Commissioner of Internal Revenue Vs.

Philex Mining Corporation 

G.R. No. 218057; January 18, 2021 
FACTS:
Philex is a domestic corporation engaged in the mining business. On January 21, 2010,
Philex filed its original Quarterly VAT Return for the fourth quarter of 2009. On September 13,
2011, it filed an amended Quarterly VAT Return for its total zero-rated sales of
P2,680,497,020.60, importation of goods of P93,018,475.00 with input tax of P11,162,217.00,
and purchases of services of P132,944,084.17 with input tax of P15,953,290.10.

On September 28, 2011, pursuant to Section 4.112-1 of Revenue Regulations (RR) No.
16-2005, Philex filed its claim for refund/tax credit with the One Stop Shop (OSS) Center of the
Department of Finance in the amount of P27,115,507.10. The CIR failed to act on Philex's
administrative claim for refund which prompted Philex to file a Petition for Review with the
CTA on January 27, 2012.

The CTA Second Division partially granted Philex's Petition for Review. The CIR is
hereby ORDERED to REFUND in favor of Philex the amount of P18,610,568.32, representing
its unutilized and excess input VAT attributable to its zero-rated sales for the fourth quarter of
2009. The CIR elevated the case to the CTA En Banc. However, the CTA En Banc denied CIR's
Petition for Review.

ISSUE:
Whether Philex is entitled to a tax refund in the amount of P18,610,568.32, representing
its unutilized and excess input VAT attributable to its zero-rated sales for the fourth quarter of
2009.

RULING:
Yes, Philex is entitled to a refund of P18,610,568.32 representing its unutilized and
excess input VAT attributable to its zero-rated sales for the fourth quarter of 2009.

First, Philex’s judicial claim was not premature and its supporting documents to its
application are complete. Pursuant to Section 112 (c) of the NIRC, the running of the 120-day
period for the CIR to decide the claim for refund commences from the time of the submission
of complete documents in support of the tax refund application. For purposes of determining
when the supporting documents have been completed, it is the taxpayer who ultimately
determines when complete documents have been submitted for the purpose of commencing and
continuing the running of the 120-day period. After all, he may have already completed the
necessary documents the moment he filed his administrative claim, in which case, the 120-day
period is reckoned from the date of filing. The taxpayer may have also filed the complete
documents on the 30th day from filing of his application, pursuant to RMC No. 49-2003. He may
very well have filed his supporting documents on the first day he was notified by the BIR of the
lack of necessary documents. In such cases, the 120-day period is computed from the date the
taxpayer is able to submit the complete documents in support of his application.
 Records show that Philex filed its application for tax refund, attaching therewith the
necessary documents, on September 28, 2011. Within the period of 120 days from September 28,
2011, the CIR could have notified Philex, by way of a request, to submit additional documents
which he/she deems necessary. Considering that no notice was given by the CIR or no other
action was taken within the said 120 days, Philex had 30 days from January 26, 2012, the
expiration of the 120-day period, or until February 26, 2012, to appeal to the CTA. Again,
records show that Philex properly and timely filed its judicial claim on February 3, 2012. There
is thus no merit in the CIR's contention that Philex's judicial claim was premature or that its
supporting documents were incomplete.

Second, as to the substantiation of the claim for refund, the court holds that there is no
need for it to go over and review once again the documents presented by Philex which were
already passed upon by the CTA. It is settled that this Court is not a trier of facts. Factual
questions should not be entertained in petitions for review filed under Rule 45 of the Rules of
Court. The factual findings of the trial court are generally not disturbed on appeal unless it is
perceived to have overlooked, misunderstood or misinterpreted certain facts or circumstances of
weight, which, if properly considered, would affect the result of the case and warrant a reversal
of the decision involved. Besides, there is no cogent reason to depart from the CTA En
Banc's finding that Philex's zero-rated sales, which were supported by financial invoices dated
outside the period of claim, were actually generated during the period of claim in view of the
provisional invoices and bills of lading during the latter period.

Here, the CTA Second Division commissioned an Independent Certified Public

Accountant (ICPA) who found, after examining Philex's voluminous documents, that its claim
for refund was well-founded. The CTA En Banc likewise saw no reason to deviate from the
findings of the ICPA and the CTA Second Division in partially granting Philex's refund "as the
same is supported by pieces of evidence, which prove Philex's compliance with the requirements
for refund of its claimed input tax attributable to zero-rated sales for the fourth quarter of taxable
year 2009.

Finally, the submission of the subsidiary sales journal and subsidiary purchase journal is
not indispensable to support Philex's claim for refund. Section 112(A) of the NIRC, which
enumerates the requisites for a taxpayer to be entitled to a tax refund or credit, does not require
subsidiary journals as part of the substantiation requirements. The subsidiary journals are not
required, but they may be utilized by the CIR as vital sources of information for other purposes
such as making assessments.

Metropolitan Waterworks and Sewerage System Vs. Central Board of

Assessment Appeals, The Pasay City Local Board of Assessment
Appeals, The Pasay City Treasurer and City Assessor 
G.R. No. 215955; January 13, 2021
FACTS:
 To insure an uninterrupted and adequate supply and distribution of potable water for
domestic and other purposes and the proper operation and maintenance of sewerage systems, RA
No. 62344 was made to law on June 19, 1971 which created MWSS. MWSS was vested with the
power to exercise supervision and control over all waterworks and sewerage systems within
Metro Manila, Rizal, and a portion of Cavite.

In 1997, pursuant to RA No. 80417 (The National Water Crisis Act of 1995), MWSS
entered into a concessionaire agreement with Maynilad Water Services, Inc. (Maynilad) to
service the West Zone of the Metropolitan Area that includes Pasay City.

On February 21, 2008, MWSS received Real Property Tax Computations from the Pasay
City Treasurer for taxable year 2008, demanding payment of real property taxes in the total
amount of P166,629.36. On the same day, MWSS filed a Protest addressed to the Pasay City
Mayor. MWSS argued that it is a public utility and a government instrumentality, and its
properties and facilities are exempt from real property tax under Section 133(o)and Section
234(a) of the Local Government Code of 1991.

Due to inaction on the part of the Pasay City Treasurer, MWSS filed an appeal to the
Local Board of Assessment Appeals. The LBAA ruled that the MWSS is a government-owned
or controlled corporation (GOCC), not a government instrumentality. Hence, the doctrine of tax
exemption is not applicable. When the MWSS entered into a concessionaire agreement with
Maynilad, the actual use of its real properties was turned over to a taxable person. Therefore, the
assessment of real property taxes against the MWSS was "reasonable and collectible."

MWSS filed an appeal to the Central Board of Assessment Appeals (CBAA). It affirmed
the assessment's finality, not for failure to comply with Section 252 of the LGC, but for failure to
question the legality of the assessment before the city assessor in accordance with Section 226 of
the LGC. CBAA acknowledged that MWSS is a government instrumentality, recognized under
RA No. 10149. As such, it cannot be subjected to local taxes, fees and charges as provided under
Section 133(o) of the LGC. However, this is not relevant since the collections involved are real
property taxes. Instead, Section 40(a) of PD 464 as embodied under Section 234(a) of the LGC
should apply. CBAA ruled that the common limitation on the taxing power of the local
government under Section 133(o) should not affect the imposition of real property taxes.
Besides, MWSS 's tax exemption under its Charter (RA No. 6234) had already been withdrawn
by Section 234 of the LGC.

MWSS appealed the CBAA's ruling to the CA. CA dismissed MWSS's appeal for failure
to exhaust administrative remedies as provided under Sections 206 and 252 of the LGC,
requiring proof of exemption and payment under protest.

ISSUES:
Whether the City of Pasay is authorized to assess and collect real property taxes from MWSS

RULING:
 MWSS is a government instrumentality with corporate powers, not liable to the local
government of Pasay City for real property taxes. The Court explained that with the issuance of
Executive Order No. 596 as well as the passage of RA No. 10149, the Executive and the
Legislative Branches have explicitly classified MWSS as a government instrumentality with
corporate powers. The tax exemption that its properties carries, however, ceases when their
beneficial use has been extended to a taxable person. The liability to pay real property taxes on
government-owned properties, the beneficial or actual use of which was granted to a taxable
entity, devolves on the taxable beneficial user. Beneficial use means actual use or possession of
the property. Actual use refers to the purpose for which the property is principally or
predominantly utilized by the person in possession thereof.

The respondents have not alleged that the beneficial use of any of MWSS’s properties
was extended to a taxable person. In the absence of any allegation to the contrary, MWSS’s
properties in Quezon City are not subject to the levy of real property taxes. Although there was
an allegation that the beneficial use of MWSS's properties in Pasay were given to Maynilad by
virtue of a concession agreement, this however, was not proved and was merely based on a
sweeping conclusion that when MWSS entered into a concession agreement, all its properties
were effectively turned over to the concessionaires for their operations. The Court cannot make a
judicious determination of such factual matter due to the insufficiency of evidence on records. At
any rate, the tax-exempt status of a government instrumentality is not lost when it grants the
beneficial use of its real property to a taxable person; only the exemption of the real property
ceases in such case. The LGC also leaves no room for interpretation on the corresponding
liability of the taxable beneficial user for the payment of real property taxes on a government
instrumentality property.

For cases 18 and 19

Q1: When does the running of the 120-day period for the CIR to decide the claim for refund
commence?
a. from the time the application for tax refund was filed
b. from the time of the submission of complete documents in support of the tax refund
application
c. 30 days from the date the taxpayer is able to submit the complete documents in support of his
application
d. from the time the CIR gave a receipt of the application for tax refund

Q2: A government instrumentality with corporate powers is not liable for real property taxes.
When does this exemption cease?

a. When the beneficial use of the properties that such government instrumentality carries
has been extended to a taxable person or entity
b. The exemption is absolute. It does not cease.
c. Government instrumentalities are not exempt from real property taxes.
d. When the beneficial use of the properties has been converted to a use that is not public in
nature