 .92 with input tax of 12 57,463.19. Petitioner filed its original VAT Return for the first quarter of 2007 on April 24 , 2007 . It then filed an Amended Return on June 20 , 2008 , which reflected total zero-rated sales of 12 2,672 ,732 ,942 .84 , importation of goods amounting to 12 195,424,758 .14 with input tax of 12 23,450 ,971 .00 , and purchase of services of 12 1,232 ,383.92 with input tax of 12 147,886 .07 . Pursuant to Section 4.112-1 of Revenue Regulations No. 16-2005 , petitioner filed its claim for refund/tax credit with the One-Stop-Shop Center of the Department of Finance on September 24 , 2008 , per Application No. 54766 in the amount of 12 21 ,037 ,836 .19 for the fourth quarter of 2006 , and per Application No. 54765 in the amount of 12 23 ,598 ,857 .07 for the first quarter of 2007 . As respondent did not act on petitioner's claim for refund or tax credit, petitioner filed before the Court in Division Petitions for Review docketed as CTA Case Nos. 7859 and 7886 filed on January 9, 2009 and March 26 , 2009 , respectively . On February 4, 2009 , respondent filed her Answer in CTA Case No. 7859 , interposing certain Special and Affirmative Defenses. For CTA Case No. 7886 , respondent filed her Answer on May 4, 2009 , likewise raising the same Defenses . During the hearing held on June 4, 2009 , petitioner's counsel moved for the consolidation of CTA Case No. 7859 with CTA Case No. 7886 , which were f\ both pending before the Court in Division . There being no objection from

DEC IS I O N CTA EB No. 808 Page 4 of2 1 respondent's counsel , the Court in Division granted the consolidation of the two cases . On June 10, 2009 , the parties filed their "Consolidated Stipulation of Facts and Issues," which was approved in the Resolution dated June 29 , 2009. In the same Resolution , the pre-trial was terminated and the parties were ordered to proceed with the trial on the merits. Petitioner presented oral and documentary evidence and filed its Formal Offer of Evidence on December 18, 2009 , offering Exhibits "A" to "0 ", inclusive of sub-markings. During the hearing held on April 12, 2010 , counsel for respondent manifested that he is submitting the case for decision based on the pleadings . Respondent was then given thirty (30) days from April 12, 2010 or until May 12, 2010 to file her Memorandum , while petitioner was given twenty (20) days from receipt of the Resolution to file its memorandum . On June 17, 2010 , the case was submitted for decision after petitioner submitted its Memorandum on April 29 , 2010 , sans respondent's memorandum . In the assailed Decision , the Court in Division dismissed the consolidated Petitions for Review for lack of jurisdiction , considering that CTA Case No. 7859 was prematurely filed , while CTA Case No. was filed out of time . On May 12, 2011 , petitioner filed a Motion for Reconsideration of said Decision , arguing , in essence , that the Court in Division erred : (1) in dismissing the petitions on the ground of lack of jurisdiction due to alleged premature filing of I' CTA Case No. 7859 and due to alleged late filing in the case of CTA Case No. 7886; and (2) in retroactively applying the ruling in the case of Commissioner of

DEC ISION CTA EB No. 808 Page 5 of2 1 Internal vs. Aichi Forging Company of Asia, lnc.2 (hereinafter referred to as the "Aichi case") in deciding the instant case. The Court in Division ordered respondent to comment on the said Motion for Reconsideration , in its Resolution dated May 17, 2011 . However, respondent failed to do so . Nevertheless, the Court in Division denied petitioner's Motion for Reconsideration for lack of merit, in the assailed Resolution dated July 14, 201 , Hence, this recourse before the Court En Bane in this Petition for Review, praying that the assailed Decision promulgated on April 20, 2011 and Resolution dated July 14, 2011 be reversed , and that the case be remanded to the Court in Division for the determination of petitioner's excess and unutilized input VAT for the 4th quarter of 2006 and for the 1st quarter of 2007 on the basis of the evidence that has been presented and admitted. In the Resolution dated September 7, 2011 , respondent was ordered to file a comment on the instant Petition for Review within ten (1 0) days from receipt thereot_3 Respondent, however, failed to file said comment. On October 24 , 2011 , the Court En Bane resolved to give due course to the instant Petition for Review, and required the parties to file their respective memorandum . Only petitioner filed its Memorandum on November 16, 2011 while respondent failed to file her memorandum . Correspondingly, this case was deemed submitted for decision in the Resolution dated January 16, 2012 .4 Hence, this Decision. 2 G.R. No. 184823 , October 6, 2010. 3 Docket, pp. 44 to 45 . 4 Docket, p. 68

DEC IS IO N CTA EB No. 808 Page 6 of21 ASSIGNMENT OF ERRORS Petitioner assigned the following errors allegedly committed by the Court in Division , to wit: I. "THE 2ND DIVISION ERRED IN NOT RULING THAT RESPONDENT IS DEEMED TO HAVE WAIVED THE DEFENSES OF PREMATURE FILING AND LATE FILING OF THE JUDICIAL CLAIMS WITH THE CTA, PURSUANT TO RULE 9, SECTION 1, OF THE RULES OF COURT; THUS , THE 2ND DIVISION COULD ENTERTAIN AND EXERCISE JURISDICTION OVER THE CASE AND RIGHTFULLY RENDER A DECISION THEREON BASED ON THE EVIDENCE FORMALLY OFFERED AND ADMITTED . II. THE 2ND DIVISION ERRED IN DENYING THE PETITIONS DUE TO ALLEGED PREMATURE FILING AND LATE FILING . THE FACT IS THAT THE PETITIONS WERE FILED WITH THE CTA WITHIN THE PERIOD SET BY PREVAILING COURT RULINGS AT THE SAME TIME THEY WERE FILED . Ill. THE 2ND DIVISION ERRED IN RETROACTIVELY APPLYING THE AICHI RULING IN DISMISSING THE PETITIONS IN THESE CONSOLIDATED CASES ." Petitioner's Arguments Petitioner argues that since respondent failed to plead in her answer the defense that the petitions failed to state a cause of action due to premature fil ing I late filing , respondent is deemed to have waived the same . Thus , the Court in Division could entertain the case and exercise jurisdiction over it, and can render a decision thereon on the merits. Furthermore , petitioner contends that the petitions were filed with in the period set by prevailing court rulings when they were filed and hence, the filings were not premature nor late.

DEC ISION CTA EB No. 808 Page7of21 Finally, petitioner asserts that the Aichi case should not be given retroactive application . THE COURT EN BANC'S RULING The Court En Bane finds no merit in the instant Petition for Review. The premature or late filing of the Petitions for Review before the court a quo involves a question of jurisdiction, not simply of the respondent's failure to state a cause of action which can be waived. Section 112 of the NIRC of 1997, as amended by Republic Act No. (RA) 9337 ,5 provides as follows : "SEC . 112. Refund or Tax Credits of Input Tax.- (A) Zero-rated or Effectively Zero-rated Sales. - Any VAT- registered person , whose sales are zero-rated or effectively zero- rated may, within two (2) years after the close of the taxable quarter when the sales were made , apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales , except transitional input tax, to the extent that such input tax has not been applied against output tax: xxx XXX XXX XXX (C) Period within which Refund or Tax Credit of Input Taxes shall be Made.- In proper cases , the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof. In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act ..r{ on the application within the period prescribed above , the ' . 5 AN ACT AMEN DfNG SECTIONS 27, 28 , 34, 106, 107, 108, 109, 110, I l l , 112, 11 3, 114, 116, 117, 119, 121 , 148 , 15 1,236,237 AND 288 OF T HE NAT IONAL INTERNAL REVENUE CODE OF I997 , AS AMENDED, AND FOR OTHE R PURPOS ES.

DEC IS IO N CTA EB No. 808 Page 8 of21 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 . xxx xxx xxx." (Emphases supplied) In the Aichi case , the Supreme Court held : "A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the return of taxes erroneously or illegally collected . In both cases, a taxpayer must prove not only his entitlement to a refund but also his compliance with the procedural due process as non- observance of the prescriptive periods within which to file the administrative and the judicial claims would result in the denial of his claim. XXX XXX XXX Section 112(0)6 of the NIRC clearly provides that 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 case of full or partial denial by the CIR, the taxpayer's recourse is to file an appeal before the CTA within 30 days 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 refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days . In this case , the administrative and the judicial claims were simultaneously filed on September 30 , 2004 . Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-day period . For this reason , we find the filing of the judicial claim with the CTA premature . Respondent's (petitioner in these cases) assertion that the non-observance of the 120-day period is not fatal to the filing of a judicial claim as long as both the administrative and the judicial claims are filed within the two-year prescriptive period has no legal basis. There is nothing in Section 112 of the NIRC to support t respondent's view. Subsection (A) of the said provision states that 'any VAT-registered person , whose sales are zero-rated or effectively zero-rated may, within two years after the close of the 6 Now Section 11 2(C), as renumbered by RA 9337.

DEC ISION CTA EB No. 808 Page 9 of2 1 taxable quarter when the sales were made , apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales .' The phrase 'within two (2) years x x x apply for the issuance of a tax credit certificate or refund ' refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA. This is apparent in the first paragraph of subsection (D) of the same provision , which states that the CIR has '120 days from the submission of complete documents in support of the application filed in accordance with Subsections (A) and (B)' within which to decide on the claim . In fact , applying the two-year period to judicial claims would render nugatory Section 112(0)7 of the NIRC, which already provides a specific period within which a taxpayer should appeal the decision or inaction of the CIR. The second paragraph of Section 112(0)8 of the NIRC envisions two scenarios: (1) when a decision is issued by the CIR before the lapse of the 120-day period; and (2) when no decision is made after the 120-day period. In both instances, the taxpayer has 30 days within which to file an appeal with the CTA. As we see it then, the 120-day period is crucial in filing an appeal with the CTA. With regard to Commissioner of Internal Revenue v. Victorias Milling, Co., Inc. relied upon by respondent, we find the same inapplicable as the tax provision involved in that case is Section 306 , now Section 229 of the NIRC. And as already discussed , Section 229 does not apply to refunds/credits of input VAT, such as the instant case . In fine, the premature filing of respondent's claim for refund/credit of input VAT before the CTA warrants a dismissal inasmuch no jurisdiction was acquired by the CTA. xxx xxx xxx." (Emphases supplied) The foregoing jurisprudence is clear on the importance of the faithful compliance by the concerned taxpayer with the procedural due process as the non-observance of the prescriptive period within which to file the judicial cla im would result in the denial of the same . It must be emphasized that the High Court used the phrase "no jurisdiction was acquired by the CTA ", thereby indicating that the timely filing with this Court within the 30-day period contemplated under said.tl\ 7 8 ld. " ld.

DEC ISIO N CTA EB No. 808 Section 112 is jurisdictional. In other words, the Supreme Court could not have used such phrase so loosely, if the timely filing with this Court is not jurisdictional. Hence, the concerned taxpayer must file his judicial claim within the said 30-day period . Otherwise, the Court in Division will not acquire jurisdiction over the subject matter or nature of the action. Apropos , jurisdiction over the subject matter or nature of an action is fundamental for a court to act on a given controversy,9 and is conferred only by law and not by the consent or waiver upon a court which , otherwise , would have no jurisd iction over the subject matter or nature of an action . Lack of jurisdiction of the court over an action or the subject matter of an action cannot be cured by the silence , acquiescence , or even by express consent of the parties .10 Moreover, jurisdiction of a court over the nature of the action and its subject matter does not depend upon the defenses set forth in an answer11 or a motion to dismiss.12 Thus , there can be no merit on petitioner's contention that since respondent failed to plead in her answer the defense that the petitions failed to state a cause of action due to premature filing I late filing , respondent is deemed to have waived the same. Petitioner cannot invoke the first sentence of Section 1, Rule 9 of the 1997 Rules of Civil Procedure , since the applicable provision is the second sentence thereof. For easy reference , the said Section is quoted as follows : "SECTION 1. Defenses and objections not pleaded.- Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived . However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject -~ 9 Commissioner of Internal Revenue vs. Villa, et al., G.R. No . L-23988, 2 January 1968. r� 10 Laresma vs. Abel/ana, G. R. No. 140973, November I I, 2004. 11 Salas vs. Castro, G.R. No. I004 16, December 2, 1992. 12 Hi/ado vs. Chavez, G.R. No. 134742, September 22, 2004.

DEC ISIO N CTA EB No. 808 Page II of2 1 matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim ." (Emphases and underscoring supplied) In support of its argument that the applicable provision is the first sentence of the above-quoted provision , petitioner opines that the Court in Division has jurisdiction to entertain its Petitions for Review in CTA Case Nos. 7859 and 7886 by citing Section 7 of RA 1125, as amended by RA 9282 , precisely in this manner: "'Sec. 7 Jurisdiction. The CTA shall exercise : (a) Exclusive appellate jurisdiction to review by appeal , as herein provided : (1) XXX (2) Inaction by the Commissioner of Internal Revenue in cases involving x x x refunds of internal revenue taxes, fees or other charges' (Underscoring supplied)" Petitioner then concluded that since the subject matter in the instant case is the "refund of internal revenue taxes", the Court in Division has jurisdiction. Petitioner is gravely mistaken. It has wittingly or unwittingly quoted and misread said Section 7. The rule is that in order to ascertain whether a court has jurisdiction or not, the provisions of the law should be inquired into.13 However, the legislative intent must be ascertained from a consideration of the statute as a whole , and not of an r isolated part or a particular provision alone.14 Indeed , Section 7 of RA 112515, as amended by RA 928216, enumerates 13 Soller, et al. vs. Sandiganbayan, et al. , G.R. Nos. 14426 1-62, May 9, 200 I. 14 Maceda vs. Macaraig, Jr., et al., G.R. No. 88291 , May 31, 1991. 15 AN ACT CREATING THE COURT OF TAX APPEALS.

DEC ISION CTA EB No. 808 Page 12 of21 over which cases this Court has exclusive appellate jurisdiction . Its paragraph (a) , sub-paragraph (2) , completely provides : "SEC. 7. Jurisdiction.- The CTA shall exercise : (a) Exclusive appellate jurisdiction to review by appeal , as herein provided : XXX XXX XXX (2) Inaction by the Commissioner of Internal Revenue in cases involving disputed assessments, refunds of internal revenue taxes , fees or other charges, penalties in relation thereto , or other matters arising under the National Internal Revenue Code or other laws administered by the Bureau of Internal Revenue , where the National Internal Revenue Code provides a specific period for action, in which case the inaction shall be deemed a denial ; (Emphases supplied) XXX XXX xxx ." It is plain from the foregoing that it is the inaction of the Commissioner of Internal Revenue which is the subject of the "[e]xclusive appellate jurisdiction" of this Court "to review by appeal". The phrase following the words "Inaction by the Commissioner of Internal Revenue" merely enumerates the cases , which included "refunds of internal revenue taxes", to which said inaction shou ld pertain . Thus, the subject matter is the said inaction of the respondent, and not the case involving such inaction . Having looked into the provision of law regarding this Court's jurisdiction , it is pertinent to determine, as applied to petitioner's case , whether the Court in Division could indeed entertain and exercise jurisdiction over the same, an~ 16 AN ACT EXPANDfNG THE JURISD ICT ION OF THE COURT OF TAX APPEALS (CTA), ELEVATJNG ITS R.ANK TO THE LEVEL OF A COLLEG IATE COURT WITH SPECIAL JUR.ISDICTlON AND ENLARG ING ITS MEMBERSH IP, AMENDJNG FOR. THE PURPOSE CERTAfN SECTlONS OF REPUBLIC ACT NO. 11 25, AS AMENDED, OTHERW ISE KNOWN AS THE LAW CREATfNG THE COURT OF TAX APPEALS, AND FOR OTHER PURPOSES.

DEC ISION CTA EB No. 808 Page 13 of2 1 rightfully render a decision thereon based on the evidence formally offered and admitted . The answer is in the negative. The Aichi case stressed the importance of observing the 120-day and 30- day periods under Section 112 of the NIRC of 1997, as amended by RA 9337. To reiterate , the Supreme Court said in the said case : "xxx, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days . XXX XXX XXX xxx. The second paragraph of Section 112(0)17 of the NIRC envisions two scenarios : (1) when a decision is issued by the CIR before the lapse of the 120-day period ; and (2) when no decision is made after the 120-day period . In both instances, the taxpayer has 30 days within which to file an appeal with the CTA. As we see it then, the 120-day period is crucial in filing an appeal with the CTA. " (Emphases supplied) But even if We disregard the instructive ruling in the Aichi case , a closer examination of the pertinent law on the jurisdiction of this Court wou ld reveal that the timely filing of the refund claim under Section 112 greatly affects its jurisdiction . In relation to the above-quoted Section 7(a)(2) of RA 1125, as amended by RA 9282 , Section 11 of the same law prescribes how the said appeal should be taken , viz: "SEC . 11 . Who May Appeal; Mode of Appeal; Effect of Appeal.- Any party adversely affected by a decision , ruling or inaction of the Commissioner of Internal Revenue , the t Commissioner of Customs , the Secretary of Finance, the Secretary of Trade and Industry or the Secretary of Agriculture or the Central Board of Assessment Appeals or the Regional Trial Courts may file 17 ld .

DEC ISION CTA EB No. 808 Page14of21 an appeal with the CTA within thirty (30) days after the receipt of such decision or ruling or after the expiration of the period fixed by law for action as referred to in Section 7(a)(2) herein . Appeal should be made by filing a petition for review under a procedure analogous to that provided for under Rule 42 of the 1997 Rules of Civil Procedure with the CTA within thirty (30) days from the receipt of the decision or ruling or in the case of inaction as herein provided, from the expiration of the period fixed by law to act thereon . xxx (Emphases supplied) XXX XXX xxx ." One of the "inaction(s) by the Commissioner of Internal Revenue" being contemplated in these provisions is that found in Section 112 of the NIRC of 1997,18 as amended by RA 9337 ,-the provision to which petitioner anchors the its claims for refund-wherein it "provides a specific period of action", i.e., a period of 120 days from the date of submission of complete documents for the Commissioner of Internal Revenue , to grant, in proper cases , a refund or to issue a tax credit certificate for creditable input taxes due or paid attributable to zero- rated or effectively zero-rated sales. The lapse of such 120-day period is indeed crucial since it is only at such time that "the inaction shall be deemed a denial". Correspondingly, the applicant/taxpayer ought to observe the 30-day period within which to make the appeal to this Court, in view of such denial. Applying Sections 7(a)(2) and 11 of RA 1125, as amended by RA 9282 , in relation to Section 112(C) of the NIRC of 1997, as renumbered by RA 9337: (1) when petitioner filed its appeal via a Petition for Review on January 9, 2009 , which was docketed as CTA Case No. 7859 , the specified period of 120 days' inaction on the part of the respondent over the administrative claim of petitioner have not fully lapsed , as to clothe the Court in Division with jurisdiction to~ 18 The other "inaction" is fou nd in Section 22 8 ofthe N IRC of 1997.

DEC IS IO N CTA EB No . 808 Page 15 of2 1 entertain said Petition for Review; and (2) when petitioner filed its appeal via a Petition for Review on March 26 , 2009 docketed as CTA Case No. 7886 , the period of 30 days to appeal the inaction on the part of respondent over the administrative claim of petitioner, which inaction is already deemed a denial by virtue of the lapse of the 120-day period , have already expired , the Court in Division has no more jurisdiction to entertain the same . As held in Yao vs. Court of Appeals, et al.19 "The right to appeal is not a constitutional , natural or inherent right. It is a statutory privilege of statutory origin and , therefore, available only if granted or provided by statute . Since the right to appeal is not a natural right nor a part of due process , it may be exercised only in the manner and in accordance with the provisions of law. Corollarily, its requirements must be strictly complied with . "That an appeal must be perfected in the manner and within the period fixed by law is not only mandatory but jurisdictional. " (Emphases supplied) Moreover, it should be recalled that this Court is a court of special jurisdiction . As such , it can only take cognizance of such matters as are clearly within its jurisdiction .20 Relative thereto , when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, the court shall dismiss the claim .21 r Such being the case , We see no cogent reason to reverse the ruling of the Court in Division in dismissing the Consolidated Petitions for Review. 19 G.R. No. I32428, October 24, 2000. �2 Ker & Company, Ltd. vs. Court ofTax Appeals, eta!. , G.R. No. L- I2396, January 3 I, I 962. 21 Section I, Rule 9, Rul es ofCourt.

DEC ISION CTA EB No. 808 Page 16 of2 1 The interpretation of Section 112 of the NIRC of 1997 by the Supreme Court in the Aichi case constitutes as part of the law of the land as of the date it was originally passed. Petitioner's contention that the Aichi case should be applied prospectively is without merit. The Supreme Court's interpretation of a statute constitutes part of the law as of the date it was originally passed since it merely establishes the contemporaneous legislative intent that the interpreted law carried into effect. 22 In Columbia Pictures, Inc., eta/. vs. Court of Appeals, eta/., 23 the Supreme Court qualified this principle , to wit: "It is consequently clear that a judicial interpretation becomes a part of the law as of the date that law was originally passed, subject only to the qualification that when a doctrine of this Court is overruled and a different view is adopted, and more so when there is a reversal thereof, the new doctrine should be applied prospectively and should not apply to parties who relied on the old doctrine and acted in good faith . To hold otherwise would be to deprive the law of its quality of fairness and justice then , if there is no recognition of what had transpired prior to such adjudication ." Based on the foregoing , the general rule is that judicial interpretation becomes part of the law as of the date it was originally passed , and the exception thereto is that when a doctrine laid down by the High Court is subsequently overruled or reversed , in which case , the new doctrine will only be applied prospectively. t The Aichi case , however, did not overrule or reverse any existing doctrine laid down by the Supreme Court. This must be so because the doctrinal 22 Victorias Milling Co., Inc. vs. Intermediate Appellate Court, eta!. , G.R. No. 66880, August 2, 1991 . 23 G.R. No. I I03 18, August 28 , 1996.

DEC IS IO N CTA EB No. 808 Page 17of2 1 pronouncement in the said case was not done by the Supreme Court En Bane, but by a Division thereof (i.e., by its First Division) . In this connection , it must be recalled that Section 4(3) , Article VIII of the 1987 Constitution provides that "no doctrine or principle of law laid down by the court in a decision rendered en bane or in division may be modified or reversed except by the court sitting en banc'i2.4. Furthermore , the pronouncement made by the Supreme Court in the case of Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue25 (hereinafter referred to as the "Atlas case"), to the effect that the filing of the administrative and judicial claims for refund of input VAT on zero- rated sales should be made within the two-year prescriptive period , cannot be said to have been reversed or modified by the Aiehi case. It must be emphasized that the At/as case involved the refund/credit of the input VAT on purchases of capital goods and on its zero-rated sales in the taxable quarters of the years 1990 and 1992. Thus, the said case was decided interpreting the pertinent provisions of the NIRC of 1977 [Presidential Decree No. (PO) 1158], as amended by Executive Order No. (EO) 27326 (the law in force in the years 1990 and 1992), which took effect on January 1, 1988?7 Upon the other hand , the Aiehi case entailed the refund/credit of input VAT for the period July 1, 2002 to September 30 , 2002 . Hence, it was decided applying and interpreting Section 112 of the NIRC of 1997, which took effect on January 1, 1998.28 24 Underscoring supp lied . 25 G .R. Nos . 141 104 and 148763, June 8, 2007. 26 ADOPT ING A VALUE-AD DED TAX, AMENDING FOR THIS PURPOS E CE RTAIN PROVISI ONS OF T HE NATIONAL INTERNAL REVENUE CODE, AND FOR OTHER PURPOSES . 27 Section 30, Executive Order No . 273, series of 1987. 28 Section 8, Repub lic Act No . 8424.

DEC IS IO N CTA EB No. 808 Page 18 of2 1 To bolster this point, a comparison of the provisions in question is in order, to wit: NJRC of 1977, as amended by EO 273 NJRC of 1997 (renumbered by RA 9337) SEC . 106. Refunds or tax credits SEC . 112. Refunds or Tax of input tax. - x x x. Credits of Input Tax. - (b) Zero-rated or effectively zero- (A) Zero-rated or Effectively Zero- rated sales. - Any person , except rated Sales. - Any VAT-registered those covered by paragraph (a) person , whose sales are zero-rated above, whose sales are zero-rated or effectively zero-rated may, within may, within two years after the close two (2) years after the close of the of the quarter when such sales were taxable quarter when the sales were made, apply for the issuance of a made, apply for the issuance of a tax credit certificate or refund of the tax credit certificate or refund of input taxes attributable to such sales creditable input tax due or paid to the extent that such input tax has attributable to such sales , except not been applied against output tax. transitional input tax , to the extent that such input tax has not been xxxx applied against output tax: x x x (e) Period within which refund of (C) Period within which Refund or input taxes may be made by the Tax Credit of Input Taxes shall be Commissioner. - The Commissioner Made. - In proper cases , the shall refund input taxes within 60 Commissioner shall grant a refund days from the date the application or issue the tax credit certificate for for refund was filed with him or his creditable input taxes within one duly authorized representative . No hundred twenty (120) days from the refund of input taxes shall be date of submission of complete allowed unless the VAT-registered documents in support of the person files an application for refund application filed in accordance with within the period prescribed in Subsections (A) and (B) hereof. paragraphs (a) , (b) and (c) as the case may be. In case of full or partial denial of the claim 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 supplied)

DEC IS IO N CTA EB No. 808 Page 19of2 1 It can be easily discerned from the foregoing comparison that in the refund of input VAT attributable to zero-rated sales , unlike Section 106 of the NIRC of 1977, as amended by EO 273 , Section 112 of the NIRC of 1997 spelled out the judicial remedy , by specifying the court where appeal should be taken , and the period within which the same appeal should be made , in case of full or partial denial of the claim , or in case of inaction on the part of the Commissioner of Internal Revenue . Thus , considering that the two cases were decided under different sets of law, it cannot be said that the Aichi case overturned or abandoned the doctrinal pronouncement in the Atlas case . The deliberate selection in a statute of language differing from that of earlier acts on the subject indicates that a change of law was intended .29 In other words , the change in phraseology by amendment of a provision of law indicates a legislative intent to change the meaning of the provision from that it orig inally had .30 Logically, a different meaning of the law entails a different interpretation . An amended act is ordinarily to be construed as if the original statute had been repealed , and a new and independent act in the amended form had been adopted in its stead .31 The Supreme Court, by tradition and in Our system of judicial administration , has the last word on what the law is. It is the final arbiter of any justiciable controversy.32 Such being the case , in Commission on Higher Education vs. Dasig,33 the High Court said : 29 Portillo vs. Salvani, G.R. No. L-32 18 1, March 10, 1930, citing Brewster vs. Gage [1930] , U.S. Sup . Ct. Advance Opinion s, p. 183. �3 Commissioner ofCustoms vs. Court of Tax Appeals, et al., G.R. Nos. L-48886-88, July 2 1, 1993. 31 Estrada vs. Caseda, No . L- 1560, October 25 , 1949 , 84 Phil. 791. 32 Nacuray, et a!. vs. National Labor Relations Commission, et a!., G.R. Nos. 114924-27, March 18, 1997. 33 G.R. No . 172776, December 17, 2008 .

DEC ISIO N CTA EB No. 808 Page 20 of2 1 "... it is the duty of lower courts to obey the decisions of the Supreme Court and render obeisance to its status as the apex of the hierarchy of courts . 'A becoming modesty of inferior courts demands conscious realization of the position that they occupy in the interrelation and operation of the integrated judicial system of the nation. ' 'There is only one Supreme Court from whose decision all other courts should take their bearings ,' so declared Justice J. B. L. Reyes ." Thus , Our adherence to the doctrine laid down in the Aichi case is well- founded , despite the fact that this Court has previously issued several decisions or rulings which were contrary to the said case. WHEREFORE , all the foregoing considered , the instant Petition for Review is hereby DENIED. The assailed Decision dated April 20 , 2011 and Resolution dated July 14, 2011 , is hereby AFFIRMED . SO ORDERED. WE CONCUR: .. AEsR~ ~~~stiUcYe \LA- kr . ~ ERNESTO D. ACOSTA ~-~z, CcAS.T~AaN.E-D-A~, Jf.lfC.'l. - J~ANITO~ C. Associate Justice CAESA~SANOVA ~t~'?= ESPER OLGA PALANCA'---EN....R,. IQUEZ Associate Justice ~� N. 1\4~~ - G~ CIELITO N. MINDARO-GRULLA Associate Justice

DEC ISION CTA EB No. 808 Page 2 1 of2 1 h-/1-~~d.~/~ AMELIA R. COTANG~t-;;ANALASTAS Associate Justice CERTIFICATION Pursuant to Section 13, Article VIII of the Constitution , it is hereby certified that the conclusions in the above decision were reached in consultation before the case was assigned to the writer of the opinion of the Court En Bane. ~~ ~ ERNESTO D. ACOSTA Presid ing Justice

REPUBLIC OF THE PHILIPPINES Court ofTax Appeals QUEZON CITY En Bane CTA EB CASE NO. 808 (CTA Case Nos. 7859 & 7886) PHILEX MINING CORPORATION, Petitioner, -versus- Present: Acosta, P.J. Castaneda, Jr., Bautista, Uy, Casanova, Palanca-Enriquez, Fabon- Victorino, Mindaro-Grulla, and Cotangco-Manalastas, JJ. COMMISSIONER OF INTERNAL Promulgated: REVENUE, tW4~~ Respondent. JUN 06 2012 /,''P,& ~ .. x----------------------------------------------------------------------------------------------------x CONCURRING AND DISSENTING OPINION BAUTISTA,[.: Prior determinations deemed to have finality and acted upon accordingly, demands examination. The effect of a subsequent ruling as to invalidity may have to be considered in various aspects. It may have consequences which cannot just be ignored.1 And with the above said principle, it is my considered view that the factual circumstances present in the case at bench supports the application of the then prevailing jurisprudence at the time the claim was made. 1 AlbinoS. Co v. Court of Appeals, et al., G.R. No. 100776, October 28, 1993, 277 SCRA 444, citing Chicot Counh; ~ Droi""8' Di<trict v. 80>ta Stv t� BvM, 308 US 371,374/1940/.

CONCURRING AND DISSENTING OPINION CfA EB Case No. 808 (CfA Case Nos. 7859 & 7886) When petitioner filed its claims for refund/ tax credit with the One-Stop-Shop Center of the Department of Finance on September 24, 2008, in the following amounts of ~21,037,836 . 19 for the fourth quarter of the taxable year 2006, and ~23,598,857.07 for the first quarter of the taxable year 2007; and due to respondent' s inaction, it accordingly filed Petitions for Review with this Court on January 9, 2009, docketed as CTA Case No. 7859, and on March 26, 2009, docketed as CTA Case No. 7886, the then controlling doctrine is that of the case of Commissioner of Internal Revenue v. Mirant Pagbilao Corporation [Formerly Southern Energy Quezon, Inc.).2 The case of Commissioner of Internal Revenue v. Aichi Forging Company of A sia, Inc.,3 has yet to be promulgated on October 6, 2010. And where there has been justifiable reliance on Our decisions, and those who have so relied may be substantially harmed if retroactive effect is given, where the purpose of the new rule can be adequately effectuated without giving it retroactive operation, or where retroactive operation might greatly burden the administration of justice, then it is Our duty to apply the new rule prospectively.4 Therefore, albeit the latter ruling is more in accordance with the letter and spirit of Section 112 of the 1997 National Internal Revenue Code ("NIRC"), as amended, it would be the height of injustice to impose a new ruling, on the basis of the so-called "adherence to precedence," for the latter doctrine is clearly 2 G.R. No. 172129, September 12, 2008, 565 SCRA 154. Jl 3 G.R. No. 184823, October 6, 2010. 4 Magtoto v. Manguera, et al., G.R. Nos. L-37201-02, L-37424, and L-38929, March 3, 1975, 63 SCRA 4, Concurring Opinio~ penned by Justice Felix Q. Antonio, with Justices Antonio P. Barred o and Cecilia Mufioz-Palma,~ <OU<U<rmg. 7 '

CONCURRING AND DISSENTING OPINION CTA EB Case No. 808 (CTA Case Nos. 7859 & 7886) promulgated after the taxpayer-claimant had faithfully relied and complied with the Court' s former ruling. Even the taxpayer-claimant itself could not have foreseen that after it had filed its claims before the administrative and judicial fora, a subsequent ruling, either modifying or overruling a previous one, would be issued that would put to naught its claims. Further, the same would run counter with the use of the word "may" in Section 112(C) of the 1997 NIRC, as amended, which indicates that the judicial recourse within thirty (30) days after the lapse of the one hundred twenty (120)-day period is directory and permissive, and not mandatory nor jurisdictional as long as the claim is made within the two (2)-year prescriptive period under Sections 1125 and 2296 of the of the same Code.? s SEC. 112. Refunds or Tax Credits of Input Tax. - (A) Zero-rated or Effectively Zero-rated Sales. - Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quar ter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent tha t such input tax has not been applied against output tax: Provided, however, Tha t in the case of zero-ra ted sales under Section 106(A)(2)(a)(l ),(2) and (B) and Section 108 (B)(l) and (2), the acceptable foreign currency exchange proceeds thereof had been duly accounted for in accordance with the rules and regula tions of the Bangko Sentral ng Pilipinas (BSP): Provided, further, That where the taxpayer is engaged in zero-rated or effectively zero-rated sale and also in taxable or exempt sale of goods or properties or services, and the amount of creditable input tax due or paid cannot be directly and entirely attributed to any one of the transactions, it shall be allocated proportiona tely on the basis of the volume of sales. 6 SEC. 229. RecovenJ of Tax Erroneously or Illegally Collected. - No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under pro test or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of cr c�., I payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, Tha t the Commissioner may, even without a w ritten claim therefor, refun d or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid. ~~;,ione< of Jntom al R~enue v. Akhi Fo, ging Company of A'ia, Ino., A EB No. 416, Febwary

CONCURRING AND DISSENTING OPINION CfA EB Case No. 808 (CfA Case Nos. 7859 & 7886) With the pronouncements made in the cases of Commissioner of Internal Revenue v. Toledo Power, Inc.,Band Commissioner of Internal Revenue v. San Roque Power Corporation,9 it must be borne in mind that no claim can be had, whether in the administrative or judicial fora, beyond the two (2)-year period provided under Section 112 of the 1997 NIRC, as amended. Therefore, if the two (2)-year prescriptive period is about to expire, there is no need to wait for the denial of the claim by the Commissioner of Internal Revenue or its inaction after the expiration of the one hundred twenty (120)-day period before the taxpayer can lodge its appeal with this Court.10 Applying the above disquisitions, petitioner had until two (2) years from the close of the last taxable quarter of the year 2006, and two (2) years from the close of the first taxable quarter of the year 2007, respectively, within which to file both its administrative and judicial claims. Thus, while I find the administrative claims filed within the prescribed period, as well as, the Petition for Review, docketed as CTA Case No. 7886, covering the first quarter of the taxable year 2007, I, however, must rule that the Petition for Review, docketed as CTA Case No. 7859, covering the last quarter of the taxable year 2006, was made beyond the above mentioned period. In fine, the Petition for Review, docketed as CTA Case No. 7859 should be dismissed, not for being prematurely filed, but for being filed out of time, while the Petition for Review, docketed as CTA Case No. 7886, should be reinstated. s CfA EB Case No. 321 (CfA Case Nos. 6805 & 6851), May 7, 2008. 9 CfA EB Case No. 408 (CfA Case No. 6647), March 25, 2009. ;,:;"'fone< of Intern.J Revenue v. CE Cebu Geothermal Pow" Compnny, Inc, CTA EB Cn"' No. 426, ~

CONCURRING AND DISSENTING OPINION CTA EB Case No. 808 (CTA Case Nos. 7859 & 7886) Accordingly, I vote that the Petition for Review be PARTIALLY GRANTED. The Petition for Review, docketed as CTA Case No. 7859, should be DISMISSED for lack of jurisdiction, while the Petition for Review, docketed as CTA Case No. 7886, should be REINSTATED. LO