TAXATION LAW REVIEW

CASE DIGESTS IN TRANSFER, VAT AND EXCISETAXES

By: Aprille S. Alviarne

1. SAN ROQUE POWER CORP. VS CIR

GR. No. 205543 June 30, 2014
120+30 day period for judicial claim of tax refund

FACTS:
San Roque is a domestic corporation principally engaged in the power-
generation business. It is registered with the Bureau of Internal Revenue (BIR)
as a Value-Added Tax (VAT) taxpayer.
San Roque alleged that in 2006, it incurred creditable input taxes. It filed
an administrative claim for refund/tax credit.
When CIR failed to take action on its administrative claims, San Roque
filed two separate Petitions for Review before the CTA.
CTA First Division denied the petition for review in line with the
pronouncement in the case of CIR vs Aichi. CTA en banc upheld the application
of Aichi and explained that there was no retroactive application of the same.

ISSUE: Whether or not San Roque Power Corp is entitled to refund or tax credit
of its creditable input taxes.

HELD:
No, San Roque Power Corp. is not entitled to refund or tax credit of its
creditable input taxes.
A claim for tax refund or credit, like a claim for tax exemption, is
construed strictly against the taxpayer. One of the conditions for a judicial claim
of refund or credit under the VAT System is compliance with the 120+30 day
mandatory and jurisdictional periods. Thus, strict compliance with the 120+30
day periods is necessary for such a claim to prosper, whether before, during, or
after the effectivity of the Atlas doctrine, except for the period from the issuance
of BIR Ruling No. DA-489-03 on 10 December 2003 to 6 October 2010 when the
Aichi doctrine was adopted, which again reinstated the 120+30 day periods as
mandatory and jurisdictional.
In the instant case, San Roque failed to comply with the 120+30 day
periods for the filing of its judicial claims.
As to the argument against the supposedly retroactive application of Aichi
case, it was not applied retroactively to San Roque in the instant case. The
"prospective application" of Aichi and Mirant, in the context of San Roque
(2013), only meant that the rulings in said cases would not retroactively affect
taxpayers who relied on Atlas and/or DA-489-03 when they filed their
administrative and judicial claims for refund or tax credit of creditable input

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taxes during the period when Atlas and DA-489-03 were still in effect. Aichi and
Mirant can still be applied to cases involving administrative and judicial claims
filed prior to the promulgation of said cases and outside the period of effectivity
of Atlas and DA-489-03, such as the instant case.

2. CIR v. CA and PAJONAR

GR. No. 123206 March 22, 2000
Notarial fee and attorneys fee as estate tax deductions

FACTS:
Pedro Pajonar as part of the infamous Death March suffered shock and
became insane. He died on January 10, 1988.
BIR assessed the estate of Pedro Pajonar taxes in the amount of
P2,557.00. Pursuant to second assessment BIR held the estate of Pedro for
deficiency estate tax.
The sister of Pedro, Josefina, in her capacity as administratrix and heir of
Pedro Pajonar's estate, filed a protest.
CTA ordered the Commissioner of Internal Revenue to refund the excess
tax paid. Among the deductions from the gross estate allowed by the CTA were
the amounts of P60,753 representing the notarial fee for the Extrajudicial
Settlement and the amount of P50,000 as the attorney's fees.
CA upheld the validity of the deduction of the notarial fee for the
Extrajudicial Settlement and the attorney's fees

ISSUE: Whether or not the notarial fee and attorneys fee can be deducted from
the estate of Pedro Pajonar.

HELD:
Yes. Judicial expenses are expenses of administration. Administration
expenses, as an allowable deduction from the gross estate of the decedent for
purposes of arriving at the value of the net estate, have been construed to
include all expenses "essential to the collection of the assets, payment of debts
or the distribution of the property to the persons entitled to it."
In other words, the expenses must be essential to the proper settlement
of the estate. Expenditures incurred for the individual benefit of the heirs,
devisees or legatees are not deductible.
In the case at bar, the notarial fee paid for the extrajudicial settlement is
clearly a deductible expense since such settlement effected a distribution of
Pedro Pajonar's estate to his lawful heirs. Similarly, the attorney's fees paid to
PNB for acting as the guardian of Pedro Pajonar's property during his lifetime
should also be considered as a deductible administration expense.

3. DIZON v. CTA

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GR. No. 140944 April 30, 2008
Condoned claims may be allowed as deductions from gross estate

FACTS:
On November 7, 1987, Jose P. Fernandez (Jose) died. Thereafter, a
petition for the probate of his will was filed.
Subsequently, petitioner requested the probate court's authority to sell
several properties forming part of the Estate, for the purpose of paying its
creditors. Consequently, the said claims were reduced or condoned through
compromise agreements entered into by the Estate with its creditors.
However, BIR assessed deficiency estate tax.
CTA denied the petition for review and disallowed the claims of creditors
against the estate as lawful deductions.
CA affirmed the CTA's ruling.

ISSUE: Whether the actual claims of the aforementioned creditors may be fully
allowed as deductions from the gross estate of Jose despite the fact that the said
claims were reduced or condoned through compromise agreements entered into
by the Estate with its creditors.

HELD:
Yes. American courts are on the general principle that post-death
developments are not material in determining the amount of the deduction.
Pursuant to established rules of statutory construction, the decisions of American
courts construing the federal tax code are entitled to great weight in the
interpretation of our own tax laws.
The Court expressed its agreement with the date-of-death valuation rule,
made pursuant to the ruling of the U.S. Supreme Court. First. There is no law,
nor do we discern any legislative intent in our tax laws, which disregard the
date-of-death valuation principle and particularly provide that post-death
developments must be considered in determining the net value of the estate. It
bears emphasis that tax burdens are not to be imposed, nor presumed to be
imposed, beyond what the statute expressly and clearly imports, tax statutes
being construed strictissimi juris against the government. Any doubt on whether
a person, article or activity is taxable is generally resolved against taxation.
Second. Such construction finds relevance and consistency in our Rules on
Special Proceedings wherein the term "claims" required to be presented against
a decedent's estate is generally construed to mean debts or demands of a
pecuniary nature which could have been enforced against the deceased in his
lifetime, or liability contracted by the deceased before his death. Therefore, the
claims existing at the time of death are significant to, and should be made the
basis of, the determination of allowable deductions.

4. CIR vs. CE LUZON GEOTHERMAL POWER COMPANY, INC

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GR No. 190198 September 17, 2014
120+30 day period for judicial claim of tax refund; Exception

FACTS:
CE Luzon is a VAT-registered domestic corporation.
On September 26, 2003, it filed an administrative claim for refund of
unutilized input VAT for the third quarter of 2001 before the BIR. Alleging
inaction on the part of the CIR, it filed a judicial claim for refund before the CTA
on September 30, 2003
Thereafter, on December 18, 2003, CE Luzon likewise filed an
administrative claim for refund of unutilized input VAT for the fourth quarter of
2001 and all quarters of 2002 before the BIR. It then filed a judicial claim for
such refund before the CTA on December 19, 2003
CTA Division partially granted CE Luzons claims for refund. It ordered the
CIR to refund or issue a tax credit certificate in favor of CE Luz representing the
unutilized input VAT attributable to its zero-rated sales for the third and fourth
quarters of 2001 and all quarters of 2002
The CTA En Banc affirmed the CTA Divisions Ruling. The CTA En Banc
further held that CE Luzons judicial claims were not prematurely filed, despite
the fact that it filed its petitions for review before the CTA only days after it filed
its administrative claims before the BIR. It opined that the use of the word
"may" in Section 112 (D) of the NIRC indicates that judicial recourse within 30
days after the lapse of the 120-day period is directory and permissive, and is
neither mandatory nor jurisdictional as long as the said period is within the 2-
year prescriptive period enshrined in Section 229 of the NIRC.

ISSUE: Whether or not the CTA En Banc correctly ruled that CE Luzon did not
prematurely file its judicial claims for refund.

HELD:
The petition is partly granted. In Taganito Mining Corp v. CIR, the Court
held that the rule must be, that during the period December 10, 2003 (when BIR
Ruling No. DA-489-03 was issued) to October 6, 2010(when the Aichi case was
promulgated), taxpayers-claimants need not observe the 120-day period before
it could file a judicial claim for refund of excess input VAT before the CTA. Before
and after the aforementioned period (i.e., December 10, 2003 to October 6,
2010), the observance of the 120-day period is mandatory and jurisdictional to
the filing of such claim.
In the case at bar, while both claims for refund were filed within the two
(2)-year prescriptive period, CE Luzon failed to comply with the 120-day period
as it filed its judicial claim in C.T.A. Case No. 6792 four (4) days after the filing
of the administrative claim, while in C.T.A. Case No. 6837, the judicial claim was
filed a day after the filing of the administrative claim. Proceeding from the
aforementioned jurisprudence, only C.T.A. Case No. 6792 should be dismissed
on the ground of lack of jurisdiction for being prematurely filed. In contrast, CE

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Luzon filed its administrative and judicial claims for refund in C.T.A. Case No.
6837 during the period, i.e., from December 10, 2003 to October 6, 2010, when
BIR Ruling No. DA-489-03 was in place. As such, the aforementioned rule on
equitable estoppel operates in its favor, thereby shielding it from any supposed
jurisdictional defect which would have attended the filing of its judicial claim
before the expiration of the 120-day period.

5. CIR v. TOLEDO POWER CORP

GR. 195175 August 10, 2015
120+30 day period for judicial claim of tax refund; Exception

FACTS:

Toledo Power Corp. (TPC) is a VAT registered company engaged in the

business of power generation. It is engaged in zero-rated sales.
On December 23, 2004, TPC filed an administrative claim for the refund of
the alleged unutilized input VAT for taxable year 2003 and 2004.
CTA En Banc ruled partially granted the claim for refund for taxable year
2004 while it denied the claim for the first quarter of taxable year 2003 for it
was prematurely filed and for the second quarter for it was filed late.

ISSUE: Whether or not the claims for refund was filed within the prescribed
period.

HELD:
The Court partly granted the claims for refund.
On the issue of prescriptive period, the Court ruled that the observance of
the 120+30 day period is mandatory and jurisdictional. All taxpayers, however,
can rely on BIR Ruling No. DA-489-03 from the time of its issuance on December
20, 2003 up to its reversal on October 6, 2010, as an exception to the
mandatory and jurisdictional 120+30 day periods.
As to the claim for refund for the four quarters of taxable year 2004, the
administrative claim was timely filed on December 23, 2004 which is within two
years from the close of the taxable year. Since the filing of the administrative
claim was done within the period where BIR Ruling No. DA-489-03 was
recognized valid, TPC is not compelled to observe the 120-day waiting period.
Nevertheless, it should have filed the Petition within 30 days after the expiration
of the 120-day period. TPC should have filed its judicial claim from December
23, 2004 until May 22, 2005. It however filed its petition to CTA only on April
24, 2006. The claim was denied.
As to the claim for refund for the first quarter of taxable year 2003, the
case falls within the exception period. BIR Ruling No. DA-489-03 allows
premature filing. TPC filed its judicial claim on 22 April 2005. In theory, the CTA
does not have jurisdiction over the Petition, since it was filed on the last day of

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the 120-day period for the CIR, or without waiting for the expiration of the
aforesaid period. The BIR Ruling applies to this case. The claim was partly
granted while the claim for the second quarter was denied.

6. TAGANITO MINING CORPORATION v. CIR

G.R. No. 201195 November 26, 2014
120+30 day period for judicial claim of tax refund; Exception

FACTS:
Petitioner Taganito Mining Corporation (Taganito), a value-added tax
(VAT) and Board of Investments (BOI) registered corporation.
On March 26, 2008, Taganito filed with respondent Commissioner of
Internal Revenue (CIR) a claim for credit/refund of input VAT paid for the period
covering January 1, 2006 to December 31, 2006.
On April 17, 2008, as respondent CIR had not yet issued a final decision
on the administrative claim, Taganito filed a judicial claim before the CTA
Division with the intention of tolling the running of the two-year period to
judicially claim a tax credit/refund
On April 8, 2010, the CTA Division denied Taganitos petition for review.
CTA En Banc affirmed the decision of the Division considering that
Taganito filed its judicial claim before the expiration of the 120-day period.

ISSUE: Whether or not the judicial claim was prematurely filed.

HELD:
No. It was settled that in claims for a refund or tax credit for unutilized
creditable input VAT it is Section 112 which applies, thereby making the 120+30
day period prescribed therein mandatory and jurisdictional in nature.
As an exception to the mandatory and jurisdictional nature of the 120+30
day period, judicial claims filed from the issuance of BIR Ruling No. DA-489-03
on December 10, 2003 up to its reversal in Aichion October 6, 2010, need not
wait for the lapse of the 120+30 day period, in consonance with the principle of
equitable estoppel.
In the present case, Taganito filed its judicial claim with the CTA on April
17, 2008, clearly within the period of exception of December 10, 2003 to
October 6, 2010. Its judicial claim was, therefore, not prematurely filed.

7. ROHM APOLLO SEMICONDUCTOR PHILIPPINES vs. CIR

G.R. No. 168950 January 14, 2015
120+30 day period for judicial claim of tax refund

FACTS:

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 Petitioner Rohm Apollo is a domestic corporation registered with the
Bureau of Internal Revenue (BIR) as a value-added taxpayer. It filed with the
BIR an administrative claim for the refund or credit of accumulated unutilized
creditable input taxes on 11 December 2000.
Instead of filing a judicial claim within 30 days from the lapse of the 120-
day period on 10 April, or until 10 May 2001, Rohm Apollo filed a Petition for
Review with the CTA docketed as CTA Case No. 6534 on 11 September 2002.
CTA First Division rendered a Decision denying the judicial claim for a
refund or tax credit.
CTA En Banc rendered its Decision denying Rohm Apollos Petition for
Review.

ISSUE: Whether the CTA acquired jurisdiction over the claim for the refund or
tax credit of unutilized input VAT.

HELD:
No, on the ground that the taxpayers judicial claim for a refund/tax credit was
filed beyond the prescriptive period.
A claim for tax refund or credit, like a claim for tax exemption, is
construed strictly against the taxpayer. One of the conditions for a judicial claim
of refund or credit under the VAT System is with the 120+30 day mandatory and
jurisdictional periods. Thus, strict compliance with the 120+30 day periods is
necessary for such a claim to prosper, whether before, during, or after the
effectivity of the Atlas doctrine, except for the period from the issuance of BIR
Ruling No. DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi
doctrine was adopted, which again reinstated the 120+30 day periods as
mandatory and jurisdictional.
In sum, premature filing is allowed for cases falling during the time when
BIR Ruling No. DA-489-03 was in force; nevertheless, late filing is absolutely
prohibited even for cases falling within that period.
In the case at bar, the taxpayer filed its judicial claim with the CTA on 11
September 2002. This was before the issuance of BIR Ruling No. DA-489-03 on
10 December 2003. Thus, Rohm Apollo could not have benefited from the BIR
Ruling. Besides, its situation was not a case of premature filing of its judicial
claim but one of late filing. To repeat, its judicial claim was filed on 11
September 2002 long after 10 May 2001, the last day of the 30-day period for
appeal. The case thus falls under the general rule the 30-day period is
mandatory and jurisdictional.

8. EASTERN TELECOMMUNICATIONS PHILIPPINES, INC., v. CIR

G.R. No. 183531 March 25, 2015
VAT invoicing requirements

FACTS:

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 ETPI is a domestic corporation located registered with the Bureau of
Internal Revenue (BIR) as a VAT taxpayer.
On January 25, 2000, ETPI filed an administrative claim with the BIR for
the refund of the amount representing excess input tax attributable to its
effectively zero-rated sales in 1998.
In order to toll the two-year reglementary period under Section 229 of the
NIRC, ETPI filed a Petition for Review before the CTA on February 21, 2000.
CTA denied the petition because the VAT official receipts presented by
ETPI to support its claim failed to imprint the word zero-rated on its face in
violation of the invoicing requirements. It discussed, among others, that ETPIs
failure to imprint the word zero-rated on the face of its receipts and invoices
gives the presumption that it is 10% VATable
CTA affirmed the decision. In its disquisition, the CTA en banc stated that
VAT-registered persons must comply with the invoicing requirements

ISSUE: Whether or not the CTA erred in denying ETPIs claim for refund of input
taxes resulting from its zero-rated sales.

HELD:
No. The word zero-rated is required on the invoices or receipts issued by
VAT-registered taxpayers.
An applicant for a claim for tax refund or tax credit must not only
prove entitlement to the claim but also compliance with all the documentary and
evidentiary requirements. This is in accordance with Section 110(A)(1) of the
NIRC. Sections 237 and 238 of the same Code as well as Section 4.108-1 of RR
No. 7-95 provide for the invoicing requirements that all VAT-registered taxpayers
should observe, such as: (a) the BIR Permit to Print; (b) the Tax Identification
Number of the VAT-registered purchaser; and (c) the word zero-rated
imprinted thereon . Thus, the failure to indicate the words zero-rated on the
invoices and receipts issued by a taxpayer would result in the denial of
the claim for refund or tax credit.
The printing of the word zero-rated on the invoice helps segregate sales
that are subject to 10% (now 12%) VAT from those sales that are zero-rated.
Considering that ETPI is engaged in mixed transactions that cover its zero-rated
sales, taxable and exempt sales, it is only appropriate and reasonable for it to
present competent evidence to validate all entries in its returns in order to
properly determine which transactions are zero-rated and which are taxable.
Clearly, compliance with all the VAT invoicing requirements provided by tax laws
and regulations is mandatory. A claim for unutilized input taxes attributable to
zero-rated sales will be given due course; otherwise, the claim should be struck
off for failure to do so, such as what ETPI did in the present case.

9. MIRAMAR FISH vs CIR

GR No. 185432 JUNE 4, 2014

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120+30 day period for judicial claim of tax refund; VAT invoicing requirements

FACTS:
Petitioner is a domestic corporation registered as a VAT Taxpayer. It filed
an administrative claim for refund or issuance of tax credit certification allegedly
representing the unutilized or unapplied VAT input taxes attributable to
petitioners zero-rated transactions or its export sales for taxable years 2002 and
2003.
Since no final action has been taken by the CIR, the petitioner filed a
petition for review before the CTA on March 30,2004. The CTA dismissed the
petition on the ground that the sales invoices presented did not comply with the
invoicing requirements under Sec. 113, that the petitioners failure to indicate
that it is a VAT Registered entity and/or to imprint the word zero-rated on the
subject invoices or receipts were fatal to its claim

ISSUE: Whether or not petitioner is entitled to a tax credit certificate for its
excess and unutilized input VAT for the taxable years 2002 and 2003.

HELD:
No, petitioner is not entitled to tax credit certificate. For its claim under
taxable year 2002, one of the conditions for a judicial claim of refund or credit
under the VAT System is compliance with the 120+30 day mandatory and
jurisdictional periods except for the period from the issuance of BIR Ruling No.
DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine
was adopted, which again reinstated the 120+30 day periods as mandatory and
jurisdictional.
In the case at bar, although it appears that petitioner has indeed complied
with the required two-year period within which to file a refund/tax credit claim
with the BIR by filing its administrative claims on 24 February 2003 and 25
March 2004 this Court finds that petitioners corresponding judicial claim insofar
as to the four quarters of taxable year 2002 was filed beyond the 30-day period
Section 112(D) specifically states that in case of failure on the part of the
respondent to act on the application within the 120-day period prescribed by
law, petitioner only has thirty (30) days after the expiration of the 120-day
period to appeal the unacted claim with the CTA.
As to its claim under taxable year 2003, the strict compliance with the
invoicing requirements under existing laws and prevailing jurisprudence in order
to be entitled to a refund claim of excess and/or unutilized input VAT, the settled
rule is that absence or non-printing of the word zero-rated in petitioners
invoices is fatal to its claim for the refund and/or tax credit representing its
unutilized input VAT attributable to its zero-rated sales. Section 113 of the NIRC
of 1997, as amended, categorically provides that a VAT-registered entity, like
petitioner, shall issue a duly registered VAT invoice or official receipt, which must
contain a statement that the seller is a VAT-registered person. Therefore, as

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correctly articulated by the CTA En Banc, compliance with the aforesaid invoicing
requirements is mandatory.

10. MANUEL G. ABELLO v. CIR

G.R. No. 120721. February 23, 2005
Donors Tax; Political contributions

FACTS:
During the 1987 national elections, petitioners, who are partners in the
ACCRA law firm, contributed P882,661.31 each to the campaign funds of Senator
Edgardo Angara, then running for the Senate. BIR assessed each of the
petitioners P263,032.66 for their contributions.
Petitioners questioned the assessment through a letter to the BIR. They
claimed that political or electoral contributions are not considered gifts under the
National Internal Revenue Code (NIRC), and that, therefore, they are not liable
for donors tax.
CTA ordered the Commissioner to desist from collecting donors taxes from
the petitioners.
On appeal, the Court of Appeals reversed and set aside the CTA decision.

ISSUE: Whether or not the political contributions are taxable gifts.

HELD:
Yes. The present case falls squarely within the definition of a donation.
The NIRC does not define transfer of property by gift. However, reference may
be made to the definition of a donation in the Civil Code. Article 725 of said Code
defines donation as:
. . . an act of liberality whereby a person disposes gratuitously of a thing or
right in favor of another, who accepts it.
Donation has the following elements: (a) the reduction of the patrimony of
the donor; (b) the increase in the patrimony of the donee; and, (c) the intent to
do an act of liberality or animus donandi.
Petitioners, each gave P882,661.31 to the campaign funds of Senator
Edgardo Angara, without any material consideration. All three elements of a
donation are present. The patrimony of the four petitioners were reduced by
P882,661.31 each. Senator Edgardo Angaras patrimony correspondingly
increased by P3,530,645.24. There was intent to do an act of liberality or animus
donandi was present since each of the petitioners gave their contributions
without any consideration. In fine, the purpose for which the sums of money
were given, which was to fund the campaign of Senator Angara in his bid for a
senatorial seat, cannot be considered as a material consideration so as to negate
a donation.

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11. CIR v. MAGSAYASAY LINES
GR No. 146984 July 24, 2006
Isolated transactions are outside the coverage of VAT

FACTS:
Pursuant to a government program of privatization, NDC decided to sell to
private enterprise all of its shares in its wholly-owned subsidiary the National
Marine Corporation (NMC).
The NMC shares and the vessels were offered for public bidding. Among
the stipulated terms and conditions for the public auction was that the winning
bidder was to pay "a value added tax of 10% on the value of the vessels." On 3
June 1988, private respondent Magsaysay Lines, Inc. (Magsaysay Lines) offered
to buy the shares and the vessels for P168,000,000.00.
Private respondents through counsel received VAT Ruling, holding that the
sale of the vessels was subject to the 10% VAT. Ruling cited that NDC is VAT-
registered enterprise, and thus its "transactions incident to its normal VAT
registered activity of leasing out personal property including sale of its own
assets that are movable, tangible objects which are appropriable or transferable
are subject to the 10% [VAT]."
The CTA ruled that the sale of a vessel was an "isolated transaction," not
done in the ordinary course of NDC's business, and was thus not subject to VAT.
CA reversed the decision of CTA.

ISSUE:
Whether or not the sale was made in the ordinary course of its business
making it liable to 10% VAT?

HELD:
No, the sale was not made in the ordinary course of its business and thus
not subject to VAT.
"Doing business" conveys the idea of business being done, not from time
to time, but all the time. "Course of business" is what is usually done in the
management of trade or business. What is clear therefore is that "course of
business" or "doing business" connotes regularity of activity.
In the instant case, the sale was an isolated transaction. The sale which
was involuntary and made pursuant to the declared policy of Government for
privatization could no longer be repeated or carried on with regularity. It should
be emphasized that the normal VAT-registered activity of NDC is leasing
personal property. The fact that the sale was not in the course of the trade or
business of NDC is sufficient in itself to declare the sale as outside the coverage
of VAT.

12. CIR v. SONY PHILIPPINES

GR No. 178697 November 17, 2010

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A mere dole out and not in payment for goods or properties sold, bartered or
exchanged are outside the coverage of VAT

FACTS:
On November 24, 1998, the CIR issued Letter of Authority authorizing
certain revenue officers to examine Sonys books of accounts and other
accounting records regarding revenue taxes for the period 1997 and unverified
prior years. On December 6, 1999, a preliminary assessment for 1997 deficiency
taxes and penalties was issued by the CIR which Sony protested.
Sony sought re-evaluation of the aforementioned assessment by filing a
protest on February 2, 2000.
After trial, the CTA-First Division disallowed the deficiency VAT
assessment because the subsidized advertising expense paid by Sony which was
duly covered by a VAT invoice resulted in an input VAT credit. CTA En Banc
affirmed the decision.
CIRs argued that Sonys advertising expense could not be considered as
an input VAT credit because the same was eventually reimbursed by Sony
International Singapore (SIS).

ISSUE:
Whether or not petitioner is liable for deficiency value added tax?

HELD:
No, petitioner is not liable for deficiency value added tax. It is evident
under Section 110 of the 1997 Tax Code that an advertising expense duly
covered by a VAT invoice is a legitimate business expense. There is also no
denying that Sony incurred advertising expense.
Under Sec. 106 of the NIRC, there must be a sale, barter or exchange of
goods or properties before any VAT may be levied. Certainly, there was no such
sale, barter or exchange in the subsidy given by SIS to Sony. It was but a dole
out by SIS and not in payment for goods or properties sold, bartered or
exchanged by Sony.
Court had the occasion to rule that services rendered for a fee even on
reimbursement-on-cost basis only and without realizing profit are also subject to
VAT. This is not true in the present case. Sony did not render any service to
Sony-Singapore at all. The services rendered by the advertising companies, paid
for by Sony using Sony-Singapore dole-out, were for Sony and not Sony-
Singapore. Sony-Singapore just gave assistance to Sony in the amount
equivalent to the latters advertising expense but never received any goods,
properties or service from Sony.

13. RENATO V. DIAZ v. THE SECRETARY OF FINANCE and CIR

G.R. No. 193007 July 19, 2011
VAT imposition on tollway operators and operations is valid

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FACTS:
The BIR revived the idea and would impose the VAT on toll fees beginning
August 16, 2010 unless judicially enjoined. Petitioners who claimed to have an
interest as regular users of tollways filed a petition for declaratory relief assailing
the validity of the VAT imposed.
Petitioners hold the view that Congress did not, when it enacted the NIRC,
intend to include toll fees within the meaning of "sale of services" that are
subject to VAT; that a toll fee is a "users tax," not a sale of services.
The government avers that the NIRC imposes VAT on all kinds of services
of franchise grantees, including tollway operations, except where the law
provides otherwise.
In reply, petitioners point out those tollway operators cannot be regarded
as franchise grantees under the NIRC since they do not hold legislative
franchises.

ISSUE:
1. Whether or not the government is unlawfully expanding VAT coverage by
including tollway operators and tollway operations in the terms "franchise
grantees" and "sale of services" under Section 108 of the Code; and
2. Whether or not the imposition of VAT on tollway operators amounts to a tax
on tax and not a tax on services;

HELD
1. No. They are lawfully included in the terms franchise grantees and sale of
services
The third paragraph of Section 108 defines "sale or exchange of services"
as follows:
The phrase sale or exchange of services means the performance of all kinds
of services in the Philippines for others for a fee, remuneration or
consideration,xxx; services of franchise grantees of electric utilities,
telephone and telegraph, radio and television broadcasting and all other
franchise grantees except those under Section 119 of this Code and non-life
insurance xxx (Underscoring supplied)
It is plain from the above that the law imposes VAT on "all kinds of services"
rendered in the Philippines for a fee, including those specified in the list. The
enumeration of affected services is not exclusive. Every activity that can be
imagined as a form of "service" rendered for a fee should be deemed included
unless some provision of law especially excludes it. "Services" to be subject to
VAT need not fall under the traditional concept of services, the personal or
professional kinds that require the use of human knowledge and skills.
Tollway operators are franchise grantees and they do not belong to
exceptions that Section 119 spares from the payment of VAT. The word
"franchise" broadly covers government grants of a special right to do an act or
series of acts of public concern.

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 The public nature of the services rendered by tollway operators does not
exclude such services from the term "sale of services. In specifically including
by way of example electric utilities, telephone, telegraph, and broadcasting
companies in its list of VAT-covered businesses, Section 108 opens other
companies rendering public service for a fee to the imposition of VAT.

2. No. Petitioners argue that a toll fee is a "users tax" and to impose VAT on toll
fees is tantamount to taxing a tax.
VAT on tollway operations cannot be deemed a tax on tax due to the
nature of VAT as an indirect tax. In indirect taxation, a distinction is made
between the liability for the tax and burden of the tax. The seller who is liable for
the VAT may shift or pass on the amount of VAT it paid on goods, properties or
services to the buyer. In such a case, what is transferred is not the sellers
liability but merely the burden of the VAT.

14. PANASONIC v. CIR

GR. No. 178090 February 8, 2010
VAT invoicing requirements

FACTS:
Panasonic is a registered VAT enterprise engaged in zero-rated sales. It
filed a claim for refund or tax credit of its unutilized or unapplied input VAT on its
export sales.
BIR did not act on the claim. CTA denied the claim on the ground that the
export sales did not qualify for zero-rating because the word zero-rated was
not printed on Panasonics export invoices. CTA en banc upheld the decision.

ISSUE: Whether or not the CTA en banc correctly denied petitioner Panasonics
claim for refund of the VAT it paid as a zero-rated taxpayer on the ground that
its sales invoices did not state on their faces that its sales were "zero-rated."

HELD:
Yes, CTA en banc correctly denied the petition. For the effective zero
rating of export sales the taxpayer has to be VAT-registered and must comply
with invoicing requirements.
When petitioner made the export sales subject of this case, i.e., from April
1998 to March 1999, the rule that applied was Section 4.108-1 of RR 7-95,
otherwise known as the Consolidated Value-Added Tax Regulations, which the
Secretary of Finance issued on December 9, 1995 and took effect on January 1,
1996. It already required the printing of the word "zero-rated" on the invoices
covering zero-rated sales. Section 4.108-1 of RR 7-95 proceeds from the rule-
making authority granted to the Secretary of Finance under Section 245 of the
1977 NIRC.

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 The appearance of the word "zero-rated" on the face of invoices covering
zero-rated sales prevents buyers from falsely claiming input VAT from their
purchases when no VAT is actually paid. Absent such word, the government may
be refunding taxes it did not collect. Further, the printing of the word "zero-
rated" on the invoice helps segregate sales that are subject to 12% VAT from
those sales that are zero-rated.

15. HITACHI v. CIR

GR No. 174212 October 20, 2010
VAT invoicing requirements

FACTS:
Hitachi is a domestic corporation engaged in the business of
manufacturing and exporting computer products. Hitachi is registered with the
Bureau of Internal Revenue (BIR) as a Value-added Tax (VAT) taxpayer
Hitachi filed an administrative claim for refund or issuance of a tax credit
certificate before the BIR representing excess input VAT attributable to Hitachis
zero-rated export sales for the four taxable quarters of 1999.
Due to the BIRs inaction, Hitachi filed a petition for review with the CTA.
CTA First Division rendered a decision denying the claim because of Hitachis
failure to comply with the mandatory invoicing requirements. CTA En Banc
affirmed the decision of the First Division.
Hitachi argues that Section 4.108-1 of RR 7-95 cannot expand the
invoicing requirements prescribed by Section 113(A) of the NIRC, in relation to
Sections 237 and 106(A)(2)(a)(1), by imposing the additional requirement of
printing the word "zero-rated" on the invoices of a VAT registered taxpayer.

ISSUE: Whether or not the invoicing requirements are mandatory.

HELD:
Yes, the invoicing requirements are mandatory. The Court already settled
the issue of printing the word "zero-rated" on the sales invoices in Panasonic v.
Commissioner of Internal Revenue.
Section 4.108-1 of RR 7-95 proceeds from the rule-making authority
granted to the Secretary of Finance under Section 245 of the 1997 NIRC
(Presidential Decree 1158) for the efficient enforcement of the tax code and of
course its amendments. The requirement is reasonable and is in accord with the
efficient collection of VAT from the covered sales of goods and services. As aptly
explained by the CTAs First Division, the appearance of the word "zero-rated"
on the face of the invoices covering zero-rated sales prevents buyers from
falsely claiming input VAT from their purchases when no VAT was actually paid.
If absent such word, a successful claim for input VAT is made, the government
would be refunding money it did not collect.

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 In this case, when Hitachi filed its claim for refund or tax credit, RR 7-95
was already in force. Hitachis export sales invoices did not indicate Hitachis Tax
Identification Number (TIN) followed by the word VAT. The word "zero-rated"
was also not imprinted on the invoices. Moreover, both the CTA First Division
and the CTA En Banc found that the invoices were not duly registered with the
BIR.

16. CHEVRON v. CIR

GR No. 210836 September 1, 2015
Excise Tax

FACTS:
Chevron sold and delivered petroleum products to Clark Development
Corp. (CDC). Chevron did not pass on to CDC the excise taxes paid on the
importation of the petroleum products sold to CDC in taxable year 2007, hence
on June 26, 2009, it filed an administrative claim for tax refund or issuance of
tax credit. Considering that CIR did not act on the administrative claim, Chevron
elevated its claim to the CTA.
CTA First Division denied Chevrons judicial claim. CTA En Banc affirmed
stating that there was nothing in Section 135(c) of the NIRC that explicitly
exempted Chevron as the seller of the imported petroleum products from the
payment of the excise taxes; and holding that because it did not fall under any
of the categories exempted from paying excise tax, Chevron was not entitled to
the tax refund or tax credit.

ISSUE: Whether or not importer (i.e., Chevron) was entitled to the refund or
credit of the excise taxes it paid on petroleum products sold to CDC, a tax-
exempt entity under Section 135(c) of the NIRC.

HELD:
Yes, Chevron is entitled to refund. Excise tax on petroleum products is
essentially a tax on property, the direct liability for which pertains to the
statutory taxpayer (i.e., manufacturer, producer or importer). Any excise tax
paid by the statutory taxpayer on petroleum products sold to any of the entities
or agencies named in Section 135 of the National Internal Revenue Code (NIRC)
exempt from excise tax is deemed illegal or erroneous, and should be credited or
refunded to the payer pursuant to Section 204 of the NIRC. This is because the
exemption granted under Section 135 of the NIRC must be construed in favor of
the property itself, that is, the petroleum products.
Chevron, being the statutory taxpayer, paid the excise taxes on its
importation of the petroleum products. Pursuant to Section 135(c), supra,
petroleum products sold to entities that are by law exempt from direct and
indirect taxes are exempt from excise tax. Consequently, the payment of the
excise taxes by Chevron upon its importation of petroleum products was deemed

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illegal and erroneous upon the sale of the petroleum products to CDC. Section
204 of the NIRC explicitly allowed Chevron as the statutory taxpayer to claim the
refund or the credit of the excise taxes thereby paid.

17. PAGCOR v. BIR

GR. No 172087 March 15, 2011
PAGCOR is exempt from paying VAT

FACTS:
PAGCOR was created pursuant to Presidential Decree (P.D.) No. 1067-
A on January 1, 1977. Simultaneous to its creation, P.D. No. 1067-B was issued
exempting PAGCOR from the payment of any type of tax, except a franchise tax
of five percent (5%) of the gross revenue.
On January 1, 1998, the National Internal Revenue Code of 1997, took
effect. Section 27 (c) of R.A. No. 8424 provides that government-owned and
controlled corporations (GOCCs) shall pay corporate income tax, except, among
others, petitioner PAGCOR.
Section 1 of R.A. No. 9337, amended Section 27 (c) of the National
Internal Revenue Code of 1997 by excluding PAGCOR from the enumeration of
GOCCs that are exempt from payment of corporate income tax. The Court
upheld the constitutionality of R.A. No. 9337. On the same date, respondent BIR
issued Revenue Regulations (RR) No. 16-2005, specifically identifying PAGCOR
as one of the franchisees subject to 10% VAT imposed under Section 108 of the
National Internal Revenue Code of 1997, as amended by R.A. No. 9337.

ISSUE: Whether or not RR No. 16-2005 subjecting PAGCOR to 10% VAT is valid.

HELD:
No. Petitioner is exempt from the payment of VAT, because PAGCORs
charter, P.D. No. 1869, is a special law that grants petitioner exemption from
taxes.
Moreover, the exemption of PAGCOR from VAT is supported by Section 6
of R.A. No. 9337, which retained Section 108 (B) (3) of R.A. No. 8424.
R.A. No. 9337 itself exempts petitioner from VAT pursuant to Section 7
(k) thereof.
Anent the validity of RR No. 16-2005, the Court holds that the provision
subjecting PAGCOR to 10% VAT is invalid for being contrary to R.A. No. 9337.
Nowhere in R.A. No. 9337 is it provided that petitioner can be subjected to VAT.
R.A. No. 9337 is clear only as to the removal of petitioner's exemption from the
payment of corporate income tax, which was already addressed above by this
Court.

18. CLARK INVESTORS v. SECRETARY OF FINANCE

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GR No. 200670 July 16, 2015
Imposition of VAT and excise tax is based on Section 244 of the NIRC

FACTS:
The businesses and enterprises within Clark Freeport Zone are exempt
from the payment of all taxes and duties on the importation of raw materials,
capital and equipment granted by RA No. 7227 and RA No. 9400.
DOF issued RR 2-2012 which imposed VAT and excise tax on the
importation of petroleum and petroleum products from abroad and into the
Freeport or Economic Zones.
Petitioner filed a petition directly to the Supreme Court, arguing that RR
2-2012 unilaterally revoked the tax exemption granted by RA No. 7227 and RA
No. 9400 to the businesses and enterprises operating within the Subic Special
Economic Zone and Clark Freeport Zone.
The OSG contend that the petition must be denied outright because the
special civil action for certiorari cannot be used to assail RR 2-2012 which was
issued by the respondents in the exercise of their quasi-legislative or rule-
making powers.

ISSUE: Whether or not the petition should prosper.

HELD:
No. In order to determine whether a Revenue Regulation is quasi-
legislative in nature, we must examine the legal basis of the Secretary of
Finance in the issuance thereof. In BPI Leasing Corporation v. Court of Appeals
the Court ruled that Revenue Regulation 19-86 was quasi-legislative in nature
because it was issued by the Secretary of Finance in the exercise of his rule-
making powers under Section 244 of the National Internal Revenue Code
(NIRC). Section 277 (now Section 244) is an express grant of authority to the
Secretary of Finance to promulgate all needful rules and regulations for the
effective enforcement of the provisions of the NIRC. In Paper Industries
Corporation of the Philippines v. Court of Appeals, the Court recognized that the
application of Section 277 calls for none other than the exercise of quasi-
legislative or rule-making authority. Verily, it cannot be disputed that Revenue
Regulation 19-86 was issued pursuant to the rule-making power of the Secretary
of Finance, thus making it legislative and not interpretative as alleged by BLC.
Similarly, in the case at bar, RR 2-2012 was also issued by the Secretary
of Finance based on Section 244 of the NIRC.

19. SILICON PHILIPPINES, INC., v. CIR

G.R. No. 172378 January 17, 2011
Value-Added Tax; Capital Goods

FACTS:

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 Silicon Philippines, Inc., is a corporation duly organized and existing under
and by virtue of the laws of the Republic of the Philippines and also registered
with the Bureau of Internal Revenue (BIR) as a Value Added Tax (VAT) taxpayer.
On May 21, 1999, petitioner filed with the CIR, an application for
credit/refund of unutilized input VAT for the period October 1, 1998 to December
31, 1998 .
CTA Division denied petitioner claim for credit/refund of input VAT
attributable to ITS ZERO-RATED EXPORT SALES because petitioner failed to
present an Authority to Print (ATP) from the BIR; neither did it print on its
export sales invoices the ATP and the word "zero-rated." It however partially
granted its claim for refund of unutilized input VAT on CAPITAL GOODS because
training materials, office supplies, posters, banners, T-shirts, books, and other
similar items purchased by petitioner were not considered capital goods under
Section 4.106-1(b) of Revenue Regulations (RR) No. 7-95.

ISSUE: Whether the expenses for training materials, office supplies, etc. are
classified as input VAT paid on capital goods.

HELD:
No, the expenses are not capital goods. To claim a refund of input VAT on
capital goods, Section 112 (B) of the NIRC requires that the input taxes claimed
must have been paid on capital goods. Corollarily, Section 4.106-1 (b) of RR
No. 7-95 defines capital goods as follows: Capital goods or properties" refer to
goods or properties with estimated useful life greater that one year and which
are treated as depreciable assets under Section 29 (f), used directly or indirectly
in the production or sale of taxable goods or services.
Based on the foregoing definition, we find no reason to deviate from the
findings of the CTA that training materials, office supplies, posters, banners, T-
shirts, books, and the other similar items reflected in petitioners Summary of
Importation of Goods are not capital goods.

20. VISAYAS GEOTHERMAL VS. CIR

GR No. 197525 June 4, 2014
120+30 day period for judicial claim of tax refund; Exception

FACTS:
Petitioner is a special limited partnership duly organized under Philippine
laws. Petitioner filed with the BIR its quarterly VAT returns for the taxable years
2005 and 2006. It filed an administrative claim for refund with the BIR on the
ground that it was entitled to recover excess and unutilized input VAT payments
for the four quarters or 2005 pursuant to RA 9136, which treated sales of
generated power subject to VAT to a zero percent rate starting June 26, 2001.
Nearly a month later, while its administrative claim was pending,
petitioner filed its judicial claim via a petition for review with the CTA praying for

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the refund or the issuance of tax credit certificate for year 2005. The CTA en
banc dismissed the petition for having been filed prematurely, that although the
petitioner seasonably filed its administrative claim within the 2-year prescriptive
period, its judicial claim was prematurely filed under Sec. 112(D) of the NIRC.

ISSUE:
Whether or not the 120-day and 30-day periods prescribed under Sec.
112(D) of the NIRC are jurisdictional and mandatory in the filing of the judicial
claim for refund.

HELD:
Yes. Under Section 112(A), the taxpayer may, within 2 years after the
close of the taxable quarter when the sales were made, via an administrative
claim with the CIR, apply for the issuance of a tax credit certificate or refund.
Under Section 112(D), the CIR must then act on the claim within 120 days from
the submission of the taxpayers complete documents. In case of (a) a full or
partial denial by the CIR of the claim, or (b) the CIRs failure to act on the claim
within 120 days, the taxpayer may file a judicial claim via an appeal with the
CTA, within 30 days (a) from receipt of the decision; or (b) after the expiration
of the 120-day period.
The 120+30 day period prescribed under Section 112(D) mandatory and
jurisdictional. The jurisdiction of the CTA over decisions or inaction of the CIR is
only appellate in nature and, thus, necessarily requires the prior filing of an
administrative case before the CIR under Section 112. The CTA can only acquire
jurisdiction over a case after the CIR has rendered its decision, or after the lapse
of the period for the CIR to act, in which case such inaction is considered a
denial. As an exception to the mandatory and jurisdictional nature of the
120+30 day period the Court in San Roque noted that BIR Ruling No. DA-489-
03, dated December 10, 2003, expressly stated that the taxpayer-claimant
need not wait for the lapse of the 120-day period before it could seek judicial
relief with the CTA by way of Petition for Review. Hence, taxpayers can rely on
BIR Ruling No. DA-489-03 from the time of its issuance on December 10, 2003
up to its reversal by this Court in Aichi on October 6, 2010, where it was held
that the 120+30 day period was mandatory and jurisdictional.
The facts of the present case, reveals that petitioner VGPC timely filed its
administrative claim with the CIR on December 6, 2006, and later, its judicial
claim with the CTA on January 3, 2007. The judicial claim was clearly filed within
the period of exception and was, therefore, not premature and should not have
been dismissed by the CTA En Banc.

21. NORTHERN MINDANAO POWER CORPORATION v. CIR

GR. No. 185115 February 18, 2015
120+30 day period for judicial claim of tax refund

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FACTS:
Petitioner allegedly incurred input value-added tax (VAT) on its domestic
purchases of goods and services that were used in its production and sale of
electricity to NPC. Petitioner filed an administrative claim for a refund. Alleging
inaction of respondent on these administrative claims, petitioner filed a Petition
with the CTA.
The CTA denied the Petition and the subsequent Motion for
Reconsideration for lack of merit. The Court in Division found that the term
zero-rated was not imprinted on the receipts or invoices presented by
petitioner in violation of Section 4.108-1 of Revenue Regulations No. 7-95.
Petitioner failed to substantiate its claim for a refund and to strictly comply with
the invoicing requirements of the law and tax regulations.
On appeal to the CTA En Banc, the Petition was likewise denied.

ISSUES: Whether or not the CTA properly acquired jurisdiction over the
petitioners appeal warranting the denial thereof.

HELD:
No, the CTA has not acquired jurisdiction over the petitions. Pursuant to
Section 112(D) of the NIRC of 1997, respondent had one hundred twenty (120)
days from the date of submission of complete documents in support of the
application within which to decide on the administrative claim. Thus, the 120-
day period for the CIR to act on the administrative claim commenced on 20 June
2000 and 25 July 2001. Within the period of 10 December 2003 until 6 October
2010, BIR Ruling No. DA-489-03 was applicable. The ruling is recognized as an
equitable estoppel, during which judicial claims may be filed even before the
expiration of the 120-day period granted to the CIR to decide on a claim for a
refund.
Counting 120 days from 20 June 2000, the CIR had until 18 October 2000
within which to decide on the claim of petitioner for an input VAT refund
attributable to its zero-rated sales for the period covering the 3rd and the
4th quarters of taxable year 1999. If after the expiration of that period
respondent still failed to act on the administrative claim, petitioner could elevate
the matter to the court within 30 days or until 17 November 2000.
Petitioner however belatedly filed its judicial claim with the CTA on 28
September 2001.
As for the claim for the refund of input VAT covering all quarters of
taxable year 2000, Petitioner timely filed its administrative claim on 25 July
2001 within the two-year period from the close of the taxable quarter when the
zero-rated sales were made. Pursuant to Section 112(D) of the NIRC of 1997,
respondent had 120 days or until 22 November 2001 within which to act on
petitioners claim. It is only when respondent failed to act on the claim after the
expiration of that period that petitioner could elevate the matter to the tax court.
Records show, however, that petitioner filed its Petition with the CTA on
28 September 2001 without waiting for the expiration of the 120-day period. On

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28 September 2001 the date on which petitioner filed its judicial claim for the
period covering taxable year 2000 - the 120+30 day mandatory period was
already in the law and BIR Ruling No. DA-489-03 had not yet been issued.
Considering this fact, petitioner did not have an excuse for not observing the
120+30 day period.
The judicial claim was thus prematurely filed for failure of petitioner to
observe the 120-day waiting period. The CTA therefore did not acquire
jurisdiction over the claim for a refund of input VAT for all the quarters of
taxable year 2000.

22. CARGILL PHILIPPINES, INC. v. CIR

G.R. No. 203774 March 11, 2015
120+30 day period for judicial claim of tax refund

FACTS:
Cargill is a domestic corporation duly organized and existing under
Philippine laws and as a VAT-registered entity.
On June 27, 2003, Cargill filed an administrative claim for refund of its
unutilized input VAT for the period of April 1, 2001 to February 28, 2003 (first
refund claim)
Thereafter, or on June 30, 2003, it filed a judicial claim for refund, by way
of a petition for review, before the CTA, docketed as CTA Case No. 6714. On
September 29, 2003, it subsequently filed a supplemental application with the
BIR increasing its claim for refund of unutilized input VAT
On May 31, 2005, Cargill filed a second administrative claim for refund of
its unutilized input VAT for the period of March 1, 2003 to August 31,
2004 (second refund claim) before the BIR. On even date, it filed a petition for
review before the CTA, docketed as CTA Case No. 7262.
CTA Division citing the case of CIR v. Aichi Forging Company of Asia, Inc.
(Aichi), held that the 120-day period provided under Section 112(D) of the
National Internal Revenue Code (NIRC) must be observed prior to the filing of a
judicial claim for tax refund. As Cargill failed to comply therewith, the CTA
Division, without ruling on the merits, dismissed the consolidated cases for being
prematurely filed.
In a Decision dated June 18, 2012, the CTA En Banc affirmed the CTA
Divisions Amended Decision.

ISSUE: Whether or not CTA has jurisdiction over the claim.

HELD:
No, CTA has no jurisdiction over the claim. In the case of Taganito Mining
Corporation v. CIR, the Court ruled that from December 10, 2003 to October 6,
2010 which refers to the interregnum when BIR Ruling No. DA-489-03 was
issued until the date of promulgation of Aichi, taxpayer-claimants need not

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observe the stringent 120-day period; but before and after said window period,
the mandatory and jurisdictional nature of the 120-day period remained in force.
In this case, records disclose that anent Cargills first refund claim, it filed
its administrative claim with the BIR on June 27, 2003, and its judicial claim
before the CTA on June 30, 2003, or before the period when BIR Ruling No. DA-
489-03 was in effect, i.e., from December 10, 2003 to October 6, 2010. As such,
it was incumbent upon Cargill to wait for the lapse of the 120-day period before
seeking relief with the CTA, and considering that its judicial claim was filed only
after three (3) days later, the CTA En Banc, thus, correctly dismissed Cargills
petition in CTA Case No. 6714 for being prematurely filed.
In contrast, records show that with respect to Cargills second refund
claim, its administrative and judicial claims were both filed on May 31, 2005, or
during the period of effectivity of BIR Ruling NO. DA-489-03, thus taxpayer-
claimants need not wait for the expiration of the 120-day period before seeking
judicial relief. Verily, the CTA En Banc erred when it outrightly dismissed CTA
Case No. 7262on the ground of prematurity. The Court finds that Cargills second
refund should not be instantly granted. This is because the determination of
Cargills entitlement to such claim, if any, would necessarily involve factual
issues and, thus, are evidentiary in nature which are beyond the pale of judicial
review under a Rule 45 petition where only pure questions of law, not of fact,
may be resolved.

23. CIR v. KEPCO ILIJAN CORP.

GR. No. 199422 June 21, 2016
Jurisdiction of Court of Tax Appeals

FACTS:
Respondent filed with the BIR its claim for refund representing input tax
incurred for the first and second quarters of the calendar year 2000. CTA First
Division held that petitioner is entitled to a refund. There being no motion for
reconsideration filed by the petitioner, the decision became final and executory
and a corresponding Entry of Judgment was issued then the Court issued a Writ
of Execution.
Thereafter, petitioner filed a petition for annulment of judgment with the
CTA En Banc. CTA En Banc dismissed the petition.

ISSUE: Whether or not the CTA en banc can annul the decision of its division
which already attained finality.

HELD:
No, CTA en banc cannot annul the decision of its division which already
attained finality.

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 The laws creating the CTA and expanding its jurisdiction (RA Nos. 1125
and 9282) and the court's own rules of procedure (the Revised Rules of the CTA)
do not provide for such a scenario.
The silence of the Rules may be attributed to the need to preserve the
principles that there can be no hierarchy within a collegial court between its
divisions and the en banc, and that a court's judgment, once final, is immutable.

24. SILICON PHILIPPINES INC. v. CIR

GR. No. 182737 March 2, 2016
120+30 day period for judicial claim of tax refund

FACTS:
Petitioner is a corporation registered with the Bureau of Internal Revenue
(BIR) as a VAT taxpayer by virtue of its sale of goods and services. Petitioner
filed with an application for a tax credit/refund of the VAT it had paid on
imported capital goods for the 3rd and 4th quarters of 2001 and the VAT it paid
on imported capital goods for the 2nd quarter of 2001.
Due to inaction by respondent on the administrative claims of
petitioner the latter filed separate petitions for review before the CTA.
CTA Second Division dismissed the petition, CTA En Banc affirmed the
same.

ISSUE: Whether or not respondent has jurisdiction to rule on petitioners claim

of refund.

HELD:
No, CIR has no jurisdiction over the claim since the judicial claim was filed
beyond the 120+30 days period.
Under Section 112 of NIRC, the administrative claim of a VAT-registered
person for the issuance by respondent of tax credit certificates or the refund of
input taxes paid on zero-rated sales or capital goods imported may be made
within two years after the close of the taxable quarter when the sale or
importation/purchase was made. In the case of petitioners administrative claims
well within the two-year period provided by law.
Whether respondent rules in favor of or against the taxpayer - or does not
act at all on the administrative claim - within the period of 120 days from the
submission of complete documents, the taxpayer may resort to a judicial claim
before the CTA. The judicial claim shall be filed within a period of 30 days after
the receipt of respondent's decision or ruling or after the expiration of the 120-
day period, whichever is sooner. Aside from a specific exception to the
mandatory and jurisdictional nature of the periods provided by the law, any
claim filed in a period less than or beyond the 120+30 days provided by the
NIRC is outside the jurisdiction of the CTA.

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 Based on the records of the case, the claim of petitioner for the 2nd,3rd
and 4th quarter of 2001 were filed 502 days,261 days, and 332 days late
respectively. The judicial claim for the fourth quarter of 2001 cannot find solace
to the exception of the 120+30 period. The rule allowed premature filing but not
the filing of judicial claim long after the expiration of 120+30 period.

25. CIR v. PILIPINAS SHELL

GR. No. 180402 February 10, 2016
Excise Tax

FACTS:
Pilipinas Shell sold and delivered petroleum products to various
international carriers of the Philippines or foreign registry for their use outside
the Philippines. A portion of these sales and deliveries was sourced by Pilipinas
Shell from Petron Corporation (Petron) by virtue of a "loan or borrow
agreement" between them. The excise taxes paid by Petron were passed on to
Pilipinas Shell and the latter, in turn, sold these to international carriers net of
excise taxes.Thereafter, Pilipinas Shell filed claims for the refund or credit of the
excise taxes paid on the foregoing sales. Due to the inaction of BIR, respondent
decided to file a petition for review with the CTA.
CTA Second Division granted respondents in a reduced amount. CTA En
Banc upheld the CTA Divisions decision.
In the present petition, CIR alleged that - that the excise tax on
petroleum products is levied on the manufacturer of the petroleum product
regardless of its purchaser or buyer and that the grant of exemption under
Section 135 of the NIRC simply means that the manufacturer cannot pass on to
the international carrier-buyer the excise taxes it paid on its petroleum products,
hence respondent is not entitled to a refund/credit of the excise taxes paid on its
sales and deliveries to international carriers. Respondent on the other hand
argues that that it was exempt from payment of excise taxes levied on its
petroleum products sold and delivered to international carriers of foreign registry

ISSUE: Whether or not Pilipinas Shell is not entitled to a refund/credit of the

excise taxes paid on its sales and deliveries to international carriers.

HELD:
Yes, Pilipinas Shell is entitled to refund. In the case which involves the
same parties the Court maintained that Section 135 (a), in fulfillment of
international agreement and practice to exempt aviation fuel from excise tax and
other impositions, prohibits the passing of the excise tax to international carriers
who buys petroleum products from local manufacturers/sellers such as
respondent. However, the Court agrees that there is a need to reexamine
the effect of denying the domestic manufacturers/sellers' claim for refund of the
excise taxes they already paid on petroleum products sold to international

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carriers, and its serious implications on our Government's commitment to the
goals and objectives of the Chicago Convention. The court therefore concluded
that respondent, as the statutory taxpayer who is directly liable to pay the
excise tax on its petroleum products, is entitled to a refund or credit of the
excise taxes it paid for petroleum products sold to international carriers, the
latter having been granted exemption from the payment of said excise tax under
Sec. 135(a) of the NIRC.

26. CIR v. MIRANT PAGBILAO

GR. No. 180434 January 20, 2016
120+30 day period for judicial claim of tax refund

FACTS:
MPC is domestic corporation primarily engaged in the generation and
distribution of electricity to the NAPOCOR, it is registered with the BIR as a VAT
taxpayer. For taxable year 2000 the quarterly VAT returns filed by MPC showed
an excess input VAT paid on domestic purchases of goods, services and
importation of goods. MPC filed an administrative claim for refund of its input
VAT, fearing that the period for filing a judicial claim for refund was about to
expire, MPC proceeded to file a petition for review before the CTA without
waiting for the CIRs action on the administrative claim.
CTA Second Division granted MPCs claim for refund in reduced amount.
CTA en banc affirmed the same.

ISSUE: Whether or not CTA has jurisdiction in granting MPCs claim for refund.

HELD:
No, CTA has no jurisdiction to grant the claim for refund. Compliance with
the requirements on administrative claims with the CIR, which are to precede
judicial actions with the CTA, indubitably impinge on the tax courts jurisdiction.
The two-year prescriptive period under Section 112(A) of the NIRC of 1997, as
amended, is reckoned from the close of the taxable quarter when the sales were
made. It is indisputable that compliance with the 120+30 day period
is mandatory and jurisdictional. Strict compliance with the 120+30 day periods
is necessary for a claim to prosper, whether before, during or after the effectivity
of the Atlas doctrine, except for the period from the issuance of BIR Ruling No.
DA-489-03 on 10 December 2003 to 6 October 2010 when the Aichi doctrine
was adopted, which again reinstated the 120+30 day periods as mandatory and
jurisdictional.
In the instant case, contrary to the specified periods, MPC filed its petition
for review with the CTA on March 26, 2002, or a mere 15 days after it filed an
administrative claim for refund with the CIR on March 11, 2002. It then did not
wait for the lapse of the 120-day period expressly provided for by law within
which the CIR shall grant or deny the application for refund. The cited exception

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to the general rule, which came as a result of the issuance of BIR Ruling No. DA-
489-03, does not apply to MPCs case as its administrative and judicial claims
were both filed in March 2002.

27. VILLANUEVA v. SPOUSES FROILAN

GR. No. 172804 January 24, 2011
Payment of tax not necessary for perfection of donation

FACTS:
Petitioner is represented by his heirs, who sued respondents, to recover a
3,492 square-meter parcel of land (Property). Petitioner claimed ownership over
the Property through purchase in July 1971 from Casimiro Vere who, in turn,
bought the Property from Alvegia Rodrigo (Rodrigo) in August 1970. Petitioner
declared the Property in his name for tax purposes soon after acquiring it.
Respondents on the other hand claim ownership over the said Property
through purchase in July 1983 from Eufracia Rodriguez to whom Rodrigo
donated the Property in May 1965. Respondents entered the Property in 1983
and paid taxes afterwards.
RTC ruled for petitioner, the trial court rejected respondents claim of
ownership after treating the Deed as a donation mortis causa which Rodrigo
effectively cancelled by selling the Property to Vere in 1970. CA however
reversed the trial courts ruling.
Petitioner alleged that Rodrigo never passed ownership over the Property
to Rodriguez, namely, that Rodriguez registered the Deed and paid taxes on the
Property only in 1982.

ISSUE: Whether or not petitioners title over the Property is superior to

respondents, hence lawful owner of the said property.

HELD:
No. The court held that respondents title is superior. Neither registration
nor tax payment is required to perfect donations.
It is immediately apparent that Rodrigo passed naked title to Rodriguez
under a perfected donation inter vivos. Rodrigos acceptance of the transfer
underscores its essence as a gift in presenti, not in futuro, as only
donations inter vivos need acceptance by the recipient. What Rodrigo reserved
for herself was only the beneficial title to the Property, evident from Rodriguezs
undertaking to give one [half] x x x of the produce of the land
to Apoy Alve during her lifetime. The existence of consideration other than the
donors death, such as the donors love and affection to the donee and the
services the latter rendered, while also true of devises, nevertheless
corroborates the express irrevocability of x x x [inter vivos] transfers. Rodrigos
post-donation sale of the Property vested no title to Vere.

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28 - 29. VITUG v. CA
GR. No. 82027 March 29, 1990
And/or accounts passed through a survivorship agreement is not part of the
estate

FACTS:
Romarico G. Vitug, petitioner and widower of the decedent, filed a motion
to sell certain shares of stock and real properties belonging to the estate to
cover allegedly his advances to the estate, which he claimed were personal
funds. The advances were spent for the payment of estate tax.
Rowena Corona the private respondent, as executrix, opposed the motion
to sell on the ground that the same funds withdrawn were conjugal partnership
properties and part of the estate. Vitug insists that the said funds are his
exclusive property having acquired the same through a survivorship agreement
executed with his late wife.
Probate court upheld the validity of the survivorship agreement and
granted the motion. CA however held that the survivorship agreement
constitutes a conveyance mortis causa which "did not comply with the
formalities of a valid will and even assuming that it is a mere donation inter
vivos, it is a prohibited donation under the provisions of Article 133 of NCC.

ISSUE: Whether or not the amounts under the savings account is part of the
estate of the deceased.

HELD:
No, the amount under the savings account is not part of the estate of the
deceased. It is from the personal funds of the petitioner thus he is entitled to
reimbursement through the sale of shares of stock.
Mrs. Vitug having predeceased her husband, the latter has acquired upon
her death a vested right over the amounts under savings account No. 35342-
038 of the Bank of Americathe. CA therefore erred in ordering their inclusion in
the inventory of assets left by Mrs. Vitug.
The surviviorship agreement is not one of mortis causa, which should be
embodied in a will. There is no showing that the funds exclusively belonged to
one party, and hence it must be presumed to be conjugal, having been acquired
during the existence of the marital relations.
Neither is the survivorship agreement a donation inter vivos, 1. because it
was to take effect after the death of one party, 2. it is not a donation between
the spouses because it involved no conveyance of a spouse's own properties to
the other. Certainly, the spouses are not prohibited by law to invest conjugal
property, say, by way of a joint and several bank account, more commonly
denominated in banking parlance as an "and/or" account. When the spouses
Vitug opened savings account, they merely put what rightfully belonged to them

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in a money-making venture. They did not dispose of it in favor of the other,
which would have arguably been sanctionable as a prohibited donation.

30. SPS. GESTOPA v. CA

GR. No. 111904 October 5, 2000
Tax declarations are not proofs of ownership but only as evidence of the intent
by the donor to transfer ownership.

FACTS:
Spouses Danlag executed three deeds of donation mortis causa, in favor
of private respondent containing 4 parcels of land. Thereafter Spouses Danlag
executed a deed of donation inter vivos covering the aforementioned parcels of
land plus two other parcels, again in favor of private respondent. This contained
two conditions, that (1) the Danlag spouses shall continue to enjoy the fruits of
the land during their lifetime, and that (2) the donee cannot sell or dispose of
the land during the lifetime of the said spouses, without their prior consent and
approval. Private respondent caused the transfer of the parcels' tax declaration
to her name and paid the taxes on them.
Spouses Danlag subsequently sold parcels 3 and 4 to petitioner-spouses
Gestopa, subsequently Danlags executed a deed of revocation recovering the six
parcels of land subject of the aforecited deed of donation inter vivos.
Private respondent then filed a petition against the Gestopas and the
Danlags, for quieting of title over the above parcels of land.
Petitioners averred that the intention was for the donation to take effect
upon the death of the donor.
RTC ruled in favor of Danlags. CA however reversed the RTCs decision.

ISSUE: Whether or not the donor intended to transfer the ownership over the
properties upon the execution of the deed.

HELD:
Yes, the donor intended to transfer the ownership over the properties
upon the execution of the deed. Corollarily, the donation is inter vivos.
First, the granting clause shows that Diego donated the properties out of
love and affection for the donee. Second, the reservation of lifetime usufruct
indicates that the donor intended to transfer the naked ownership over the
properties. Third, the donor reserved sufficient properties for his maintenance in
accordance with his standing in society, indicating that the donor intended to
part with the six parcels of land. Lastly, the donee accepted the donation.
Furthermore, Court of Appeals did not refer the tax declarations in the
name of private respondent, as proofs of ownership but only as evidence of the
intent by the donor to transfer ownership.

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