A "year" for the purpose of computing legal periods is understood to be twelve calendar months, as provided in Section 31, Chapter VIII, Book I of the Administrative Code of 1987, which has impliedly repealed the definition of a "year" as 365 days under Article 13 of the Civil Code.

The case originated from a claim for a tax refund by Primetown Property Group, Inc. (Primetown) for taxes paid in 1997. Due to the Asian Financial Crisis, the real estate industry slowed down, causing Primetown to suffer significant losses for that year. Despite these losses, the company had paid quarterly corporate income taxes and remitted creditable withholding taxes. Believing it was not liable for income tax due to its net loss, Primetown filed an administrative claim for a refund with the Bureau of Internal Revenue (BIR), which was not acted upon, prompting the company to seek judicial relief.

• In 1997, respondent Primetown Property Group, Inc. suffered losses amounting to P71,879,228 due to an economic slowdown.
• Despite the losses, Primetown paid quarterly corporate income tax and remitted creditable withholding tax totaling P26,318,398.32 for the year 1997.
• On April 14, 1998, Primetown filed its final adjusted income tax return for 1997.
• On March 11, 1999, Primetown filed an administrative claim with the BIR for a refund or tax credit of the amount paid.
• The BIR did not act on the claim, prompting Primetown to file a petition for review with the Court of Tax Appeals (CTA) on April 14, 2000.
• The CTA dismissed the petition, ruling it was filed one day late, reasoning that the two-year period under the Civil Code is equivalent to 730 days, but 731 days had elapsed from April 14, 1998, to April 14, 2000, because 2000 was a leap year.
• The Court of Appeals reversed the CTA, holding that Article 13 of the Civil Code does not distinguish between a regular year and a leap year, and thus the two-year period should be counted as 730 days.

• Tax refunds are in the nature of tax exemptions and should be strictly construed against the claimant.
• The two-year prescriptive period under Section 229 of the National Internal Revenue Code (NIRC) must be strictly applied.
• The prescriptive period begins to run from the day the claimant files its final adjusted return.
• Based on Article 13 of the Civil Code, two years is equivalent to 730 days (365 days x 2).
• Since Primetown filed its judicial claim 731 days after filing its final return (due to the leap year 2000), the claim was filed beyond the reglementary period.

• Respondent's arguments are reflected in the Court of Appeals' decision which it defended before the Supreme Court.
• The Court of Appeals ruled that Article 13 of the Civil Code, stating a year has 365 days, applies regardless of whether a particular year is a leap year.
• Therefore, the two-year period should be counted as 730 days, and the petition was timely.

• Procedural Issues:
  • Whether respondent's judicial claim for a tax refund, filed on April 14, 2000, was filed within the two-year prescriptive period that commenced on April 14, 1998.
• Substantive Issues:
  • Whether the computation of the two-year prescriptive period should be based on Article 13 of the Civil Code (defining a year as 365 days) or Section 31 of the Administrative Code of 1987 (defining a year as twelve calendar months).

• Procedural:
  • The Supreme Court ruled that the respondent's petition for review was filed within the reglementary period. The two-year period, computed as 24 calendar months from April 14, 1998, ended on April 14, 2000. As the petition was filed on this exact date, it was timely.
• Substantive:
  • The Court held that Section 31, Chapter VIII, Book I of the Administrative Code of 1987 governs the computation of legal periods. This provision, which defines a "year" as twelve calendar months, is a more recent law and is irreconcilably inconsistent with Article 13 of the Civil Code, which defines a "year" as 365 days. Therefore, the Administrative Code has impliedly repealed the Civil Code provision on this matter. Under this rule, the number of days in a year is irrelevant for computing periods denominated in years.

• Lex posteriori derogat priori — This Latin maxim, meaning "a later law repeals an earlier one," was applied by the Court to resolve the conflict between the Civil Code and the Administrative Code of 1987. The Court held that the Administrative Code, being the more recent law, prevails over the older Civil Code provision regarding the computation of legal periods.
• Implied Repeal — The Court explained that a law is impliedly repealed when a later law covers the whole subject of a former one and is manifestly inconsistent with it. It found that the definitions of a "year" in the Civil Code (365 days) and the Administrative Code (12 calendar months) are irreconcilable, thus concluding that the latter impliedly repealed the former on this specific point.
• Calendar Month — The Court defined a "calendar month" as a month designated in the calendar without regard to the number of days it contains, running from a certain day to the corresponding day of the next month. This definition was crucial in computing the 24-month period from April 14, 1998, to April 14, 2000.

• "There obviously exists a manifest incompatibility in the manner of computing legal periods under the Civil Code and the Administrative Code of 1987. For this reason, we hold that Section 31, Chapter VIII, Book I of the Administrative Code of 1987, being the more recent law, governs the computation of legal periods. Lex posteriori derogat priori."

• National Marketing Corporation v. Tecson — Cited to illustrate the old rule under Article 13 of the Civil Code where a year was held to be equivalent to 365 days, regardless of whether it was a regular or a leap year. The Supreme Court effectively overturned this precedent by applying the Administrative Code of 1987.
• Gutierrez v. Carpio — Referenced for its definition of a "calendar month," which supported the Court's application of the Administrative Code's provision.
• Agujetas v. Court of Appeals — Cited to explain that a general repealing clause, like the one in the Administrative Code, does not constitute an express repeal but may effect an implied repeal of inconsistent laws.
• David v. Commission on Election — Referenced for the test of implied repeal, which requires that the subsequent law must encompass the entire subject matter of the former and be irreconcilably inconsistent with it.

• Section 229, National Internal Revenue Code (NIRC) — This section establishes the two-year prescriptive period for filing a suit or proceeding for the recovery of erroneously or illegally collected taxes.
• Article 13, Civil Code — This article, which defines a "year" as 365 days, was held by the Court to have been impliedly repealed by the Administrative Code of 1987 with respect to the computation of legal periods.
• Section 31, Chapter VIII, Book I, Administrative Code of 1987 (E.O. 292) — This is the controlling provision applied by the Court, which states that a "year shall be understood to be twelve calendar months."
• Section 27, Book VII, Administrative Code of 1987 (E.O. 292) — This is the repealing clause of the Administrative Code, which the Court interpreted as effecting an implied, not express, repeal of all inconsistent laws.