Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=84255:59977&amp;catid=1594&amp;Itemid=566
Timestamp: 2019-04-26 04:01:48+00:00

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SILICON PHILIPPINES, INC. (FORMERLY INTEL PHILIPPINES MANUFACTURING, INC.), Petitioner, v. COMMISSIONER OF INTERNAL REVENUE, Respondent.
Before the Court is a Petition for Review on Certiorari filed by petitioner Silicon Philippines, Inc. (SPI) seeking the reversal and setting aside of the following: (1) the Decision1 dated January 27, 2006 of the Court of Tax Appeals (CTA) en banc in CTA EB Case No. 24, which affirmed the Decision2 dated November 24, 2003 and Resolution3 dated August 10, 2004 of the CTA Division in CTA Case No. 6170; and (2) Resolution4 dated June 26, 2006 of the CTA en banc also in CTA EB Case No. 24, which denied the Motion for Reconsideration of SPI. The CTA Division only granted the claim of SPI for tax credit/refund of input Value-Added Tax (VAT) on its purchases of capital goods, but not the input VAT attributable to its zero-rated sales.
SPI, formerly known as Intel Philippines Manufacturing, Inc., is a corporation duly organized and existing under Philippine laws, and engaged in the business of designing, developing, manufacturing, and exporting advance and large-scale integrated circuit components, commonly referred to in the industry as Integrated Circuits or “ICs.” It is registered with the Bureau of Internal Revenue (BIR) as a VAT taxpayer and with the Board of Investments as a preferred pioneer enterprise enjoying a six-year income holiday, in accordance with the provisions of the Omnibus Investments Code.
When respondent Commissioner of Internal Revenue (CIR) failed to act upon its aforesaid Application for Tax Credit/Refund, SPI filed on September 29, 2000 a Petition for Review before the CTA Division, which was docketed as CTA Case No. 6170.
SPI sought recourse from the CTA en banc by filing a Petition for Review assailing the Decision dated November 24, 2003 and Resolution dated August 10, 2004 of the CTA Division. The Petition was docketed as CTA EB Case No. 24.
SPI filed a Motion for Reconsideration but said Motion was denied for lack of merit by the CTA en banc in a Resolution dated June 26, 2006.
During the pendency of the present Petition, this Court en banc promulgated on February 12, 2013 its Decision in the consolidated cases of 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 Revenue10 (hereinafter collectively referred to as San Roque). In San Roque, the Court settled the rules on the prescriptive periods for claiming credit/refund of input VAT under Section 112 of the 1997 Tax Code.
(B) Excess Output or Input Tax. – If at the end of any taxable quarter the output tax exceeds the input tax, the excess shall be paid by the VAT-registered person. If the input tax exceeds the output tax, the excess shall be carried over to the succeeding quarter or quarters. Any input tax attributable to the purchase of capital goods or to zero-rated sales by a VAT-registered person may at his option be refunded or credited against other internal revenue taxes, subject to the provisions of Section 112.
(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 or 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 the volume of sales.
(B) Capital Goods. – A VAT-registered person may apply for the issuance of a tax credit certificate or refund of input taxes paid on capital goods imported or locally purchased, to the extent that such input taxes have not been applied against output taxes. The application may be made only within two (2) years after the close of the taxable quarter when the importation or purchase was made.
x x x 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.
This law is clear, plain, and unequivocal. Following the well-settled verba legis doctrine, this law should be applied exactly as worded since it is clear, plain, and unequivocal. As this law states, the taxpayer may, if he wishes, appeal the decision of the Commissioner to the CTA within 30 days from receipt of the Commissioner’s decision, or if the Commissioner does not act on the taxpayer’s claim within the 120-day period, the taxpayer may appeal to the CTA within 30 days from the expiration of the 120-day period.
Section 112(A) and (C) must be interpreted according to its clear, plain, and unequivocal language. The taxpayer can file his administrative claim for refund or credit at anytime within the two-year prescriptive period. If he files his claim on the last day of the two-year prescriptive period, his claim is still filed on time. The Commissioner will have 120 days from such filing to decide the claim. If the Commissioner decides the claim on the 120th day, or does not decide it on that day, the taxpayer still has 30 days to file his judicial claim with the CTA. This is not only the plain meaning but also the only logical interpretation of Section 112(A) and (C).
When Section 112(C) states that “the taxpayer affected may, within thirty (30) days from 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,” the law does not make the 120+30 day periods optional just because the law uses the word “may.” The word “may” simply means that the taxpayer may or may not appeal the decision of the Commissioner within 30 days from receipt of the decision, or within 30 days from the expiration of the 120-day period. x x x.
To repeat, a claim for tax refund or credit, like a claim for tax exemption, is construed strictly against the taxpayer. One of the conditions for a judicial claim of refund or credit under the VAT System is compliance with the 120+30 day mandatory and jurisdictional periods. Thus, strict compliance with the 120+30 day periods is necessary for such a claim to prosper, whether before, during, or after the effectivity of the Atlas doctrine, except for the period from the issuance of BIR Ruling No. DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine was adopted, which again reinstated the 120+30 day periods as mandatory and jurisdictional.
The taxpayer can file an appeal in one of two ways: (1) file the judicial claim within thirty days after the Commissioner denies the claim within the 120-day period, or (2) file the judicial claim within thirty days from the expiration of the 120-day period if the Commissioner does not act within the 120-day period.
The 30-day period always applies, whether there is a denial or inaction on the part of the CIR.
The Court proceeds to apply the prescriptive periods set forth in Section 112 of the 1997 Tax Code, as construed by the Court in the aforementioned cases.
Evidently, the Petition for Review in C.T.A. Case No. 7687 was filed 426 days late. Thus, the Petition for Review in C.T.A. Case No. 7687 should have been dismissed on the ground that the Petition for Review was filed way beyond the 30-day prescribed period; thus, no jurisdiction was acquired by the CTA Division; x x x.
Courts are bound by prior decisions. Thus, once a case has been decided one way, courts have no choice but to resolve subsequent cases involving the same issue in the same manner.
WHEREFORE, premises considered, the Decision dated January 27, 2006 and Resolution dated June 26, 2006 of the Court of Tax Appeals en banc in CTA EB Case No. 24, which affirmed the Decision dated November 24, 2003 and Resolution dated August 10, 2004 of the Court of Tax Appeals Division in CTA Case No. 6170, are REVERSED and SET ASIDE. The Petition for Review of Silicon Philippines, Inc. seeking tax credit/refund of the input Value-Added Tax attributable to its zero-rated sales and on its purchases of capital goods for the Third Quarter of 1998, docketed as CTA Case No. 6170 before the Court of Tax Appeals Division, is DISMISSED for being filed out of time.
1Rollo, pp. 12-30; penned by Associate Justice Caesar A. Casanova with Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, and Olga Palanca-Enriquez, concurring, and Presiding Justice Ernesto D. Acosta, concurring and dissenting.
2 Id. at 121-131; penned by Associate Justice Lovell R. Bautista with Presiding Justice Ernesto D. Acosta and Associate Justice Juanito C. Castañeda, Jr., concurring.
3 Id. at 171-185; approved by Associate Justices Lovell R. Bautista and Juanito C. Castañeda, Jr. with Presiding Justice Ernesto D. Acosta, dissenting.
4 Id. at 31-37; approved by Associate Justices Juanito C. Castañeda, Jr., Lovell R. Bautista, Erlinda P. Uy, and Caesar A. Casanova with Presiding Justice Ernesto D. Acosta and Associate Justice Olga Palanca-Enriquez, on leave.
10 G.R. Nos. 187485, 196113 and 197156, February 12, 2013, 690 SCRA 336.
11 Prior to the amendments introduced by Republic Act No. 9337 (which took effect on November 1, 2005) and Republic Act No. 9361 (which took effect on November 28, 2006).
12Commissioner of Internal Revenue v. San Roque Power Corporation, supra note 10 at 387-404.
13 G.R. No. 191498, January 15, 2014, 713 SCRA 645, 676-677.
14 The thirty (30)-day period actually ends on September 3, 1999 which was a Sunday. SPI had until the next working day, September 4, 1999, Monday, to file its Petition for Review with the CTA.
15 Commissioner of Internal Revenue v. San Roque Power Corporation, supra note 10 at 389-390.
17Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.) v. Commissioner of Internal Revenue, G.R. Nos. 184360, 184361 and 184384, February 19, 2014, 717 SCRA 30, 50-51.
18Nippon Express (Philippines) Corporation v. Commissioner of Internal Revenue, G.R. No. 196907, March 13, 2013, 693 SCRA 456, 465.
19Silicon Philippines, Inc. (formerly Intel Philippines Manufacturing, Inc.) v. Commissioner of Internal Revenue, supra note 17 at 43.
20 Heirs of Domingo Valientes v. Ramas, 653 Phil. 111, 117-118 (2010).

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