THE Court of Tax Appeals (CTA) affirmed the dismissal of the P10.6-million tax refund claim of Hedcor, Inc. for lack of jurisdiction.
In a 13-page decision dated June 10, the CTA sitting en banc denied the petition of Hedcor, saying it failed to file in time its judicial claim for refund or issuance of tax credit certificate over alleged input value-added tax (VAT) paid and incurred from the domestic purchases of goods and services mostly attributable to zero-rated sales of electricity for the third quarter of 2006.
“In fine, Hedcor’s judicial claim cannot prosper for its failure to comply with the 30-day mandatory and jurisdictional period set forth by law,” the CTA ruled.
The CTA noted that the hydropower generation company filed its administrative claim with the Bureau of Internal Revenue (BIR) on Aug. 20, 2008 and completed submission of documents on Nov. 12, 2008.
Since no action or decision was given by the BIR after 120 days on March 12, 2009, as stated in the Tax Code, Hedcor had 30 days or until April 11, 2009 to file to the CTA.
Hedcor, however, only filed its petition for review to the CTA on Dec. 10, 2015.
Under Section 112(C) of the National Internal Revenue Code of 1997, the commissioner of BIR shall grant or deny a refund or issue a tax credit certificate within 120 days from the submission of complete documents. In case of full or partial denial or inaction from the part of the bureau, a taxpayer has 30 days to file the claim to the CTA.
The CTA also cited various decisions by the Supreme Court which stated that the 120+30 day periods in the Tax Code are “mandatory and jurisdictional.”
The tax court also denied the claim of Hedcor that the 30-day-period for the filing in the CTA started from the date of its receipt of the alleged denial of its claim from the BIR on Nov. 10, 2015.
“Applying the plain meaning of the words in the said resolution-letter, it is clear that there is no express denial of the claim,” the court said.
“In this case, considering that there is no actual denial of the claim, it should be treated as inaction. Hedcor’s allegation that its claim was acted upon and expressly denied precluding the application of the ‘deemed denial’ doctrine, is, therefore, bereft of merit,” it added.
The court also said the contention of Hedcor that the CTA in division erred in applying the provisions of Revenue Memorandum Circular No. 54-2014, which required complete submission of documents for claims at the time the claim was filed, is “bereft of merit” as the circular was not mentioned or discussed.
It also said Hedcor’s allegation on issue of prescription of period to appeal requires full-blown trial is “untenable.”
The CTA First Division on Dec. 22, 2016 granted the motion of the BIR for the early resolution on the issue of jurisdiction and dismissed the petition for lack of jurisdiction. The court in Nov. 2017 denied for lack of merit the motion for reconsideration of Hedcor.
The decision was penned by Associate Justice Juanito C. Castañeda, Jr.
Hedcor is Aboitiz Power Corp.’s run-of-river hydropower arm. — Vann Marlo M. Villegas
