WNS GLOBAL SERVICES PHILIPPINES, INC. v. COMMISSIONER OF INTERNAL REVENUE

REPUBLIC OF THE PHILIPPINES COURT OF TAX APPEALS QUEZON CITY ENBANC WNS GLOBAL SERVICES CTA EB NO. 1453 PHILIPPINES, INC., (CTA Case No. 9061) Petitioner, Present: -versus- Del Rosario, PJ, Castaneda, Jr., COMMISSIONER OF INTERNAL Bautista, REVENUE, Uy, Casanova, Respondent. Fabon-Victorino, Mindaro-Grulla, Ringpis-Liban, and Manahan,JJ ,__ Promulgated: DEC 27 2017 II :s-oe<.m.. . X---------------------------------------------------------------------------------------------X RESOLUTION CASTANEDA, JR., J.: For resolution of the Court En Bane is petitioner's Motion for Reconsideration (Re: Decision dated 12 May 2017), filed on June 9, 2017, sans respondent's comment. For easy reference, the dispositive portion of the assailed Decision reads: "WHEREFORE, the instant Petition for Review is DISMISSED. Accordingly, the Resolutions dated October 29, 2015 and April 8, 2016, respectively, are AFFIRMED. ?t--

RESOLUTION CTA EB No. 1453 Page 2 of9 SO ORDERED."1 Petitioner argues in the instant motion that: "I. As a matter of substaqtial justice and equity and due to the peculiarity of the iqstant case, an exception to the doctrine of immutability ! of judgment necessitates second review, closer look and kirjtd consideration of the Honorable Court En Bane on the attending circumstances of the instant case. II. The First Judicial Cl~im filed on 8 August 2011 was timely filed and conforl(ned to the 120+30 day period provided under Section 112(C) of the NIRC. III. Even if the reckoning point of the 120-day period is on 1 July 2011, the Second Ju4icial Claim filed on 28 May 2015 was still timely filed bec~use the running of the 120-day period was tolled upon filing of the judicial claim on 8 August 2011. IV. With all due respect to the Honorable Court En Bane, Article 1155 of the New <;ivil Code is not applicable in the instant case."2 After careful consideration of the foregoing, the Court En Bane finds petitioner's arguments untenable. The principle of stare decisis requires this Court to follow the decision of the Supreme Court in G.R. No. 211739 Petitioner agrees with this. Court that the decision of the Supreme Court in G.R. No. 211739 has alr�ady attained finality under the doctrine of finality of judgment or immutability of judgment. However, petitioner argues that there are some recogqized exceptions to this rule, such as when the case involves significant, far-r�aching or of transcendental importance. However, it must be stressed that the principle of stare decisis requires this Court to follow the decision of the Supreme Court in G.R. No. 211739. In Carmela F. LazatinJ et al. v. Hon. Aniano A. Desierto as j- 1 Decision, Court En Bane Docket, p. 343. 2 Motion for Reconsideration (Re: Decision dated 12May 2017), Grounds for Reconsideration, Court En Bane Docket, pp. 349-350.

RESOLUTION CTA EB No. 1453 Page 3 of9 Ombudsman, and Sandiganbayan, Third Division,3 the Supreme Court explained the principle of stare debisis in this wise: "The doctrine of s(are decisis enjoins adherence to judicial precedents. It requires courts in a country to follow the rule established in a, decision of the Supreme Court thereof. That decision be�omes a judicial precedent to be followed in subsequent cases by all courts in the land. The doctrine of stare decisis is: based on the principle that once a question of law has been tlxamined and decided, it should be deemed settled and closed tp further argument. In Chinese Young A(en's Christian Association of the Philippine Islands v. Remi'rzgton Steel Corporation, the Court expounded on the importance of the foregoing doctrine, stating that: The doctrine of stare decisis is one of policy grounded on the necessity for securing certainty and stability of judicial decisions, thus: Time and again, th� court has held that it is a very desirable and necessary judicial practice that when a court has laid down a principle of law as applicable to a certain state of facts, it will adhere to th~t principle and apply it to all future cases in which the facts are substantially the same. Stare decisis et non quieta movere. StaQ.d by the decisions and disturb not what is settled. Stare decisi's simply means that for the sake of certainty, a conclusion reached in one case should be applied to those that folio}\' if the facts are substantially the same, even though the parties may be different. It proceeds from the first principle of justice that, absent any powerful countervailing consideratipns, like cases ought to be decided alike. Thus, where the satne questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue." Based on the above-quoted doctrine, where the same questions relating to the same event have been put forward by the parties similarly situated as in a previous case litigated and decided by a competent court, the rule of stare decisis is a bar to any attempt to relitigate the same issue. 9Z- 3 G.R. No. 147097. June 5, 2009.

RESOLUTION CTA EB No. 1453 Page 4 of9 Applying the pronouncemep.t of the Supreme Court in this case, this Court is therefore bound to apply the ruling of the Supreme Court in G.R. No. 211739, in relation to the doctrine of finality of judgment or immutability ofjudgment. As such, the Court En Bane finds no error when it ruled that: "On this score, We J1evisit the decision of this Court in WNS Philippines, Inc. v. Commissioner of Internal Revenue (First Judicial Claim). In petitioner's First Judicial Claim, this Court sustained the findings of the CTA 1st Division and concluded that petitioner's administrative claim was prematurely filed. Thus: 'A perusal of the documents reveals that petitioner submitted its documents twice. The first was when it filed its administrative claim on March 11, 2011. And the second was on July 1, 2011, when it submitted additional documents in support of its application for refund. This only shows that on March 11, 2011, the documents submitted by petitioner were not complete. For if petitioner finds the documents submitted on March 11, 2011 are already comp[ete, petitioner would not have submitted additional documents on July 1, 2011. xxx Based on the con$olidated cases of Commissioner of Internal Revenue vs. San Roque Power Corporation, Taganito Mining Corporation vs. Commissioner of Internal Revenue, Philex Mining Corporation vs. Commissioner ofInternatl Revenue, where it adopted the ruling in CIR vs. Aichi Forging Company ofAsia, Inc, the Supreme Court held that the 120-day period provided in Section 112(C) is mandatory and jurisdictional. Resort to the courts prior to the e~piration of the 120-day period is a patent violation of the doctrine of exhaustion of administrative remedies,, a ground for dismissing the judicial suit due to prematurity. In the instant case, petitioner filed its administrative claim for refund of unutilized input VAT for fiscal year ended March 31, 2010 in the amount of Php21,818,942.57 with l{evenue District Office ('RDO') No. 47, on March 11, 2011. Subsequently, on July 1, 2011, petitioner submitted additional documents to completely support its application for refund with the same RDO. Following the instructions of the Supreme Court in the aforesaid consolidated cases and Section ~

RESOLUTION CTA EB No. 1453 Page 5 of9 112(C) of the NIRC of 1997, as amended, respondent has 120 days from July 1, 2011, or until October 29, 2011, to act on petitioner's claim. However, petitioner filed the instant Petition for Review on August 8, 2011, or before the 120-day period had lapsed. Therefore, the Court has no jurisdiction to entertain the Petition for Review for it was prematurely filed.' Consequently, this Court's Decision in petitioner's First Judicial Claim was sustained by the Supreme Court in G.R. No. 211739, which became fin~l as per Entry of Judgment dated February 9, 2015. In other words, the findings of the CTA 1st Division, which was sustained by this Court and consequently by the Supreme Court, had already attained finality under the doctrine of finality of judgment or immutability of judgment. XXX XXX XXX XXX Considering the fore$oing, We rule that the 120+30 day period in Section 112(C) <)f the NIRC of 1997, as amended, shall be counted from July 1, 2011." The filing of petitioner's judicial claim on August 8, 2011 did not toll the running of the 120-day period Petitioner asserts that it did not resort to a wrong remedy, its available remedy being an appeal to the decision or inaction of respondent within the 120-day period. Petitioner is incorrect. In a long line of decisions decided by the Supreme Court, it has been consistently held that the 120+30 day period under Section 112(C) of the National Internal Revenue Code (NIRC) of 1997, as amended, is mandatory and jurisdictional.4 In fact, the Supreme Court emphasized in Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.) v. Commissioner of Internal Revenue5 that "the 120/30-day prescriptive periods are mandatory and jurisdictional, and are not mere technical It- 4 Rohm Apollo Semiconductor Philippines v. Commissioner of Internal Revenue, G.R. No. 168950, January 14, 2015; Taganito Mining Corporation v. Commissioner df Internal Revenue, G.R. No. 198076, November 19, 2014; Commissioner of Internal Revenue v. Dash Engineering Philippines, Inc., G.R. No. 184145, December 11, 2013; Hedcor, Inc. v. Commissioner of Internal Revenue, G.R. No. 207575, July 15, 2015; and Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.) v. Commissioner of Internal Revenue, G.R. No.173241, March 25, 2015. 5 Id.

RESOLUTION CTA EB No. 1453 Page 6 of9 requirements. The Court should not establish the precedent that noncompliance with mandatory and jurisdictional conditions can be excused if the claim is otherwise meritoriolJs, particularly in claims for tax refunds or credit. Such precedent will render meaningless compliance with mandatory and jurisdictional requirements." Considering the mandatory and jurisdictional nature of the 120+30 day period under Section 112(C) of the NIRC of 1997, as amended, the premature filing of petitioner's judicial claim on August 8, 2011, or before the lapse of the 120-day period, is obviously a wrong remedy. Hence, the Court En Bane likewise finds no error when it ruled that: "Considering that the 120+30 day period shall be counted from July 1, 2011, the CTA 1st Division is correct when it held that: 'The CTA has ex.clusive appellate jurisdiction to review on appeal decisions of the CIR in cases involving refunds of internal revenue taxes. Moreover, if the CIR fails to decide within the 120-day period provided by law, such inaction shalll be deemed a denial of the application for tax refund which the taxpayer can elevate to the CTA through a petition for review. A perusal of the r�cords shows that petitioner filed with the BIR the administrative claim for refund of its accumulated excess inptit VAT for fiscal year 2009 on March 11, 2011 and submitted documents in support of the claim on July 1, 2011. Considering that petitioner appealed the alleged inaction of respondent on its administrative claim for refund, petitioner must file the judicial claim within 30 days from the expiration of the 120-day period provided by law. However, the instant petition was only filed on May 28, 2015, or almost 4 years after the expiration of the 120-day period. The Court canno~ give credence to petitioner's argument that it had until June 1, 2015 within which to file its judicial claim. Tllle filing of the judicial claim on August 8, 2011 did not toll the running of the 120+30 day period provided under Section 112(C) of the NIRC of 1997, as amended. In the case of Commissioner of Internal Revenue vs. San Roque Power Corporation, the Supreme Court stressed the mandatory :and jurisdictional nature of the f.-

RESOLUTION CTAEB No. 1453 Page 7 of9 120+30 day period provided under Section 112(C) of the NIRC. Likewise, the Cou,rt En Bane, in the case of Hyder Consulting Middle East Ltd. Manila ROHQ vs. Commissioner of Internal Revenue, ruled that the resort to a wrong remedy will not toll the running of the prescriptive period to file the judicial claim for a refund before this Court, to wit: XXX XXX XXX In this case, petitioner prematurely filed its judicial claim on August 8, 2011. Such wrong remedy did not toll the running of the prescriptive period to file the judicial claim for a refund before this Court. Thus, the instant Petition for Review filed by petitioner on May 28, 2015 was clearly filed out of time. The Court therefore has no jurisdiction over the instant petition.' Thus, the CTA 1st Division committed no error when it held that the petition was belatedly filed on May 28, 2015, or almost 4 years after the expiration of the 120-day period. Meanwhile, it is also cdrrect that a wrong remedy, i.e., premature filing, will not toll the running of the prescriptive period to file the judicial claim for refund. Considering the foregoing, We see no cogeht reason to disturb the findings of the CTA 1st Division." The pronouncement of this C~urt applying Article 1155 of the :New Civil Code is a mere obiter dictum Finally, petitioner asserts that Article 1155 of the New Civil Code is not applicable to the instant case. On this score, it is noteworthy that in the assailed Decision, the Court En B'anc categorically ruled that the running of the prescriptive period was not to~led when petitioner filed its judicial claim on August 8, 2011. At any rate, th� Court En Bane expressed its opinion that even if the prescriptive period was tolled, the case still would not have prospered due to premature filing. Based on the foregoing, it is obvious that the opinion expressed by the Court En Bane is a mere obiter dictum which is not necessary for the determination of the instant case. To be clear, the Supreme Court explained ~

RESOLUTION CTA EB No. 1453 Page 8 of9 in Land Bank of the Philippines v; Federico Suntay6 the nature of an obiter dictum in this wise: "An obiter dictum has been defined as an opmwn expressed by a court upon some question of law that is not necessary in the determination of the case before the court. It is a remark made, or opini<1ln expressed, by a judge, in his decision upon a cause by the way, that is, incidentally or collaterally, and not directly upon the question before him, or upon a point not necessarily involved in the determination of the cause, or introduced by way of illustration, or analogy or argument. It does not embody the resolution or determination of the court, and is made without argument, or full consideration of the point. It lacks the force of an adjudication, being a mere expression of an opinion with no binding force for purposes of res judicata."7 Thus, the Court En Bane maintains that the 120+30 day period is counted from July 1, 2011. Conse<1J.uently, the premature filing of petitioner's judicial claim on August 8, 2011, or before the lapse of the 120-day period, is obviously a wrong remedy which did not toll the running of the 120-day period. As such, the denial of the instant motion is in order. WHEREFORE, the instant Motion for Reconsideration (Re: Decision dated 12 May 201 7) is DENIED, for lack of merit. SO ORDERED. aa-c-�~ c.~~ ~~R.. WE CONCUR: 00ANITO C. CASTANEDA, Associate Justice LOVELL~ BAUTISTA Presiding Justice Associate Justice � E~.UY Associate Justice 6 G.R. No. 188376, December 14, 2011. 7 Id., citing Delta Motors Corporation v. C.A., G.R. No. 121075, July 24, 1997, 276 SCRA 212, 223; Office of the Ombudsman v. Court of Appeals, G.R. No. 146486, March 4, 2005, 452 SCRA 714, 733-734; and City ofManila vs. Entote, No. L-24776, June 28, 1974, 57 SCRA 497, 508-509.

RESOLUTION CTA EB No. 1453 Page 9 of9 ~NOVA CAESAR. Associate Justice ~JJ.M~.b'~ ~. ~ .J '- CIELITO N. MINDARO-GRULLA MA. BELEN M. RINGPIS-LIBAN Associate Justice Associate Justice ~-7-~.C.C,..c,.c..CA4J,""'-"--- CATHERIINE T. MANAHAN Associate Justice