G.R. No. 182737 Case Digest

G.R. No. 182737, March 2, 2016

Silicon Phils., Inc.

vs CIR

Facts:

Silicon is engaged in the business of designing, developing, manufacturing and exporting integrated circuit components, registered as a VAT taxpayer with BIR by virtue of its sale of goods and services with a permit to print accounting documents like sales invoice and official receipts.

Later, Silicon sought to recover the VAT it paid on imported capital goods and applied for tax credit/refund. Because of the continuous inaction of CIR, Silicon filed petitions for review before the CTA.

CTA 2nd Division consolidated all their claims and dismissed the petitions for lack of merit.

It ruled that pursuant to Section 112 of the National Internal Revenue Code (NIRC), the refund/tax credit of unutilized input VAT is allowed (a) when the excess input VAT is attributable to zero-rated or effectively zero-rated sales; and (b) when the excess input VAT is attributable to capital goods purchased by a VAT-registered person.

In order to prove zero-rated export sales, a VAT-registered person must present the following: (1) the sales invoice as proof of the sale of goods; (2) the export declaration or bill of lading/airway bill as proof of actual shipment of the goods from the Philippines to a foreign country; and (3) bank credit advice or certificate of remittance or any other document proving payment for the goods in acceptable foreign currency or its equivalent in goods and services.

The CTA Second Division found that petitioner presented nothing more than a certificate of inward remittances for the entire year 2001, in compliance with the third requirement only. That being the case, petitioner's reported export sales in the total amount of P2,444,167,418.4028 cannot qualify as VAT zero-rated sales.

Silicon filed a petition for review with CTA En Banc after its motion reconsideration was also denied by the division.

CTA En Banc affrimed the findings of the division. Thus this petition with SC.

Ruling:

In the case of petitioner, its administrative claim for the 2nd quarter of the year 2001 was filed on 16 October 2001, well within the two-year period provided by law. The same is true with regard to the administrative claims for the 3rd and the 4th quarters of 2001, both of which were filed on 4 September 2002.

Considering that there is no evidence in this case showing that petitioner made later submissions of documents in support of its administrative claims, the 120-day period within which respondent is allowed to act on the claims shall be reckoned from 16 October 2001 and 4 September 2002.

Whether respondent rules in favor of or against the taxpayer - or does not act at all on the administrative claim - within the period of 120 days from the submission of complete documents, the taxpayer may resort to a judicial claim before the CTA.

The judicial claim for the 4th quarter of 2001, while filed within the period 10 December 2003 up to 6 October 2010, cannot find solace in BIR Ruling No. DA-489-03. The general interpretative rule allowed the premature filing of judicial claims by providing 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."52 The rule certainly did not allow the filing of a judicial claim long after the expiration of the 120+30 day period.53

As things stood, the CTA had no jurisdiction to act upon, take cognizance of, and render judgment upon the petitions for review filed by petitioner. For having been rendered without jurisdiction, the decision of the CTA Second Division in this case - and consequently, the decision of the CTA En Banc - is a total nullity that creates no rights and produces no effect.