CIR v. San Roque Corporation | G.R. No. 187485 | October 8, 2013 | Carpio, J. | Article VIII, Section 5 |
Recit Ready Summary
At present is a motion for reconsideration of the previous decision of the Supreme Court granting the petition of the CIR to deny the tax refund or credit claim of San Roque. San Roque prays that rule established in the previous decision only be given a prospective effect, saying that the way the BIR and CTA treated the “120 + 30 days” rule constitutes as an operative fact, which makes the effects and consequences irreversible. However, the SC denies the motion and says that the Court only invalidated BIR-Ruling No. DA-489-03 and not any other law or executive issuance. For the Doctrine of Operative Fact to apply, there must be a legislative or executive measure.
San Roque is being denied of its tax refund since it filed for judicial relief only 13 days after it filed its administrative claim, violating the said “120+30 days” rule. San Roque says that the BIR and CTA in “actual practice” didn’t observe or require the refund-seekers to comply with the 120+30 days period. SC says this argument will not fly since an administrative practice is neither a law nor an executive issuance, plus no such administrative practice by the BIR actually exists.
In DA-489-03, BIR ruled that a taxpayer-claimant need not wait for the lapse of the 120 days to seek judicial relief with the CTA. Prior to the ruling, BIR’s actual practice was to contest simultaneous filing of claims at the administrative or judicial levels, different from the practice San Roque claims. After, SC decided in the Aichi case that the 120+30 days period was mandatory.
The doctrine of operative fact can only applied in this case insofar as reversing the BIR Ruling DA-489-03 and promulgating Aichi. Section 246 of the Tax Code incorporates the doctrine saying that taxpayers may rely on rulings by the Commissioner from the time the rule is issued up to its reversal by the Commissioner or the Court. However, San Roque’s argument is simply based on an informal administrative practice, not an actual ruling.
San Roque also insists that the Court should not decide the present cases in violation of the rulings made by the CTA, but CTA or CA decisions, as well as those of the lower courts are not binding and do not form part of the law of the land like the SC’s. SC also reiterates that all cases that do not pass through the SC are not valid as precedents. The cases cited by San Roque are all CTA cases
Thus, with finality, the Supreme Court denies the Motion for Reconsideration.
FACTS:
For tax refunds or credit claims, there is a mandatory rule under Section 112 of the NIRC of waiting 120 days plus another 30 days after filing an administrative claim before you can file a judicial claim with the CTA.
San Roque Corporation violated said rule and filed with the CTA just 13 days after filing the administrative claim.
San Roque was not granted the tax refund by the Supreme Court. Hence, this motion for reconsideration. They say that the BIR and CTA in “actual practice” didn’t observe or require the refund-seekers to comply with the 120+30 days period.
In DA-489-03, BIR ruled that a taxpayer-claimant need not wait for the lapse of the 120 days to seek judicial relief with the CTA. Prior to the ruling, BIR’s actual practice was to contest simultaneous filing of claims at the administrative or judicial levels, different from the practice San Roque claims.
San Roque violated the mandatory period. The doctrine of operative fact can only be applied in this case insofar as reversing the BIR Ruling DA-489-03 and promulgating Aichi
San Roque also insists that the Court should not decide the present case in violation of the rulings made by the CTA, but CTA or CA decisions, as well as those of the lower courts are not binding and do not form part of the law of the land like the SC’s.
SC reiterates that all cases that do not pass through the SC are not valid as precedents
ISSUES:
1. W/N San Roque can claim their tax refund? NO.
2. W/N the CTA Ruling is binding on the SC? NO.
HELD:
1. A claim for tax refund or credit is strictly construed against the taxpayer, who must prove that his claim clearly complies with all the conditions for granting the tax refund or credit. San Roque did not comply with the mandatory period of filing claims according to Section 112 of the NIRC. San Roque cannot rely on the Doctrine of Operative Fact since their basis is a non-existent administrative practice, and even if it did exist, the doctrine can only be applicable to a law or executive measure. The doctrine can only be applied to the BIR Ruling No. DA-489-03 reversed by the SC ruling in Aichi, but even then it cannot apply since what is contemplated in the BIR Ruling is not the same as the “administrative practice” relied on by San Roque.
2. Only Supreme Court decisions are binding and form part of the land.
Separate Opinions:
Leonen, J.
The
strict and mandatory application of the 120 + 30 day- period must be reckoned
from the date of the effectivity of the 1997 NIRC. The construction made by the
Court in Aichi should be read into and considered part of Section 112 (C) from
the moment it became effective on January 1, 1998. The Aichi doctrine as confirmed
in San Roque should be applied to all
undecided Value Added Tax or VAT refund cases, regardless of the period when
the claim for refund was made.
Velasco, J.
For
judicial claims for refund/credit of input VAT filed from January 1, 1996
(effectivity of Revenue Regulation No. RR 7-95) up to October 31, 2005 (prior
to effectivity of RR 16-2005), the Court may treat the period provided for the
filing of judicial claims as permissible provided that both the administrative
and judicial claims are filed within two (2) years from the close of the
relevant taxable quarter. Then, for judicial claims filed from November 1,2005
(date of effectivity of RR 16-2005) and thereafter, the prescriptive period
under Section 112 (C) is mandatory.
OTHER
NOTES:
Section 112 of the
NIRC (Tax Code) says: The
taxpayer can file the judicial claim (1) only within thirty days
after the Commissioner partially or fully denies the claim within
the 120- day period, or (2) only within thirty days from the
expiration of the 120- day period if the Commissioner does not act
within the 120-day period
Present case is consolidated with Taganito
v CIR, where the the previous decision is assailed because BIR Ruling
DA-489-03 was issued by a Deputy Commissioner. The motion for reconsideration
is also denied since the Commissioner may delegate the powers vested in him to
any subordinate official with the rank of division chief or higher, subject to
the limitations promulgated by the Secretary of Finance.
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