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    04 Zuellig Pharma Asia Pacific Ltd. Phils. Rohq vs. CIR

    Uploaded by

    Enma Kozato

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 12
    Republic of the Philippines Supreme Court Manila SECOND DIVISION ZUELLIG-PHARMA _ ASIA GAR. No. 244154 PACIFIC) LTD. PHILS. ROHQ, Present Petitioner, PERLAS-BERNABE, S.A./, Chaieperson, = versus - HERNANDO, INTING, DELOS SANTOS, and COMMISSIONER oF GAERLAN,' JU. INTERNAL REVENUE (cir), Promulgated Respondent DECISION PERLAS-BERNABE, Asal in this petition for review on certiorari! isthe Decision? dated January 21, 2019 of the Court of Tax Appeals En Bane (CTA En Banc) in CTA BB No. 1656, which upheld the CTA-Second Division's dismissal of Petitioner Zuellig-Pharma Asia Pacific Ltd. Phils. ROHQ (Zuellig-PH)'s claim for refund or issuance of a tax credit eerificate amounting to 1P39,951,971.21, representing its excess and unutilized input value-added tax (VAT) for calendar year (CY) 2010, Wat set Pn by Asal sce Ma Sen M, Ragin with Pring hse Ronan Dl Reais Acie ste unt CC tds Uy ape ao Decision 2 GR. No, 244154 ‘The Facts Zucllig-PH is a regional operating headquarters (ROHQ) of Zuellig- Pharma Asia Pacific Lud. (Zuelli-HK), a foreign corporation duly organized and existing under the laws of Hong Kong.” For CY 2010, Zucllig-PHi filed its Quarterly VAT Retums (BIR Form No, 2550-Q) on April 22, 2010," July 21, 2010 October 20, 2010. and January 20, 2011,” respectively. On February 15, 2011, Zuellig-PH filed its amended Quarterly VAT Returns for all four (4) quarters of CV 2010. On February 17, 2011, it fled an administrative claim for refund’ with attached Application for Tax Credits/Refunds"® (BIR Form No. 1914) ofits ‘excess and unuilized input VAT for CY 2010 amounting to a total of 'P39,931,971.21 with the Bureau of Intemal Revenue (BIR) Revenue District Office (RDO) No. 49." Zucllig-PH then received Leter of Authority (LOA) No. ¢eLA201000037096" dated March 3, 2011 fom the BIR. In the stid LOA, the BIR authorized Revenue Officer (RO) Joaquin Tinio (RO Tinio) and Group Supervisor Socrates Regala to examine Zuellig-PH’s book of accounts and ‘other accounting records for VAT for CY 2010." In 9 Jeter dated June 29, 2011, the BIR requested Zucllig-PHt to present its records and submit supporting documents in relation to its administrative claim for refund. In response thereto, Zuellig-PH submitted the requested documents to the BIR on July $, 2011." According to Zuellig-PH, the BIR made further verbal requests for submission of documents from 2012 until 201, to whieh the former acceded. Consequently, Zuellig-PH made submissions on May 82012,” July 25, 2012,"" December 6, 2012,” and September 11, 2013.” all of ‘which were received by RO Tinio. On February 4,2014, Zucllig-PI'selaio ity VAT eta Quang Soe Wm) Ses lat di uy 12011 of ati. CTA Dion all 5, Sieh Zea 8 i Sletten ed Spot 1,33 Za Pm 960, Decision 2 GRNo. 246154 \was forwarded tothe BIR Assessment Service and assigned to RO William P. Manzanares, Jr. (RO Manzanares)?" Due to the inordinate delay in the processing of its refund claim, Zuellig-PH sent a letter on March 5, 2014 to then Commissioner Kim § Jacinto-Hlenares, requesting that its application for refund be resolved atthe soonest possible time. Deputy Commissioner Nelson M. Aspe (Depuly Commissioner Aspe) replied to Zuelig-PH in a leter® dated March 12,2014, stressing that applications for refund were processed by the Assessment Service on a “frstin-firstout” basis. Nevertheless, Deputy Commissioner Aspe assured Zucllig-PH that “[the BIR] shall exert all the necessary efforts to ensure the timely processing of [its] VAT refund claim wit the 120-day period under [Section] 112 (D) of the Tax Code, as amended, provided {that] all the required documents have been submitted.”"" ‘Thereafter, RO Manzanares requested Zuclig-PH to resubmit certain documents, to which the later complied as evidenced hy a letter” dated April 29, 2014. The aforesaid leer was stamped received by the Assessment Service on the same date* In the same letter, ZuellisPH Imanifested that it had “wleeady submited the complete documents in support its application for refund of excess and unutilized input VAT for t four (4) quarters of TY 2010 iw the amount of Php39,931,971.21." Consequently, it averred that the BIR should act on its application for VAT refund *within 120 days from the date of submission x x nin suvvrdance with Section {112 (C)], National Intemal Revenue Code of 1997." When the BIR filed to act on the administrative claims For refund within 120 days from receipt of Zuellig-PH’s last correspondence on April 29, 2014 (the 120" day being August 27, 2014), Zuellig-PH filed a Petition for Review before the CTA-Second Division on September 25, 2014, docketed 1s CTA Case No. 8899. For its part, the BIR argued that the CTA did not acquire jurisdiction ‘over the ease, considering that Zuellig-PH’s judicial claim for refund was belatedly filed. In particular, the BIR pointed out that since Zuellig-PH filed its administrative claim for refund on February 17, 2011, the RDO had until une 11, 2011" to aet on the claim. When the RDO failed to do s0, Zuellis- PH should have filed a judicial claim with the CTA within thirty (90) days Seer ach 2 4 fy Con 5 Seti nape 1: eng nd wc te Dit epee 26 204 a Decision 4 GR, No, 244156 therefrom, or until July 11, 20112 Since Zuellig-PH filed its judicial claim ‘only on September 25, 2014, which was clearly long after the lapse ofthe 30- ‘ay period, the claim was already belatedly filed. In any event, it argued thet Zuellg-PH was not able to discharge its burden of proving its entitlement to its claim for refund. ‘The CTA-Second Division Ruling Ina Decision” dated March 9, 2017, the CTA-Second Division denied Zuellig-PH's Petition for Review for being filed out of time thet thatthe 120-day period within which the BIR should act on the {administrative claim for refiand must be reckoned from the date when Zulli PH submitted the requested documents on July $, 2011, which was in Fesponse to the BIR’s written request for such dated June 29,2011. In this regard, the CTA-Second Division disregarded the subsequent verbal requests for written documents made by the BIR to Zuelig-PIl, considering that, as per the case of Pilipinas Total Gas, Ine. 9. CIR (Pilipinas Tora! Gas).” the notice for additional documents should be in ‘writing; hence, the 120-day period for the BIR co act on the refund elaim was, reckoned from June 29, 2011, and upon the lapse thereof, Zuellig-PH had thirty G30) days to file its judicial claim for refund, or on December 2, 2011 However, since Zuelig-PH filed the Petition for Review only on September 5, 2014, the same was Tiled out of time Agartieved, Zuelig-PH moved for revonsideration.” It argued thatthe BBIR was estopped from questioning the jurisdiction of the CTA given the subsequent representations of Deputy Commissioner Aspe (albeit verbal) ‘regarding the continued processing ofits VAT refund claim which took place {even beyond July 5, 2011 (ce, the date which the CTA-Division construed as ‘the reckoning point of the 120-day petiod for the BIR to act on Zuellig-PH's administrative claim for refund). In a Resolution” dated May 9, 2017, Zuelig-PH's motion for reconsideration was denied. Unperturbed, it then elevated! the matter to the CTA En Bane. Boon oo 31d abe ly 17,2011 Sec pores ihe suet etn fr Reve ie Sep 23,214 diel Novena 3, ig 22-169, Pome by iat ats ai ‘ete ni cs ae Cor tamraseogy ‘5 mu Tr rosea Re: Deco ho Mach 9, 207) od Meh 27,2017 8 75 Decision 5 GR. No. 244158 ‘The CTA En Bane Ruling In. Decision dated January 21, 2019, the CTA Ein Bane affirmed the CTA-Second Division, It agreed with the latter's application of the ruling in Pilipinas Total Gas to Zuellig-PH's case, and further held thatthe government ‘cannot be estopped by the mistakes ofits agents.” Hence, the instant petition. ‘The Issue Before the Court ‘The essential issue forthe Court's resolution is whether or not Zueli H's judicial claim for refund was filed out of time, ‘The Court's Ruling “The petition is meitorious Section 112 (C) of the National Intemal Revenue Code of 1997 (Tax Code)" provides for the period within which to file a claim for refund of creditable input tax ‘SHC, 112, Refunds or Tax Cris of Input Tax.— (©) Period within wich Refind or Tax Credit of typ Taxes sal! be Made. ~In proper cscs, the Commissioner shall grant refund oF Ise the tax credit certificate for creditable Input taxes within one buundred trent (120) days from the date of submission of complete aguments in support of the applicaon led in aceordance with Subsection (A) hereot. In case of fl or paral denial of the elim for tx refund or tax ‘edit, or the fallue on the par af the Commissioner t0 act on the ‘pplication within the peri presclted above, te taxpayer afore may, within thirty (30) daa from the recspt of the deeision denying the ‘aim or after the expiration ofthe one hundred twenty day-peiod, !ppeal the decison or the unacted claim with the Cour f Tax Ap (Einpheses and underscoring supplied) ‘As may be gleaned from the above provision, the CIR has 2 period of the date of submission lete documents within which ‘weevaluaie an administrative claim for tax credit or refund of creditable input {axes (120-day period), If the CIR denies the administrative claim, or it it ‘emains unacted upon the expiration ofthe said period ~ which is essentially ‘considered a “denial due to inaction,” the taxpayer may, within thirty (30) flop. "© ep, RA) S24 mend po RA337 Oy. 2085) u Decision ‘ GR. No, 244154 ‘days from such denial or expiration, aval ofthe further remedy of filing 1 judicial elaim before the CTA." Inthis relation, the BIR issued RMC No, 49-2003 which provides for the procedure in instances where there are pending administrative claims for refund but with incomplete documents. The circular states that the taxing authority shall requite the further submission of the needed. supporting «documents through a notice-request, which should then be complied with by ‘the taxpayer within thy (30) days from receipt thereof Q-18: For pen lete documents, what is the Period within which’ sebmit the supporting documents Fequired by the investigating/processing office? Whe should the investigating’ processing offic ually receive claims for fax eredirefund nd what the period required to sch lain? AcIB: For pending cams whieh have not Been acted pon by the investigating processing office duc to incomplete Jocumenation, ‘he tmpayerctaimant ae given thity (0) ays within Which to submit the documentary requirements unless given further extension by dhe ead ofthe processing unit, bt sch exason should nt sce hy 30) ys For claims to be filed by claimants with the respective investigating processing ofc of the administrative agency. the sume shal be offically received only upon submission of complete For current an future claims for tx reiting, the same shall bbe processed within one hundred twenty (120) days fm rept ofthe complete daeament In the course o he inesigion and procesing ofthe elim, addtional documents are equted for the proper deteminaion of the legitimate mount of eli, dhe ‘axpayerlaiant shal sabi och dures within tity (30) days from request ofthe investigating/procesing office. ich shall be costued as within the one honed twenty [(120)y] period Emphases and underscoring supplied) ‘The foregoing rules were further refined by the Court in Pilipinas Total Gas, which resolved the question of: “In an administrative claim for tax credit oF refund of creditable input VAT, from what point does the law allow the CIR to determine when it should decide an application for tefund? Or stated differently: Under present la, when should the submission of documents be deemed ‘completed’ for purposes of determining the running of the 120-doy perms Ernie “aacina Avra To Queshow Noe 7 oF REVEWE MENORANDL CRCLLAR NO. eh dof Apna comntsanisRaatve nu actanoer Ce event Gro, owssror Stor IibeAaeNeY Tax CHIT MO DUTY Dusen Coes, Deratraexor Fret (OSS Oe) Bec Erte bel ow gu 15 Sepa 35 4 Gee ogi Decision 7 GR, No, 244154 Conffonted with this question, the Court then ruled that the reckoning point ofthe 120-lay period would depend on the following circumstances: (2) __fthe taxing authority does not make any notice requesting for additional documents or ifthe taxpayer manifests that he no longer wishes to submit any additional document, the 120

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