Sunday, January 31, 2016

TAN CHONG vs SECRETARY OF LABOR

JOSE TAN CHONG, petitioner-appellee
SECRETARY OF LABOR, respondent-appellant
G.R. No. 47616. October 15, 1941. EN BANC.

FACTS:

Petitioner Jose Tan Chong, was born in San Pablo, Laguna, in July 1915 of a Chinese father and a Filipino mother,
who were legally married. Sometime in 1925 when Chong was about ten years old he was taken by his parents to
China. On January 25, 1940, he arrived at the port of Manila and sought entry as a native born citizen. The Board of
Special Inquiry assigned to hear his case, denied him admission on the alleged ground that he is a Chinese citizen.
On appeal, the Secretary of Labor affirmed the decision of the Board and ordered the deportation of Chong to the
port from whence he came. Chong sued for a writ of habeas corpus in the Court of First Instance of Manila which was
granted.

ISSUE:

WON Chong is a Filipino citizen.

RULING:

Yes, Chong having been born in the Philippines before the approval of our Constitution, of a Chinese father and a
Filipino mother, is a Filipino citizen. His sojourn in China did not adversely affect his Philippine citizenship, it
appearing that ever since he was twelve years old he wanted to return to the Philippines but his father would not
allow him to come, and he did not have the means to pay for his transportation back to the Philippines until the date
of his return. Animus revertendi existed here.

CASE DIGEST: PARCERO V. PRIMETOWN PROPERTY

GROUP INC.
Published by paul on July 22, 2013 | Leave a response

COMMISSIONER OF INTERNAL REVENUE and ARTURO V. PARCERO,

petitioners,vs. PRIMETOWN PROPERTY GROUP INC., respondent.
G.R. No. 162155. August 28,2007.

Facts:

On March 11, 1999, Gilbert Yap, the Vice President of Primetown (respondent), applied
for refund of the income tax which they have paid on 1997. According to Yap, the company
accrued losses amounting to P/ 71,879,228. These losses enabled them to be exempt from
paying income tax, which respondent paid diligently. Respondent was therefore claiming
a refund. Respondents submitted requirements but the petitioners ignored their claim.
On April 14, 2000, respondents filed a review in the Court of Tax Appeals. The said Court,
however, denied the petition stating that the petition was filed beyond the 2-year
prescriptive period for filing judicial claim for tax refund.
According to Sec 229 of the National Internal Revenue Code, “no suit or proceedings shall
be filed after the expiration of 2-yearsfrom the date of the payment of the tax regardless
of any supervening cause that may arise after payment. Respondents paid the last income
tax return on April 14, 1998. Article 13 of the New Civil Code states that a year is
considered 365 days; months 30 days; days 24-hours; and night from sunset to sunrise.
Therefore, according to CTA, the date of filing a petition fell on the 731st day, which is
beyond the prescriptive period.

Issues:

Whether the two-year/730-day prescriptive period ends on April 13, 2000 or April 14,
2000 considering that the last payment of tax was on April 14, 1998 and that year 2000
was a leap year.

Whether or not Article 13 of the New Civil Code be repealed by EO 292 Sec 31 Chap 8
Book 1 of the Administrative Code of 1987.

Ruling:

The Court ruled that when a subsequent law impliedly repeals a prior law, the new law
shall apply. In the case at bar, Art 13 of the New Civil Code, which states that a year shall
compose 365 days, shall be repealed by EO 292 Sec 31 of the Administrative Code of 1987,
which states that a year shall be composed of 12 months regardless of the number of days
in a month. Therefore, the two-year prescriptive period ends on April 14, 2000.
Respondents filed petition on April 14, 2000 (which is the last day prescribed to file a
petition.

Tax Case Digest: CIR V. Aichi Forging

Company (2010)
FIRST DIVISION
CIR v. Aichi Forging Company (2010)
G.R. No. 184823 October 6, 2010
DEL CASTILLO, J.

Lessons Applicable: Legal Period: 1 year = 12 months, Exhaust Administrative Claim Before Judicial
Claim, Lex Posterioni Derogati Priori

Laws Applicable:
FACTS:

 Aichi forging, a VAT entity filed a claim for refund of input VAT for its zero-rated sales with the
Dept. of Finance One-Stop Inter-Agency Tax Credit and Duty Drawback Center on Sept 30,
2004.
 On the same date, it filed a Petition for Review with the CTA.
 CTA partially granted the refund by reducing the leaseless claims.
 CIR filed a Motion for Reconsideration insisting that they were filed beyond the prescriptive
period in accordance to Art. 13 that: 1 year = 365 days and that filing an administrative claim is a
condition precedent before a judicial claim can be filed with the CTA.
 CTA and CTA En Banc denied petition.
ISSUE:
1. W/N the claim was filed with the prescriptive period of 2 year provided under Sec. 112 (A) NIRC
2. W/N filing an administrative claim is a condition precedent to a judicial claim for refund.

HELD:
1. Yes. Sec. 204 (c) and 229 are applied only in instances of erroneous payment and illegal
collection. Sec. 112 (A) of NIRC applies here. Sec. 31 Chapter VIII Book I of the Administrative
Code of 1987 being the more recent law governing legal period applies making 1 year = 12
months. The principle of Lex Posterioni Derogati Priori applies. Thus, since it is filed on exactly
Sept. 30, 2004 filing is timely.

2. Yes. Sec. 112 (D) of the NIRC clearly provides that the CIR has 120 days from date of the
submission of the complete documents in support of the application within which to grant or deny the
claim. In case of full or partial denial by the CIR, the recourse is to appeal before the CTA within 30
days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act
on the application for tax refund, the remedy is to appeal the inaction of the CIR to the CTA within 30
days.

Commissioner of Internal Revenue v. Aichi Forging

Company of Asia, Inc., G.R. No. 184823, 06
October 2010
24NOV
[DEL CASTILLO, J.]

FACTS
Respondent Aichi filed a claim for refund/credit of input VAT for the period July 1, 2002 to September 30,
2002, with the petitioner Commissioner of Internal Revenue (CIR), through the Department of Finance
(DOF) One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center.On even date, respondent filed
a Petition for Review with the CTA for the refund/credit of the same input VAT. The CTA partially granted
the petition. In a Motion for Reconsideration, petitioner argued that the simultaneous filing of the
administrative and the judicial claims contravenes Sections 112 and 229 of the NIRC and a prior filing of
an administrative claim is a “condition precedent” before a judicial claim can be filed. The CTA En Banc
affirmed the division ruling.

ISSUE
Whether the respondent’s judicial and administrative claims for tax refund/credit were filed within the two-
year prescriptive period as provided in Sections 112(A) and 229 of the NIRC.

HELD
NO.
The two-year period to file a claim for tax refund/credit for the period July 1, 2002 to September 30, 2002
expired on September 30, 2004. Hence, respondent’s administrative claim was timely filed.The filing of the
judicial claim was premature. However, notwithstanding the timely filing of the administrative claim, [the
Supreme Court is] constrained to deny respondent’s claim for tax refund/credit for having been filed in
violation of Section 112(D). Section 112(D) of the NIRC clearly provides that the CIR has “120 days, from
the date of the submission of the complete documents in support of the application [for tax refund/credit],”
within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer’s recourse
is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after
the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer
is to appeal the inaction of the CIR to CTA within 30 days.

In this case, the administrative and the judicial claims were simultaneously filed on September 30, 2004.
Obviously, respondent did not wait for the decision of the CIR or the lapse of the 120-day period. For this
reason, we find the filing of the judicial claim with the CTA premature. The premature filing of respondent’s
claim for refund/credit of input VAT before the CTA warrants a dismissal inasmuch as no jurisdiction was
acquired by the CTA.
 CIR v. AICHI FORGING COMPANY OF ASIA, INC.

G.R. No. 184823 October 6, 2010

Del Castillo, J.

Doctrine:

– The CIR has 120 days, from the date of the submission of the complete documents within which to grant or deny

the claim for refund/credit of input vat. In case of full or partial denial by the CIR, the taxpayer’s recourse is to file an

appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the

CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR
to CTA within 30 days.

– A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, privilege, or incentive

in his favor, or under the principle of solutio indebiti requiring the return of taxes erroneously or illegally collected. In

both cases, a taxpayer must prove not only his entitlement to a refund but also his compliance with the procedural
due process.

– As between the Civil Code and the Administrative Code of 1987, it is the latter that must prevail being the more
recent law, following the legal maxim, Lex posteriori derogat priori.

– The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund” under Subsection

(A) of Section 112 of the NIRC refers to applications for refund/credit filed with the CIR and not to appeals made to
the CTA.

Facts:

Petitioner filed a claim of refund/credit of input vat in relation to its zero-rated sales from July 1, 2002 to September
30, 2002. The CTA 2nd Division partially granted respondent’s claim for refund/credit.

Petitioner filed a Motion for Partial Reconsideration, insisting that the administrative and the judicial claims were filed

beyond the two-year period to claim a tax refund/credit provided for under Sections 112(A) and 229 of the NIRC. He

reasoned that since the year 2004 was a leap year, the filing of the claim for tax refund/credit on September 30, 2004

was beyond the two-year period, which expired on September 29, 2004. He cited as basis Article 13 of the Civil

Code, which provides that when the law speaks of a year, it is equivalent to 365 days. In addition, petitioner argued

that the simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and 229 of the

NIRC. According to the petitioner, a prior filing of an administrative claim is a “condition precedent” before a judicial
claim can be filed.
The CTA denied the MPR thus the case was elevated to the CTA En Banc for review. The decision was affirmed.
Thus the case was elevated to the Supreme Court.

Respondent contends that the non-observance of the 120-day period given to the CIR to act on the claim for tax

refund/credit in Section 112(D) is not fatal because what is important is that both claims are filed within the two-year
prescriptive period. In support thereof, respondent cited Commissioner of Internal Revenue v. Victorias Milling Co.,

Inc. [130 Phil 12 (1968)] where it was ruled that “if the CIR takes time in deciding the claim, and the period of two

years is about to end, the suit or proceeding must be started in the CTA before the end of the two-year period without
awaiting the decision of the CIR.”

Issues:

1. Whether or not the claim for refund was filed within the prescribed period

2. Whether or not the simultaneous filing of the administrative and the judicial claims contravenes Section 229 of the

NIRC, which requires the prior filing of an administrative claim, and violates the doctrine of exhaustion of
administrative remedies

Held:

1. Yes. As ruled in the case of Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (G.R. No. 172129,

September 12, 2008), the two-year period should be reckoned from the close of the taxable quarter when the sales

were made.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc (G.R. No. 162155, August 28, 2007, 531

SCRA 436), we said that as between the Civil Code, which provides that a year is equivalent to 365 days, and the

Administrative Code of 1987, which states that a year is composed of 12 calendar months, it is the latter that must
prevail being the more recent law, following the legal maxim, Lex posteriori derogat priori.

Thus, applying this to the present case, the two-year period to file a claim for tax refund/credit for the period July 1,

2002 to September 30, 2002 expired on September 30, 2004. Hence, respondent’s administrative claim was timely
filed.

2. Yes. We find the filing of the judicial claim with the CTA premature.

Section 112(D) of the NIRC clearly provides that the CIR has “120 days, from the date of the submission of the

complete documents in support of the application [for tax refund/credit],” within which to grant or deny the claim. In

case of full or partial denial by the CIR, the taxpayer’s recourse is to file an appeal before the CTA within 30 days
from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for
tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days.
Subsection (A) of Section 112 of the NIRC states that “any VAT-registered person, whose sales are zero-rated or
effectively zero-rated may, within two 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.”

The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund” refers to applications
for refund/credit filed with the CIR and not to appeals made to the CTA.

The case of Commissioner of Internal Revenue v. Victorias Milling, Co., Inc. is inapplicable as the tax provision

involved in that case is Section 306, now Section 229 of the NIRC. Section 229 does not apply to refunds/credits of
input VAT.

The premature filing of respondent’s claim for refund/credit of input VAT before the CTA warrants a dismissal
inasmuch as no jurisdiction was acquired by the CTA.