G.R. No. 180434 Case Digest

G.R. No. 180434, January 20, 2016

CIR

vs Mirant Pagbilao Corp.

Facts:

MPC is corporation engaged in generation and distribution of electricity to NAPOCOR under a build, operate , trnasfer scheme.

1999, BIR approved MPC's application for effective zero-rating for the construction and operation of its power plant.

2002, MPC filed before BIR an administrative claim for refund of its input VAT covering year 2000. Thereafter, fearing that the period for filing a judicial claim for refund was to expire, MPC proceeded to file a petition for review before CTA.

CTA division partially granted MPC's claim for refund and ordered CIR to grant refund or tax credit but have reduced the amount. CTA division held that by virtue of NAPOCOR's exemption from direct and indirect taxes MPC's sale of services to NAPOCOR is subject to VAT at 0% rate.

CIR filed a motion for reconsideration . CTA En Banc affirmed in toto the decision of the division. CIR now seeks recourse to the SC via petition for review on certiorari.

Ruling:

Clearly, MPC's failure to observe the mandatory 120-day period under the law was fatal to its immediate filing of a judicial claim before the CTA. It rendered the filing of the CTA petition premature, and barred the tax court from acquiring jurisdiction over the same. Thus, the dismissal of the petition is in order. "[T]ax refunds or tax credits - just like tax exemptions - are strictly construed against taxpayers, the latter having the burden to prove strict compliance with the conditions for the grant of the tax refund or credit."

With the CTA being barren of jurisdiction to entertain MPC's petition, the Court finds it unnecessary, even inappropriate, to still discuss the main issue of MPC's entitlement to the disputed tax refund. The petition filed by MPC with the CT A instead warrants a dismissal. It is settled that "a void judgment for want of jurisdiction is no judgment at all."38

WHEREFORE, the Decision dated September 11, 2007 and Resolution dated November 7, 2007 of the Court of Tax Appeals en banc in E.B. Case Nos. 216 and 225 are SET ASIDE, as the CTA Case No. 6417 was prematurely filed, and therefore, the CTA lacked jurisdiction to entertain Mirant Pagbilao Corporation's judicial claim.