TOWA INDUSTRY, INC. v. COMMISSIONER OF INTERNAL REVENUE

r;EPUBL I C OF Ti-lE Ph! i... I PP I NES COURT OF TAX APPEALS QUEZON CITY TO!tJA INDU~TRY, INC.~ Petitioner, versus - CaT~ .. CASE NO. 55S2 CaM~ISSIONER QF INTERNAL Prcmul~catf ed:t ! \ REl.'ENUE, ~UL 0 9 19_99 _ .;?:;pondent. '< D E C I S I O t..... ce��;e �:: 12 1 'T' l-~ :'1- .,�� , ...... -~n J ./ ~,. r � l�t Q �F c:. �� -- e ar� ""' 1 1 G[j(-?'j :. y .... =- 1 e �.: a�-1c ec' :l n u ...1�t PF""Od July iJ.-: Peri+- �one ?. man'-"-= act ~-'.r''e c l 3. ':3 �:, .':..., c-. >' r.:� e t 1 t 1 'J n e t~ r E�' ~1 - ., s� �.-. �� r 1./C>T thE Bul~eau ., t:: ��'I r: t)(: :� - !� 3l+ ( ~-( 1��~.. r�~: ~ the IPvestment:; (BDI) as Sh(2Wn bv its On 1 9'37. filed ar T 'I .. ' -� ::.:.'J/:.-'1'_=;' �1

DECI S ION C.T.A . CASE NO. 5552 2 On 1997, Petitioner filed an 21ppl icat ion for tax cred~t/re~und for t~e sa1C cuarter in t~e amount of P316,557.00 with the Tax Revenue Grouo of the One Stop Shop Inter Agency Tax Credit and Duty Drawback Center of the Deoartment of Finance <Exh. D). Contending inaction the instant petition was consequently filed on Sept ember' to t; 0 l1 of the reglementary period. l=<espondent, by way of Special and ~ Pet it ioner'' s claim t''e fund/tax .i. u credit is pending administ~ative investigation; l�'efund:-~ a1��e in n.':3.tu.r�e of tax in e~-<empt:i.ons. As such, they t-�e g<::n-�d ed ~-- ;..._ ".., der�-ogation of sovereign authority and to '�' ' ! ~:.::- t t C 0 n <;; 1'' l..t E! d :~ Y"j S !�' .i C' t� .i s; S .i !TI .i I ' I I ' .i E �'3 1;:: .,:::, .;. T'1 S ��:.� person or entity claiming the exemotion; 3. Taxes paid a nd collected a~e presumed to have been made in accordance with the laws and regulations; and 4. It 1s i n cumbent upon the taxpayer to estab:ish its riqht to the refund and failu~e to sustain the burden is fatal to the claim for ,-�r�~' fund. Petitioner�~ in i t s cla.im,., submitted the following documentary evidences, tc wit:

DECISION C.T. A. CASE NO~ 5 5 52 3 2.) b) CertifJcate of Registration lS~Jed tv +~e 80!; c) VAT Registrat:on Certificate issued by the BIR; c:l) Appl1cat1on for Tax Credit/Refund Res pondent, on the other hand, was to the cresentation of his evidence due tc t~e failure of his counsel to a ppe a r for three con<~ecutive 5:1.) u in his memorandum, Respondent did not that Pet:tioner has a va~1d claim of creditable 1nput vqT nor the fact of t~e timely filing of its cla1m. ~ence, the sole issue to be resolved in th1s case is or~ not Petitioner has fully substant:tated i ts claim for refun d/tax credit in the amount of P3:1.S,557.00. of the evictence of Pet i t i one t~, b ot h t est i mon 1 a l and doc u men �tat~ y, t h i s Co :_w t holds agains~ the t~e�-/ea that Petitioner has not been able to p1�~ o v e the o�;.:- its cLOl.im. Section :1.06 of the Tax Code provides: SEC. 106. Refunds ot� tax credits ot= creditable input tax. (a) Any VAT- r egistered person? whose sa1es are zero-rated o1�~ effec t i vely zer�' o-r~ated, m.:~y, within two (c~) years after the close of the taxable quarter when the sales were made, a pply for t h e issuance of a tax credit certificate or refund

DECISION C.T.A. CASE NO. 5552 4 of rred1table 'np~t ta~ cue ~r p~ attributable to sucn sa~es, except transitional inp~t tax, to the exte~t that such inp~t tax has not bee~ applied acainst 3~tcut tax: ratEd sales ~nde- Sect .on ;\ and (b) and Section 102(b) (1) and <C:~), the acceptable forei g n currenc y exchance Ot'OCeed:. accov'd<::lnC(:> t'te 'r"'et:!ul-::ttlons B<::\n 1:1 l~ o ~)entr-'<::tl. nq Pil.ipinas CBSPl: Provided, Y X X. "(b) C',;.?pital Goods. A V0T-reglstered -f. c .... the S-:~.U-::\T'IC~E of '1 t .;;)}( c~edit certificate or refund of input taxes paid on capital good~ imported or locally pur�chased,, to the extent that su.rh inout taxes have not been applied aqainst cutout taxes. The application may be made only within two (2) years after the close of the taxable ouarter when the importation or ~urchase was made. (Underscoring supplied) .~Ln ���elation SectioP 15 Revenue F{egu.~.at ions 1\iD. a~enceJ by Reven~e Re;; .:.la:tio ... s No. 3-88, requires that: X X X n ohotocoov of the curchase invoice or receipt evidencino the value a~ded tav paid shall be submitted to~et~er with the aQolication. The original copy of the said invoice/receipt, however, shall be presented fo~ cancellation oricr to the issuaP~e o~ t~e Tax Credit Certificate or refund in addition. the followinQ documents shalJ be attached whenever applicable: i' Photocopy of export document showing the amou~t of exp0rt, arc tho date and destination of the goods exoorted. With resoect to forei~n currenc~ denominated sale. the cooy of the invoice or receiot evidencing +�rH' s,;\l(:-> o�; the qoor.'s, <:t~; v~eJ:' as the n�;�(me of the person to whom the goods were delivered.

DECISION C.T.A. CASE NO. 5552 - 5- :L i) ~3tatEITIE�nt f~-om +;he [,:,,..l.,..'"c?\1 b2 1'l -, any af its accredited age~t banks that the the iP acceptable ~orcign currency has been 1nwarGLV remitted and accounted for 1n a cc o r't.::i .';:!. q c p barking regu!ations. XXX XXX In all case. the amount of refund or tax c-edit that mav be c~anted ~hal] be limited to r:rr ) t h e t::\ m0 lJ n t c f t, h e 'v' 2. l u. e -:3. d d 9 d t a ~~�� I } d rJ E:). �:. directlv and entirelv att-ibutable ~o t~e zero- rated transaction durino the oeriod covered bv the appliration for cred1t or refund~ CEmohasis su~plied) ;:�Is ment i O"'led earl1erl Petitioner only submitted the I 1 .(::c C'.i�J1 rll] t o docum<~nt,::. t S U.DCO\�"+' :i. S VfZ'~ (a_) return for the quarter i"'lvolved; (b) BDI Certi~icate vr::n R(~ ~~is t r��at �;,on:;~' C\ Regisb'c.d:ion t'. cI.,} I qpolication for Tax Cred:t/Refund. Petit i one~' d :.cl not s Jcceec:~.ng it formally offered its evidence, and it did rot even bother to file its memnrand~m. in the light of the documents submitted and offered 1n evidenc~. Pet1tioqer only proved that fded :Lts of HP 1 1 a.�::; ,,, VA 7 -registered taxoayer; and tha�:: it .ouJpl1ed for' a tax e 1se. Petitioner therefore was not able tCJ supoor't its :i. n put vr:n. cY~ly the documents aforementioned on record, this Court O'f qoocj';;; <:\nci ,-:3.c-I:: u �:.\,

DECISION C.T.A. CASE NO . 5552 - 6- amo:~t ot exoort sa~es 1t alleg~~ly ~~de dm�::.ng tr,e thl''�..: of 1ggs. -r 1n1=ut oe:nr . . . +- T I 1 (": ~ax - l } ... c.ai~r~ De> ent:t�ely sa.~.es o.;= gauds'* U,.. r.�o�..ta .� 'moo����tancr and r t'ltc�a +� '1 a s ,~voi~es1rece1pts WE'L the ent1��v ~PCQl~~~ to prove the tact a.nd i'TID01'tation of ooods which Sl.lDITI it. Without said documents documents~ no d e 1;; e 1�� mi nat i on can be made iY! e ,. e l ~ s t ::. n o o t' scn' eo.u .". e Co �.u--t of the o.,.,+- \ 1. 1 s t e d t h e t' e i n � As a:i. r�eady oointed .Nit at ~- s allo~-.~ed to be "\t'e dit�ect ly attt�1butable to the PPtitiorel' dtc not P\/ J.dEP.C�'? indeed t~e services it purchased, as well as the qoods it t;c, t~le F"'PGt''l- the pet' i od involved. Cleat�ly and Pt�t;�t:.r.r('l:�� failf'C' tr� "'�""s';a�~�~�~ 1tc 1ts � a�m. it is wot�th stressinq t~at tax t'e fund~, r.:>cn�t.3.kP the 'la-cu.t�e of tax exem;::Ji'.ions .:.'\nd n E\nd in fa,JCJt�� of the taxi~g a~t~ority. (Pes ins, Inc. vs. Auditor General,

DECIS I ON C.T.A. CASE NO. 5552 - 7- Co is~ioner of Internal Revenue vs. Ledesma, Insular L~ ber Co. v s. Co mmi ssioner of I nterna l Reven ue and Cour t of Ta x Appeals . (3" ~. Cow iss i orer o f Interna l Reve n ue vs. Rio Tuba Nickel Mining Corporation. \lo <=. WHEREFORE, v.1ew of a.l~. hpr hy DISMISSED ~or ins~fficie ncy of e viden c e. SO ORDERED WE CONCUR: I ~\Q~~ ERNESTO D. ACOSTA :-, 'e 1.- n g Judge CERTIFICATION I nerebv ~er~ifv t~at the aoove dec�~lO" was reach~ r c a t .. t P t' due c on u :. t t,;:1 i on w i - h t ""~ ... E� mbe,.. s o .,.. t a c ..ll''.:.. c-= a~ Acpeals in accordance Wl~h Sec~ton 1~. ArL�cle 8 o& ~he Consttt u tion. ~(Q- ~ ERNESTO D. ACOSTA