EDC BURGOS WIND POWER CORPORATION v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY SPECIAL THIRD DIVISION EDC BURGOS WIND POWER CTA CASE NO. 9446 (CTA EB No. CORPORATION, 2548) Petitioner, Mem bers: -versus - RINGPIS-LIBAN, Chairperson, MODESTO-SAN PEDRO, and FERRER-FLORES, Jl. COMMISSIONER OF INTERNAL Promulgated: REVENUE, Respondent. NOV 0 5 2025 x-------------------------------------------- ---------~--t-~~~~:-~-~--------------x RESOLUTION RINGPIS-LIBAN, ].: Submitted before this Court is respondent's Motion for Partial Reconsideration (Re: Decision promulgated 19 Mqy 2025) flied on June 9, 2025, with petitioner's Comment (Re: Motion for Partial Reconsideration dated June 9, 2025) ftled on June 25, 2025. O n J anuary 31, 2024, the Court En Bane rendered an Amended D ecision in EB Case No. 2548 (CTA Case No. 2446), remanding the case to this Court for the determination o f the refundable amount due to petitioner. Accordingly, the Court promulgated a D ecision o n May 19, 2025, partially granting petitioner's claim for unutilized input value-added tax 0fAT) attributable to its zero-rated sales for the fust (1sr) quarter of calendar year (CY) 2015, the dispositive portion o f which reads as follows: "WHEREFORE, in light o f the foregoing considerations, the presen t Petition for Review is PARTIALLY GRANTED. Accordingly, respondent is ORDERED TO REFU ND or ISSU E A TAX CREDIT CERTIFICATE in favor of petitioner the amount o f P3,114,588.43, representing the latter's excess and unutilized input VAT attributable to its zero-rated sales for the 1" quarter of CY 2015. SO ORDERED."

RESOLUTION CTA Case No. 9446 (CTA EB No. 2548) In the motion, respondent argues that the Court erred in ruling that petitioner is entitled to refund the reduced amount of P3,114,588.43. Respondent expounds that the Court should have dismissed the Petition for Review for petitioner's failure to substantiate its claim for refund in the administrative level. He asserts that since a decision was rendered in the administrative level, the Court's jurisdiction becomes strictly appellate in nature and should only have confined itself to the findings in respondent's decision. Furthermore, respondent contends that petitioner cannot submit documents it did not submit at the administrative level since the Court is limited to the issue of whether respondent's decision was proper given the evidence submitted during the administrative proceedings. Lastly, respondent insists that petitioner is not entitled to the refund sought considering that there were no zero-rated safes reported for the 1sr and 2"d quarters of 2014 - thus, no creditable input tax during the same period; there was no direct attribution established between the input taxes and petitioner's zero-rated sales; and, the burden of proof lies on petitioner to establish the factual basis for its claim for refund. In its Comment, petitioner asserts that respondent's motion deserves scant consideration for the following reasons: that this :Court is a "court of record" and conducts a trial de novo and may give credence to all evidence presented by petitioner, including that which may not have been submitted to respondent; that the National Internal Revenue Code of 1997, as amended, does not impose any requirement that zero-rated sales must be made within the same period during which the input tax subject of the refund claim was paid or incurred; that petitioner has sufficiently established that it incurred input tax.es on its purchase of goods and services, as well as its importation of goods and purchases , are attributable to its zero-rated sales of power; and that" petitioner presented sufficient evidence to prove its compliance with the requisites for the grant of the VAT refund. As such, petitioner maintains that it is entitled to the refund sought. After due consideration, the Court find s respondent's Motion for Partial Reconsideration bereft of merit. Again, Section 8 of Republic Act No. 1125, as amended, declares this Court is a ((court of record". As such, it is required to conduct a trial de novo where the parties must present their evidence anew in order for the Court to take such evidence into consideration.1 The appealing party must establish that it is entitled to the refund being sought under substantive law. Correspondingly, the Court is authorized to conduct trial de novo, and consistent with this principle, 1 Commissioner ofInternal Revenue v. Manila Mining Corporation, G.R. No. 153204, August 31, 2005.

RESOLUTION CTA Case No. 9446 (CTA EB No. 2548) parties who come to court are required to prove every aspect of their case if they want the Court to take such evidence into consideration.2 Furthermore, the power of the Court to exercise its appellate jurisdiction does not preclude it from taking into account evidence that was not presented in the administrative claim before the Bureau of Internal Revenue (BIR).3 The question of whether the evidence submitted by a party is sufficient to warrant the granting of its prayer lies within the sound discretion and judgment of the Court. As cases flied before this Court are litigated de novo, the Court, is not governed strictly by technical rules of evidence, thus, is not precluded from considering evidence not presented at the administrative level for the paramount consideration remains the ascertainment of truth.4 While the Court weighs respondent's arguments, the evidence nonetheless has shown that petitioner was able to sufficiently prove that it was entitled to the grant of its claim. Petitioner satisfied all the evidentiary requirements for its entitlement to the claim of P3,114,588.43, as held in the assailed decision:5 "Under the eighth reqwstte, the input taxes claimed must be attributable to zero-rated or effectively zero-rated sales. However, where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionatelY allocated 011 the basis of sales 11olume. XXX Section 112(A) of the N IRC of 1997, as amended, does not require that zero-rated sales be generated within the same period as the purchases. However, this provision mandates that in order to claim for a refund/ tax credit of input VAT, there must be zero-rated sales or effectively zero-rated sales to which the input VAT sought to be refunded are attributable. For purposes of determining when petitioner can be said to be legally entitled to claim a refund of input tax due o r paid, what should matter is not the date when the purchases o f goods and services were made, but rather, the date when petitioner's zero-rated sales were made. For indeed, it is only at the time of such sale that petitioner can establish with certainty that the input taxes due or paid were either direct!J att1ibutable or otherwise allocable to its zero-rated sales. XXX 2 Philippine Airlines, Inc. (PAL) v. Commissioner of Internal Revenue, G.R. Nos. 206079-80, January 17, 2018; Commissioner of Internal Revenue v. Philippine National Bank, G.R. no. 180290, September 29, 2014. 3 Philippine Airlines, Inc. v. Commissioner of Internal Revenue and Commissioner of Internal Revenue v. Philippine Airlines, Inc., G.R. Nos. 206079-80 and 206309, January 17, 2018. 4 Commissioner of Internal Revenue v. Univation Motor Philippines, Inc. (formerly Nissan Motor Philippines, Inc.), G.R. No. 231581, April 10, 2019. s Decision, pp. 18-23.

RESOLUTION CTA Case No. 9446 (CTA EB No. 2548) Considering that the importations related to the P3,115,271.00 valid input VAT were used in the construction of the key components of the petitioner's Burgos Wind Power Project, the said input VAT of P3,115,271.00 can be wholly attributed to petitioner's declared zero-rated sales/ receipts for the 1" quarter of CY 2015 in the amount of P384,474,309.49. However, as stated earlier, pet1t10ner was able to properly substantiate only the amount of P384,390,069.13 out of its total declared zero-rated sales/receipts o f P3 84,474,309.49. Thus, with regard to petitioner's compliance with the eighth requisite, only the amount of P3,114,588.43 represents its valid input VAT attributable to its valid zero- rated sales/ receipts of P384,390,069.13: Valid Input VAT Claim on Importations fo r the 2nd P3,115,271 .00 Quarter of CY 2014 3 8 4,474,309 .49 Divided by: 384,390,069.13 Declared Zero-Rated Sales/ Receipts for the 1" P3,114,588.43 Q uarter of CY 2015 Multiplied by: Valid Zero-Rated Sales/ Receipts for the 1" Q uarter of CY 2015 Input VAT Attributable to Valid Zero-Rated Sales/ Receipts for the 1�� Quarter of CY 2015 XXX In flne, petitioner has sufficiently proven its entitlement to the refund or issuance of tax credit certificate in the amount of P3,114,588.43, representing excess and unutilized input VAT attributable to its zero-rated sales for the 1'' quarter of CY 2015." In view of the foregoing and there being no new matter or substantial issue raised by respondent in his Motionfor Partial Reconsideration, the Court finds no compelling reason to reverse or modify the conclusions reached in the Decision promulgated on May 19, 2025. ACCORDINGLY, premises considered, respondent's Motion for Partial Reconsideration (Re: Decision promulgated 19 M ay 2025) is DENIED for lack of merit. ~. ~ _, '--- MA. BELEN M. RINGPIS-LIBAN Associate Justice

RESOLUTION CTA Case No. 9446 (CTA EB No. 2548) We Concur: MARlAR