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China Banking Corporation vs. Commissioner of Internal Revenue

G.R. No. 172509, February 4, 2015; First Division, Sereno, C.J.

Prescription of BIRs right to collect

Petitioner bank received an assessment from the BIR for deficiency documentary stamp tax
on transactions involving sales of foreign exchange to the Central Bank, commonly known as
SWAP transactions. However, there was neither a warrant of distraint or levy served on the
bank's properties nor a collection case filed in court by the BIR within three years from the
assessment. Is the BIRs right to collect barred by prescription?

Yes. The applicable rule was that the right to collect the assessed tax is set at three years,
to be reckoned from the date when the BIR sends the assessment notice to the taxpayer.
Further, the assessed tax must be collected by distraint or levy and/or court proceeding within
the three-year period. All these being absent, prescription already set in.

The fact that petitioner requested BIR for a reinvestigation did not toll the running of the
three-year prescriptive period. Two things must concur for the period to be tolled: there must be
a request for reinvestigation and the CIR must have granted it.||| The CIR did not grant the
request in this case.

Even if petitioner raised the question of prescription only on appeal, it falls under an
exception to the rule that the defense of prescription must be raised at the trial court, i.e. the
pleadings or the evidence on record show that the claim is barred by prescription.||| Morevoer,
by the BIRs silence, it is barred by estoppel or waiver from invoking the rule.

Cargill Philippines, Inc. vs. Commissioner of Internal Revenue

G.R. No. 203774, March 11, 2015; First Division, Bernabe, J.

Period within which to file claims for refund

On June 27, 2003, Cargill filed its first refund claim for unutilized input VAT with the BIR;
and on June 30, 2003, filed a petition for review before the CTA on the same claim. On May 31,
2005, it filed its second refund claim before the BIR; and on the same date, filed a petition for
review before the CTA on the same claim. It was alleged that the petitions should be dismissed
for being premature as they were filed prior to the lapse of 120 days from filing of claims with the
BIR. Should the petitions be dismissed?

Yes, with regards to the first claim. No, with respect to the second claim.

From December 10, 2003 to October 6, 2010 which refers to the interregnum when BIR
Ruling No. DA-489-03 (which provides that taxpayers-claimants need not wait for the 120-day
period to lapse) was issued until the date of promulgation of the Aichi Forging decision (which
states that the 120-day period is mandatory and jurisdictional), taxpayer-claimants need not
observe the stringent 120-day period; but before and after said window period, the mandatory
and jurisdictional nature of the 120-day period remained in force.

Cargills first claim was filed on June 27, 2003, which was prior to the effectivity of the BIR
Ruling. As such, it was incumbent upon Cargill to wait for the lapse of the 120-day period before

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seeking relief with the CTA. The second claim was filed on May 31, 2005, which was within the
exemption window period. Hence, Cargill need not wait for the 120-day period to expire.

Commissioner of Internal Revenue vs. Traders Royal Bank

G.R. No. 167134, March 18, 2015; First Division, Leonardo De Castro, J.

Presumption of correctness of tax assessments

Whether a Trust Indenture Agreements constitutes deposits or trusts: the BIR posits that
these were deposits subject to documentary stamp tax, while the bank proffers that these were
trusts exempt from DST.

The only way the Court can determine the actual relationship between the bank and its
clients is through a scrutiny of the terms and conditions embodied in the said agreements. The
burden fell upon the bank to produce the Trust Indenture Agreements, not only because the said
agreements were in its possession, but more importantly because its protest against the DST
assessments was entirely grounded on the allegation that said agreements were trusts. The bank
was not able to produce the agreements.

On the other hand, tax assessments by tax examiners are presumed correct and made in
good faith. The taxpayer has the duty to prove otherwise. In the absence of proof of any
irregularities in the performance of duties, an assessment duly made by a BIR examiner and
approved by his superior officers will not be disturbed. All presumptions are in favor of the
correctness of tax assessments.

Given the failure of the bank to present proof of error in the tax assessments of the BIR,
the Court affirmed the same.

Northern Mindanao Power Corporation vs. Commissioner of Internal Revenue

GR No. 185115 February 18, 2015; First Division, Sereno, C.J.

Period within which to file claim for refund, etc.

NMPC produces electricity and sells it to NPC. It allegedly incurred input VAT on its
domestic purchases of goods and services that were used in its production and sale of electricity.
Petitioner filed an administrative claim for refund on 20 June 2000 for the 3rd and the 4th
quarters of taxable year 1999, and on 25 July 2001 for all the quarters in taxable year 2000.

CTA denied the claims due to the fact that the term zero-rated was not imprinted on the
receipts or invoices presented by petitioner in violation of Revenue Regulations No. 7-95. NMPC
on the other hand argues that the invoices are sufficient to evidence the amounts of sales and the
claim for refund.

1) Were the claims to the CTA filed on time? No. A VAT-registered person whose
sales are zero-rated or effectively zero-rated has a two-year prescriptive period after the close
of the taxable quarter to apply for the issuance of a tax credit certificate or refund through an
administrative claim with the BIR.

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In this case, for the 3rd and the 4th quarters of taxable year 1999, petitioner had until 30
September 2001 and 31 December 2001 to file the claims with the BIR. Petitioner actually filed
on 20 June 2000, hence filing was made on time. For all the quarters in taxable year 2000,
petitioner had until 31 March 2002, 30 June 2002, 30 September 2002 and 31 December 2002 to
file the claims. Petitioner actually filed on 25 July 2001, hence filing was made on time.

For the 3rd and the 4th quarters of taxable year 1999, the CIR, counting 120 days from 20
June 2000, had until 18 October 2000 within which to decide on the claim. Since the CIR failed to
do so, petitioner could elevate the matter to the CTA within 30 days or until 17 November 2000.
However, petitioner only belatedly filed its judicial claim with the CTA on 28 September 2001.
Thus, petitioner lost his right to the claim.

For all the quarters in taxable year 2000, the CIR had 120 days from 25 July 2001 or until
22 November 2001 within which to act on petitioners claim. However, petitioner filed its petition
with the CTA on 28 September 2001. Hence, the petition was prematurely filed.

2) Is the requirement in RR 7-95 valid? Yes. RR 7-95 proceeds from the rule-making
authority granted to the Secretary of Finance by the NIRC for the efficient enforcement of the
Tax Code and its amendments. This provision is reasonable and is in accord with the efficient
collection of VAT from the covered sales of goods and services.

3) Is the company sales invoice sufficient to prove amount of sales/receipts? No.

VAT invoice is the sellers best proof of the sale of goods or services to the buyer, while a VAT
receipt is the buyers best evidence of the payment of goods or services received from the
seller. A VAT invoice and a VAT receipt should not be confused and made to refer to one and
the same thing. Certainly, neither does the law intend the two to be used alternatively.

Panay Power Corporation (formerly AVON River Power Holdings Corporation) vs.
Commissioner of Internal Revenue
G.R. No. 203351, 21 January 2015; First Division, Perlas-Bernabe, J.

Period within which to file claim for refund

On December 29, 2005, petitioner filed an administrative claim for refund/credit of its
unutilized input VAT before the Revenue District Office of the BIR. Thereafter, on January 20,
2006, petitioner filed a judicial claim for tax refund/credit by way of a petition for review before
the CTA. Citing the case of CIR vs. Aichi Forging Company of Asia, Inc., the CTA Division held
that the observance of the 120-day period provided under Section 112 (D) of the NIRC is
mandatory and jurisdictional to the filing of a judicial claim for tax refund/credit, thus concluding
that petitioner's judicial claim for tax refund/credit must be dismissed for being prematurely filed.
CTA En Banc affirmed the CTA Division's outright dismissal of petitioner's claim for tax
refund/credit. Is the CTA En banc correct on the prematurity of the claim?

No. Citing Taganito Mining Corporation v. CIR, the rule must be that during the period
December 10, 2003 (when BIR Ruling No. DA-489-03 was issued) to October 6, 2010 (when
the Aichi case was promulgated), taxpayers-claimants need not observe the 120-day
period before it could file a judicial claim for refund of excess input VAT before the CTA. Before
and after the aforementioned period (i.e., before and after December 10, 2003 to October 6,
2010), the observance of the 120-day period is mandatory and jurisdictional to the filing of such
claim. In this case, records disclose that petitioner filed its administrative and judicial claims for

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refund/credit of its input VAT on December 29, 2005 and January 20, 2006, respectively, or
during the period when BIR Ruling No. DA-489-03 was in place.

Commissioner of Internal Revenue v. Team (Phils.) Energy Corporation, formerly Mirant

(Phils.) Energy Corporation
G.R. No. 188016; January 14, 2015; First Division, Bersamin, J.

Requirements for claim of tax refund or issuance of tax credit certificate

The respondent filed its annual ITR for years 2002 and 2003, on April 15, 2003 and April
15, 2004, respectively, reflecting overpaid income taxes or excess creditable withholding taxes
for those taxable years. It indicated in the ITRs its option for the refund of the tax overpayments.
On March 22, 2005, respondent filed an administrative claim for refund or issuance of tax credit
certificate with the BIR for the overpaid income tax or the excess creditable withholding tax. Is
the respondent entitled to the refund?

Yes. The requirements for entitlement of a corporate taxpayer for a refund or the issuance
of tax credit certificate involving excess withholding taxes are met: (1) the claim for refund was
filed within the 2-year reglementary period; (2) it was shown in the ITR that the income payment
received was declared part of the taxpayers gross income, and it was even supported by
testimonies of certified accountants duly commissioned by the Court; (3)the fact of withholding is
established by a copy of the withholding tax statement, showing the amount paid and income tax
withheld from that amount (presenting the 10 certificates of creditable taxes withheld at source).

FURTHER, Section 76 of the NIRC provides corporate taxpayers options in case tax on
income is paid in excess of the amount due: (1) they may ask to be refunded, provided that a
taxpayer properly applies for the refund or (2) by applying the refundable amount, as shown on
the Final Adjusted Return of a given taxable year, against the estimated quarterly income tax
liabilities of the succeeding taxable year. These two options under Section 76 are alternative in
nature. One cannot get a tax refund and a tax credit at the same time for the same excess
income taxes paid. In this case, respondent opted to be refunded.

Silicon Philippines, Inc. (formerly INTEL Philippines Manufacturing, Inc.), vs.

Commissioner of Internal Revenue.
G.R. No. 173241. March 25, 2015; First Division, Perlas-Bernabe, J.

Period within which to file claim for refund

SPI filed on May 6, 1999 an Application for Tax Credit/Refund of Value-Added Tax Paid
covering the Third Quarter of 1998. A judicial claim was filed on September, 29, 2000. Was the
judicial claim filed on time?

No. SPI belatedly filed its judicial claim. The 120-day period for CIR to decide ended on
September 3, 1999. Hence, the 30-day period to file with CTA was only until October 4, 1999.
SPI filed its Petition for Review with the CTA on September 29, 2000, or 391 days after the lapse
of the 120-day period without the CIR acting on its application for tax credit/refund. Thus, the
CTA Division never acquired jurisdiction over the said Petition. The 120/30-day prescriptive
periods are mandatory and jurisdictional, and are not mere technical requirements. The Court

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should not establish the precedent that noncompliance with mandatory and jurisdictional
conditions can be excused if the claim is otherwise meritorious, particularly in claims for tax
refunds or credit.

Winebrenner & Iigo Insurance Brokers, Inc. vs. Commissioner of Internal Revenue
G.R. No. 206526, January 28, 2015; Second Division, Mendoza, J.

Requirements in claiming tax refund

On April 15, 2004, petitioner filed its Annual Income Tax Return for CY 2003. About two
years thereafter, petitioner applied for the administrative tax credit/refund claiming refund of its
excess or unutilized CWT for CY 2003. Petitioner submitted its annual income tax return for CY
2004 to prove that the refund being claimed was not carried over in CY 2004.

There being no action taken on the said claim, a petition for review was filed by petitioner
before the CTA. The CTA denied the claim, reasoning out that petitioner should have presented as
evidence its first, second and third quarterly ITRs for CY 2004, and not just its annual ITR for that
year, to prove that the unutilized CWT being claimed had not been carried over to the succeeding
quarters in 2004.
Is the submission and presentation of the quarterly ITRs of the succeeding quarters
indispensable in a claim for refund?

No. There is no question that those who claim must not only prove its entitlement to the
excess credits, but likewise must prove that no carry-over has been made in cases where refund
is sought. Proving that no carry-over has been made does not absolutely require the presentation
of the quarterly ITRs. Taxes computed in the quarterly returns are mere estimates. It is the
annual ITR which shows whether a corporation incurred a loss or gained a profit during the
taxable quarter. Thus, the presentation of the annual ITR would suffice in proving that prior
years excess credits were not utilized for the taxable year in order to make a final determination
of the total tax due. Any document, other than quarterly ITRs may be used to establish that
indeed the non-carry over clause has been complied with, provided that such is competent,
relevant and part of the records.

Rohm Apollo Semiconductor Philippines v. Commissioner of Internal Revenue

G.R. No. 168950, January 14, 2015; First Division, Sereno, C.J.

Period within which to file claim for refund

Rohm Apollo, a VAT-registered taxpayer engaged in the business of manufacturing

semiconductor products, hired Shimizu Philippine Contractors, Inc. (Shimizu) to construct a
factory. The payments for services paid to Shimizu was treated by Rohm as capital goods
purchases; thus Rohm filed with the BIR an administrative claim for the refund or credit of
accumulated unutilized creditable input taxes on 11 December 2000. Pursuant to Section
112(D) of the 1997 Tax Code, the CIR had a period of 120 days from the filing of the application
for a refund or credit on 11 December 2000, or until 10 April 2001, to act on the claim but the
CIR did not act on the application. On September 11, 2002, Rohm Apollo filed a Petition for
Review with the CTA.

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Did the Petitioner file the case on time? No. Rohm Apollo should then have treated the
CIRs inaction as a denial of its claim. Petitioner would then have had 30 days, or until 10 May
2001, to file a judicial claim with the CTA. Rohm Apollo filed a Petition for Review with the CTA
only on 11 September 2002. The judicial claim was thus filed late.
The 30-day period was adopted precisely to do away with the old rule, so that under the
VAT system, the taxpayer will always have 30 days to file the judicial claim even if the
Commissioner acts only on the 120th day, or does not act at all during the 120-day period. The
30-day period to appeal is mandatory and jurisdictional.

CBK Power Company Limited, v. Commissioner of Internal Revenue &Commissioner of

Internal Revenue, v/ CBK Power Company Limited; G.R. Nos. 193383-87 & G.R. NOS.
193407-08, January 14, 2015; First Division, Perlas-Bernabe, J.

Period within which to file claim for refund

The following shows the material dates for CBKs claim of refund of excess final withholding
taxes:

WHEN FINAL WHEN LAST DAY OF WHEN WHEN PETITION

INCOME REMITTANCE THE 2-YEAR ADMINISTRATIVE FOR REVIEW
TAXES WERE RETURN PRESCRIPTIVE CLAIM WAS WAS FILED
WITHHELD FILED PERIOD FILED WITH BIR WITH CA
February 2003 3/10/2003 3/10/2005 3/4/2005 3/9/2005
May 2003 6/10/2003 6/10/2005 3/4/2005 3/9/2005

The CIR laments that he was deprived of the opportunity to act on the administrative claim
which CBK filed on March 4, 2005, a Friday, then the following Wednesday, March 9, 2005, the
latter hastily elevated the case on petition for review before the CTA. He argues that the failure
on the part of CBK to give him a reasonable time to act on said claim is violative of the doctrines
of exhaustion of administrative remedies and of primary jurisdiction.

For its part, CBK maintains that it would be prejudicial to wait for the Commissioners ruling
before it files its judicial claim since it only has 2 years from the payment of the tax within which
to file both its administrative and judicial claims.

Is CBKs resort to CTA proper? Yes. Had CBK awaited the action of the Commissioner on its
claim for refund prior to taking court action knowing fully well that the prescriptive period was
about to end, it would have lost not only its right to seek judicial recourse but its right to recover
the final withholding taxes it erroneously paid to the government thereby suffering irreparable
damage. Nowhere and in no wise does the tax code imply that the Collector of Internal Revenue
must act upon the claim, or that the taxpayer shall not go to court before he is notified of the
Collectors action. The filing of the claim with the CIR is to be intended primarily as a notice of
warning that unless the tax or penalty alleged to have been collected erroneously or illegally is
refunded, court action will follow.

MCIAA vs. City of Lapu-Lapu and Elena T. Pacaldo

G.R. No. 181756, June 15, 2015; First Division, Leonardo-De Castro, J.

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Imposition of Real Estate Tax on Government Instrumentality

Can the City of Lapu-lapu levy real estate tax on MCIAA? Can it levy real estate tax on
MCIAAs airport lands and buildings?

MCIAA is an instrumentality of the government; thus, its properties actually, solely and
exclusively used for public purposes, consisting of the airport terminal building, airfield, runway,
taxiway and the lots on which they are situated, are not subject to real property tax.

MCIAA is vested with corporate powers but it is not a stock or non-stock corporation,
which is a necessary condition before an agency or instrumentality is deemed a government-
owned or controlled corporation. MCIAA has capital under its charter but it is not divided into
shares of stock. It also has no stockholders or voting shares.

The airport lands and buildings of MCIAA are properties of public dominion because they
are intended for public use. As properties of public dominion, they indisputably belong to the
State or the Republic of the Philippines, and are outside the commerce of man. This, unless
MCIAA leases its real property to a taxable person, the specific property leased becomes subject
to real property tax; in which case, only those portions of properties which are leased to taxable
persons like private parties are subject to real property tax by the City of Lapu-Lapu.

Commissioner of Internal Revenue vs. Puregold Duty Free Inc.

G.R. No. 202789, June 22, 2015; Third Division, Velasco Jr.

Tax Amnesty

Puregold was issued various tax exemptions pursuant to Sec. 5 of E.O. 80. In Coconut
Oil Refiners vs. Torres, however, SC annulled such exemption. BIR issued a Preliminary
Assessment Notice regarding unpaid VAT and excise tax on wines, liquors and tobacco products
imported by Puregold from January 1998 to May 2004. In due time, Puregold protested the
assessment. Thereafter, RA 9399 was passed granting amnesty to business enterprises affected
by the SCs rulings in John Hay People's Coalition vs. Lim 10 and Coconut Oil Refiners. Is
Puregold liable for the tax?

No. The government, through the enactment of RA 9399, has expressed its intention to
waive its right to collect taxes, duties and liabilities, inclusive of fines, penalties, interests and
other additions thereto, which is the tax imposed under Sec. 131 (A) of the 1997 NIRC, subject to
the condition that Puregold has complied with the requirements provided therein.

China Banking Corporation vs. City Treasurer of Manila

G.R. No. 204117, July 1, 2015; Second Division, Mendoza, J.

Protest under the LGC

China Banking was assessed by the City Treasurer. On Jan. 15, 2007, CBC paid the
assessed amount but questioned the imposition pointing out that the basis for the assessment,
the Manila Revenue Code, was already declared unconstitutional. In the CTA En Banc, it was

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decided that the petition for review CBC be denied as it was filed out of time. Is CTA En Banc
correct?

Yes. The protest was filed on Jan. 15, 2007. Under the LGC, CBC had 60 days or until
March 16, 2007 to await the decision of the City Treasurer. After the lapse of 60 days, since there
was inaction on the part of the treasurer, CBC has 30 days within which to appeal, or April 16
(April 15 being a Sunday). But CBC only filed its petition one day later. Thus, the petition was
already beyond the reglementary period rendering the assessment final and executory.

Republic of the Philippines rep. by the Commissioner of Customs vs. Philippine Airlines,
Inc.
G.R. Nos. 209353-54 & 211733-34, July 6, 2015; First Division, Sereno, C.J.

Exemption under P.D. 1590

PAL claims that it is exempt for excise tax under P.D. 1590 which provides: "Its
payment of either basic corporate income tax or franchise tax, whichever is lower,
shall be in lieu of all other taxes, duties, royalties, registrations, licenses, and other
fees and charges, except only real property tax." The BIR denied the claim on the
basis that R.A. 9334 abolished the franchise tax and subjected PAL and similar entities to
corporate income tax and value-added tax (VAT). Who is correct?

PAL. Upon the amendment of the NIRC, PAL nevertheless remains exempt from taxes,
duties, royalties, registrations, licenses, and other fees and charges, provided it pays
corporate income tax as granted in its franchise agreement. the payment of which shall
be in lieu of all other taxes, except VAT, and subject to certain conditions provided in its
charter.

Alvin Mercado vs. People of the Philippines

G.R. No. 167510, July 8, 2015; First Division, Bersamin, J.

Entry under TCCP

May the accused be held guilty for violation of Sec 3602 of the Tariff and Customs Code
of the Philippines (TCCP) when the evidence did not sufficiently prove that he willfully made an
entry of the imported articles by means of false and fraudulent invoice and declaration with
intent?

No. The elements to be established in order to convict him of the crime charged are: (1)
there must be an entry of imported or exported articles; (2) the entry was made by means of any
false or fraudulent invoice, declaration, affidavit, letter, or paper; and (3) there must be intent to
avoid payment of taxes. The term entry as used in the TCCP is susceptible of any of the following
three meanings, to wit: (1) the documents filed at the Customs house; or (2) the submission and
acceptance of the documents; or (3) the procedure of passing goods through the Customs house.
The second and third elements were not established beyond reasonable doubt.

Commissioner of Internal Revenue vs. La Tondea Distillers, Inc.

G.R. No. 175188, July 15, 2015; Second Division, Perlas-Bernabe, J.

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DST in Transfers of Real Properties

Is respondent LTDI liable for documentary stamp taxes considering that the transfer of its
properties was by virtue of a merger?

The Court, citing the earlier case of Commissioner of Internal Revenue vs. Pilipinas Shell
Petroleum Corporation, ruled that Section 196 of the NIRC pertains only to transactions where
real property is conveyed to a purchaser for a consideration. The phrase granted, assigned,
transferred or otherwise conveyed is qualified by the word sold which means that documentary
stamp tax under Section 196 is imposed on the transfer of real property by way of sale and does
not apply to all conveyances of real property. Thus, respondent is not liable to DST as the
transfer of real properties from the absorbed corporations to respondent was pursuant to a
merger.

Commission of Internal Revenue vs. Court of Tax Appeals

G.R. No. 207843, July 15, 2015; First Division, Perlas-Bernabe, J.

Jurisdiction of the CTA

The CIR categorically stated that Petron's importation of alkylate is exempt from excise
tax. However, the CIR assessed Petron for excise taxes pursuant to a Customs Memorandum
Circular to its alkylate importations covering the period September 2011 to June 2012. Petron
immediately filed a petition for review before the CTA. Does the latter have jurisdiction over the
petition?

No. CIR was exercising its quasi-legislative functions in this case. CTA has no jurisdiction
to determine the validity of a ruling issued by the CIR or COC in the exercise of their quasi-
legislative powers to interpret tax laws. Where what is assailed is the validity or constitutionality
of a law, or a rule or regulation issued by the administrative agency in the performance of its
quasi-legislative function, the regular courts have jurisdiction to pass upon the same. Moreover,
Petron failed to exhaust administrative remedies. CTA has no jurisdiction to review by appeal,
decisions of the customs collector. The TCC prescribes that a party adversely affected by a ruling
or decision of the customs collector may protest such ruling or decision upon payment of the
amount due and, if aggrieved by the action of the customs collector, may have the same
reviewed by the COC. It is only after the COC shall have made an adverse ruling on the matter
may the aggrieved party file an appeal to the CTA.

Hedcor, Inc. v. Commissioner of Internal Revenue

G.R. No. 207575, July 15, 2015; First Division, Sereno, C.J.

120+30 Day Period in Appeal of Claims for Tax Refund/Credit

On 12/28/2009, Hedcor filed an administrative claim with BIR for refund of excess and
unused input VAT for Quarter 2 of 2008. It filed a Petition for Review with the CTA on
07/06/2010. On 11/08/2010, the CIR filed a Motion to Dismiss for lack of jurisdiction which was
granted as Hedcors Petition was filed out of time; this was affirmed by the CTA en banc. Was the
dismissal correct?

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Yes. Pursuant to Sec. 112(C), NIRC, the BIR had 120 days to decide Hedcors claim filed
on 12/28/2009. Thereafter, Hedcor may appeal to the CTA within 30 days from receipt of the
decision or from expiration of the 120-day period (until 05/27/2010). Compliance with both
periods is jurisdictional. Hedcor belatedly filed its judicial claim on 07/06/2010.

M/V "Don Martin" Voy 047, et al. v. Hon. Secretary of Finance, et al.
G.R. No. 160206, July 15, 2015; First Division, Bersamin, J.

Forfeiture

The District Collector seized M/V Don Martin and its rice cargo based on an intelligence
report that the rice was smuggled. Petitioners presented documents to prove that the rice was
locally produced and acquired. The District Collector ordered the rice forfeited and the vessel
released. The BOC Deputy Commissioner affirmed the forfeiture of rice while the order releasing
the vessel was elevated to the SOF and reversed. The CTA ordered release of the vessel and the
rice cargo. The CA ordered forfeiture of both. Was the forfeiture of the rice and the vessel proper?

No. To warrant forfeiture, Section 2530 (a) and (f) of the TCCP requires that the
importation must have been unlawful or prohibited. No probable cause existed prior to forfeiture
here as the records show that the rice was of local origin. Since there was no unlawful
importation to speak of, the vessel must also be released.

ING Bank N.V. v. Commissioner of Internal Revenue

G.R. No. 167679, July 22, 2015; Second Division, Leonen, J.

Tax Amnesty; Withholding of Taxes

While the case was pending, ING Bank filed a Motion stating that it availed itself of the
governments tax amnesty. However, CIR asserts that BIR Revenue Memorandum Circular No.
19-2008 specifically excludes cases which were ruled by any court even without finality in favor
of BIR prior to amnesty availment of taxpayer from the coverage of the tax amnesty. May ING
Bank validly avail itself of the tax amnesty granted by RA 9480?

Yes. Qualified taxpayers with pending tax cases may still avail themselves of the tax
amnesty program under Republic Act No. 9480, otherwise known as the 2007 Tax Amnesty Act.
Thus, the provision in BIR Revenue Memorandum Circular No. 19-2008 excepting issues and
cases which were ruled by any court (even without finality) in favor of the BIR prior to amnesty
availment of the taxpayer" from the benefits of the law is illegal, invalid, and null and void.

CIR argues that it can exercise discretion in the implementation of the tax amnesty. Is
the CIR correct?

No, it confers no discretion on CIR. Unlike the power to compromise or abate a taxpayers
liability that is within the discretion of CIR, its authority under RA 9480 is limited to determining
whether (a) the taxpayer is qualified to avail oneself of the tax amnesty; (b) all the requirements
for availment under the law were complied with; and (c) the correct amount of amnesty tax was
paid within the period prescribed by law.

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On the other hand, ING Bank contends that bonus accruals in 1996 and 1997 were not
yet subject to withholding tax because these bonuses were actually distributed only in the
succeeding years of their accrual when the amounts were finally determined. Is the bank correct?

No. The all-events test requires the right to income or liability be fixed, and the amount
of such income or liability be determined with reasonable accuracy. The obligation of the payor or
employer to deduct and withhold the related withholding tax arises at the time the income was
paid or accrued or recorded as an expense in the payors or employers books, whichever comes
first. ING Bank accrued or recorded the bonuses as deductible expense in its books. Therefore, its
obligation to withhold the related withholding tax due from the deductions for accrued bonuses
arose at the time of accrual and not at the time of actual payment.

CIR vs. Standard Charter Bank

GR No. 192173, July 29, 2015; First Division, Perez, J.

Prescription of the Right to Assess

CIR issued a demand letter for alleged deficiency taxes for more than P1M. Respondent
protested the assessment. CIR presented Waivers of Statute of Limitations. The waivers were not
signed by the BIR. Has the period of prescription been tolled?

The waivers were in violation of RMO No. 20-90 which requires the Commissioner of
Internal Revenue to sign for the BIR when the amount involved is more than P1,000,000.00, and
that the kind and amount of tax be indicated. The dates of acceptance of both waivers were also
not indicated. The tenor of the waivers was that of a mere request. The waivers in question were
defective.

Commissioner of Internal Revenue vs. Air Liquide Philippines, Inc.

G.R. No. 210646, July 29, 2015; Second Division, Mendoza, J.

120+30 Day Period to Appeal in Claims for Tax Refund/Credit

On December 29, 2009, ALPI filed a claim with the BIR for tax credit for its unutilized
input VAT attributable. Six days later, ALPI filed its petition for review with the CTA Division,
without awaiting the resolution of its application for tax credit certificate or the expiration of the
120-day period. Did the CTA Division acquire jurisdiction?

Yes. BIR Ruling No. DA-489-03, issued on December 10, 2003, stated that 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 a petition for review. This was nullified in Aichi, on October 6, 2010. But San
Roque clarified, that BIR Ruling No. DA-489-03 was a general interpretative rule and all taxpayers
can rely on it from the time of its issuance on December 10, 2003 up to its reversal in Aichi on
October 6, 2010. Here, ALPI can benefit from said BIR Ruling.

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Manila Electric Company vs. The City Assessor and City Treasurer of Lucena
G.R. No. 166102, August 5, 2015; First Division, Leonardo-De Castro, J.

Tax Exemption

Meralco was formerly granted tax exemption on its poles, wires, transformers and meters
prior to the enactment of LGC. Upon the effectivity of LGC, respondent assessed Meralco with real
property tax. Whether the latter is liable for real property tax?

Yes. Under Sec. 193 of the LGC, it provides for the withdrawal of tax exemption
privileges. Only those expressly enumerated entities in the code are exempt from real property
tax. Expressio Unius est Exclusio Alterius. To be entitled for the tax exemption, a taxpayer must
point to a specific provision of law conferring on the taxpayer. Any doubt on exemption must be
resolved against the taxpayer.

Commissioner of Internal Revenue vs. Toledo Power Company

G.R. No. 195175, August 10, 2015; First Division, Sereno, C.J.

120+30 Day Period in Appeal of Claim for Tax Refund/Credit

Respondent TPC filed a claim for refund for unutilized input VAT for 2004. It was filed on
23 December 2004, within the period where BIR Ruling No. DA-489-03 was recognized valid.
Thus, TPC is not compelled to observe the 120-day waiting period. It allowed premature filing of a
judicial claim, the non-exhaustion of the 120-day period for the Commissioner to act on an
administrative claim. Is TPC is entitled to the refund?

No. TPC cannot claim the benefit of BIR Ruling No. DA-489-03 because it did not file its
judicial claim prematurely but filed it long after the lapse of the 30-day period following the
expiration of the 120-day period. TPC should have filed its judicial claim from 23 December 2004
until 22 May 2005; however, it filed its Petition to the CTA only on 24 April 2006. It should file
within 30 days after the expiration of the 120-day period.
Ce Luzon Geothermal Power Company, Inc. vs. CIR
G.R. Nos. 200841-42, August 26, 2015; First Division, Perlas-Bernabe, J.

120+30 day period for Appeals in Claims for Tax Refunds/Credits

On Nov. 30, 2006, CE Luzon filed with the BIR a claim for refund of unutilized input VAT.
On Jan. 3, 2007, it filed a judicial claim for the same refund before the CTA. The CTA dismissed
the claim on the ground of non-observance of the 120-day period. Was the ruling correct?

No. In case of failure of the Commissioner to act on the application, the taxpayer may,
after the expiration of the 120 day-period, appeal with the CTA. BIR Ruling No. DA-489-03
(issued on Dec. 10, 2003) declared that claimant need not wait for the 120-day period to
expire before filing the claim. Aichi Forging case (promulgated on Oct. 6, 2010) held that
observance of the 120-day period is mandatory. From Dec. 10, 2003 to Oct. 6, 2010 - need
not observe the 120-day period; but before and after said window, the period it is mandatory.
CE Luzon's administrative and judicial claims were filed on Nov. 30, 2006 and Jan. 3, 2007,
respectively, or within the window. Hence, the petition filed with the CTA was not premature.

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Chevron Philippines v. Commissioner of Internal Revenue

G.R. No. 210836, September 1, 2015; En Banc, Bersamin, J.

Excise Tax

Chevron sold and delivered petroleum products to CDC, a tax-exempt entity, who
did not pass on to the latter the excise taxes paid. Is Chevron liable to pay the excise tax?

No. Excise tax on petroleum products is essentially a tax on property, the direct
liability for which pertains to the statutory taxpayer. Any excise tax paid by the statutory
taxpayer on petroleum products sold to any of the entities or agencies named in Section 135 of
the NIRC exempt from excise tax is deemed illegal or erroneous, and should be credited or
refunded to the payor pursuant to Section 204 of the NIRC. This is because the exemption
granted under Section 135 of the NIRC must be construed in favor of the property itself, that is,
the petroleum products.

Bureau of Customs vs. Devanadera, et al.

G.R. No. 193253, September 8, 2015; En Banc, Peralta, J.

Unlawful Importation

The Bureau of Customs filed a complaint-affidavit against UNIOIL Petroleum Philippines

for violation of Sections 3601 (unlawful importation) and 3602 (fraudulent practices against
customs revenue) under the Tariff and Customs Code of the Philippines (TCCP), which was
dismissed by the Prosecutor and DOJ for lack of probable cause. Was the dismissal proper?

Yes. UNIOIL cannot be charged with UNLAWFUL IMPORTATION as the allegations in the
complaint-affidavit do not constitute any of these acts: (1) fraudulently importing or bringing into
the Philippines the subject petroleum products (2) assisting in so doing; or (3) dealing with such
products even with the knowledge that it was illegally imported; OR with various FRAUDULENT
PRACTICES against customs revenue as there are no allegations to the effect that UNIOIL made
or attempted to make any entry of imported article; or knowingly effected any entry of goods by
means of undervaluation, miscalculation and misdeclaration of import entry.

Commissioner of Internal Revenue vs. Nippon Express (Phils.) Corporation

G.R. No. 212920, September 16, 2015; First Division, Perlas-Bernabe, J.

Withdrawal of Appeals in the CTA

Nippon filed a claim for refund before the BIR. A day later, it filed a judicial claim for tax
refund before the CTA. On August 10, 2011, the CTA Division partially granted Nippon's claim for
tax refund in the amount of P2,614,296.84. Before its receipt of the August 10, 2011 Decision
Nippon filed a motion to withdraw considering that the BIR granted it a tax credit on July 27,
2011. May the appeal be withdrawn?

No. Rule 55 of the Rules of Court, applying suppletorily to the CTA, provides that when
the case is deemed submitted for resolution, withdrawal of appeals made after the filing of the
appellee's brief may still be allowed in the discretion of the court. While it is true that the CTA

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Division has the prerogative to grant a motion to withdraw, the attendant circumstances in this
case should have incited it to act otherwise because the August 10, 2011 Decision was rendered
by the CTA Division after a full-blown hearing.

Commissioner of Internal Revenue vs. Toledo Power Company (TPC)

GR No. 196415, December 2, 2015; Second Division, Del Castillo, J.

120+30 Day Period for Appeal in Tax Refunds/Credits

On December 22, 2003, TPC filed with the BIR a claim for refund or credit of its unutilized
input VAT. On April 22, 2004, due to the inaction of the CIR, TPC filed with the CTA an appeal.
Were the administrative and judicial claims for tax refund filed on time?

Yes. The CIR has 120 days to act on the administrative claim. Upon receipt of the
decision, a taxpayer has 30 days within which to appeal the decision to the CTA. If the CIR does
not act on the claim, the taxpayer may appeal to the CTA within 30 days from the expiration of
the 120-day period. The 120+30-day period must be strictly observed except from the date of
issuance of BIR Ruling No. DA-489-03 on December 10, 2003, which allowed taxpayers to file a
judicial claim without waiting for the end of the 120-day period, up to the date of promulgation of
the Aichi Ruling on October 6, 2010, where SC declared that compliance with the 120+30-day
period is mandatory and jurisdictional.

Commissioner of Internal Revenue vs. Next Mobile, Inc.

GR No. 209418, December 7, 2015; Third Division, Velasco Jr., J.

Waiver of Limitations; Pari Delicto Rule

In April 2002, Next Mobile filed its corporate ITR. Subsequently, its Director of Finance,
without a notarized authority through a Board Resolution, executed five subsequent waivers of
prescriptive period. Are the waivers valid?

Yes. The rules on waiver must be strictly observed. Hence, in the case, the waivers
should have been found as invalid because: (1) they were executed without a notarized board
authority; (2) the dates of acceptance by the BIR were not indicated therein; and (3) the fact of
receipt by respondent of its copy of the Second Waiver was not indicated on the face of the
original Second Waiver. However, notwithstanding non-compliance, the Court found them valid
because the parties are in pari delicto. On the one hand, Next Mobile deliberately filed the
defective waivers amounting to bad faith. On the other, BIR was so grossly negligent in allowing
the patently defective waivers to be admitted, amounting to bad faith.

Pilipinas Total Gas, Inc. vs. CIR

GR No. 207112, December 8, 2015; En Banc, Mendoza, J.

Reckoning Period of the 120 Day Period

On May 15, 2008, Total Gas filed a claim for refund of unutilized input VAT. However, it
was only on August 28, 2008, when it submitted additional supporting documents. On January

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23, 2009, it elevated the matter to the CTA in view of the inaction of the CIR. Did Total Gas
seasonably file its judicial claim for refund?

Yes. The CIR has 120 days from the date of submission of complete documents to
decide a claim for refund. The taxpayer may, within 30 days from receipt of the denial of the
claim or after the expiration of the 120-day period, which is considered a "denial due to inaction,"
appeal the decision or unacted claim to the CTA. In this case, the reckoning period is August 28,
2008, the date when Total Gas made its "submission of complete documents to support its
application" for refund, and not on May 15.

It bears mentioning at this point that the foregoing summation of the rules should only be
made applicable to those claims for tax credit or refund filed prior to June 11, 2014. As it now
stands, RMC 54-2014 dated June 11, 2014 mandates that:

The application for VAT refund/tax credit must be accompanied by complete

supporting documents hereof and in addition, the taxpayer shall attach a statement under
oath attesting to the completeness of the submitted documents. This requires the taxpayer that
at the time he files his supporting documents, he attest to the completeness of the same and
further attest that he will no longer submit any other document to prove his claim. Further, the
taxpayer is barred from submitting additional documents after he has filed his administrative
claim. This, however, cannot be applied rectroactively to the case at bar since it imposes
new obligations upon taxpayers in order to perfect their administrative claim

Republic of the Philippines vs. Pilipinas Shell Petroleum Corporation

GR No. 209324, December 9, 2015; Third Division, Villarama, Jr., J.

Prescription under Tariffs and Customs Code

In 1997, the Commissioner allowed PSPC to pay its customs duties and taxes through Tax
Credit Certificates. The TCCs were declared void by the Court. In 2002, BOC filed a collection suit
against PSPC who opposed on the ground that the action already prescribed since it had been
filed beyond the 1 year period.

The action has not prescribed. These assessed customs duties and taxes were previously
assessed and paid by the taxpayer, only that the TCCs turned out to be spurious and hence
worthless certificates that did not extinguish PSPC's tax liabilities. The liability for duties, taxes,
fees and other charges attaching on importation constitutes a personal debt due from the
importer to the government which can be discharged only by payment in full of all duties, taxes,
fees and other charges legally accruing.

Air Canada vs. Commissioner of Internal Revenue

G.R. No. 169507, January 11, 2016; Second Division, J. Leonen, J.

Offline Intl Air Carrier subject to Corporate Income Tax

Is an offline international air carrier selling tickets in the Philippines thru a general sales
agent subject to tax on its Gross Philippine Billings or to regular Corporate Income tax?

An offline international air carrier has no flights to and from the Philippines, hence it cannot
be subject to tax on its Gross Philippine Billings. It is however deemed a resident foreign

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corporation doing business in the Philippines under the NIRC hence liable for regular corporate
income tax of 32 % subject to applicable tax treaties to which Philippines is a signatory.

Since Philippines and Canada have an existing Tax Treaty Agreement, Air Canada may only
be taxed at 1 % of its gross revenues from its ticket sales in the Philippines.

Alta Vista Golf and Country Club vs. The City of Cebu, Mayor Tomas Osmena
and Teresita Camarillo
G.R. No. 180235, January 20, 2016; First Division, J. De Castro

Nature of Amusement Tax

Alta Vista refused to pay amusement tax for the operation of golf course. Thus, it filed with
RTC a petition questioning the validity of the tax ordinance for being beyond the taxing authority
of Cebu City. Did the local government validly impose amusement tax to the act of playing golf?

No. Amusement taxes are imposed on admission to amusement places which stages
spectacles or the holding of public shows, exhibitions, performances, and other events meant to
be viewed by an audience. Other events meant venues where one seeks admission to entertain
oneself by seeing or viewing the show or performance. A golf course is not a place of amusement
as people do not enter to see a performance.

Commissioner of Internal Revenue v. Mirant Pagbilao Corporation

(Now Team Energy Corporation)
G.R. No. 180434, January 20, 2016; Third Division, J. Reyes, J.

Refund of Input VAT

MPC filed its petition for review with the CTA 15 days after it filed an administrative claim for
refund of input VAT with the CIR. It did not wait for the lapse of the 120-day period expressly
provided for by law within which the CIR shall grant or deny the application for refund. Did the
CTA acquire jurisdiction?

No. In the refund of input VAT, the 120-day period is mandatory and jurisdictional, and that
the CTA does not acquire jurisdiction over a judicial claim that is filed before the expiration of the
120-day period. It rendered the filing of the CTA petition premature, and barred the tax court
from acquiring jurisdiction over the same.

Philippine Amusement and Gaming Corporation vs. Bureau of Internal Revenue, et. al.
G.R. No. 208731, January 27, 2016; Second Division, J. Carpio, A.

Inaction by the RD and CIR; Premature Filing of Petition for Review to CTA

A Final Assessment Notice for FBT deficiency was received by PAGCOR on January 17,
2008. A protest was then filed on January 24, 2008 to the RD. Subsequently, another protest was
filed to the CIR on August 14, 2008. Without any action from both the RD and CIR, PAGCOR filed
a Petition for Review with the CTA on March 11, 2009. Was the petition timely filed?

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No. Under Section 3.1.5 of Revenue Regulation No. 12-99, implementing Section 228 of
the NIRC, a petition before the CTA may only be made after a whole or partial denial of the
protest by the CIR or the CIRs authorized representative. When PAGCOR filed its petition for
review, there was still no denial of its protest by either the RD or the CIR. Therefore, the petition
before the CTA had no cause of action because it was prematurely filed.

Malayan Insurance Company, Inc. vs. St. Francis Square Realty Corporation
G.R. No. 198916-17 & 198920-21, February 16, 2016; Third Division, J. Peralta, J.

Input VAT as a part of Actual Remaining Construction Cost

Malayan and St. Francis constructed a condominium agreeing to distribute reserved units
based on the excess of Actual Remaining Construction Cost (ARCC). St. Francis argues that Input
VAT incurred by Malayan should not be treated as part of the ARCC since Malayan would be able
to offset the Input VAT from its Output VAT. Is it Correct?

No. The ARCC refers to actual expenditures made by Malayan. The issue is not the technical
classification of taxes under accounting rules, but whether such tax was incurred and paid as part
of the construction cost. It cannot be denied that Malayan had to pay input VAT. Thus, it forms
part of the ARCC.

Commissioner of Internal Revenue vs. GJM Philippines Manufacturing, Inc.

G.R. No. 202695, February 25, 2016; Third Division, J. Peralta, J.

Effect of failure to prove taxpayers receipt of assessment

Within three years from the actual filing of GJMs annual ITR, a final assessment was issued
by the BIR against GJM. Respondent, however, denies having received the assessment; thus, the
CTA ordered for its cancellation and withdrawal. Was the CTA correct?

Yes. If the taxpayer denies having received an assessment, it becomes incumbent upon the
BIR to prove that such notice was indeed received by presenting the registry receipt issued by the
Bureau of Posts or the Registry return card, which would have been signed by the taxpayer or its
authorized representative, or, absent such documents, a certification issued by the Bureau of
Posts. In this case, the BIRs failure to prove respondents receipt of the assessment leads to no
other conclusion but that no assessment was issued. Consequently, the governments right to
issue an assessment has already prescribed.

Silicon Philippines, Inc. vs. Commissioner of Internal Revenue,

G.R. No. 182737, March 2, 2016; First Division, CJ. Sereno

Input VAT credit or refund

Petitioner filed claims for input VAT credit with the CIR, for which no action was taken. Thus,
petitioner filed a petition before the CTA, albeit beyond 30 days from the lapse of the 120-day
period. The CTA denied the petition on the ground of petitioners failure to present the necessary
documentary evidence; thus, a Petition for Review on Certiorari under Rule 45 was filed before
the SC. Was the action proper?

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No. Any claim filed in a period less than or beyond the 120+30 days provided by the NIRC is
outside of the jurisdiction of the CTA. Thus, the CTA had no jurisdiction to act upon, take
cognizance of, and render judgment upon the petition filed by the petitioner. Consequently, the
assailed CTA rulings are not decisions in contemplation of law that can serve as the subject of the
SCs exercise of its petition for review.

Tridharma Marketing Corporation vs. Court of Tax Appeals

GR No. 215950, 20 June 2016; Third Division, Bersamin, J.

Surety bond requirement to suspend collection of assessed taxes

Despite the supposedly patent illegality of the assessments and in order to suspend the
collection of taxes, the CTA in Division (CTA-D) required petitioner to file a surety bond that was
beyond petitioners net worth, but equivalent to the deficiency assessment for income tax (IT)
and value added tax (VAT).

Did the CTA-D commit grave abuse of discretion in doing so?

Yes. The CTA-D may order the suspension of the collection of taxes when the taxpayer
files a surety bond for not more than double the amount. Although the amount of the surety bond
was equivalent to the assessment, the CTA-D gravely abused its discretion under Section 11 of
RA 1125 when it fixed the amount of the bond at nearly five times the net worth of the petitioner
without conducting a preliminary hearing to ascertain (1) whether the assessment would
jeopardize the interest of the taxpayer or (2) whether the means adopted by the CIR in
determining the liability of the taxpayer was legal and valid. It must be remembered that the
power to task is not the power to destroy.

Commissioner of Internal Revenue vs. Philippine National Bank

GR No. 195147, July 11, 2016; First Division, Bersamin, J.

Whether interbank call loans are subject to documentary stamp tax (DST)

Petitioner assessed PNB with deficiency taxes, including documentary stamp taxes arising
from PNB's interbank call loans and special savings account. Are interbank call loans and special
savings account subject to DST?

No. An interbank call loan is considered as a deposit substitute transaction by a bank

performing quasi-banking functions to cover reserve deficiencies. It does not fall under the
definition of a loan agreement. Even if it does, the DST liability under Section 180 of the NIRC will
only attach if the loan agreement was signed abroad but the object of the contract is located or
used in the Philippines, which is not the case in regard to PNBs loans. For taxation purposes,
interbank call loans are not considered deposit substitutes by express provision of Section 20(y)
of the 1977 NIRC, as amended by PD No. 1959.

Capitol Wireless, Inc. vs. The Provincial Treasurer of Batangas, et al.

GR No. 180110, May 30, 2016; Third Division, Peralta, J.

Submarine communications cables as taxable real property

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The Provincial Assessor of Batangas issued assessments of real property against Capwire
after determining that the submarine cable systems, which Capwire had rights over, are taxable
real property. Capwire argues that the cable system is not subject to tax.

May the submarine cables used for communications be taxed like other real properties?

Yes. They are akin to electric transmission lines which the SC recently declared as no
longer exempt from real property tax and may therefore qualify as machinery subject to tax
under the LGC. Electric lines and communications cables, in the strictest sense, are not directly
adhered to the soil but pass through posts, relays or landing stations. Nonetheless, both may be
classified under the term machinery as real property under Article 415(5) of the Civil Code as
such serve the owners business or tend to meet the needs of his industry or works that are on
real estate.

Coral Bay Nickel Corporation vs. Commissioner of Internal Revenue

GR No. 190506, June 13, 2016; First Division, Bersamin, J.

Input VAT for PEZA-registered entities

Coral Bay Nickel Corporation (Petitioner) is a domestic corporation registered with the
Philippine Economic Zone Authority (PEZA). As a PEZA-registered entity, it filed an amended VAT
Return declaring unutilized input tax from its domestic purchases of capital goods for tax
credit/refund purposes.

Was the petitioner, an entity located within the ECOZONE, entitled to the refund of its
unutilized input taxes incurred before it became a PEZA-registered entity?

An ECOZONE is managed and operated as a separate customs territory. Thus, the sales
made by suppliers to a purchaser located within an ECOZONE will be considered as exportations.
According to the cross border doctrine and destination principle, no VAT shall be imposed to form
part of the cost of goods destined for consumption outside of the territorial border of the taxing
authority. Therefore, the purchases of goods and services by the petitioner that were destined for
consumption within the ECOZONE should be free of VAT; hence, no input VAT should then be paid
on such purchases, rendering the petitioner not entitled to claim a tax refund or credit.

Philippine Bank of Communications vs. CIR

GR No. 194065, June 20, 2016; First Division, Sereno, C.J.

Claim for refund of erroneously paid DST

From March to December 2004, PBC executed several repurchase agreements with the
BSP. The documentary stamps were imprinted on the Confirmation Letters through PBC's
Documentary Stamp (DS) Metering Machine. Since the repurchase agreements were not subject
to DST, it filed with the BIR an administrative claim for the issuance of tax credit certificates in
May 2006.

When should the payment of the DST be reckoned for the purpose of counting the two-
year prescriptive period for filing a claim for a refund or tax credit?

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Under the NIRC, the claim for a refund of erroneously paid DST must be made within two
years from the date of payment of the DST. For DS metering machine users, the payment of the
DST upon loading/reloading is merely an advance payment for future application. The liability for
the payment of the DST falls due only upon the occurrence of a taxable transaction, i.e. the date
when the documentary stamps were imprinted on the Confirmation Letters. Considering that this
transaction is exempt from tax, petitioner is entitled to a refund.

Spouses Emmanuel D. Pacquiao and Jinkee J. Pacquiao vs. The

Court of Tax Appeals-First Division and The Commissioner of Internal
Revenue
GR No. 213394, April 6, 2016; Second Division, Mendoza, J.

Posting of surety bond in lieu of collection of tax liability

The petitioners ascribe grave abuse of discretion on the part of the CTA when it required
them to deposit the amount of P3,298,514,894.35 or post a bond in the amount of
P4,947,772,341.53 as a condition for its order enjoining the CIR from collecting the taxes from
them. The spouses argue that pursuant to jurisprudence, the tax court should have not only
ordered the CIR to suspend the collection efforts, but also dispensed with the requirement of
depositing a cash or filing a surety bond.

Are the spouses correct?

Section 11 of R.A. No. 1125, as amended by R.A. No. 9282, provides that the CTA may
suspend the collection and instead require the taxpayer either to deposit the amount claimed or
to file a surety bond when it finds that the collection may jeopardize the interest of the
government and/or the taxpayer. Here, The CTA should have conducted a preliminary hearing
and received evidence so it could have properly determined whether the requirement of providing
the required security under Section 11, R.A. No. 1125 could be reduced or dispensed with
pendente lite.

Commissioner of Internal Revenue vs. Liquigaz Philippines Corp.

GR Nos. 215534 & 215557, April 18,2016; Second Division, Mendoza, J.

Effect of a void decision on disputed assessment over the assessment itself

When may a Final Decision on Disputed Assessment (FDDA) be declared void, and in
the event that it is found void, what would be its effect on the tax assessment?

A decision differs from an assessment, and failure of the FDDA to state the facts and
law on which it is based renders the decision void but not necessarily the assessment. The
FDDA must state the facts and law on which it is based to provide the taxpayer the opportunity to
file an intelligent appeal. Thus, the assessment remains valid notwithstanding the nullity of the
FDDA because the assessment itself differs from a decision on the disputed assessment. Tax laws
may not be extended by implication beyond the clear import of their language, nor their operation
enlarged so as to embrace matters not specifically provided.

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