Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue

REPUBLIC OF THE PHILIPPINES

COURT OF TAX APPEALS

QIJEZON CITY

ATLAS CONSOLIDATED MINING and

DEVELOPMENT CORPORATION,

Petitione r,

-

versus -

C.T.A. CASE NO.

COMMISSIONER OF INTERNAL

REVENUE,

Respondent.

X

-

-

-

-

-

-

-

-

-

X

To

this

Court

comes

petitioner

I

.

I

I '.x.

I

I

Atlas

Consolidat e d

Mining

and

Development

Corporation

wit h

the

prayer that respondent

Commissioner

of

Internal

Re venue be ordered to refund or

issue

a

tax credit certificate to herein petitioner for the

sum

of P40,078, 267 . 81, representing

input

value-

added

tax

<VAT> allegedly paid during

the

first

quarter <January to Ma rch> of 1990 as shown in

i ts

application for

ax cr e dit/refund filed on Jul y 24,

1990 <p . 262, BIR Records>.

The

facts

of the case as manifested

by

the

parties in the Joint Stipulation of Facts submitted

to

this

Court on January 8, 19 93 are

as

follows

<pp. 40-55, CTA Recorda>:

--

-

D E C I S I 0 N -

C.T.A. Case No. 4794

-

2 -

Petitioner is a corporation duly organized and

existing under the laws of the Philippines.

It is

engaged in the business of mining, production,

and

sale

of

various

min ral

products,

consisting

principally of co pper concentrates and gold.

It is

registered

with

the Bureau

of

Internal

Revenue

<B IR> as a VAT e nterprise.

Pursuant to Sect on 100( >< 2 > of the Tax Code,

a s

am nded, p t i ti oner applied f or zero - rating

of

the fol l owing s 1 e:

( 2)

Gold

Ph i

. o

the

Central

pp i nee <C B>

Bank

of

the

co centrates to t e

a ·

d

Sm 1 i ng

end

ation <PASAR>

Pyr'te

concentrates

to

Ph

ph t~

Fertilizer

<Ph lphoe)

Ph i lippine

Refining

.,

Phili ppine

· Corporation

The

SIR' s approval o

s lee to CB

and

PASAR

was

dated Apri l 2 1, 1988 <Anne x " A"> '

while

zero -

rating of sales to Philphos was approved

effective

''

June 1, 1988 <Annex "8">.

PASAR

and

Philphos are regis ered

wit h

the

-

~ .

Board

of Investme nts

<BOI> and

Export

Processing

Zone

Authority

<EPZA>

as

export- oriented

enterprises located in an EPZA zone .

''

--

-

D E C I S I 0 N -

C.T. A. Case No. 4794

-

3

-

In the VAT return filed by petitioner with the

BIR

on April 20, 1988 covering the period

January

to Marc h 1990, pet i tioner declared its sales to CB,

PASAR

and

Philphos

as

zero-rate d

sales

and

therefore not s ubj ect to the lO Y. output VAT

<Annex

"C-1">.

Petitioner applied with respondent on J uly 24,

1990 for tax credit /refund of input

VAT paid on i ts

purchases

of

goods

and services

for

the first

quarter

of

990

in

the

total

amount

of

~40,078,267.81 <Ann x "D ">.

No act on h ad as yet been t

k en by

res pondent

on

the aforementioned application at the time

the

instant petition

or r ~ vie w was fil e d on April

20,

1992,

t h

avow

purpo"·e of which · ·s ·bo · beat

t he

two-yea

od

w thi n ,. I whic h

a

judicial

olB m e hould b

il

Su aequently ,

an

amended applic

i on for

x credit/refund ~as filed

I

on

September 22,

1992 reducing the amoun't • claimed

to P35,522,056.58 <Ann x "E"; p . 265, BIR

Recor da).

On or about September 22,

1992, respondent ap pr oved

t he

issuance

of

tax credit

cert,tfia::ate

to

petitioner but only in th

amount of

P 2;5~8,122.32

while

disallowing

P33,003,934.2G.

Tbe.· detailed

computation is shown below <Annex

"F"

~ p. 295,

BIR

Recorda>:

.,

-

D E C I S I 0 H -

C.T.A. Case No. 4794

-

4 -

h aunt. Claiaed

Less-Dis llowancea

tal

No O.R./Invoic a/Proper

Oocu~~enh

ibl Invoice w/o VAT

Registration No.

(c) Invoice w/ Sold to 'Cash'

ld! Invoice t/o authority to

prin

I l VAT No. stoap /typwritt n

handwritten

printed

in

198 ·1909

<fl Others

lgl Erroneous eo•putolion

Allowable Input T9 ~

Other Deductions!

!hi Output tax due on

ftiacellan ou taxable

8 1 B

Iii Output tax du on sale

of

gold to Centr 1

Bank 1179,314,048.17 •

Pl, 384, 172.48

474,606.87

:U,499.04

441, 195.54

71,088.09

§5,362.58

p

972, 535. 67

1/11)

16,301, 277.11

tj) Input tax attributable

to sal a to PASAR <No

valid BOI certification

as required by

RKO

22-92)

12,404,150.65

(kl

Inpu~ t J a\tributab t

tc

sal~e to Philphos

!Mo BOI c~rti£ e lionl

W

Pena ~ y for iaou nc

of

invo· ces without

authority to u loose

leaf a leu invo .c~~

Allo1nble Input T~x Reeotsend

for issuance o!

Tax Credit

Certificat~

501,652.00

!Q,OOO.Q£1

P35,522, 05&.58

2,814, 318.83

P32,7fJI,737.75

3!!,189,615.43

Jl 2,518, 122.32

The ·

:foregoing

disallowa nces'

and l

I

I

••

other

d e duc tions

which e:f:fectively denied a

substantial

portion

o:f

the

claim :for

input

VAT

re:fund/tax

credit

are

assailed by

pe titioner

:for

various

reasons.

1102

- DECISION -

C.T.A. Case No. 4794

A supplemental report of investigation was

submitted by the BIR examiners on October 15, 1992

recommending the increase in allowable input tax

credit from F2,518,122.32 to P12,101,569.11 or an

increment of P9,583,446.79 due to petitioner’s

submission of BOI certifications on the -sales to

PASAR which hrought down the deduction of

P1i2,404,150.65 to P2,518,122.32 (pp. 344-367, BIR

Records).

The diasues raised and agreed upon by the

parties in their respective pleadings are as

follows:

a. the validity of VAT Ruling No. 008-92 in

connection with -

i. the applicability of 10% VAT

on sales of cépper‘coricentrates

to PASAR and pyrite to

Philphos; low

ii. the application of 10% VAt—) on

sales of gold to CB;

pe

b. the validity of VAT Ruling No. 59-92

which applies retroactively VAT Ruling

008-92 dated January 23; 1992;

ce the applicability of Revenue Regulations

No. 2-88 in that it requires the

purchaser to export more than''70% of its

O00

-

D E C I S I 0 N -

C.T.A. Case No. 4794

-

6 -

total

annual

production

for

the

supplier's sales s uch as petitioner 's to

be lOOY. zero - rated;

d.

th

v

id ty o:f

he d eallowance of input

ta~e

n

h

moun

o:f P2,814,318.83

on

h

g

und

t h

p titioner

has

not

OO!Tlp.\. e-d w th Sect on 108 <e> of the NIRC;

e.

th

v li

y

ef

B R

fi@ ~ tl~tions that

automa ia

ly

dis

1

~

VAT

refund

for

failu

t -

eq ir -d

documents

although

he

purohaae

can

be

substantiated by other documents;

f.

the

propriety of deducting

the

"output

tax on miscellaneous taxable sales"

from

the current input tax ihste:ad o-f" against

petitioner's presumptive ~nput ~:ax

<PIT>

whiol,

per Blq find tnge nr

sufficient

to cover the amount assessed; ,

g.

the mandatory nature of Sect~on

~ ~~6(e) of

the NIRC prescr ibing a

specif~c period of

sixty

( 60) days within which , to 1 process

and

grant

applications

fo~

~nput

VAT

refund and the corresponding right

given

to

claimants

t o apply

VAT

credits to

other

taY

l abilities as

allowed

under

1 , n / I

-

D E C I S I 0 H -

C.T.A. Case Ho. 4794

-

7 -

Section 104<b > of the NIRC law as well as

i nterest

for the delay in the

grant

of

petitioner' s

claims

for

VAT

refund/credit.

;,•

I

is

axiom

c

th

th

Cou~t : can

only

adjudicate and rende

its opinion on matters as

to

which

there is a live or

justiciable controver sy

brought befo e i

•

It cannot r~ nd e r such

o pinions

on

the basie o

hypo h t cal d'sputes or

disputes

which a e not yet ripe for adjudication.

The

task

of

he

a u

is to

djudicate o n

actual

disp utes

and not to render advisory Qpini ons .

To the mind of th

Court,

t h e threshold

issue

involved in th s case is whether under t h e peculiar

set

of

facts

ob aining

in

the

case

at

bar,

petitioner is ent

led to cla m any value-added tax

credit/refund.

If the answer is in the

negative,

there

would

be no need to dwel ve in o

the

other

/

issues

agreed

pon by

h e p

ie, as :there

would

no

longer be any liv

controversy to spea~ of

and

any

ruling this Court may lay down on sa~d issues

would

partake

of

he natu e of • a

mere

advisory

opini on.

1 1

-

D E C I S I 0

N -

C.T.A. Case No. 4794

-

8 -

The records of the case show ~ h at a lthough the

parties

stipulated

t hat

petitioner is

a

VAT

registered en erp i

per

i

s

Registration

No.

32-A-6-00222 4,.,

the

VAT

Regis tration Certificate

of

petitioner

as

appearing

in

the

records

is

32-0-004622

and

not 32- A- 6 - 002224

<p.

250,

BIR

f

Records) .

Sect'on 107<d > of th

NIRC states that

"eac h

VAT - re~·s ·

r d

p~r son

h• l be assigned

only

one

egis ra t ion number."

We are therefore

at

a

l oss

as

to whe

petitioner got its alleged

VAT

Registration No. 32- A- 6-002224 whic h i t used in the

VAT

return and ap plication for

t x

credit/refund

that it :fi l ed,

In

addit ' on, the Court

likaw se

notes

that

the

supp

r.;:

cl

ctiv'ty d

Reg1.atration

q ) r

;l't;.

R@

t'lt rrtidn

1Certif icate

s u bmitted>

we

Au \.1St 1 • 19 o, wherders' 't .he

input

VAT refund i

s e eks

a v l"f!l th

p

i

d f x'-6m

January

I

to

March 1990.

Si nce liability fo~ VAT ·• commences

only

on the first day of the month

following

the

registration of the e nter prise E Se>ction., 2a,. Revenue

Regulations

No.

5-87 >, the

reckoning i p,oint

for

petitioner's

entitlement to any

· refun~At~x credit

should

likewise

be c ounted from .

the

~t sa me date,

i.e., September 1, 1990.

..

. ... ~ ~

1 i I I

-

D E C I S I 0 N -

C.T.A. Case No. 4794

-

9 -

BIR

Rulings

cannot,

as a

rule,

be

given

retroactive

effect

<Commissioner

of ·

Internal

Revenue vs. Burroughs Limited 142 SCRA 324>

The

Court

can

only

ascertain

the

truth

respecti ng

a matter of fact by means

of

evidence

presented

before

it.

The

VAT

Registration

Certif c ate

submitt d by pet'tioner plainly

shows

that

't b cam

f

ct'v

on Augu t 15,

1990.

It

t herefore

foll ~~s that

pr i r

to

said

date,

pet:lt on

~gist er ed nte pri e under

the

VAT

system.

An

"ot bGing then

a

VAT-registered

person,

pet t oner

:i.

not entitle

to

a ny

tax

credit/refund of 'n put VA T paid for the period from

January to Ma c h 1990, pur

ant to Section 16 <a> of

Revenue R-g u a·

ons No.

·- 87 ,

a amended tly Revenue

Regulations

No,

states

s fell ws:

"Sec.

tax.

- 88 dated A r il 7 ,

~ 1988,

which

tax c'redits o:£

aa·l ea

of

e v cea.

~

VA T~

er on

!!!.§!.Y. be

. i ven •( !t , t ax

cer if ca _g_ Q.!:. ref und

of

value -

taxes

aid cor e a pond-ing. 1 "to. i the

zero - rated sa ea of goods or

ervicea, to

t he e xtent that s uc h t x s h v

~ot

,~ b ee n

applied

against

output

axes,

upon

showing

o£ proof of oompli nee witD , the

· condi i on s

stat d in Section 8 of

these

Regulations." <Underscor'ng supplied)

1 1 / ) ' J

-

D E C I S I

0 H -

C.T.A. Case No. 4794

-

10 -

Rule is sett l ed that laws granting exemptions

from

t

x ar

c n

tru~d tr'c is im' juris against

the

taxpayer

and

i be al l y

e onstrued

of

the

taxing power

< Ni tsub.i. . h:i Mot a

Corp. vs • • ·ciR,

181

SCRA 2 14>.

Having

det e mined

that

pe titioner is

not

entitle

0

h

tax r fun

cl

me d by it, the Court

i

dee m£l

tli

y t

w

.l

~

h eco other

issues

raised

on

eed

upon

y

the

p rties.

The

resolut-'on -

:f

h

e ia ues are ti C longer germane to

the

adj udicati on o£ p titi an

'a

i ghte under

the

specific

circums ances

obtai n i ng in the

case

at

bar.

There

s no 1 ng r any live

or

justiciable

controversy

whic h

the

Cour

e

called

upon

to

adjudicate.

Any op ' nion We

re nd~r. on '. such

other

iss u e s

would

b

me e

dic·t ·um) ' a•nd,

worse ,

would

par take

of

h

nat.ure of " a

·mere

a'dvisor y

opinion,

The Cou _t

s not p

p red to emba~k upon

such

a

enuo

v n ur , esp e

lly c onside ring

the

serious

imp i c

ion

that an a dverse

T uling

may

ha ve on the admin:stration of the VAT

e~stiem.

Lastly, tax a

ar~ wh -t

w

paf for te civilized

socie_ty.

Without

taxes the government • ·• would

be

paralyzed

:for lack of th~ motive po'lller to

actuate

and

operate it,

It is

the

li:febl o dd

o:f

the

...

-

D E C I 5 I 0 N -

C.T.A. Case No. 4794

-

11 -

government

and

so

should

be

collected

without

unnecessary

h indrance. <Commissioner of Internal

Revenue · v.

Wyeth S uaco Laboratories,

Inc.,

G.R.

76281 , 30 Sept. 9 1>

WHEREFORE, i n view of the foregoing, the Court

reso l ves to DENY the petition for lack of. merit.

50 ORDERED.

GRUBA

Judge

WE CONCUR:

I l

Concurs & Dissents

in ~separate opin ion

ER -sTO D. ACOSTA

. . es;ding J~e

v~ J~~~

RAMON O. P£ ·. - · A

Assoc·a ~ Jud

/

I

I~

j li •

CE ON

I

hereby

certify that thi

i: