CASE DIGEST: VISAYAS GEOTHERMAL POWER COMPANY vs. CIR. G.R. No. 197525. June 04, 2014

FACTS:

After filing its quarterly returns,  VGPC, a limited partnership in Ormoc City, filed an administrative claim for refund on its excess and unutilized VAT payment for the 4 quarters of 2005 pursuant to RA 9136, a law which treated generated power subject to a 0% rate starting 2001.

VGPC filed a judicial claim via petition for review with CTA while the administrative case was still pending,  praying for refund or issuance of tax credit covering the four quarters of taxable year 2005. CTA Division partially  granted the claim, but when it reached the CTA En Banc, tge latter dismissed the case for being prematurely filed. 

TAXPAYER'S ARGUMENTS:

Petitioner contends that CTA En Banc erred in applying the Aichi case and that CTA division should take cognizance of the judicial appeal as long as it is filed within the two year prescriptive period under Sec. 229 of the Tax Code. Petitioner further contends that Aichi's application to the present case is contrary to existing jurisprudence at the time VGPC filed it's administrative and judicial claims. 

GOVERNMENT'S ARGUMENTS:

Petitioner prematurely filed it's judicial claim with CTA. The law, as contended by the respondent, provides for the 120+30 days waiting period before filing a judicial claim with CTA and such rule is mandatory, otherwise, CTA acquires no jurisdiction over the case. 

ISSUE:

whether the judicial claim filed by VGPC was prematurely filed. 

RULING:

No. As a general rule, the 120+30 day period under Sec. 112 of the NIRC is mandatory and jurisdictional from NIRC's effectivity up to present. However, this rule is not absolute because those judicial claims from December 10, 2003, or the time BIR Ruling DA-489-03 was issued up to October 6, 2010, the promulgation of Aichi Case, were exempted from exhausting the 120+30 days period. 

Based on the facts presented,  VGPC timely filed its administrative claim with CIR and its judicial claim with the CTA. This case falls within the exemption to the general rule. 

PERSONAL END NOTE:

The general rule is that, taxpayers must first observe the 120+30 days period before they file a judicial claim with CTA. This rule is mandatory and jurisdictional. Hence, the filing of cases before CTA without first complying with the mandatory periods will make the case dismissible for lack of jurisdiction and prematurity. However,  those cases which rely on the BIR ruling DA 489-03 are exempted from complying with the mandatory waiting periods.