COMMISSIONER OF INTERNAL REVENUE vs.

SAN ROQUE POWER

CORPORATION
G.R. No. 187485, February 12, 2013

FACTS:
On October 11, 1997, San Roque Power Corporation (San Roque) entered into a
Power Purchase Agreement (PPA) with the National Power Corporation (NPC) by
building the San Roque Multi-Purpose Project in San Manuel, Pangasinan. Under the
PPA, San Roque shall be responsible for the design, construction, installation,
completion, testing and commissioning of the Powe Station and shall operate and
maintain the same subject to NPC instructions. During the cooperation period of 25
years commencing from the completion date of the Power Station NPC will take and
pay for all electricity available from the Power Station.
The San Roque Multi-Purpose Project allegedly incurred, excess input VAT in the
amount of P559,709,337.54 for taxable year 2001 which it declared in its Quarterly VAT
Returns filed for the same year.
However, on March 28, 2003, San Roque filed amended Quarterly VAT Returns for the
year2001 since it increased its unutilized input VAT To the amount of P560,200,283.14.
San Roque filed with the BIR on the same date, separate amended claims for refund in
the aggregate amount of P560,200,283.14.

CIR’s inaction on the subject claims led to the filing of the Petition for Review with the
CTA in Division on April 10, 2003.

The CIR filed a Petition for Review before the CTE en banc praying for the denial of
San Roque’s claim for refund or tax credit. The CTA en banc dismissed the CIR’s
petition and cited the case of “CIR v. Toledo Power Inc. and Revenue Memorandum
Circular No. 489-03 dated August 18, 2003that the CIR knows that claims for VAT
refund or tax credit filed with the CTA can proceed simultaneously with the ones filed
with the BIR.

ISSUE:
Whether Revenue Memorandum Circular No. 489-03 can be retroactively applied.

HELD:
NO. BIR Ruling No. DA-489-03 cannot be given retroactive effect for four reasons:
first, it is admittedly an erroneous interpretation of the law;
second, prior to its issuance, the BIR held that the 120-day period was
mandatory and jurisdictional, which is the correct interpretation of the law;
third, prior to its issuance, no taxpayer can claim that it was misled by the BIR
into filing a judicial claim prematurely; and
fourth, a claim for tax refund or credit, like a claim for tax exemption, is strictly
construed against the taxpayer.