Nippon Express (Philippines) Corp.

Versus Commissioner of Internal Revenue

G.R. No. 185666, February 4, 2015
First Division, Perez, J.

Facts: Nippon Express (Nippon) is a domestic corporation who filed an

administrative claim for refund of its unutilized input Value Added Tax (VAT) for
the year 2002 with the Bureau of Internal Revenue (BIR)and only a day later, it
filed for a judicial claim of tax refund on a petition for review with the Court of
Tax Appeals (CTA). The Commissioner of Internal Revenue argue, that Nippon
should not be given way since its claims are not documented. The CTA division
partially granted Nippon’s claim and ordered the CIR to issue a tax certificate.
The CIR found that most of its recipients were non-resident enterprises. Nippon
however filed for a motion to withdraw before it received the CTA’s decision,
thus upon motion of the CIR for reconsideration the CTA considered the case
closed and terminated the same. The CTA En Banc affirmed the July 31, 2012
Resolution of the CTA Division granting Nippon's motion to withdraw.

Issue(s): Whether the CTA properly granted Nippon's motion to withdraw.

Decision: No. Rule 50 of the Rules of Court provides, equally adopted in the
Revised Rules of the CTA; 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 withdrawal may be allowed
in the discretion of the court. The Court points out that notwithstanding the said
discretion, the CTA should have considered the motion further, the claim of
Nippon, and the reductions sought by the CIR should have been looked into.
Based on record; the fact that the CTA Division, in its August 10, 2011 Decision,
had already determined that Nippon was only entitled to refund the reduced
amount of P2,614,296.84 since it failed to prove that the recipients of its services
were non-residents "doing business outside the Philippines"; Nippon's purported
sales therefrom could not qualify as zero-rated sales, necessitating the
reduction in the amount of refund claimed. Such massive discrepancy should
have been indication for the CTA to reconsider. Clearly, the interest of the
government, and, more significantly, the public, will be greatly prejudiced by
the erroneous grant of refund - at a substantial amount at that - in favor of
Nippon. It should be noted the CIR is not estopped from assailing the validity
of the July 27, 2011 Tax Credit Certificate; In matters of taxation, the
government cannot be estopped by the mistakes, errors or omissions of its
agents for upon it depends the ability of the government to serve the people
for whose benefit taxes are collected.

Page 29 of 30