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MINDANAO II
7227 1st Quarter
7287
2nd Quarter
31 March
2003
30 June 2003
Actual date
of filing
application
for tax
refund /
credit
(admin
claim)
31 March 2005
13 April 2005
30 June 2005
13 April 2005
Last day
for
filing case
with CTA
Actual Date
of filing
case with
CTA
(judicial
claim)
12 Sept
2005
12 Sept
2005
22 April
2005
7 July 2005
7317
MINDANAO I
7228 1st Quarter
7286
7318
2nd Quarter
3rd and 4th
Quarters
30 Sept 2003
30 Sept 2005
13 April 2005
12 Sept
2005
9 Sept 2005
31 Dec. 2003
31 March
2003
30 June 2003
30 Sept 2003
31 March 2005
4 April 2005
1 Sept 2005
30 June 2005
30 Sept 2005
4 April 2005
4 April 2005
1 Sept 2005
1 Sept 2005
22 April
2005
7 July 2005
9 Sept 2005
31 Dec. 2003
2 January 2006
(31 Dec. 2005
being a Saturday)
Section 112(A) of the 1997 Tax Code was the applicable law at the time of filing of the claims in
issue, therefore the claims needed to have been filed within two (2) years after the close of the taxable
quarter when the sales were made. Mindanao I and IIs administrative claims for the first quarter of 2003
had prescribed, but their claims for the second, third and fourth quarters of 2003 were filed on time.
Prescriptive Period for the Filing of Judicial Claims
In determining whether the claims for the second, third and fourth quarters of 2003 had been
properly appealed, there is still see no need to refer to either Atlas or Mirant, or even to Sec. 229. The
second paragraph of Sect. 112(C) is clear that the taxpayer can appeal to the CTA within thirty (30) days
from the receipt of the decision denying the claim or after the expiration of the one hundred twenty dayperiod.
The 120+30 day periods are mandatory and jurisdictional. The taxpayer cannot simply file a
petition with the CTA without waiting for the Commissioners decision within the 120-day period, because
otherwise there would be no decision or deemed a denial decision for the CTA to review. Moreover,
Sec. 112(C) expressly grants a 30-day period to appeal to the CTA, and this period need not necessarily
fall within the two-year prescriptive period, as long as the administrative claim is filed within such time.
The said prescriptive period does not refer to the filing of the judicial claim with the CTA, but to the
administrative claim with the Commissioner.
San Roque: Recognition of BIR Ruling No. DA-489-03
BIR Ruling No. DA-489-03 provided that the taxpayer-claimant need not wait for the lapse of the
120-day period before it could seek judicial relief with the CTA. In the consolidated cases of CIR v. San
Roque, however, the Supreme Court En Banc held that the taxpayer cannot simply file a petition with the
CTA without waiting for the Commissioners decision within the 120-day jurisdictional period.
Notwithstanding, the Court also held in San Roque that BIR Ruling No. DA-489-03 constitutes equitable
estoppel in favor of taxpayers. Being a general interpretative rule, it can be relied on by all taxpayers from
the time of its issuance on 10 December 2003 up to its reversal by the Court in Commissioner of
Internal Revenue v. Aichi Forging Company of Asia, Inc. (Aichi) on 6 October 2010, where this Court
held that the 120+30 day periods are mandatory and jurisdictional.
Mindanao II filed its administrative claims for the second, third, and fourth quarters of 2003 on
13 April 2005. Counting 120 days after filing of the administrative claim (11 August 2005) and 30 days
after the CIRs denial by inaction, the last day for filing a judicial claim with the CTA for the second,
third, and fourth quarters of 2003 was on 12 September 2005. However, the judicial claim could not
be filed earlier than 11 August 2005, which was the expiration of the 120-day period for the
Commissioner to act.
Mindanao II filed its judicial claim for the second quarter before the expiration of the 120-day
period; it was thus prematurely filed. However, pursuant to San Roque, the claim qualifies under the
exception to the strict application of the 120+30 day periods. Its judicial claims for the third quarter
and fourth quarter of 2003 were filed on time.
Mindanao I filed its administrative claims for the second, third, and fourth quarters of 2003 on
4 April 2005. Counting 120 days after filing of the administrative claim with the CIR (2 August 2005)
and 30 days after the CIRs denial by inaction, the last day for filing a judicial claim was on 1
September 2005. However, the judicial claim cannot be filed earlier than 2 August 2005, which is the
expiration of the 120-day period for the Commissioner to act on the claim. Mindanao I prematurely
filed its judicial claim for the second quarter of 2003 but claim qualifies under the exception in San
Roque. Its judicial claims for the third and fourth quarters of 2003, however, were filed after the
prescriptive period.
[2] ISSUE: Whether the sale of the fully-depreciated Nissan Patrol is a one-time transaction not incidental
to the VAT zero-rated operation of Mindanao II, thus not VATable?
Mindanao II asserts that the sale of a fully depreciated Nissan Patrol is not an incidental
transaction in the course of its business but an isolated transaction that should not have been subject to
10% VAT. It does not follow that an isolated transaction cannot be an incidental transaction for purposes
of VAT liability. Indeed, a reading of Section 105 would show that a transaction in the course of trade or
business includes transactions incidental thereto. In the course of its business, Mindanao II bought and
eventually sold a Nissan Patrol. Prior to the sale, the Nissan Patrol was part of Mindanao IIs property,
plant, and equipment. Therefore, the sale of the Nissan Patrol is an incidental transaction made in the
course of Mindanao IIs business which should be liable for VAT.
DISPOSITION: Petitions partially granted. The claim of Mindanao II for the first quarter of 2003 is
DENIED, while its claims for the second, third, and fourth quarters of 2003 are GRANTED. The claims of
Mindanao I for the first, third, and fourth quarters of 2003 are DENIED while its claim for the second
quarter of 2003 is GRANTED.