G.R. No. 205652 - PROCTER & GAMBLE ASIA PTE LTD., VS. COMMISSIONER OF INTERNAL REVENUE.DECISION - Supreme Court E-Library

Ruling

Accordingly, pursuant to the Court's ruling in San Roque , its judicial claims with the CTA was deemed timely filed. [28] . P&G further contends that the CTA En Banc gravely erred in applying the Aichi doctrine retroactively. According to P&G, the retroactive application of Aichi amounts to a denial of its constitutional right to due process and unjust enrichment of the CIR. [29] Lastly, P&G claims that assuming, without conceding, that its judicial claims were prematurely filed, its failure to observe the 120-day period was not jurisdictional but violates only the rule on exhaustion of administrative remedies, which was deemed waived when the CIR did not file a motion to dismiss and opted to actively participate at the trial. [30] The CIR, on the other hand, insists that the plain language of Section 112(C) of the NIRC, as amended, demands mandatory compliance with the 120+30-day rule; and P&G cannot claim reliance in good faith with BIR Ruling No. DA-489-03 to shield the filing of its judicial claims from the vice of prematurity. [31] The Court's Ruling The Court finds the petition meritorious. Exception to the mandatory and jurisdictional 120+30-day periods under Section 112(C) of the NIRC Section 112 of the NIRC, as amended, provides for the rules on claiming refunds or tax credits of unutilized input VAT, the pertinent portions of which read as follows: SEC. 112. Refunds or Tax Credits of Input Tax . (A) Zero-rated or Effectively Zero-rated Sales . Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax: x x x x x x x (C) Period within which Refund or Tax Credit of Input Taxes shall be Made . In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsection (A) hereof . In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty-day period, appeal the decision or the unacted claim with the Court of Tax Appeals. (Emphasis supplied) Based on the plain language of the foregoing provision, the CIR is given 120 days within which to grant or deny a claim for refund. Upon receipt of CIR's decision or ruling denying the said claim, or upon the expiration of the 120-day period without action from the CIR, the taxpayer has 30 days wi