CTA Case No. 5219

DECISION

C.T.A.

CASE NO.

5219 - 2 - Per i od Covered Cu•ulatlve Creditable Input Tax July 1 to Sept ember 30, 1993 October ·t to December 31, 1993 January 1 to Maroh 31, 1994 Apr I I 1 to June 30, 1994 July 1 to September 30, 1994 October 1 to December 31, 1994 p 530,088.48 568,628.50 845,561.28 1,115,590.51 1,428,427.67 1 '8 ., 3' 093. 36 Being a zero-rated taxpayer, petit i one r Incurred no VAl output as all its s ale s were export sales, resulting to a total creditable VAr Input of P1,873,093.35 for the period January 1, 1993 to (Jeoember 31, 1994.

On Maroh 2 7, 1996, petitioner filed Its appl loation tor tax credit/refund of the aforestated cumulative VAT Input payments with the Tax and Revenue Group of the One- Stop-Shop Inter-Agency lax Credit Center of the Department of Flnanoe.

and Duty Drawback <Exhibit "A") Considering that the two-year period m andat ed by law under Sections 204 and 230 of the Tax Code Is about to expIre, InactIon of the respondent on the aforementIoned olalm prompted the petitione r to fl le the Instant petition before Ue on Maroh 31, 1995.

On July 10, 1996, respondent's o ounsel manifested In oourt that a partial refund had already been granted and furnished the petitioner with a oopy of the letter of the Department ot Flnanoe, dated January 17, 1996 (p.82, CTA reo«.>.

addressed to the C ommissioner of Customs on the &41d approval of olaiM for refund.

This faot urged the 4G3 DECISION C.T.A.

CASE NO.

5219 - 3 -- petitioner to fl Je a Manifestation and Motion for leave of Court tor the Admission of Amended Petition for Review on August I, 1996 Cpp.

78-80, CTA reos. l for the purpose of impleading the Commissioner of Custon1s as an indispensable party to the oase considering that he Is the pe r son who has the authority to Issue the tax oredlt oertifloate and therefore necessary to a OOtllp I ete de t e r m I n a t I on o r· s e t t I em e n t of t he q u e s t I on s I n v o I v e d I n the oase.

On August 30, 1996, this Court through a Resolution Cp.

111.

CTA reos.)

denied the foregoing motion fl led by the petitioner on the ground that" "x x x In the original petition for review, as wet I as In the amended petition tor review, the amount be ing prayed for to be refunded Is the same witho ut taking Into consideration the tax credit already granted to the petitioner by the r e spondent Commissioner of Internal Revenue, the balanoe that stl 1 I has to be I ltigated and the portion of the olalm that pe r tains to the Bureau of Customs.

On September 23, 1996, respondent tl led a Motion to OlsRi j ss (pp.

113-115, CTA reos.)

on the ground that the olalø for refund had already been approved and granted by the respondent as f o I I ows a In the amount of P1,606,651.02, computed '· DECISION C.T.A.

CASE NO.

5219 Amount of Claim Add:

Output raxes App I i ed Less1 0 I sal I owed I nput Taxes - 4 - DoMestic Purchases P1,421,368.03 P1,421,368.03 201 ,15 . 16 lllportatlons P451,725.32

P45 1

, 7 2 5 . 32 65,227.17 P1,873,093.35 P1,873,093.35 226,442.33 Appi'OVed Refund 220, 152.87 £'3 8 6,498 . 15 P1 ,606,651.02 Respondent further maintained that the Bureau of Internal Revenue already Issued TCC SN 006137 In the amount ot P1,220,152.8"1 (p.

150, BIR recs. > and with respeot to the taxes paid on importations, the Bureau of Customs has the authority to Issue the tax oredlt thereon.

And slnoe the principal Issue of the case has become moot and academia, the case must be dismissed.

Petitioner fl led an Opposition to Motion to Dismiss on October 3, 1996 (pp.

117-122, CTA recs.)

arguing that since petitioner's olalm for refund has not been fully satisfied as a result of dlsal lowance of a portion of Its creditable value added tax I nput I n the amount of P226r,442.33, the motion to dismiss Ia devoid of Merit.

This court resolved (Resolution, pp.124-125, CTA reca. > to deny the Motion to Dismiss tl led by the respondent on the ground that since there was only pƒrtlal grant of the ref und request ed , the case should 4Ct5 \ DECISION C.T.A.

CASE NO.

5219 - 6 - eubalstOwlth regard to the Input taxes disallowed by the respondent In the total amount of P266,442.33.

Considering alI that transpired during the trial of this case, the lone Issue that remains to be resolved Is whether or· not the petItIoner· is entitled to the unapproved balance of c la im for refund amount i ng to P266,442.33.

After oarerul examination of the evldenoes presented by the petitioner before this Court, We are oonvlnoed that the said olalm for r·etund should be denied .

t/rax refunds ar'e in the nature of tax exempt Ions.

As suoh, they are regarded as In d erogation of sovereign authority and to be construed l!_tr.!_ot/ssimi juris aga inst the person or ent i ty olalming the exemption.

The burden of proof Is upon him who oialms the exemption In his favor and he must be able to justify his olalm by the olearest grant of organlo or statute law and oannot be permitted to exist upon vague lmplloatlons <Aetatlo PetroleuM Co.

v.

Llanes, 49 Phil.

466;

Northern Phil.

Tobaooo Corp.

v.

Uun.

of Agoo, La Union, 31 SCRA 304a Reagan v.

CoMMAsaloner, 30 SCRA 968;

Asturias Sugar Central, lno.

v.

CoMMissioner of CustoMs, 29 SCRA 6171 Oavao Light cnd Power Co.

I no.

v.

CoMMissioner of Cuat,OMs, 44 SCRA 122). \ _ /Thus, when tax exempt I on Is otalmed, It must be shown undubltably to exist, for every 486 i I ·' •, 1 i  DECISION C.T.A.

CASE NO.

5219 - 6 - preaumtlon Is against It, and a wei I founded doubt Ia fatal to the olalm (Farrington v.

Tennessee a Country Shelby, 95 U.S.

679, 686;

Manila Eleotrlo Co.

v.

Vera , L- 29987, Oct.

22, 1975;

M an i la Eleotrlo Co.

v.

Tablos, l- r, 23847, Oct.

22, 197b, 67 SCRA 351).

In the case at bar, petitioner failed to prove and substantiate the amount of Its input tax otalm, tor It merely presented its Amended Value Added Tax Returns for the quarters ooverlng the period January 1, 199a to December 31 , 1994, where the amount of cumulative creditable Input taxes ar e reported.

It did not submit In Cour-t the Invoices, official receipts or oth er documents corresponding to the Input taxes claimed whloh would have served as basis for the refund/credit.

WHEREFORE, In view of a I I the foregoing, petitioner 's olaim for Issuance of tax oredlt oertlfloate or refund for the unapproved balance of P266,442.33 Is hereby

DEN IED

tor laok of merit.

No pronouncement as to oosts.

SO ORDERED.

4.G'(

 -Q__

ERNESTO D.

ACOSTA Presiding Judge ' i DECISION C.T.A. CASE NO.

5219 WE v::: l, HAMON 0.

DE V 'A

As soc I ate ,Jud.J' - 7 - I t- C E A ..•.. I F I C A ·r

I 0 N

hereby oertlfy that this deolslon was reached aft$r due consultation among the members of the Court of Tax Appeals In accordance with Section 13, Art tole

VI I I

of the Constitution.

48E  - m - ERNESTO D.

ACOSTA Presiding Judge Court of Tax Appeals