G.R. No. 185666 - NIPPON EXPRESS (PHILIPPINES) CORP., VS. COMMISSIONER OF INTERNAL REVENUE.D E C I S I O N - Supreme Court E-Library

Ruling

accordingly dismissed petitioners claim for the issuance of a TCC on the ground of its failure to comply with the substantiation requirements. It explained that the sales invoices, transfer slips, and credit memos presented in support thereof did not comply with the substantiation requirements provided for under Sections 106, 108, and 113 [8] of the National Internal Revenue Code (NIRC) of 1997, as amended, considering that petitioners sales are sales of services which should only be supported by official receipts. Consequently, without the VAT official receipts evidencing its zero-rated revenues, the input VAT payment alleged to be directly attributable thereto cannot be refunded or a TCC cannot be issued in its favor in accordance with Revenue Memorandum Circular (RMC) No. 42-2003. Having rendered such ruling, the CTA in Division decided not to pass upon other incidental issues raised before it for being moot. On 13 November 2007, the CTA in Division denied both petitioners Motion for Reconsideration and Supplemental Motion for Reconsideration for lack of merit. [9] Aggrieved, petitioner appealed to the CTA En Banc by filing a Petition for Review under Section 18 of Republic Act (R.A.) No. 1125, as amended by R.A. No. 9282, [10] on 21 December 2007, docketed as C.T.A. E.B. No. 335. The Ruling of the CTA En Banc The CTA En Banc affirmed in toto both the aforesaid Decision and Resolution rendered by the CTA in Division in CTA Case No. 6464, pronouncing that although Sections 113 and 237 of the NIRC of 1997, as amended, and Section 4.108-1 of Revenue Regulations (RR) No. 7-95 use the words invoice and receipt without distinction, nevertheless, the NIRC of 1997, as amended, provides separate provisions, which must be read in relation thereto: Section 106 for VAT on sale of goods or properties, and Section 108 for VAT on sale of services and use or lease of properties. [11] Clearly therefore, the CTA En Banc agreed with the court a quos findings that the evidence submitted by petitioner, i.e. sales invoices, transfer slips, credit memos, cargo manifests, and credit notes, as well as formal report of the independent certified public accountant (ICPA), to prove its zero-rated sales, were insufficient so as to entitle it to the issuance of a TCC since the aforesaid legal provisions do not provide for any other document that can be used as an alternative to, or in lieu of an invoice and official receipts. [12] Ultimately, it ruled that petitioners sales, being sales of services, shall properly be supported by VAT official receipts only, which unfortunately were not presented and submitted as evidence by petitioner during trial. Upon denial of petitioners Motion for Reconsideration thereof, it filed the instant Petition for Review on Certiorari before this Court seeking the reversal of the aforementioned Decision and the 16 December 2008 Resolution [13] rendered in C.T.A. E.B. No. 335, based on the following grounds: That nowhere in the NIRC of