Atlas Consolidated Mining and Development Corporation v. CIR

Atlas Consolidated Mining and Development Corporation v.
CIR
G.R. No. 159490; February 18, 2008; Velasco, Jr., J.
Digest prepared by Laurence A. Mopera
I. FACTS
1. Atlas, a VAT registered entity, is a corporation engaged in the production of copper concentrates for export.
2. For the 1st quarter of 1993, Atlast export sales amounted to P642,685,032.24. These proceeds were received in
acceptable foreign currency and inwardly remitted in accordance with CB regulations. Atlas paid P7,907,662.53
input taxes.
3. On April 20, 1993, Atlas filed a VAT return for the 1 st quarter of 1993 with the BIR.
4. On September 20, 1993, Atlas applied with the BIR for the issuance of a tax credit certificate or refund under
Section 106(b) of the Tax Code.
a. This would represent the VAT paid for the first quarter of 1993 in the amount of P7,907,662.53 corresponding to
the input tax not applied against any output VAT.
5. On February 22, 1995, Atlas filed a petition for review with the CTA to prevent the running of the prescriptive
period under the Tax Code.
a. CIR filed an answer asserting that Atlas has the burden of proving erroneous or illegal payment of tax being
claimed for refund because claims for refund are strictly construed against the taxpayer. However, CIR did not
present any evidence nor filed a memorandum so the CTA decided the case solely on the basis of Atlas’ evidence.
6. On October 13, 1997, the CTA denied the claim for tax credit or refund for insufficiency of evidence.
a. It held that Atlas failed to present sufficient evidence to warrant grant of tax credit or refund.
b. Under Revenue Regulation 3-88, which enumerated the list of documents to be submitted in cases of refund, Atlas’
documents did not comply with the said regulation. Atlas failed to submit photocopies of export documents,
invoices or receipts evidencing the sale of goods and others. Moreover, the certification by Atlas’ Bank HSBC did
not indicate any conversion rate from US dollars to peso.
c. Hence, CTA could not ascertain the veracity of the contents indicated in Atlas’ VAT return.
7. Atlas timely filed an MR. It argued that Section 106 of the Tax Code merely requires proof that foreign exchange
proceeds has been accounted for.
a. It argued that the documents it presented, coupled with the testimony of its Accounting and Finance Manager
Isabel Espeno were sufficient.
b. RR 3-88 is for administrative claims before the BIR and not for judicial claims as in the present case.
c. It then prayed for a re-trial under Rule 37.2 of the ROC.
8. CTA denied the MR saying that it is within its discretion to ascertain the veracity of claims for refund which must
be strictly construed against the taxpayer. It also denied the prayer for re-trial due to Atlas failure to submit the
required affidavit of merits.
9. Atlas appealed to CA.
10. CA dismissed the appeal due to insufficiency of evidence to support action for tax credit or refund.
a. CTA cannot be faulted in denying Atlas’ action for refund. Failure to comply with RR 3-88 was fatal to Atlas’ action.
Contrary to Atlas’ assertion, RR 3-88 is applicable also to judicial proceedings as held in a line of cases. It also
sustained denial of re-trial due to lack of affidavit of merits.
11. Hence, this Rule 45 petition to SC.
II.ISSUES
Whether or not Atlas has sufficiently proven entitlement to a tax credit or refund [NO]
III. HELD
Petition is denied for lack of merit.
IV. RATIO
ATLAS argued that RR 3-88 is applicable only to administrative proceedings. Further, it is CTA Circular No. 1-95, as
amended by CTA Circular 10-97, which requires only submission of summary of the invoices and certification from an
independent public accountant, being the later law, must apply in this case.
SC disagreed for various reasons:
1. As a general rule, findings of fact by the CA are conclusive and binding especially that it merely affirmed the
findings of the trial court which is the trier of facts.
2. The Rules of Court have suppletory application in quasi-judicial proceedings. Under Rule 132.34, no evidence
which has not been formally offered shall be considered.
a. Hence, where the pertinent invoices or receipts evidencing the VAT payments were not submitted, the court
cannot determine the veracity of the input VAT Atlas paid.
b. The most competent evidence must be adduced and presented. Here, the best pieces of evidence were not
presented.
3. The summary presented by Atlas does not replace the pertinent invoices, receipts and export sales documents
as competent evidence to prove the fact of creditable or refundable input VAT. This, coupled with the
certification by an independent CPA, is at most corroborative of the actual input VAT paid and actual export
sales.
4. Atlas’ mere allegations in its amended VAT return for the 1 st quarter of 1993 were not sufficient proof of the
amount of entitlement to refund. Because tax refunds are in the nature of tax exemptions, they are to be
construed strictissimi juris against the taxpayer.
5. RR 3-88 is binding on the courts as long as the procedure fixed for its promulgation is followed. These
regulations have the force of law and are entitled to great weight.
6. CTA Circular 10-97 is inapplicable because it was enacted only in 1997 while the proceedings in the instant
case were conducted prior to 1997. In fact, Atlas Offer of Evidence was filed as early as 1996.
As to the prayer for retrial

1. The motion for new trial would not prosper because Atlas was guilty of inexcusable negligence in the
prosecution of its case. It has the duty to ensure that all proofs required under the rules are duly presented.
2. Forgotten evidence not presented during the trial nor formally offered is not newly found evidence that merits
a new trial.
3. It goes against the orderly administration of justice to allow a party to submit forgotten evidence which could
have been offered with the exercise of ordinary diligence more so when it has already been decided.

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