GOLEA, Ma. Consorcia A.

2013 – 0060

CIR vs. Pilipinas Shell Petroleum Corporation

G.R. No. 188497 February 19, 2014

FACTS:
Pilipinas Shell paid excises taxes for the petroleum products it sold to international
carriers from October 2001 to June 2002.

It filed administrative claim for refund on the excise taxes it paid. CTA granted
respondent'’ claim for tax refund. However, in the Decision on 25 April 2012, CTA was declared
to have erred in granting the claim for tax refund. A Motion for Reconsideration and
Supplemental Motion for Reconsideration was filed by Pilipinas Shell.

ISSUE:
Whether or not Pilipinas Shell is entitled to refund or credit for the excise taxes it paid for
petroleum products already sold to international carriers.

RULING:
Yes, Pilipinas Shell is entitled to refund. The Supreme Court held that there is prohibition
from passing the excise tax to international carriers who buys petroleum products from local
manufacturers/sellers. Such is pursuant to Section 135 (a) of NIRC, international agreement
under Chicago Convention of 1994, and practice to exempt aviation fuel from excise tax and
other impositions. However, SC held that there is a need to reexamine the effect of denying the
domestic manufacturers/sellers’ claim for refund of the excise taxes they already paid on
petroleum products sold to international carriers, and its serious implications. With the prospect
of declining sales of aviation jet fuel sales to international carriers on account of major domestic
oil companies' unwillingness to shoulder the burden of excise tax, or of petroleum products
being sold to said carriers by local manufacturers or sellers at still high prices , the practice of
"tankering" would not be discouraged. This scenario does not augur well for the Philippines'
growing economy and the booming tourism industry. Worse, the Government would be risking
retaliatory action under several bilateral agreements with various countries. Ultimately, SC
found merit in Pilipinas Shell’s motion for reconsideration. It granted Pilipinas Shell’s claim for
refund representing the excise taxes it paid on petroleum products sold to international carriers.

Page 1 of 2
GOLEA, Ma. Consorcia A.
2013 – 0060

CIR vs. Team Sual Corp (formerly Mirant Sual Corp)

G.R. No. 194105 February 5, 2014

FACTS:
On 24 April 2000, 25 July 2000, 25 October 2000 and 25 January 2001, Team Sual Corp
(TSC) filed its VAT returns for the 1st,2nd,3rd and 4th quarters, respectively of taxable year 2000.

On 11 March 2002, TSC filed its administrative claim for refund for the taxable year
2000.

On 01 April 2002, TSC filed its petition for review before CTA seeking for refund or the
issuance of a tax credit certificate for its unutilized input VAT for the taxable year 2000, which
was granted.

CIR sought a reconsiderationbefore CTA En Banc claiming that petition for review was
prematurely filed because it was filed without waiting for the 120-day period to lapse.

ISSUE:
Whether TSC’s petition for review with CTA was prematurely filed.

RULING:
Yes. TSC’s petition for review with CTA was prematurely filed. Under Sec 112 of the
NIRC it is provided that 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 or its inaction, the taxpayer's recourse is to file
an appeal before the CTA within 30 days from receipt of the decision of the CIR or lapse of the
120-day. Failure to comply with the 120-day waiting period violates the doctrine of exhaustion of
administrative remedies, and renders the petition premature and thus without a cause of action,
with the effect that the CTA does not acquire jurisdiction over the taxpayer's petition.

TSC provided that the 2-year prescriptive period will lapse should it wait to file its judicial
claim only after 120 days it filed its administrative claim.SC find the justification unmeritorious. It
further provided that upon careful reading of Sec 112 of NIRC there are three compelling
reasons why the 30-day period need not necessarily fall within the two-year prescriptive period,
as long as the administrative claim is filed within the two-year prescriptive period: (1) Section
112(A) states that the taxpayer may apply with the Commissioner for a refund or credit "within
two (2) years," which means at anytime within two years; (2) the two-year prescriptive period
does not refer to the filing of the judicial claim with the CTA but to the filing of the administrative
claim with the Commissioner;(3)the theory that the 30-day period must fall within the two-year
prescriptive period adds a condition that is not found in the law. It results in truncating 120 days
from the 730 days that the law grants the taxpayer for filing his administrative claim with the
Commissioner. This Court cannot interpret a law to defeat, wholly or even partly, a remedy that
the law expressly grants in clear, plain, and unequivocal language.

Page 2 of 2