SC rejects appeals of CTA Deutsche Knowledge ruling

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Supreme Court

THE Supreme Court (SC) rejected appeals from the Bureau of Internal Revenue (BIR) and Deutsche Knowledge Services Pte. Ltd., a subsidiary of Deutsche Bank Group in Singapore, thereby upholding a Court of Tax Appeals (CTA) ruling partially granting the company’s refund claim worth P51.7 million.

In a two-page notice of resolution dated June 3, the SC second division ruled that the CTA en banc did not commit “any reversible error in dismissing the petitions outright for lack of jurisdiction.”

“The CTA EB (en banc) correctly found that the parties’ failure to file their respective motions for reconsideration from the CTA Division’s Amended Decision rendered their petitions for review dismissible on the ground of lack of jurisdiction,” the court ruled.

Deutsche Knowledge sought a refund on unutilized excess input value-added tax attributable to zero-rated sales for April to December 2010 in the amount of P119.8 million but the CTA third division in May 2015 partially granted its claim allowing only the refund of P53 million.

The company and the BIR filed motions for partial reconsideration and the CTA amended its decision, reducing the amount to P51.7 million.

Both parties filed a petition for review before the CTA en banc.

The court, however, in its decision dated Oct. 18, 2017 said the petitions were “procedurally flawed” which prevented it from acquiring jurisdiction over the case, saying the parties immediately filed their appeal to the court en banc instead of filing motions for reconsideration over the amended decision.

The CTA cited Section 1, Rule 8 of the Revised Rules of the CTA (RRCTA) which said that a petition for review of a decision or resolution of a court in division must be preceded by the filing of a motion for reconsideration or a new trial before the division.

It also noted a previous Supreme Court decision which said that for the CTA en banc to take cognizance of a petition for review, Section 1, Rule 8 of the RRCTA must be followed and the same applies to amended decisions.

“The foregoing is concise yet clear. There are no other qualifications or conditions set by the High Court in applying the provisions of the RRCTA in cases of Amended Decisions,” it said.

The motions for reconsideration were also denied by the CTA en banc for lack of merit. — Vann Marlo M. Villegas