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2017-84191-1

Case Title: Pilipinas Total Gas, Inc., Petitioner, vs. Commissioner of Internal Revenue, Respondent
Case Number/Citation: G.R. No. 207112
Facts:
Pilipinas Total Gas, Inc., filed before the court a petition for review on certiorari under Rule
45 of the Rules of Court assailing the decision and resolution of the Court of Tax Appeals (CTA) En
Banc. The petitioner is a business engaged in selling, transporting, distributing industrial gas, selling
gas equipment and other related businesses registered itself with the Bureau of Internal Revenue as a
Value Added Tax (VAT) taxpayer. On April 20, 2007 and July 20, 2007 they filed their original
quarterly VAT returns for the first and second quarter respectively. On May 20, 2008 they filed an
amended quarterly VAT returns for the first and second quarters of 2007 where they claimed that they
have an excess of ₱7,898,433.98 unutilized input VAT. On May 15 of the same year they filed an
administrative claim for refund of the unutilized input VAT inclusive of supporting documents and
on August 28 they submitted additional supporting documents to the BIR. Due to the inaction of the
Commissioner of Internal Revenue (CIR) the petitioner elevated the case to the CTA on January 23,
2009 where the CTA Division ruled on January 13, 2011 that the petition of Pilipinas Total Gas, Inc.
is prematurely filed and thus dismissed. The CTA En Banc also denied the petition for review of Total
Gas for lack of merit because (1) Total Gas failed to seasonably file its petition (2) it also failed to
submit the complete supporting documents to warrant the grant of its application for refund. The
petitioner filed a motion for reconsideration which was denied by the CTA En Banc.
Issues:
(a) Whether the judicial claim for refund was belatedly filed on 23 January 2009, or way
beyond the 30-day period to appeal as provided in Section 112(c) of the Tax Code, as
amended; and
(b) Whether the submission of incomplete documents at the adminstrative level (BIR) renders
the judicial claim premature and dismissible for lack of jurisdiction.
Hold:
(a) No, the court holds that the Judicial claim is timely filed since according to Section 112 (C) of
the NIRC:
SEC. 112. Refunds or Tax Credits of Input Tax. -
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(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 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.-
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The CTA En Banc erred in counting the number of days and thus in ruling that the judicial
claim was belatedly filed because it started to count the 120-day period from the filing instead
of starting to count from the time the complete set of documents were submitted as clearly
stated in Section 112 (C) of the NIRC. Which was further clarified in RMC no. 49-2003 which
states:
Q-18: For pending claims with incomplete documents, what is the period
within which to submit the supporting documents required by the
investigating/processing office? When should the investigating/processing office
officially receive claims for tax credit/refund and what is the period required to process
such claims?
A-18: For pending claims which have not been acted upon by the
investigating/processing office due to incomplete documentation, the taxpayer-
claimants are given thirty (30) days within which to submit the documentary
requirements unless given further extension by the head of the processing unit, but
such extension should not exceed thirty (30) days.
For claims to be filed by claimants with the respective investigating/processing
office of the administrative agency, the same shall be officially received only upon
submission of complete documents.
For current and future claims for tax credit/refund, the same shall be
processed within one hundred twenty (120) days from receipt of the complete
documents. If, in the course of the investigation and processing of the claim, additional
documents are required for the proper determination of the legitimate amount of
claim, the taxpayer-claimants shall submit such documents within thirty (30) days from
request of the investigating/processing office, which shall be construed as within the
one hundred twenty (120) day period.
Although the Section 112 was amended when R.A. 9337 was passed on July 1, 2005, it was
only amended by deleting Section 112 (B) and by amending and renaming Section 112 (D) to
Section 112 (C) which states:
(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 Subsection (A) 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 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.
Thus it must be understood that RMC No. 29-2003 still applies. Therefore it is the taxpayer
that ultimately determine when the complete documents have been submitted and thus
determine the start of the 120 day period during which the CIR must decide except when the
BIR requires additional documents to be submitted in order to fully appreciate the case.
However this is only applicable for claims filed prior to June 11, 2014 because of RMC 54-
2014 it should be noted that this does not apply retroactively.
Since the CIR did not question the adequacy of the documents of the petitioner nor
did it rule to deny its claim for failure to adequately substantiate its claim the 120 day period
shall be reckoned from Aug. 28, 2008 until Dec. 26 2008 and the petitioners 30 days to file a
judicial claim is until Jan. 25, 2009. Therefore it timely filed its judicial claim on Jan. 23, 2009.
RMO No. 53-98 which enumerated the documents required is not fatal to the claims
of the petitioner for refund of excess unutilized excess VAT because they were not informed
or notified by any revenue officer or employee about the lacking documents.
(b) No, the Judicial claim is not prematurely filed because “The alleged failure of Total Gas to
submit the complete documents at the administrative level did not render its petition for
review with the CTA dismissible for lack of jurisdiction. The Court Holds that first, the 120
days period has commenced and the 120+30 days were complied with; second, the CIR failed
to notify the petitioner that the documents were incomplete or that they require additional
documents – it is the inaction of the respondent that prompted the petitioner to file the judicial
claim; lastly the appeal made by the petitioner cannot be said to be premature based on the
belief that it did not observe the mandatory and jurisdictional 120+30 day period. Since Total
Gas filed the judicial claim because of the inaction of the BIR “the CT A may give credence
to all evidence presented by Total Gas, including those that may not have been submitted to
the CIR as the case is being essentially decided in the first instance.”
(c) The Court also holds that it cannot make any ruling regarding the issue of whether the
petitioner is entitled to the refund amounting to Php7,898,433.98 since it is not a trier of facts.
Thus the case is remanded to the CTA Division for trial de novo.
The Petition is partially granted and the decision and resolution of CTA are reversed and set aside and
the case is remanded to the CTA Third Division for trial de novo.
Ruling:
WHEREFORE, the petition is PARTIALLY GRANTED. The October 11, 2012 Decision
and the May 8, 2013 Resolution of the Court of Tax Appeals En Banc, in CTA EB No. 776 are
REVERSED and SET ASIDE.
The case is REMANDED to the CTA Third Division for trial de novo.