Petitioner is a Value-Added Tax (VAT) taxpayer engaged in the importation and exportation business, as a pure buy-sell trader. Petitioner alleged that from September 1998 to December 31, 2000, it paid an aggregate sum of input taxes for its importation of food ingredients.Subsequently, these imported food ingredients were exported between the periods of April 1, 2000 to December 31, 2000, from which the petitioner was able to generate export sales amounting to P114,577,937.24. The aforestated export sales which transpired from April 1, 2000 to December 31, 2000 were “zero-rated” sales, pursuant to Section 106(A (2)(a)(1) of the NIRC of 1997.Petitioner alleged that the accumulated input taxes for the period of September 1, 1998 to December 31, 2000 have not been applied against any output tax.
On March 26, 2002 and June 28, 2002, petitioner filed two separate applications for the issuance of tax credit certificates.On July 24, 2002, in view of respondent’s inaction, petitioner elevated the case before this Court by way of a Petition for Review, docketed as C.T.A. Case No. 6513.Trial ensued and the CTA First Division rendered a Decision on 13 June 2007. It denied petitioner’s claim for failure to comply with the invoicing requirements prescribed under Section 113 in relation to Section 237 of the National Internal Revenue Code (NIRC) of 1997 and Section 4.108-1 of Revenue Regulations No. 7-95.On appeal, the CTA En Banc likewise denied the claim of petitioner citing violation of the invoicing requirements.
Is the petitioner is entitled to the issuance of a tax certificate or refund representing creditable input taxes attributable to zero-rated sales?
The Commissioner of Internal Revenue (CIR) 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.Counting 120 days from 26 March 2002, the CIR had until 24 July 2002 within which to decide on the claim of petitioner for an input VAT refund attributable to the its zero-rated sales for the period April to September 2000.On the other hand, the CIR had until 26 October 2002 within which to decide on petitioner’s claim for refund filed on 28 June 2002, or for the period covering October to December 2000.
In this case, the judicial claim of petitioner was filed on 24 July 2002. Petitioner clearly failed to observe the mandatory 120-day waiting period. Consequently, the premature filing of its claim for refund/credit of input VAT before the CTA warranted a dismissal, inasmuch as no jurisdiction was acquired by the CTA. In accordance with the ruling in San Roque and considering that petitioner’s judicial claim was filed on 24 July 2002, when the 120+30 day mandatory periods were already in the law and BIR Ruling No. DA-489-03 had not yet been issued, petitioner does not have an excuse for not observing the 120+ 30 day period. Failure of petitioner to observe the mandatory 120-day period is fatal to its claim and rendered the CT A devoid of jurisdiction over the judicial claim.