ATLAS

CONSOLIDATED

AND

DEVELOPMENT

CORPORATION

vs.

COMMISSIONER OF INTERNAL REVENUE, G.R. No. 159490, February 18, 2008

FACTS: Atlas is a corporation duly organized and existing under Philippine laws engaged in the production of copper concentrates for export. It is registered as a VAT entity and a VAT Registration Certificate No. 32-0-004622 effective August 15, 1990. On September 20, 1993, Atlas applied with the BIR for the issuance of a tax credit certificate or refund under Section 106(b) of the Tax Code. The certificate would represent the VAT it paid for the first quarter of 1993 in the amount of PhP 7,907,662.53, which corresponded to the input taxes not applied against any output VAT. On February 22, 1995, Atlas then filed with the CTA and on October 13, 1997, the CTA rendered a Decision against Atlas. The CTA held that Atlas failed to present sufficient evidence to warrant the grant of tax credit or refund for the alleged input taxes paid by Atlas. It found that the documents submitted by Atlas did not comply with Revenue Regulation No. 3-88. Atlas timely filed its Motion for Reconsideration of the above decision contending that it relied on Sec. 106 of the Tax Code which merely required proof that the foreign exchange proceeds has been accounted for in accordance with the regulations of the Central Bank of the Philippines (CBP). Consequently, Atlas asserted that the documents it presented, coupled with the testimony of its Accounting and Finance Manager, sufficiently proved its case. The Motion for Reconsideration was denied. Atlas appealed and the CA denied and dismissed Atlas petition on the ground of insufficiency of evidence to support Atlas action for tax credit or refund.

ISSUE: Whether Atlas has sufficiently proven entitlement to a tax credit or refund.

RULING: No.

The Rules of Court, which is suppletory in quasi-judicial proceedings, particularly Sec. 349 of Rule 132, Revised Rules on Evidence, is clear that no evidence which has not been formally offered shall be considered. Thus, where the pertinent invoices or receipts purportedly evidencing the VAT paid by Atlas were not submitted, the courts a quo evidently could not determine the veracity of the input VAT Atlas has paid. Moreover, when Atlas likewise failed to submit pertinent export documents to prove actual export sales with due certification from accredited banks on the export proceeds in foreign currency with the corresponding conversion rate into Philippine currency, the courts a quo likewise could not determine the veracity of the export sales as indicated in Atlas amended VAT return.

MELECIO R. DOMINGO, as Commissioner of Internal Revenue vs. HON. LORENZO C. GARLITOS, in his capacity as Judge of the Court of First Instance of Leyte, and SIMEONA K. PRICE, as Administratrix of the Intestate Estate of the late Walter Scott Price, G.R. No. L-18994, June 29, 1963 FACTS: In Domingo vs. Moscoso, the Supreme Court declared as final and executory the order of the lower court for the payment of estate and inheritance taxes, charges and penalties amounting to Php 40,058.55 by the estate of the of the late Walter Price. The petitioner for execution filed by the fiscal was denied by the lower court. The court held that the execution is unjustified as the Government is indebted to the estate for Php 262, 200 and ordered the amount of inheritance taxes can be deducted from the Governments indebtedness to the estate.

ISSUE: Whether or not a tax and a debt may be compensated.

RULING: The court having jurisdiction of the Estate had found that the claim of the Estate against the government has been recognized and the amount has already been appropriated by a corresponding law, Rep. Act No. 2700. Both the claim of the Government for

inheritance taxes and the claim of the intestate for services rendered have already become overdue and demandable as well as fully liquidated. Compensation takes place by operation of law and both debts are extinguished to the concurrent amount. Therefore the petitioner has no clear right to execute the judgment for taxes against the estate of the deceased Walter Price.