Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=83839:58348&catid=1589&Itemid=566
Timestamp: 2019-04-19 10:24:43+00:00

Document:
G.R. No. 185969, November 19, 2014 - AT&T COMMUNICATIONS SERVICES PHILIPPINES, INC., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
AT&T COMMUNICATIONS SERVICES PHILIPPINES, INC., Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
Finding no merit in petitioner's contentions, the CTA En Banc rendered the assailed 24 September 2008 Decision which affirmed both the Decision and Resolution rendered by the CTA in Division in C.T.A. Case No. 7221. It categorically pronounced that official receipt cannot be interchanged with sales invoice.14 It further emphasized that proof of inward remittances like bank credit advices cannot be used in lieu of VAT official receipts to demonstrate petitioner's zero-rated transactions. Under Section 113 of the NIRC of 1997, as amended, irrespective of the nature of transaction, be it taxable, exempt or zero-rated sale, the law mandates that the taxpayer "for every sale, issue an invoice or receipt." Thus, the enumerated zero-rated transactions under Sections 106 and 108 are those which are duly covered by VAT invoices (in the case of sales of goods), and VAT official receipts (in the case of sales of services).15 In other words, the law itself clearly specified that an official receipt shall cover sales of services, and did not provide for any other document which can be used as an alternative to or in lieu thereof.
Upon denial of petitioner's Motion for Reconsideration thereof, it filed the instant Petition for Review on Certiorari before this Court seeking the reversal of the aforementioned Decision and the 13 January 2009 Resolution16 rendered in C.T.A. EB No. 381.
At this juncture, it bears emphasis that jurisdiction over the subject matter or nature of an action is fundamental for a court to act on a given controversy,18 and is conferred only by law and not by the consent or waiver upon a court which, otherwise, would have no jurisdiction over the subject matter or nature of an action. Lack of jurisdiction of the court over an action or the subject matter of an action cannot be cured by the silence, acquiescence, or even by express consent of the parties.19 If the court has no jurisdiction over the nature of an action, its only jurisdiction is to dismiss the case. The court could not decide the case on the merits.20 Needless to state, to obviate the possibility that its decision may be rendered void, the Court can, by its own initiative, raise the question of jurisdiction, although not raised by the parties.21 As a corollary thereto, to inquire into the existence of jurisdiction over the subject matter is the primary concern of a court, for thereon would depend the validity of its entire proceedings.22 Therefore, even if there was no jurisdictional issue raised by any party, the Court may look into it at anytime of the proceedings, even during this appeal.
Relevant thereto, the Court sitting En Banc has finally settled the issue on proper observance of the prescriptive periods in claiming for refund of creditable input tax due or paid attributable to any zero-rated or effectively zero-rates sales. Thus, in view of the jurisprudential pronouncements rendered in Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of Internal Revenue (San Roque case),25 this Court finds it imperative to first look into the factual findings of the CTA for the purpose of achieving a complete . determination of the issue presented, particularly as to the timeliness of its administrative and judicial claims.
In C.T.A. Case No. 7221, the CTA in Division solely ruled on petitioner's non-compliance with the substantiation requirements, expressing that the evidence submitted by petitioner to prove its zero-rated sales were insufficient so as to entitle it to the claim for refund or issuance of a TCC. Similar declaration was made by the CTA En Banc in the assailed 24 September 2008 Decision and 13 January 2009 Resolution in C.T.A. EB No. 381.
Nonetheless, although it is true that the substantiation requirements in establishing a refund claim is a valid issue for this Court to rule upon, the prior determination of whether or not the CTA properly acquired jurisdiction over petitioner's claim covering the four (4) quarters of taxable year 2003, taking into consideration the timeliness of the filing of the administrative and judicial claims pursuant to Section 112 of the NIRC of 1997, as amended, and consistent with the pronouncements made in the San Roque case, is still our primary concern. Clearly, petitioner's claim can only proceed upon compliance with the aforesaid jurisdictional requirement.
(D)26Period 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.
taxpayer and he can avail of the full period before his right to apply for a tax refund or credit is barred by prescription.
Second, Section 112(C) provides that the Commissioner shall decide the application for refund or credit "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)." The reference in Section 112(C) of the submission of documents "in support of the application filed in accordance with Subsection A" means that the application in Section 112(A) is the administrative claim that the Commissioner must decide within the 120-day period. In short, the two-year prescriptive period in Section 112(A) refers to the period within which the taxpayer can file an administrative claim for tax refund or credit. Stated otherwise, 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. As held in Aichi, the "phrase 'within two years x x x apply for the issuance of a tax credit or refund' refers to applications for refund/credit with the CIR and not to appeals made to the CTA."
Clearly, the CTA had no jurisdiction to rule on petitioner's refund claim covering the First Quarter of taxable year 2003 since its administrative claim was filed beyond the 2-year prescriptive period as mandated by law, or exactly fourteen (14) days after the last day to file the same.
Like San Roque, Taganito also filed its petition for review with the CTA without waiting for the 120-day period to lapse. Also, like San Roque, Taganito filed its judicial claim before the promulgation of the Atlas doctrine. Taganito filed a Petition for Review on 14 February 2007 with the CTA. This is almost four months before the adoption of the Atlas doctrine on 8 June 2007. Taganito is similarly situated as San Roque - both cannot claim being misled, misguided, or confused by the Atlas doctrine.
Without doubt, it is evident from the foregoing jurisprudential pronouncements that as a general rule, a taxpayer-claimant needs to wait for the expiration of the one hundred twenty (120)-day period before it may be considered as "inaction" on the part of the Commissioner of Internal Revenue (CIR). Thereafter, the taxpayer-claimant is given only a limited period of thirty (30) days from said expiration to file its corresponding judicial claim with the CTA. However, with the exception of claims made during the effectivity of BIR Ruling No. DA-489-03 (from 10 December 2003 to 5 October 2010),34 petitioner has indeed properly and timely filed its judicial claim covering the Second, Third, and Fourth Quarters of taxable year 2003, within the bounds of the law and existing jurisprudence.
Now, the significance of the difference between a sales invoice and an official receipt as evidence for zero-rated transactions.
For emphasis, even prior to the enactment of R.A. No. 9337,35 which clearly delineates the invoice and official receipt, our Tax Code has already . made the distinction.
Although it appears under the above-quoted provision that there is no clear distinction on the evidentiary value of an invoice or official receipt, it is worthy to note that the said provision is a general provision which covers all sales of a VAT registered person, whether sale of goods or services. It does not necessarily follow that the legislature intended to use the same interchangeably. The Court therefore cannot conclude that the general provision of Section 113 of the NIRC of 1997, as amended, intended that the invoice and official receipt can be used for either sale of goods or services, because there are specific provisions of the Tax Code which clearly delineates the difference between the two transactions.
Apparently, the construction of the statute shows that the legislature intended to distinguish the use of an invoice from an official receipt. It is more logical therefore to conclude that subsections of a statute under the same heading should be construed as having relevance to its heading. The legislature separately categorized VAT on sale of goods from VAT on sale of services, not only by its treatment with regard to tax but also with respect to substantiation requirements. Having been grouped under Section 108, its subparagraphs, (A) to (C), and Section 106, its subparagraphs (A) to (D), have significant relations with each other.
Settled is the rule that every part of the statute must be considered with the other parts.37 Accordingly, the whole of Section 108 should be read in conjunction with Sections 113 and 237 so as to give life to all the provisions intended for the sale of services. There is no conflict between the provisions of the law that cover sale of services that are subject to zero rated sales; thus, it should be read altogether to reveal the true legislative intent.
To finally settle this matter, this Court declared in KEPCO Philippines Corporation v. Commissioner of Internal Revenue,38 that the VAT invoice is the seller's best proof of the sale of the goods or services to the buyer while the VAT receipt is the buyer's best evidence of the payment of goods or services received from the seller. Thus, the High Court concluded that VAT invoice and VAT receipt should not be confused as referring to one and the same thing. Certainly, neither does the law intend the two to be used interchangeably. Accordingly, we agree with the mling of the CTA in Division, as well as that of the CTA En Banc, insofar as to its discussion on the relevancy of the aforesaid substantiation requirements.
WHEREFORE, the petition is DENIED. No costs.
Sereno, C.J., (Chairperson), Velasco, Jr.,* Leonardo-De Castro, and Perlas-Bernabe, JJ., concur.
* Per Special Order No. 1870 dated 4 November 2014.
1Rollo, pp. 68-87; Penned by Associate Justice Juanito C. Castañeda, Jr. with Associate Justices Lovell R. Bautista, Erlinda P. Uy, Caesar A. Casanova and Olga Palanca-Enriquez, concurring and Presiding Justice Ernesto D. Acosta, dissenting.
3 Id. at 210-229, 259-264; Penned by Associate Justice Lovell R. Bautista with Associate Justice Caesar A. Casanova concurring and Presiding Justice Ernesto D. Acosta dissenting.
10 Id. at 210-229; Penned by Associate Justice Lovell R. Bautista with Associate Justice Caesar A. Casanova, concurring and Presiding Justice Ernesto D. Acosta, dissenting.
12 Id. at 259-264; CTA in Division Resolution.
14 Id. at 78; CTA En Banc Decision dated 24 September 2008.
18Commissioner of Internal Revenue v. Villa, et al., 130 Phil. 3, 4 (1968).
19Laresma v. Abellana, 484 Phil. 766, 778 (2004).
20 Please refer to Lt. Col. De Guzman v. Judge Escalona, 186 Phil. 431, 438 (1980).
21Ker & Company, Lid. v. Court of Tax Appeals, 114 Phil. 1220 (1962).
22Commissioner of Internal Revenue v. Villa, et al., supra note 18.
23Ker & Company, Ltd. v. Court of Tax Appeals, supra note 21.
24 Section 1, Rule 9, Rules of Court.
25 G.R. Nos. 187485, 196113, and 197156, 12 February 2013, 690 SCRA 336.
26 Presently Section 112(C) upon the effectivity of Republic Act No. 9337 on 1 November 2005.
27Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of internal Revenue (San Roque case), supra note 25. See also Mindanao II Geolhermal Partnership v. Commissioner of Internal Revenue, and Mindanao I Geothermal Partnership v. Commissioner of Internal Revenue, G.R. Nos. 193301 and 194637, 11 March 2013, 693 SCRA 49.
30Atlas Consolidated Mining and Dev't. Corp. v. Commission on Internal Revenue, 551 Phil. 519 (2007).
31 Considering that taxable year 2004 was a leap year.
32Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of Internal Revenue, supra note 25 at 388.
33 "BIR Ruling No. DA-489-03 does provide a valid claim for equitable estoppel under Section 246 of the Tax Code. BIR Ruling No. DA-489-03 expressly states that the 'taxpayer-claimant need not wait for the lapse of the 120-day period before it could seek judicial relief with the CTA by way of Petition for Review.'" See Commissioner of Internal Revenue v. San Roque Power Corporation, Taganito Mining Corporation v. Commissioner of Internal Revenue, and Philex Mining Corporation v. Commissioner of Internal Revenue, supra note 25 at 401.
35 An Act Amending Sections 27, 28, 34, 106, 107, 108, 109, 110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 and 288 of the National Internal Revenue Code of 1997, as Amended, and for Other Purposes.
36Aboitiz Shipping Corp., et.al. v. City of Cebu, et al., 121 Phil. 425, 429 (1965).
37Planters Association of Southern Negros Inc. v. Hon. Ponferrada, 375 SCRA 901, 913 (1999).
38 G.R. No. 181858, 24 November 2010, 636 SCRA 166, 182.

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