CIR v. Team Sual Corporation

3/7/22, 1:16 PM SUPREME COURT REPORTS ANNOTATED 861

G.R. Nos. 201225-26. April 18, 2018.*

(from C.T.A.-E.B. Nos. 649 & 651)

TEAM SUAL CORPORATION (formerly MIRANT SUAL
CORPORATION), petitioner, vs. COMMISSIONER OF
INTERNAL REVENUE, respondent.

G.R. No. 201132. April 18, 2018.*
(from C.T.A.-E.B. No. 651)

COMMISSIONER OF INTERNAL REVENUE,
petitioner, vs. TEAM SUAL CORPORATION (formerly
MIRANT SUAL CORPORATION), respondent.

G.R. No. 201133. April 18, 2018.*
(from C.T.A.-E.B. No. 649)

COMMISSIONER OF INTERNAL REVENUE,
petitioner, vs. TEAM SUAL CORPORATION (formerly
MIRANT SUAL CORPORATION), respondent.
Taxation; Tax Refund; Tax Credit; In order for the Court of

Tax Appeals (CTA) to acquire jurisdiction over a judicial claim for
refund or tax credit arising from unutilized input Value-Added
Tax (VAT), the said claim must first comply with the mandatory
120+30-day waiting period.—In order for the CTA to acquire
jurisdiction over a judicial claim for refund or tax credit arising
from unutilized input VAT, the said claim must first comply with
the mandatory 120+30-day waiting period. Any judicial claim for
refund or tax credit filed in contravention of said period is
rendered premature, depriving the CTA of jurisdiction to act on it.
Same; Same; Same; Any taxpayer seeking a refund or tax
credit arising from unutilized input Value-Added Tax (VAT) from
zero (0)-rated or effectively zero-rated sales should first file an
initial administrative claim with the Bureau of Internal Revenue
(BIR). This claim
_______________
* SECOND DIVISION.

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Team Sual Corporation (formerly Mirant Sual
Corporation) vs. Commissioner of Internal Revenue
for refund or tax credit must be filed within two (2) years after the
close of the taxable quarter when the sales were made.—Any taxpayer
seeking a refund or tax credit arising from unutilized input VAT from
zero-rated or effectively zero-rated sales should first file an initial
administrative claim with the BIR. This claim for refund or tax credit
must be filed within two years after the close of the taxable quarter when
the sales were made. The CIR is then given a period of 120-days from the
submission of complete documents in support of the application to either
grant or deny the claim. If the claim is denied by the CIR or the latter
has not acted on it within the 120-day period, the taxpayer-claimant is
then given a period of 30 days to file a judicial claim via petition for
review with the CTA. As such, the law provides for two scenarios before a
judicial claim for refund may be filed with the CTA: (1) the full or partial
denial of the claim within the 120-day period, or (2) the lapse of the 120-
day period without the CIR having acted on the claim. It is only from the
happening of either one may a taxpayer-claimant file its judicial claim for
refund or tax credit for unutilized input VAT. Consequently, failure to
observe the said period renders the judicial claim premature, divesting
the CTA of jurisdiction to act on it. This mandatory and jurisdictional
nature of the 120-day waiting period has been reiterated time and again
by the Court. In the case of Commissioner of Internal Revenue v. San
Roque Power Corporation, 690 SCRA 336 (2013), the Court En Banc
categorically stated: Failure to comply with the 120-day waiting period
violates a mandatory provision of law. It 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. Philippine
jurisprudence is replete with cases upholding and reiterating these
doctrinal principles.
Same; Same; Same; Due to the nature of its functions, the tax
court dedicates itself to the study and consideration of tax
problems and necessarily develops expertise thereon. Unless there
has been an abuse of discretion on its part, the Supreme Court
(SC) accords the highest respect to the factual findings of the Court
of Tax Appeals (CTA).—It is well-settled that factual findings of
the CTA when supported by substantial evidence, will not be
disturbed on appeal. Due to the nature of its functions, the tax
court dedicates itself to the study and consideration of tax
problems and necessarily develops

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VOL. 861, APRIL 18, 2018 607

expertise thereon. Unless there has been an abuse of

discretion on its part, the Court accords the highest respect to the
factual findings of the CTA.
Remedial Law; Civil Procedure; Appeals; Petition for Review
on Certiorari; It must be emphasized that generally, it is not the
province of an appeal by petition for review on certiorari to
determine factual matters; The issue of whether a claimant has
actually presented the necessary documents that would prove its
entitlement to a tax refund or tax credit, is indubitably a question
of fact.—It must be emphasized that generally, it is not the
determine factual matters. Although there are exceptions to this
general rule, none of these exist in the instant case. With that
being said, the issue of whether a claimant has actually presented
the necessary documents that would prove its entitlement to a tax
refund or tax credit, is indubitably a question of fact.
Taxation; Tax Refund; Tax Credit; Tax refunds or tax credits,
just like tax exemptions, are strictly construed against the
taxpayer-claimant.—Tax refunds or tax credits, just like tax
exemptions, are strictly construed against the taxpayer-claimant.
A claim for tax refund is a statutory privilege and the mere
existence of unutilized input VAT does not entitle the taxpayer, as
a matter of right, to it. As such, the rules and procedure in
claiming a tax refund should be faithfully complied with.
Noncompliance with the pertinent laws should render any judicial
claim fatally defective.
PETITIONS for review on certiorari of the consolidated

decision and resolution of the Court of Tax Appeals En
Banc.
The facts are stated in the opinion of the Court.
Follosco, Morallos & Herce for Team Sual Corporation.
Office of the Solicitor General for Commissioner of
Internal Revenue.

608
608 SUPREME COURT REPORTS ANNOTATED

REYES, JR., J.:

Nature of the Petitions

Challenged before the Court via Petitions for Review on

Certiorari1 under Rule 45 of the Rules of Court is the
Consolidated Decision2 of the Court of Tax Appeals (CTA)
En Banc dated September 15, 2011 and its subsequent
Resolution3 dated March 21, 2012 in C.T.A.-E.B. Nos. 649
and 651. The assailed Decision and Resolution modified the
Amended Decision4 of the CTA Special First Division dated
June 7, 2010 and partially granted Team Sual
Corporation’s (TSC) claim for refund in the amount of
P123,110,001.68 representing unutilized input Value-
Added Tax (VAT) for the second, third, and fourth quarters
of taxable year 2001.

The Antecedent Facts

TSC is a domestic corporation duly organized and
existing under and by virtue of the laws of the Philippines
with principal office at Barangay Pangascasan, Sual,
Pangasinan. It is principally engaged in the business of
power generation and subsequent sale thereof to the
National Power Corporation (NPC) under a Build, Operate,
and Transfer scheme. TSC was originally registered with
the Securities and Exchange Commission under the name
“Pangasinan Electric Corporation.” On August 17, 1999, it
changed its name to “Southern Energy Pangasinan, Inc.,”
which was then changed to “Mirant Sual Corporation” on
June 28, 2001, and finally to “Team Sual” on July 23,
2007.5
_______________
1 Rollo (G.R. Nos. 201225-26), Vol. I, pp. 104-129 & Rollo (G.R. No.
201132), Vol. I, pp. 12-50.
2 Id., at pp. 136-163.
3 Rollo (G.R. No. 201132), Vol. I, pp. 186-204.
4 Rollo (G.R. Nos. 201225-26), Vol. I, pp. 12-25.
5 Id., at pp. 137-138.
As a seller of services, TSC is registered with the Bureau of Internal
Revenue (BIR) as a VAT taxpayer with Certificate of Registration bearing
RDO Control No. 05-0181 and Taxpayer’s Identification No. 003-841-103.6

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On December 6, 2000, TSC filed with the BIR Revenue

District Office No. 5-Alaminos, Pangasinan an application
for zero-rating arising from its sale of power generation

services to NPC for the taxable year 2001. The same was
subsequently approved. As a result, TSC filed its VAT
returns covering the four quarters of taxable year 2001.7
For the first, second, third, and fourth quarters of 2001,
TSC reported excess input VAT amounting to
P37,985,009.25, P29,298,556.12, P32,869,835.40, and
P66,566,967.02, respectively. The total excess input VAT
claimed by TSC for the taxable year amounted to
P166,720,367.79.8
On March 20, 2003, TSC filed with the BIR an
administrative claim for refund in the aggregate amount of
P166,720,367.79 for its unutilized input VAT for taxable
year 2001.9
On March 31, 2003, without waiting for the resolution of
its administrative claim for refund or tax credit, TSC filed
with the CTA Division a petition for review docketed as
CTA Case No. 6630. It prayed for the refund or issuance of
a tax credit certificate for its alleged unutilized input VAT
for the first quarter of taxable year 2001 in the amount of
P37,985,009.25.10
On July 23, 2003, TSC filed another petition for review
docketed as CTA Case No. 6733, seeking the refund or
issuance of a tax credit certificate for its alleged unutilized
input
_______________
6 Id., at p. 137.
7 The VAT returns for the first, second, third, and fourth quarters of
taxable year 2001 were filed on April 18, 2001, July 24, 2001, October 24,
2001, and January 24, 2002, respectively; id., at p. 35.
8 Id., at p. 139.
9 Id.
10 Id.

610

VAT for the second, third, and fourth quarters of taxable

year 2001 in the amount of P128,735,358.54. Both cases
were consolidated on August 7, 2003.11
Trial of the case ensued.
In its Decision dated June 9, 2006, the CTA Division
partially granted TSC’s claim. It allowed the refund of
unutilized input VAT for the first, third, and fourth
quarters of taxable year 2001, but disallowed the refund for

the second quarter. The CTA Division ruled that the claim
for the second quarter did not fall within the two-year
prescriptive period. The dispositive portion of the CTA
Division’s decision reads:
WHEREFORE, the instant Petition for Review is

hereby PARTIALLY GRANTED. ACCORDINGLY,
respondent Commissioner of Internal Revenue is
hereby ORDERED to REFUND or to ISSUE A TAX
CREDIT CERTIFICATE in the amount of ONE
HUNDRED SEVENTEEN MILLION THREE
HUNDRED THIRTY THOUSAND FIVE HUNDRED
FIFTY PESOS AND 62/100 (P117,330,550.62) to
petitioner Mirant Sual Corporation, representing unutilized
input VAT from its domestic purchases of goods and
services and importation of goods attributable to its
effectively zero-rated sales to the National Power
Corporation for the first, third, and fourth quarters of
taxable year 2001.12
The Commissioner of Internal Revenue (CIR) filed a

Motion for Partial Reconsideration on July 3, 2009, praying
that the entire claim for refund be denied. The CIR argued
that TSC has not sufficiently proven its entitlement to
refund and that the CTA had no jurisdiction to act on the
judicial claim for refund because the same was prematurely
filed.13
_______________
11 Id.
12 Id., at p. 37.
13 Id.

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Likewise, in its Motion for Partial Reconsideration dated

July 7, 2009 and Supplemental Motion for Partial
Reconsideration dated July 31, 2009, TSC prayed that the
CTA, in addition to the amount already granted, refund the
amounts of: (1) P29,298,556.12 representing input VAT for
the second quarter of taxable year 2001, and (2)
P12,761,224.50 for input VAT on local purchases of goods
and services for the same year.14
On June 7, 2010, the CTA Division promulgated an

Amended Decision which partially granted TSC’s
additional claim for refund. In said decision, the CTA
denied the claim for input VAT on local purchases of goods
and services, but allowed the refund for input VAT for the
second quarter of taxable year 2001. However, the grant
was reduced from P29,298,556.12 to P27,233,561.57 for
failure to substantiate the difference.15 The dispositive
portion of the amended decision states:
WHEREFORE, respondent’s Motion for Partial

Reconsideration filed on July 3, 2009 and
petitioner’s Supplemental Motion for Partial Reconsideration filed
on July 31, 2009 are hereby DENIED for lack of merit.
Petitioner’s Motion for Partial Reconsideration filed on July 7,
2009 is hereby PARTIALLY GRANTED and this Court’s
Decision dated June 9, 2009 denying petitioner’s claim for refund
of unutilized input VAT for the second quarter of 2001 is
hereby MODIFIED. Accordingly, respondent Commissioner of
Internal Revenue is hereby ORDERED to REFUND or to ISSUE
A TAX CREDIT CERTIFICATE in the amount of ONE
HUNDRED FORTY-FOUR MILLION FIVE HUNDRED
SIXTY-FOUR THOUSAND ONE HUNDRED TWELVE
PESOS AND 19/100 (P144,564,112.19) to petitioner Team Sual
Corporation (formerly: Mirant Sual Corporation), representing
unutilized input VAT from its domestic purchases of goods and
services and importation of goods at-
_______________
14 Id., at pp. 37-38.

15 Id., at p. 23.

612

tributable to its effectively zero-rated sales to the National

Power Corporation for the first, second, third, and fourth
quarters of taxable year 2001.
SO ORDERED.16
Dissatisfied, TSC filed a Petition for Review docketed as

C.T.A.-E.B. No. 649 before the CTA En Banc. It posits that
the CTA Division erred in disallowing the amount of
P12,761,224.50 for input VAT on local purchases of goods
and services on the mere fact that the pertinent supporting
documents were issued under TSC’s former name. TSC
argues that a corporation’s change of name does not affect

its identity or rights. Thus, it should still be entitled to
claim the said input VAT.17
The CIR also filed a petition for review praying that the
Decision dated June 9, 2009 and the Amended Decision
dated June 7, 2010 be reversed and set aside and another
one be rendered denying the entire claim for refund. The
CIR reiterated the arguments she raised in her Motion for
Partial Reconsideration. The case was docketed as C.T.A.-
E.B. No. 651.18
On September 15, 2010, the CTA En Banc resolved19 to
consolidate C.T.A.-E.B. No. 649 with C.T.A.-E.B. No. 651.
On September 15, 2011, the CTA En Banc rendered a
Consolidated Decision20 granting petitioner’s claim for
refund of input VAT for the second, third, and fourth
quarters of taxable year 2001 amounting to
P123,110,001.68. Insofar as the refund of the input VAT for
the first quarter of taxable year 2001 is concerned, the
CTA En Banc ruled that the CTA did not acquire
jurisdiction over it as it had been filed prematurely. The
dispositive portion of said decision reads as follows:
_______________
16 Id., at p. 24.
17 Id., at p. 39.
18 Id., at pp. 39-40.
19 Id., at p. 41.
20 Id., at pp. 136-163.

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VOL. 861, APRIL 18, 2018 613

WHEREFORE, all the foregoing considered, the

Commissioner’s Petition for Review in C.T.A.-E.B. No. 651
is hereby DENIED.
On the other hand, Team Sual’s Petition for Review in
C.T.A.-E.B. No. 649 is hereby PARTIALLY GRANTED,
but only insofar as the consideration of the portion of the
refund claim disallowed by the court a quo upon the reason
that the supporting documents were in Team Sual’s former
names.
The Decision promulgated on June 9, 2009 and Amended
Decision dated June 7, 2010 by the Court in Division, are
therefore MODIFIED. Accordingly, the Commissioner is
hereby ORDERED to REFUND to Team Sual the amount
of, or to ISSUE A TAX CREDIT CERTIFICATE in its

favor amounting to, ONE HUNDRED TWENTY THREE
MILLION ONE HUNDRED TEN THOUSAND ONE
PESOS and SIXTY-EIGHT CENTAVOS
(P123,110,001.68), representing Team Sual’s unutilized
input VAT attributable to its effectively zero-rated sales to
NPC for the second, third and fourth quarters of taxable
year 2001.
SO ORDERED.21
TSC filed a Motion for Partial Reconsideration of the

CTA En Banc’s decision. It insists that the judicial claim
for refund over the first quarter of 2001 was not
prematurely filed and that the CTA Division did in fact
have jurisdiction to act on it. Similarly, the CIR filed a
motion for reconsideration, praying that TSC’s claim be
denied altogether.22
In its Resolution dated March 21, 2012, the CTA En
Banc denied the motions of both TSC and the CIR,
affirming its September 15, 2011 Decision as follows:
_______________
21 Id., at p. 59.
22 Id., at p. 110.

614

WHEREFORE, premises considered, the Motion for

Reconsideration of the Commissioner and the Motion for
Partial Reconsideration of Team Sual are hereby DENIED
for lack of merit.
SO ORDERED.23
Aggrieved, the CIR and TSC filed their respective

Petitions for Review on Certiorari under Rule 45 before the
Court. TSC’s petition was docketed as G.R. Nos. 201225-
26,24 while the CIR’s petitions were docketed as G.R. Nos.
20113225 and 201133.26
In the Resolutions dated June 25, 201227 and July 18,
2012,28 the Court resolved to consolidate G.R. Nos. 201132,
201133, and 201225-26.

The Issues

On one hand, the CIR argues the following for the total
disallowance of TSC’s claim:
I. The Honorable Court of Tax Appeals En Banc erred,
when it affirmed, with modification, the former First
Division’s decision promulgated on June 9, 2009 and
Amended Decision dated June 7, 2012, granting
respondent’s claim for refund in the amount of
P123,110,001.68 allegedly representing unutilized
input VAT attributable to its effectively zero-rated
sales to the National Power Corporation for the
second, third, and fourth
_______________
23 Id., at p. 100.
24 Team Sual Corporation challenging the Decisions of the CTA En
Banc in C.T.A.-E.B. Nos. 649 & 651.
25 Commissioner of Internal Revenue challenging the Decision of the
CTA En Banc in C.T.A.-E.B. No. 651.
26 Commissioner of Internal Revenue challenging the Decision of the
CTA En Banc in C.T.A.-E.B. No. 649.
27 Rollo (G.R. No. 201132), Vol. I, p. 183A.
28 Rollo (G.R. Nos. 201225-26), Vol. I, p. 224.

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quarters of taxable year 2001, because the Honorable Court

of Tax Appeals had no jurisdiction to act on respondent’s
petitions for review; and
II. Assuming that the former First Division had
jurisdiction, petitioner avers that its denial by
inaction was proper and that respondent has not
sufficiently proven its entitlement to a refund.29

On the other hand, TSC raises the following grounds for
the allowance of its judicial claim for refund covering the
first quarter of taxable year 2001:

I. The CTA acquired jurisdiction over the case filed with
and tried by the First Division of the CTA due to the
failure of respondent CIR to invoke the rule of non-
exhaustion of administrative remedies; and
II. The CTA En Banc’s application of the doctrine laid
down in the case of Commissioner of Internal Revenue
v. Aichi Forging Company of Asia30 to petitioner’s

claim for refund is erroneous as:
A.) It will violate established rules on non-retro-
activity of judicial decisions;
B.) It will cause injustice to petitioner who relied in
good faith on the existing jurisprudence at the
time of the filing of the claim for refund; and
C.) It will unjustly enrich the government at the
expense of the petitioner.31

In sum, the rise or fall of the instant petitions rest upon
whether the CTA has jurisdiction to act on TSC’s two
judicial claims for refund.
_______________
29 Rollo (G.R. No. 201132), Vol. I, pp. 22-23.

30 646 Phil. 710; 632 SCRA 422 (2010).

616

The Court’s Ruling

The petitions are bereft of merit.
In order for the CTA to acquire jurisdiction over a
judicial claim for refund or tax credit arising from
unutilized input VAT, the said claim must first comply
with the mandatory 120+30-day waiting period. Any
judicial claim for refund or tax credit filed in contravention
of said period is rendered premature, depriving the CTA of
jurisdiction to act on it.32
Pursuant to Section 112, subsections (A) and (C) of the
National Internal Revenue Code (NIRC) of 1997,33 the
procedure to be followed in claiming a refund or tax credit
of unutilized input VAT are as follows:
Sec. 112. Refunds or Tax Credits of Input Tax.—

(A) Zero-rated or Effectively Zero-rated Sales.—Any VAT-
registered person, whose sales are zero-rated or effectively
zero-rated may, within two (2) years after the close of
the taxable quarter when the sales were made, apply
for the issuance of a tax credit certificate or refund
of creditable input tax due or paid attributable to
such sales, except transitional input tax, to the extent that
such input tax has not been applied against output
tax: Provided, however, That in the case of zero-rated sales

under Section 106(A)(2)(a)(1), (2) and (b) and Section 108(B)
(1) and (2), the acceptable foreign currency exchange
proceeds thereof had been duly accounted for in accordance
with the rules and regulations of the Bangko Sentral ng
Pilipinas (BSP): Provided, further, That where the taxpayer
is engaged in zero-rated or effectively zero-rated sale and
also in taxable or exempt sale of goods of properties or
services, and the amount of creditable input tax due or paid
cannot be directly and entirely attributed to any one of the
transactions, it shall be allocated proportionately on the
basis of
_______________
32 Rollo (G.R. No. 201132), Vol. I, p. 183A.

33 As amended by R.A. No. 9337.

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the volume of sales. Provided, finally, that for a person making

sales that are zero-rated under Section 108(B)(6), the input taxes
shall be allocated ratably between his zero-rated and nonzero-
rated sales.
x x x x
(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) 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
enacted claim with the Court of Tax Appeals. (Emphasis
supplied)

It is clear from the above quoted provisions that any
taxpayer seeking a refund or tax credit arising from
unutilized input VAT from zero-rated or effectively zero-
rated sales should first file an initial administrative claim

with the BIR. This claim for refund or tax credit must be
filed within two years after the close of the taxable quarter
when the sales were made.
The CIR is then given a period of 120 days from the
submission of complete documents in support of the
application to either grant or deny the claim. If the claim is
denied by the CIR or the latter has not acted on it within
the 120-day period, the taxpayer-claimant is then given a
period of 30 days to file a judicial claim via petition for
review with the CTA.
As such, the law provides for two scenarios before a
judicial claim for refund may be filed with the CTA: (1) the
full or

618

partial denial of the claim within the 120-day period, or (2)

the lapse of the 120-day period without the CIR having
acted on the claim. It is only from the happening of either
one may a taxpayer-claimant file its judicial claim for
refund or tax credit for unutilized input VAT.
Consequently, failure to observe the said period renders
the judicial claim premature, divesting the CTA of
jurisdiction to act on it.
This mandatory and jurisdictional nature of the 120-day
waiting period has been reiterated time and again by the
Court.34 In the case of Commissioner of Internal Revenue v.
San Roque Power Corporation,35 the Court En Banc
categorically stated:
Failure to comply with the 120-day waiting period violates a

mandatory provision of law. It 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. Philippine jurisprudence is replete
with cases upholding and reiterating these doctrinal
principles.36

Likewise, in Harte-Hanks Philippines, Inc. v.
Commissioner of Internal Revenue,37 the Court illustrated
the fatal effect of nonobservance of the 120-day period. In
said case, the Court dismissed the judicial claim for refund
because it was filed a mere seven days after taxpayer-
claimant HHPI filed its administrative claim, without

waiting for it to be first resolved. The
_______________
34 See Commissioner of Internal Revenue v. Deutsche Knowledge

Services, Pte. Ltd., G.R. No. 211072, November 7, 2016, 807 SCRA 90, 98;
Commissioner of Internal Revenue v. Toledo Power Company, 766 Phil. 20,
26; 775 SCRA 709, 723 (2015); Taganito Mining Corporation v.
Commissioner of Internal Revenue, 747 Phil. 469, 475-476; 741 SCRA 196,
207 (2014).
35 703 Phil. 311; 690 SCRA 336 (2013).
36 Id., at p. 354; p. 381.
37 G.R. No. 205721, September 14, 2016, 803 SCRA 178.

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VOL. 861, APRIL 18, 2018 679

Court explained that the CTA must wait for the

Commissioner’s decision on the administrative claim or the
lapse of the 120-day waiting period otherwise there would
be nothing to review. It is the denial or inaction “deemed a
denial” which the taxpayer-claimant takes to the CTA for
review. Without any ‘decision,’ the CTA as a court of special
jurisdiction acquires no jurisdiction over a taxpayer-
claimant’s judicial claim for refund.38
In the instant case, TSC filed its administrative claim
for refund for taxable year 2001 on March 20, 2003, well
within the two-year period provided for by law. TSC then
filed two separate judicial claims for refund: one on March
31, 2003 for the first quarter of 2001, and the other on July
23, 2003 for the second, third, and fourth quarters of the
same year.39
Given the fact that TSC’s administrative claim was filed
on March 20, 2003, the CIR had 120 days or until July 18,
2003 to act on it. Thus, the first judicial claim was
premature because TSC filed it a mere 11 days after filing
its administrative claim.
On the other hand, the second judicial claim filed by TSC was
filed on time because it was filed on July 23, 2003 or five days
after the lapse of the 120-day period.40 Accordingly, it is clear
that the second judicial claim complied with the mandatory
waiting period of 120 days and was filed within the prescriptive
period of 30 days from the CIR’s action or inaction. Therefore, the
CTA division only acquired jurisdiction over TSC’s second judicial
claim for refund covering its second, third, and fourth quarters of
taxable year 2001.
TSC submits that at the time of the filing of its claims for
refund, prevailing jurisprudence espoused that the 120-day
_______________
38 Id.
40 Id.

620

waiting period was merely permissive instead of

mandatory.41 Otherwise stated, TSC argues that as long as
a taxpayer-claimant filed both its administrative and
judicial claim within the two-year prescriptive period under
Section 112(A) of the NIRC then there would be no need to
comply with the 120-day waiting period. This assertion has
no basis.
In support of its position, TSC cites42 the cases of Intel
Technology Philippines, Inc. v. Commissioner of Internal
Revenue,43 San Roque Power Corporation v. Commissioner
of Internal Revenue,44 AT&T Communications Services
Philippines, Inc. v. Commissioner of Internal
Revenue,45 and Southern Philippines Power Corporation v.
Commissioner of Internal Revenue.46 TSC insists that in
said cases, because the Court allowed the filing of the
judicial claim even before the CIR could act on the
administrative claim, then the Court implicitly ruled that
the 120-day period is not mandatory. However, a more
thorough study of the cases reveals that they are
inapplicable to this controversy as they involve different
issues.
In Intel Technology Philippines,47 the Court resolved the issue
of whether entities engaged in business are required to indicate in
their receipts or invoices the authority from the BIR to print the
same. Nowhere in the case did the Court rule that the 120-day
period may be dispensed with as long as the administrative and
judicial claims are filed within the two-year prescriptive period.
_______________
41 Id., at pp. 116-127.

42 Id., at pp. 117-118.
43 Intel Technology Philippines, Inc. v. Commissioner of Internal

Revenue, 550 Phil. 751; 522 SCRA 657 (2007).
44 620 Phil. 554; 605 SCRA 536 (2009).
45 640 Phil. 613; 626 SCRA 567 (2010).
46 675 Phil. 732; 659 SCRA 658 (2011).
47 Intel Technology Philippines, Inc. v. Commissioner of Internal
Revenue, supra at p. 788; p. 695.

621
VOL. 861, APRIL 18, 2018 621

In San Roque Power Corporation,48 the main issue

revolved around the coverage of the terms, “zero-rated or
effectively zero-rated sales.” The Court discussed that the
NIRC does not limit the definition of “sale” to commercial
transactions in the normal course of business, but extends
the term to transactions which are also “deemed” sale
under Section 106(B) of the NIRC. Again, nowhere in said
case was the 120-day period even remotely mentioned or
ruled upon.
Finally, in AT&T Communications Services Philippines,
Inc.49 and Southern Philippines Power Corporation,50 the
issues resolved by the Court dealt with the substantiation
requirements in relation to a claim for tax refund or credit.
Likewise, the Court never even touched upon the nature of
the 120-day waiting period in said case.
Given the foregoing, it is apparent that none of these cases
constitute binding precedent as to the nature of the 120-day
period. As such, TSC cannot now claim that at the time they filed
their judicial claims, they relied in good faith on the then —
prevailing interpretation as to the nature of the 120-day period.
Nevertheless, TSC insists that assuming arguendo that
the 120-day period was indeed mandatory and
jurisdictional, the issue of its noncompliance with said
period, as a ground to deny its claim, was already waived
since the CIR did not raise it in the proceedings before the
CTA Division. It claims that noncompliance with the 120-
day period prior to the filing of a judicial claim with the
CTA merely results in a lack of cause
_______________
48 San Roque Power Corporation v. Commissioner of Internal Revenue,

supra note 44 at p. 578; p. 558.
49 AT&T Communication Services Philippines, Inc. v. Commissioner of
Internal Revenue, supra note 45 at p. 615; p. 574.
50 Southern Philippines Power Corporation v. Commissioner of

Internal Revenue, supra note 46 at p. 739; p. 665.

622

of action, a ground which may be waived for failure to timely

invoke the same.51
However, it is apparent from the records that the issue
of TSC’s noncompliance with the 120-day waiting period
has been raised by the CIR throughout the pendency of the
entire case. In fact, the records reveal that the CIR raised
it at the earliest possible opportunity, when it filed its
motion for partial reconsideration with the CTA Division
dated July 3, 2009.52
In any case, even if the CIR failed to raise the issue of
TSC’s noncompliance with the 120-day waiting period at
the first instance, such failure would not operate to vest the
CTA with jurisdiction over TSC’s judicial claims for refund.
The Court has already settled that a judicial claim for
refund which does not comply with the 120-day mandatory
waiting period renders the same void.53 As such, no right
can be claimed or acquired from it, notwithstanding the
failure of a party to raise it as a ground for dismissal.
In San Roque,54 the Court expounded on such point, to wit:
San Roque’s failure to comply with the 120-day mandatory period

renders its petition for review with the CTA void. Article 5 of the
Civil Code provides, “Acts executed against provisions of
mandatory or prohibitory laws shall be void, except when the law
itself authorizes their validity.’’ San Roque’s void petition for
review cannot be legitimized by the CTA or this Court because
Article 5 of the Civil Code states that such void petition cannot be
legitimized “except when the law itself authorizes [its] validity.”
There is no law authorizing the petition’s validity.
_______________

52 Rollo (G.R. No. 201132), Vol. I, p. 60.
53 Commissioner of Internal Revenue v. Team Sual Corporation
(formerly Mirant Sual Corporation), 726 Phil. 266, 282; 715 SCRA 478,
495 (2014).
54 Commissioner of Internal Revenue v. San Roque Power Corporation,
supra note 35.

623
VOL. 861, APRIL 18, 2018 623

It is hornbook doctrine that a person committing a void

act contrary to a mandatory provision of law cannot
claim or acquire any right from his void act. A right
cannot spring in favor of a person from his own void
or illegal act. This doctrine is repeated in Article 2254 of
the Civil Code, which states, “No vested or acquired right
can arise from acts or omissions which are against the law
or which infringe upon the rights of others.” For violating a
mandatory provision of law in filing its petition with the
CTA, San Roque cannot claim any right arising from such
void petition. Thus, San Roque’s petition with the CTA is a
mere scrap of paper.55 (Emphasis supplied)
Being a mere scrap of paper, TSC’s judicial claim for

refund filed on March 31, 2003 covering the first quarter of
taxable year 2001 cannot be the source of any rights.
Thus, considering the foregoing, the Court agrees with
the ruling of the CTA En Banc which held that between the
March 31 and the July 23 petitions for review filed by TSC,
the CTA Division only acquired jurisdiction over the latter.
Seeing as the CTA validly acquired jurisdiction over the
July 23 petition for review covering the second, third, and
fourth quarters of taxable year 2001, we give full accord to
its factual findings with respect to the amount of duly
substantiated excess input VAT for said periods.
The CTA En Banc, based on their appreciation of the
evidence presented to them, unequivocally ruled that TSC
has sufficiently proven its entitlement to the refund or the
issuance of a tax credit certificate in its favor for unutilized
input VAT in the amount of P123,110,001.68.56
It is well-settled that factual findings of the CTA when
supported by substantial evidence, will not be disturbed on
ap-
_______________
55 Id., at p. 356; pp. 382-383.


624


peal. Due to the nature of its functions, the tax court

dedicates itself to the study and consideration of tax
problems and necessarily develops expertise thereon.
Unless there has been an abuse of discretion on its part,
the Court accords the highest respect to the factual
findings of the CTA.57
It must be emphasized that generally, it is not the
determine factual matters. Although there are
58
exceptions to this general rule, none of these exist in the
instant case. With that being said, the issue of whether a
claimant has actually presented
_______________
57 Commissioner of Internal Revenue v. San Miguel Corporation, G.R.

No. 205045 and G.R. No. 205723, January 25, 2017, 815 SCRA 563, 617.
58 See Pascual v. Burgos, G.R. No. 171722, January 11, 2016, 778
SCRA 189, 207. Where the Court held that the following are known
exceptions, to wit:
(1) When the conclusion is a finding grounded entirely on
speculation, surmises or conjectures;
(2) When the inference made is manifestly mistaken, absurd or
impossible;
(3) Where there is a grave abuse of discretion;
(4) When the judgment is based on a misapprehension of facts;
(5) When the findings of fact are conflicting;
(6) When the Court of Appeals, in making its findings, went
beyond the issues of the case and the same is contrary to the
admissions of both appellant and appellee;
(7) The findings of the Court of Appeals are contrary to those of
the trial court;
(8) When the findings of fact are conclusions without citation of
specific evidence on which they are based;
(9) When the facts set forth in the petition as well as in the
petitioner’s main and reply briefs are not disputed by the
respondents; and
(10) The finding of fact of the Court of Appeals is premised on
the supposed absence of evidence and is contradicted by the
evidence on record.

625
VOL. 861, APRIL 18, 2018 625

the necessary documents that would prove its entitlement to a tax

refund or tax credit, is indubitably a question of fact.59
As a final note, tax refunds or tax credits, just like tax
exemptions, are strictly construed against the taxpayer-
claimant. A claim for tax refund is a statutory privilege and
the mere existence of unutilized input VAT does not entitle
the taxpayer, as a matter of right, to it. As such, the rules
and procedure in claiming a tax refund should be faithfully
complied with. Noncompliance with the pertinent laws
should render any judicial claim fatally defective.60
WHEREFORE, premises considered, the instant
petitions are DENIED. The Consolidated Decision dated
September 15, 2011 and the Resolution dated March 21,
2012 of the Court of Tax Appeals En Banc in C.T.A.-E.B.
No. 649 and C.T.A.-E.B. No. 651 are
hereby AFFIRMED in toto.
SO ORDERED.
Carpio** (Chairperson), Peralta, Perlas-

Bernabe and Caguioa, JJ., concur.
Petitions denied, consolidated decision and resolution

affirmed in toto.
Notes.—A tax credit or refund, like tax exemption, is

strictly construed against the taxpayer. (Silicon
Philippines, Inc. [formerly Intel Philippines Manufacturing,
Inc.] vs. Commissioner of Internal Revenue, 754 SCRA 279
[2015])
_______________
59 Atlas Consolidated Mining and Development Corporation v.

Commissioner of Internal Revenue, 655 Phil. 499, 508; 640 SCRA 504, 508
(2011).
60 Harte-Hanks Philippines, Inc. v. Commissioner of Internal Revenue,
supra note 37.
** Designated Acting Chief Justice per Special Order No. 2539 dated
February 28, 2018.

626

Upon the filing of an administrative claim, respondent is

given a period of one hundred twenty (120) days within
which to (1) grant a refund or issue the tax credit
certificate for creditable input taxes; or (2) make a full or
partial denial of the claim for a tax refund or tax credit.

(Silicon Philippines, Inc. [formerly Intel Philippines
Manufacturing, Inc.] vs. Commissioner of Internal
Revenue, 785 SCRA 351 [2016])

——o0o——

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3/7/22, 1:16 PM SUPREME COURT REPORTS ANNOTATED 861

G.R. Nos. 201225-26. April 18, 2018.*

Taxation; Tax Refund; Tax Credit; In order for the Court of

VOL. 861, APRIL 18, 2018 605

VOL. 861, APRIL 18, 2018 607

Team Sual Corporation (formerly Mirant Sual

expertise thereon. Unless there has been an abuse of

PETITIONS for review on certiorari of the consolidated

608 SUPREME COURT REPORTS ANNOTATED

REYES, JR., J.:

Challenged before the Court via Petitions for Review on

VOL. 861, APRIL 18, 2018 609

On December 6, 2000, TSC filed with the BIR Revenue

for zero-rating arising from its sale of power generation

610 SUPREME COURT REPORTS ANNOTATED

VAT for the second, third, and fourth quarters of taxable

quarters of taxable year 2001, but disallowed the refund for

WHEREFORE, the instant Petition for Review is

The Commissioner of Internal Revenue (CIR) filed a

VOL. 861, APRIL 18, 2018 611

Likewise, in its Motion for Partial Reconsideration dated

On June 7, 2010, the CTA Division promulgated an

WHEREFORE, respondent’s Motion for Partial

14 Id., at pp. 37-38.

612 SUPREME COURT REPORTS ANNOTATED

tributable to its effectively zero­-rated sales to the National

Dissatisfied, TSC filed a Petition for Review docketed as

argues that a corporation’s change of name does not affect

VOL. 861, APRIL 18, 2018 613

WHEREFORE, all the foregoing considered, the

of, or to ISSUE A TAX CREDIT CERTIFICATE in its

TSC filed a Motion for Partial Reconsideration of the

614 SUPREME COURT REPORTS ANNOTATED

WHEREFORE, premises considered, the Motion for

Aggrieved, the CIR and TSC filed their respective

VOL. 861, APRIL 18, 2018 615

quarters of taxable year 2001, because the Honorable Court

v. Aichi Forging Company of Asia30 to petitioner’s

29 Rollo (G.R. No. 201132), Vol. I, pp. 22-23.

616 SUPREME COURT REPORTS ANNOTATED

The Court’s Ruling

Sec. 112. Refunds or Tax Credits of Input Tax.—

tax: Provided, however, That in the case of zero-rated sales

32 Rollo (G.R. No. 201132), Vol. I, p. 183A.

VOL. 861, APRIL 18, 2018 617

the volume of sales. Provided, finally, that for a person making

rated sales should first file an initial administrative claim

618 SUPREME COURT REPORTS ANNOTATED

partial denial of the claim within the 120-day period, or (2)

Failure to comply with the 120-day waiting period violates a

claimant HHPI filed its administrative claim, without

34 See Commissioner of Internal Revenue v. Deutsche Knowledge

VOL. 861, APRIL 18, 2018 679

Court explained that the CTA must wait for the

620 SUPREME COURT REPORTS ANNOTATED

waiting period was merely permissive instead of

41 Id., at pp. 116-127.

43 Intel Technology Philippines, Inc. v. Commissioner of Internal

VOL. 861, APRIL 18, 2018 621

tributable to its effectively zero-rated sales to the National