PNOC Shipping and Transport Corporation, et al. vs. Commissioner of Internal Revenue, et al.

DECISION -

- 2 - Petitioner PNOC Shipping and Tt"ansport Corporation is a government-owned and controlled corporation duly ot"ganized and existing in accordance with Philippine laws with principal offices at 7901 Makati Avenue, Makati, Metro Manila, in 1982, petitioner put"chased a vessel using the proceeds of a foreign loan from the International Bank of Japan; in 1985, petitioner paid two regular amortizations which were deposited with the Central Bank of the Philippines; on April 15, 1986, petitionet" filed its corpot"ate income tax return for 1985 and paid the amount of P17,245,131.00 under BIR Payment Order No. B7731259 dated Apt"il 15, 1986 and CB Confit"mation Receipt No. B378167; on Apt"il 14, 1988, petitionet" filed a claim for refund Ot" tax ct"edit in the amount of P9'•7, 088. 00 as alleged ovet·payment of income tax for the yeat" 1985; on Febt•uat"Y 20, 1989, petitioner received respondent's decision denying petitioner's claim for refund/tax credit of the aforesaid sum of P947,088.00;

and on March 22, 1989, petitioner appealed to this Court. At this js..tnctut"e, it may be mentioned that instead of an answet", respondent filed the instant - -

- 3 - mot i on whet~ e in he in t e t~ posed esct~ipt ion of the right of petitionet~ to claim fat~ the t~efund/tax credit of the income tax alleged to have been excessively paid, invoking Section 230 (formerly Sec. 306) of the National Internal Revenue Code, as amended.

Said law pertinently provides: Sec.

230.

Rec_ove~ of Ta.x ~~_Qnf! o UJ!Lb'_ Q_r:_j 11 ega ll_y_Co 11 ect ed.- No suit or proceeding shall be maintained in any cout~t fat~ the t~ecovet~y of any national intet~nal t~evenue tax het~eaftet~ alleged to have been erroneously or illegally assessed at~ collected, at~ of any penalty claimed to have been collected without authot~ity, at~ of any sum alleged to have been excessive or in any mannet~ wt~angfully collected, until a claim for refund or credit has been duly filed with the Commissioner;

but such suit or proceeding may be maintained, whether or not such tax, penalty, at~ sum has been paid under protest or duress. I n __ ft_!!Y.... _ _G_S\...? ~_,. __ _n_g_ __ ...ll\_ch __ SJJj. t __ oy.:

PT Q_~'-'··d.i.ng__s_b_~l_L ___ Ia!t _____ b._@•,m __ ~ ft e_r__j;J:t!t •-~Pi t~at i g_t}__Q_f_i~_Q__y_~at~s _ft~am t_hg__d_S'_i_~_g_f p_~lti-'-JJ_t__g..f ___ ~tl-~_-.t. . .9.1L_QJ:"'_J;L~D-a_l_~.;t._t::g_g_~ t"..Q.l_~_~_§_ g _f__~_DY supervening c_aus~that may ari s~ M~~-t::__p..9_Ymen:t_: x x x <Undet~scot~ing Olt\'"S. )

The fot~egoing pt~ ovision t~equires that befot~ e any a c tion may be instituted in court for recovery of any intet~nal t~evenue tax alleged to have been erroneou9ly or illegally assessed ot~ collected, ot~ any sum alleged to have been excessive at~ in any 422 '

DECISION ~

manner wrongfully collected, the taxpayer must first file a claim for refund thereof with the Commissioner of Internal Revenue within two years from date of payment and the suit for refund must be filed in court within the same period. Thus, in the case of Gibbs vs. Collector of Internal Revenue and Court of Tax Appeals, 107 Phil. 2328, it has been held:

"y x x it is clear that Section 306 (now Section 230) of the National Internal Revenue Code should be construed together with Section 11 of Republic Act No. 1125. In fine, a taxpayer who has paid the tax, whether twnder protest or not, and who is claiming a refund of the same, must comply with the requirements of both sections, that is, he must file a National Internal Revenue Code, and appeal to the Court of Tax Appeals within 30 days from receipt of the Collector's decision or ruling denying his claim for refund, as required by said Section 11 of Republic Act No. 1125. If, however, the Collector takes time in deciding the be started in the Court of Tax Appeals before the end of the two-year period the doctrine that delay of the Collector (U.S. vs. Michael, e8 U.S. 656, 51 S&S.

423 - ·-

- 5 - Ct.

284;

P. J.

Ki enet~ & Co. , Ltd.

vs.

David, 92 Phi 1.

9'+5, 49 Off.

Gaz.

[5] 1852;

Co 11 ege of Ot~al & Dental Surg et~y v s. Colwt of Tax Appeals, 102 Phi 1. 912; 5lt Off.

Gaz.

[29] 7055.

< Und et~scot~ i ng ours. )

In the case at bat~, it appeat~s that the tax sought to be refunded or credited was paid on April 15, 1986.

While the claim fot~ t~efund was filed with the Commissioner on April 14, 1988, within two years from the date of payment, the judicial action for recovery was instituted with this Court only on March 22, 1989.

It is thus clear beyond doubt that court action fot~ t"' ecovet"'Y of the alleged excess ' payment of income tax corresponding to the taxable year 1985 is already time barred inasm1.1ch as Section 230 t"'equit"'es that judicial action must be instit•Jted within two yeat"'S ft"'om date of payment. In other wm~ds, the taxpayet"' must file a wt~itten claim for t"'efund with the Commissionet~ of Intet"'nal / / Revenue within two years after payment of an internal t~evenue tax alleged to have been erroneo•Jsly or illegally paid and the action for recovery must be instituted in COllt"'t also within two years after payment pursuant to Section 230 of the National Internal Revenue Code. 424 I - -

- 6 -

WHEREFORE, the petition fat~ t~eview filed in this case dismissed fat~ lack jurisdiction at petitioner's costs.

WE CONCUR1

<on leave) CONSTRNTE C. RORQUIN Associate Judge ~0 Associat~ R~~~ C E R T I F I C R T I 0 N of I hereby certify that this decision was reached after due consultation among the members of the Court of Tax Appeals in accordance with Section 13, Article VIII of the Constitution. 425 AMANTE Presidi