Atty. Recuenco - 2022 Chair's Cases in Taxation Law 09022022 (Final)

CHAIR’S CASES IN
TAXATION LAW
SEPTEMBER 2, 2022
TAXATION LAW: SYLLABUS FOR THE
2022 BAR EXAMINATIONS
Political and International Law – General Principles in Taxation
Remedial Law and Legal Ethics – Procedure in Tax Cases
TAXATION LAW: SYLLABUS FOR THE 2022 BAR
EXAMINATIONS
• Political and International Law
• General Principles of Taxation
• Definition, characteristics and purpose of taxation
• Power of taxation as distinguished from police power and eminent domain
• Scope and limitations of taxation
• Inherent and constitutional limitations of taxation
• Territoriality principle and situs of taxation
• Requisites of a valid tax
• Tax as distinguished from other forms of exactions
• Kinds of taxes
EXAMINATIONS
• General Principles of Taxation (cont.)
• Doctrines in taxation
• Lifeblood theory
• Construction and interpretation of tax laws, rules, and regulations
• Prospectivity of tax laws
• Imprescriptibility of taxes
• Double taxation
• Exemption from taxation
• Escape from taxation
• Equitable recoupment
• Prohibition on compensation and set-off
EXAMINATIONS
• Remedial Law and Legal Ethics

• Procedure in Tax Cases
• Tax Remedies under the National Internal Revenue Code of 1997, as amended
• Tax Remedies under the Local Government Code of 1991
• The Court of Tax Appeals (R.A. 1125, as amended, and the Revised Rules of the
Court of Tax Appeals)
• Jurisdiction
• Procedures
• Civil Cases
EXAMINATIONS
• Procedure in Tax Cases (cont.)
• Civil Cases
• Internal Revenue taxes
• Local taxes
• Injunction not available to restrain collection; exceptions
• Criminal Cases
• Appeal to the CTA en banc
• Petition for review on certiorari to the Supreme Court
LIST OF CHAIR’S CASES IN TAXATION
CHAIR’S CASES IN TAXATION LAW
No. Case Title Topic

PAGCOR vs. CIR
1 Tax Exemption
[G.R. No. 210689-90, 210704 & 210725, November 22, 2017]
CIR vs. Systems Technology Institute, Inc.
2 Assessment
[G.R. No. 220835, July 26, 2017]
CIR vs. Deutsche Knowledge Services, Pte. Ltd.
3 Tax Refunds
[G.R. No. 211072, November 7, 2016]
Marubeni Philippines Corp. vs CIR Tax Refunds
4
[G.R. No. 198485, June 5, 2017]
CIR vs. Semirara Mining Corp.
5 Tax Exemptions
[G.R. No. 202922, June 19, 2017]

Procter & Gamble Asia Pte. Ltd. vs. CIR Tax Refunds
6
[G.R. No. 205652, September 6, 2017] Tax Credits
Beaumont Holdings Corp. vs. Reyes Tax Refunds
7 [G.R. No. 207306,August 7, 2017] Real Estate Tax
Tax Sales
Confederation for Unity, Recognition and Advancement of Tax Exemptions
8 Government Employees vs. CIR 13th Month Pay
[G.R. Nos. 213446 & 213658, July 3, 2018] TRAIN Act
Mindanao I Geothermal Partnership vs. CIR VAT
9
[G.R. No. 197519, November 8, 2017] Tax Refunds

Sitel Philippines Corp. vs. CIR Tax Refunds
10 [G.R. No. 201326, February 8, 2017] Tax Credits
Burden of Proof
CIR vs. Hedcor Sibulan, Inc.
11 Delegation of Powers
[September 27, 2017, G.R. No. 209306]
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725,
NOVEMBER 22, 2017]
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• DOCTRINES:
• PAGCOR's tax privilege of paying five percent (5%) franchise tax in lieu of all other taxes
with respect to its income from gaming operations, pursuant to P.D. 1869, as amended,
is not repealed or amended by Section 1(c) of R.A. No. 9337;
• PAGCOR's income from gaming operations is subject to the five percent (5%) franchise
tax only; and
• PAGCOR's income from other related services is subject to corporate income tax only.
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• FACTS:
• PAGCOR is a duly created government instrumentality by virtue of Presidential Decree (PD)
No. 1869.
• PAGCOR's franchise includes the "rights, privilege and authority to operate and maintain
gambling casinos, clubs, and other recreation or amusement places, sports, gaming pools, i.e.,
basketball, football, lotteries, etc. whether on land or sea, within the territorial jurisdiction of
the Republic of the Philippines.
• It is legally empowered to "do and perform such other acts directly related to the efficient
and successful operation and conduct of games of chance in accordance with existing laws and
decrees.
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• Section 13 (2) of PD No. 1869 provides that "[n]o tax of any kind or form, income or otherwise,
as well as fees, charges or levies of whatever nature, whether National or Local, shall be assessed
and collected under this Franchise from [PAGCOR]; nor shall any form of tax or charge attach in
any way to the earnings of [PAGCOR], except a Franchise Tax of five (5%) percent of the gross
revenue or earnings derived by [PAGCOR] from its operation under this Franchise.
• Section 14 (5) of PD No. 1869 also states that PAGCOR "is authorized to operate such
necessary and related services, shows and entertainment;" and "[a]ny income that may be realized
from these related services shall not be included as part of the income of [PAGCOR] for the
purpose of applying the franchise tax, but the same shall be considered as a separate income of the
[PAGCOR] and shall be subject to income tax.
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• January 1, 1998, Republic Act (RA) No. 8424 or the Tax Code took effect wherein PAGCOR,
under Section 27 (C) thereof, was included among the government-owned or -controlled
corporations (GOCCs) exempt from the payment of income tax.
• July 1, 2005, RA No. 9337 amended Section 27 (C) of the 1997 NIRC, by
removing PAGCOR from the list of the GOCCs exempt from payment of income tax.
• On June 20, 2007, RA No. 9487 was enacted extending PAGCOR's franchise under PD No.
1869 for another period of 25 years, renewable for another 25 years.
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• On July 14, 2008, PAGCOR received a letter from BIR, requesting for an informal conference on
the results of an investigation regarding all its internal revenue tax liabilities for the taxable years
(TY) 2005 and 2006.
• On August 11, 2008, PAGCOR received from the CIR a PAN dated July 29, 2008 on its alleged
deficiency IT, VAT, FBT, and DST for TY 2005 and 2006.
• On February 3, 2009*, PAGCOR received from the CIR a FLD, with attached Assessment
Notices all dated December 9, 2008. (*30 days, Sec. 228, Tax Code)
• On March 3, 2009**, PAGCOR filed a letter-protest dated February 16, 2009 to the CIR.
(**180+30 days, Sec. 228, Tax Code)
• On September 29, 2009, PAGCOR filed a petition for review with the CTA***, alleging inaction
on the part of the CIR. (***Sec. 7(a)(2) and Sec. 11, RA 1125, as amended / Rule 42,ROC)
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• CTA Division:
• As to deficiency VAT, PAGCOR is exempt from with no distinction on whether the taxes are
direct or indirect.
• As to deficiency Income Tax, PAGCOR was deleted from the list and ceased to be among
those GOCCs exempt from paying income tax on their taxable income. In other words, RA
No. 9337 effectively withdrew the income tax-exemption granted to PAGCOR under its
charter.
• As to deficiency withholding tax on Fringe Benefits, PAGCOR, as the employer-

withholding agent, has the obligation to withhold the fringe benefit taxes due thereon; and
non-compliance with said obligation renders it personally liable for the tax arising from the
breach of a legal duty.
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• CTA Division:
• Denied the parties' respective motions for partial reconsideration* for lack of merit. (*Sec. 11, 3rd
par., RA 1125, as amended)
• PAGCOR filed an appeal** to the CTA En Banc maintaining that its casino and other related
operations are not subject to taxes. On the other hand, the CIR also filed an appeal** to the
CTA En Banc insisting on PAGCOR's liability for deficiency VAT. (**Sec. 18, RA 1125, as amended)
• CTA En Banc:
• Dismissed both appeals for lack of merit and affirmed Resolution of the CTA Division.
• The parties' respective Motions for Partial Reconsideration*** was denied by the CTA En Banc.
(***Sec. 19, RA 1125, as amended)
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• ISSUES:
• WON PAGCOR is liable for corporate income tax only on its income derived
from other related services?
• WON PAGCOR is liable for payment of withholding taxes on fringe benefits?
• WON PAGCOR is exempt from payment of VAT.

PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• HELD:
• YES, PAGCOR IS LIABLE FOR CORPORATE INCOME TAX ONLY ON ITS INCOME DERIVED
FROM OTHER RELATED SERVICES.
• Income from gaming operations is subject only to 5% franchise tax under PD No. 1869, as amended;
while its income from other related services is subject to corporate income tax pursuant to PD
No. 1869, as amended, in relation to RA No. 9337.
• The Court En Banc clarified that RA No. 9337 did not repeal the tax privilege granted
to PAGCOR under PD No. 1869, with respect to its income from gaming operations.
• What RA No. 9337 withdrew was PAGCOR's exemption from corporate income tax on its income
derived from other related services, previously granted under Section 27 (C) of RA No. 8424.
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• HELD:
• YES, PAGCOR IS LIABLE FOR PAYMENT OF WITHHOLDING TAXES ON FRINGE BENEFITS.
• FBT is not covered by the exemptions provided under PD No. 1869; and considering
that PAGCOR failed to present any evidence showing that the fringe benefits granted to its officers
were necessary to its business or for its convenience*. (*Convenience of the Employer Rule)
• Basic is the rule that mere allegations** are not evidence and are not equivalent to proof. (Tax
Exemptions – not presumed, and who claims tax exemptions must be able to justify his claim or
right)
PAGCOR VS. CIR
[G.R. NO. 210689-90, 210704 & 210725, NOVEMBER 22, 2017]
• HELD:
• YES. PAGCOR IS EXEMPT FROM PAYMENT OF VAT.
• PAGCOR v. BIR, the Court, citing the case of CIR vs. Acesite (Phils.) Hotel Corporation, affirmed PAGCOR's position
that the tax exemption granted under its Charter includes the payment of indirect taxes, such as VAT*. (*Sec.
108(B)(3), Tax Code – Transaction subject to 0% Rate)
• Under Section 13 (2) (b) of P.D. 1869, the term "Corporation" or operator refers to PAGCOR. Although the law
does not specifically mention PAGCOR's exemption from indirect taxes, PAGCOR is undoubtedly exempt
from such taxes because the law exempts from taxes persons or entities contracting
with PAGCOR in casino operations. Although, differently worded, the provision clearly
exempts PAGCOR from indirect taxes.
CIR VS. SYSTEMS TECHNOLOGY
INSTITUTE, INC.
[G.R. NO. 220835, JULY 26, 2017]
CIR VS. SYSTEMS TECHNOLOGY INSTITUTE, INC.
[G.R. NO. 220835, JULY 26, 2017]
• DOCTRINES:
• In general, CIR’s period to assess and collect* internal revenue taxes to three (3) years
counted from the last day prescribed by law for the filing of the return or from the day
the return was filed, whichever comes later.Thus, assessments issued after the expiration
of such period are no longer valid and effective. (*Sec. 203 and 222, Tax Code)
• The government must assess internal revenue taxes on time so as not to extend
indefinitely the period of assessment and deprive the taxpayer of the assurance that it
will no longer be subjected to further investigation for taxes after the expiration of a
reasonable period of time.
[G.R. NO. 220835, JULY 26, 2017]
• DOCTRINES:
• The BIR issued Revenue Memorandum Order (RMO) No. 20-90 and Revenue Delegation
Authority Order (RDAO) No. 05-01, outlining the procedures for the proper execution
of a valid waiver*, among others:. (*Sec. 222(b), Tax Code)
• The waiver must be signed by the taxpayer himself or his duly authorized representative. In
the case of a corporation, the waiver must be signed by any of its responsible officials. In case
the authority is delegated by the taxpayer to a representative, such delegation should be in
writing and duly notarized.
• Both the date of execution by the taxpayer and date of acceptance by the Bureau should be
before the expiration of the period of prescription or before the lapse of the period agreed
upon in case a subsequent agreement is executed.
[G.R. NO. 220835, JULY 26, 2017]
• DOCTRINES:
• The BIR cannot hide behind the doctrine of estoppel to cover its failure to comply with
RMO 20-90 and RDAO 05-01, which the BIR itself had issued. Having caused the defects
in the waivers, the BIR must bear the consequence. It cannot simply shift the blame to
the taxpayer.
[G.R. NO. 220835, JULY 26, 2017]
• FACTS:
• STI filed its Amended Annual Income Tax Return for fiscal year 2003; its Quarterly VAT
Returns and its BIR Form 1601E for EWT for various dates in 2002-2003.
• On May 30, 2006, STI signed a Waiver of the Defense of Prescription Under the Statute of
Limitations of the National Internal Revenue Code (the “Waiver”), with the proviso that the
assessment and collection of taxes of fiscal year 2003 shall come "no later than December 31,
2006."
• On June 2, 2006, the waiver was accepted the BIR and was notarized on even date.
[G.R. NO. 220835, JULY 26, 2017]
• On December 12, 2006, another waiver was executed extending the period to assess and
collect the assessed taxes to March 31, 2007. It was also signed and accepted by the BIR and
notarized on the same date.
• A third waiver was executed by the same signatories extending further the period to June 30,
2007.
• On June 28, 2007, STI received a FAN* from the CIR, assessing STI for deficiency income
tax,VAT and EWT for fiscal year 2003. (*30 days, Sec. 228, Tax Code)
• On July 25, 2007, STI filed a request for reconsideration/reinvestigation** dated July 23, 2007.
(**reinvestigation vs. reconsideration, Sec. 228, Tax Code)
[G.R. NO. 220835, JULY 26, 2017]
• On September 11, 2009, STI received from the CIR the Final Decision on Disputed
Assessment (FDDA) dated August 17, 2009 finding STI liable for deficiency income tax,VAT
and EWT.
• On October 12, 2009*, STI appealed the FDDA by filing a petition for review** with the
CTA (*If the last day of the period, as thus computed, falls on a Saturday a Sunday, or a legal
holiday in the place where the court sits, the time shall not run until the next working day,
Rule 22, Sec 1, ROC)
(**Sec. 7(a)(1) and Sec. 11, RA 1125, as amended / Rule 42,ROC)

[G.R. NO. 220835, JULY 26, 2017]
• CTA Division
• Cancels the assessment on the ground of prescription.
• Waivers executed by STI defective for failing to strictly comply with the requirements
provided by RMO No. 20-90 and RDAO No. 05-01.
• Consequently, the periods for the CIR to assess or collect internal revenue taxes were never
extended; and the subject assessment for deficiency income tax,VAT and EWT against STI,
which the CIR issued beyond the three-year prescriptive period provided by law, was already
barred by prescription.
• CIR filed a motion for reconsideration*, but this was denied by the CTA Division. (*Sec. 11, 3rd
par., RA 1125, as amended)
• The CIR appealed** to the CTA En Banc. (**Sec. 18, RA 1125, as amended)
[G.R. NO. 220835, JULY 26, 2017]
• CTA En Banc
• Denied the CIR's petition for lack of merit.
• Affirming the decision of CTA Division, the execution of a waiver must be strictly complied
with; otherwise, the waiver will be rendered defective and the period to assess or collect
taxes will not be extended.
• It further held that the execution of a waiver did not bar STI from questioning the validity
thereof or invoking the defense of prescription.
[G.R. NO. 220835, JULY 26, 2017]
• ISSUES:
• WON the Waivers of Statute of Limitations executed between STI and BIR is valid?
[G.R. NO. 220835, JULY 26, 2017]
• HELD:
• NO, WAIVERS OF STATUTE OF LIMITATIONS EXECUTED BETWEEN STI AND BIR IS
INVALID.
• The CTA Division found that the last day for the CIR to issue an assessment on STI's income tax
for fiscal year ending March 31, 2003 was on August 15, 2006.
• While the latest date for the CIR to assess STI of EWT for the fiscal year ending March 31, 2003
was on April 17, 2006;
• The latest date for the CIR to assess STI of deficiency VAT for the four quarters of the same
fiscal year was on May 25, 2006.
• Clearly, on the basis of these dates, the Final Assessment Notice dated June 16, 2007, assessing
STI for deficiency income tax,VAT and EWT for fiscal year 2003, which STI received on June 28,
2007, was issued beyond the three-year prescriptive period.
[G.R. NO. 220835, JULY 26, 2017]
• CTA's finding that the waivers subject of this case suffer from the following defects:
• At the time when the first waiver took effect, on June 2, 2006, the period for the CIR to assess STI
for deficiency EWT and deficiency VAT for fiscal year ending March 31, 2003, had already prescribed.
To recall, the CIR only had until April 17, 2006 (for EWT) and May 25, 2006 (for VAT),to issue the
subject assessments.
• STI's signatory to the three waivers had no notarized written authority from the corporation's
board of directors. It bears to emphasize that RDAO No. 05-01 mandates the authorized revenue official
to ensure that the waiver is duly accomplished and signed by the taxpayer or his authorized
representative before affixing his signature to signify acceptance of the same; and in case the authority is
delegated by the taxpayer to a representative, as in this case, the concerned revenue official shall see to it
that such delegation is in writing and duly notarized. The waiver should not be accepted by the
concerned BIR office and official unless notarized.
[G.R. NO. 220835, JULY 26, 2017]
• Similar to Standard Chartered Bank Case, the waivers in this case did not specify the kind
of tax and the amount of tax due. It is established that a waiver of the statute of
limitations is a bilateral agreement between the taxpayer and the BIR to extend the
period to assess or collect deficiency taxes on a certain date.
• Logically, there can be no agreement if the kind and amount of the taxes to be assessed
or collected were not indicated. Hence, specific information in the waiver is necessary
for its validity.
[G.R. NO. 220835, JULY 26, 2017]
• ISSUE ON ESTOPPEL: As regards the CIR's reliance on the case of RCBC Case and its
insistence that STI's request for reinvestigation, which resulted in a reduced assessment, bars
STI from raising the defense of prescription, the Court finds the same bereft of merit.
• The estoppel upheld in the said case arose from the taxpayer's act of payment and not on
the reduction in the amount of the assessed taxes. The Court explained that RCBC's partial
payment of the revised assessments effectively belied its insistence that the waivers are invalid
and the assessments were issued beyond the prescriptive period.
• Here, as no such payment was made by STI, mere reduction of the amount of the assessment
because of a request for reinvestigation should not bar it from raising the defense of
prescription.
CIR VS. DEUTSCHE KNOWLEDGE
SERVICES, PTE. LTD.
[G.R. NO. 211072, NOVEMBER 7, 2016]
CIR VS. DEUTSCHE KNOWLEDGE SERVICES, PTE. LTD.
[G.R. NO. 211072, NOVEMBER 7, 2016]
• DOCTRINES:
• A value-added tax (VAT)-registered taxpayer claiming for a refund or tax credit of its excess
and unutilized input VAT must file an administrative claim within two (2) years from the close
of the taxable quarter when the sales are made. (Sec. 112(A), Tax Code vis-à-vis Sec. 229, Tax
Code)
• The two (2)-year prescriptive period under Section 112(A) of Tax Code* pertains only to the
filing of the administrative claim with the BIR; (*versus Sec. 229, 2nd Par. , Tax Code)
• While the judicial claim may be filed with the CTA within thirty (30) days from the receipt
of the decision of the Commissioner of Internal Revenue (CIR) or expiration of one hundred
twenty (120)**-day period of the CIR to act on the claim. (**90-day period, Sec. 112(C), Tax
Code, as amended by TRAIN Act, Effective: January 1, 2018)
[G.R. NO. 211072, NOVEMBER 7, 2016]
• DOCTRINES:
• The one hundred twenty (120)-day period is permissible from December 10, 2003,
when BIR Ruling No. DA-489-03 was issued, until October 6, 2010, when Aichi Forging
Case was promulgated.
• But before and after said period, the observance of the 120-day** period is
mandatory and jurisdictional. (**90-day period, Sec. 112(C), Tax Code, as amended by
TRAIN Act, Effective: January 1, 2018)
[G.R. NO. 211072, NOVEMBER 7, 2016]
• FACTS:
• DKS is the Philippine branch of a multinational company organized and existing under and by the
virtue of the laws of Singapore. It is licensed to do business as a regional operating headquarters in
the Philippines.
• On July 25, 2007, DKS filed its original Quarterly VAT Return for the 2nd quarter of CY 2007
with the BIR.
• On June 18, 2009, DKS filed with the BIR an Application for Tax Credits/Refunds of its excess and
unutilized input VAT for the 2nd quarter of CY 2007.
• On June 30, 2009, or even before any action by the CIR on its administrative claim, DKS
filed a Petition for Review* with the CTA. (*Sec. 7(a)(2) and Sec. 11, RA 1125, as amended / Rule 42,
ROC)
[G.R. NO. 211072, NOVEMBER 7, 2016]
• On October 6, 2010, while DKS's claim for refund or tax credit was pending before the
CTA First Division, this Court promulgated Aichi Forging Case where SC held that compliance
with the 120-day period granted to the CIR, within which to act on an administrative claim for
refund or credit of unutilized input VAT, as provided under Section 112 (C) of the Tax Code, is
mandatory and jurisdictional in filing an appeal with the CTA.
• On February 21, 2011, the CIR filed a Motion to Dismiss, stating that the CTA First Division
lacked jurisdiction because respondent's Petition for Review was prematurely filed.
[G.R. NO. 211072, NOVEMBER 7, 2016]
• CTA Division
• Dismissed respondent's judicial claim.
• The petition for review filed by DKS on June 30, 2009, or barely twelve (12) days after
the filing of its administrative claim for refund, was clearly premature justifying its
dismissal.
• DKS moved for reconsideration*, but the same was denied by the CTA First Division in its
Resolution. (*Sec. 11, 3rd par., RA 1125, as amended)
• DKS appealed** to the CTA En Banc. (**Sec. 18, RA 1125, as amended)
[G.R. NO. 211072, NOVEMBER 7, 2016]
• CTA en banc
• Affirming the Resolutions of the CTA First Division.
• It agreed with the CTA First Division in applying the ruling in Aichi which warranted the
dismissal of DKS's judicial claim for refund on the ground of prematurity.
• However, invoking this Court's pronouncements in San Roque case, DKS moved for
reconsideration. The CTA En Banc found merit in said motion and rendered the assailed
Amended Decision – remanded to the court of origin for further proceedings.
[G.R. NO. 211072, NOVEMBER 7, 2016]
• ISSUES:
• WON the CTA En Banc erred in taking cognizance of the case and holding that DKS's petition
for review was not prematurely filed with the CTA First Division?
[G.R. NO. 211072, NOVEMBER 7, 2016]
• HELD:
• NO, CTA EN BANC IS CORRECT IN TAKING COGNIZANCE OF THE CASE AND HOLDING
THAT DKS'S PETITION FOR REVIEW WAS NOT PREMATURELY FILED WITH THE CTA FIRST
DIVISION.
• Based on the plain language of the Section 112(A)(C) of the Tax Code, a VAT-registered taxpayer
claiming for a refund or tax credit of its excess and unutilized input VAT must file an administrative
claim within two (2) years from the close of the taxable quarter when the sales are made.
• After that, the CIR is given 120 days, from the submission of complete documents in support of said
administrative claim, within which to grant or deny said claim.
• Upon receipt of CIR's decision, denying the claim in full or partially, or upon the expiration of the
120-day period without action from the CIR, the taxpayer has 30 days within which to file a petition
for review with the CTA.
[G.R. NO. 211072, NOVEMBER 7, 2016]
• In San Roque Case, while the Court reiterated the mandatory and jurisdictional nature of
the 120+30-day periods, it recognized as an exception BIR Ruling No. DA-489-03, issued prior
to the promulgation of Aichi, where the BIR expressly allowed the filing of judicial claims with
the CTA even before the lapse of the 120-day period.
• The Court held that BIR Ruling No. DA-489-03 furnishes a valid basis to hold the CIR in
estoppel because the CIR had misled taxpayers into filing judicial claims before the CTA even
before the lapse of the 120-day period.
• Records show that DKS filed its administrative and judicial claim for refund on June 18, 2009
and June 30, 2009, respectively, or after the issuance of BIR Ruling No. DA-489-03
(December 10, 2003 to October 6, 2010), but before the date when Aichi was promulgated.
[G.R. NO. 211072, NOVEMBER 7, 2016]
• Application and validity of BIR Ruling No. DA-489-03.

• It has already been settled in San Roque Case that BIR Ruling No. DA-489-03 is a general
interpretative rule which all taxpayers may rely upon from the time of its issuance on
December 10, 2003 until its effective reversal by the Court in Aichi Case.
• While RR 16-2005 (Consolidated Value-Added Tax Regulations) may have re-established
the necessity of the 120-day period, taxpayers cannot be faulted for still relying on BIR
Ruling DA-489-03 even after the issuance of RR 16-2005 because the issue on the
mandatory compliance of the 120-day period was only brought before the Court and
resolved with finality in Aichi.
[G.R. NO. 211072, NOVEMBER 7, 2016]
• Portion BIR Ruling No. DA-489-03.

• “In reply, please be informed that a taxpayer-claimant need not wait for the lapse of
the 120-day period before it could seek judicial relief with the CTA by way of
Petition for Review. Neither is it required that the Commissioner should first act
on the claim of a particular taxpayer before the CTA may acquire jurisdiction,
particularly if the claim is about to prescribe. The Tax Code fixed the period of two (2)
years for filing a claim for refund with the Commissioner [Sec. 112(A) in relation to Sec.
204(c)] and for filing a case in court [Section 229]. Hence, a decision of the
Commissioner is not a condition or requisite before the taxpayer can resort to
the judicial remedy afforded by law.”
MARUBENI PHILIPPINES CORP. VS CIR
[G.R. NO. 198485, JUNE 5, 2017]
[G.R. NO. 198485, JUNE 5, 2017]
• DOCTRINES:
• Section 112 of the Tax Code provides for the rules on claiming refunds of and/or the
issuance of a tax credit certificate (TCC) for unutilized input VAT.
• According to the Court in Mindanao II Geothermal Partnership vs. CIR, it is the above quoted
Section 112(C) of the Tax Code that applies to the judicial claim for refund, and, citing
San Roque Case, compliance with the 120+30-day period is mandatory and jurisdictional.
• Failure to observe the one hundred twenty (120) days prior to filing of a judicial claim for
refund is not a mere non-exhaustion of administrative remedies but is jurisdictional in
nature.
[G.R. NO. 198485, JUNE 5, 2017]
• FACTS:
• On April 25, 2000, Marubeni filed its Quarterly VAT Return for the 1st quarter of Calendar
Year (CY) 2000 with the BIR.
• On March 27, 2002, Marubeni filed with the BIR a written claim for a refund and/or the
issuance of a TCC, which it later amended on April 25, 2002, reducing its claim
• On the same date, Marubeni filed a petition for review* before the CTA claiming a refund
and/or issuance of a TCC. (*Sec. 7(a)(2) and Sec. 11, RA 1125, as amended / Rule 42, ROC)
[G.R. NO. 198485, JUNE 5, 2017]
• CTA Division
• CTA Second Division dismissed Marubeni's judicial claim.
• The CTA Second Division ruled that following \Mirant Pagbilao Case, Marubeni timely filed its
administrative claim for refund and/or the issuance of a TCC on March 27, 2002, which was
within the two-year period from the close of the 1st quarter of CY 2000 (April 25, 2000),
• But that Marubeni's judicial claim for refund and/or issuance of TCC that was filed on April 25,
2002 (or the same day Marubeni amended its administrative claim for a refund and/or the issuance
of a TCC) was late because this should have been filed also within the two-year period
from the close of the 1st quarter of CY 2000.
• Marubeni moved for reconsideration*, but this was denied by the CTA Second Division in its
Resolution. (*Sec. 11, 3rd par., RA 1125, as amended)
[G.R. NO. 198485, JUNE 5, 2017]
• CTA en banc
• The CTA En Banc agreed with the CTA Second Division that Marubeni timely filed its
administrative claim for refund.
• But as to Marubeni's judicial claim for refund, the CTA En Banc ruled that following Section
112 (D) Tax Code and the Court's ruling in Aichi Forging Case, the filing of the petition for
review with the CTA was premature.
• According to the CTA En Banc, Marubeni should have filed its petition for review with the
CTA 30 days from receipt of the decision of the CIR denying the claim or after the expiration
of the 120-day period from the filing of the administrative claim with the CIR.
[G.R. NO. 198485, JUNE 5, 2017]
• ISSUES:
• WON the Aichi is applicable to its claim for refund
• WON Aichi should only be applied prospectively
[G.R. NO. 198485, JUNE 5, 2017]
• HELD:
• NO, AICHI IS NOT APPLICABLE TO ITS CLAIM FOR REFUND, AND AICHI SHOULD
ONLY BE APPLIED PROSPECTIVELY.
• The issue of the retroactive application of Aichi and the applicability of Atlas was also raised
in Mindanao II Geothermal Case.The facts and issue here and in Mindanao II are identical,
except only for the covered taxable period — Marubeni's claim involved the 1st quarter
of CY 2000, while the claim in Mindanao II involved different quarters of CY 2003.
• he Court ruled in Mindanao II that a taxpayer cannot claim that Atlas, which was
promulgated on June 8, 2007, is controlling on the timeliness of a judicial claim that was filed
prior to June 8, 2007. According to the Court, it is the 1997 Tax Code, which took effect
on January 1, 1998, that applies to the taxpayer.
[G.R. NO. 198485, JUNE 5, 2017]
• Similarly, it was misleading for Marubeni to invoke Atlas given that Atlas could not have been
applicable as it was promulgated years after Marubeni had filed its administrative and judicial
claims in 2002; accordingly, it cannot escape the applicability of the 1997 Tax Code.
• Marubeni therefore failed to comply with the mandatory and jurisdictional requirement of
Section 112 (C) when it filed its petition for review with the CTA on April 25, 2002, or just 29
days after filing its administrative claim before the BIR on March 27, 2002.
• Since Marubeni filed its judicial claim for refund on April 25, 2002, it could not benefit from
BIR Ruling No. DA-489-03 that was subsequently issued on December 10, 2003.
CIR VS. SEMIRARA MINING CORP.
[G.R. NO. 202922, JUNE 19, 2017]
[G.R. NO. 202922, JUNE 19, 2017]
• DOCTRINES:
• It is a fundamental rule in statutory construction that a special law cannot be repealed or
modified by a subsequently enacted general law in the absence of any express provision in the
latter law to that effect. A special law must be interpreted to constitute an exception to the
general law in the absence of special circumstances warranting a contrary conclusion.
• Semirara Mining Corporation (SMC) is exempt from the payment of VAT on the sale of coal
produced under its Coal Operating Contract (COC), because Section 16(a) of Presidential
Decree (PD) No. 972, a special law, grants SMC exemption from all national taxes except
income tax.
[G.R. NO. 202922, JUNE 19, 2017]
• DOCTRINES:
• Settled is the rule that the SC will not lightly set aside the factual* conclusions reached by the
CTA which, by the very nature of its function of being dedicated exclusively to the resolution
of tax problems, has accordingly developed an expertise on the subject, unless there has been
an abuse or improvident exercise of authority. (*Secs. 8 and 12, of RA 1125, as amended)
[G.R. NO. 202922, JUNE 19, 2017]
• FACTS:
• SMC conducts business by virtue of Presidential Decree (PD) No. 972, otherwise known as
the "Coal Development Act of 1976”.
• On June 8, 1983, Semirara Coal Corporation (SCC) executed a Coal Operating
Contract (COC) with the Ministry of Energy (now Department of Energy) through the
Bureau of Energy Development. The term of the COC is until the year 2012. In 2002, SCC
changed its corporate name to SMC.
• As a coal mine operator, SMC sells its coal production, under the COC, to various customers,
among which is the National Power Corporation (NPC),a government-owned and controlled
corporation, in accordance with the duly executed Coal Supply Agreement.
[G.R. NO. 202922, JUNE 19, 2017]
• SMC has been selling coal to NPC for years without paying VAT pursuant to the exemption
granted under Section 16 of PD No. 972.
• However, after Republic Act (RA) No. 9337, which amended certain provisions of the Tax
Code, took effect on July 1, 2005, NPC started to withhold a tax of five percent (5%)
representing the final withholding VAT on SMC's coal billings pursuant to Section 114 (C) of
Tax Code (i.e. Sale to Government), on the belief that the sale of coal by SMC was no longer
exempt from VAT.
• SMC requested for a BIR pronouncement sustaining its position that its sale of coal to NPC
was still exempt from VAT notwithstanding RA No. 9337, which the BIR granted.
[G.R. NO. 202922, JUNE 19, 2017]
• SMC filed with the BIR for a refund or issuance of a TCC, representing the final withholding
VAT withheld by NPC on its coal billing for the period of July 1, 2006 to December 31, 2006.
• Due to the CIR's inaction, SMC filed on August 8 and November 10, 2008 its petitions for
review* with the CTA Division. (*Sec. 7(a)(2) and Sec. 11, RA 1125, as amended / Rule 42,
ROC)
[G.R. NO. 202922, JUNE 19, 2017]
• CTA Division
• Gants the SMC's refund claim for erroneously paid final VAT withheld by NPC.
• The CIR moved for reconsideration* but this was denied by the CTA Division in a Resolution.
(*Sec. 11, 3rd par., RA 1125, as amended)
• The CIR appealed** to the CTA En Banc. (**Sec. 18, RA 1125, as amended)
[G.R. NO. 202922, JUNE 19, 2017]
• CTA en banc
• CTA En Banc dismissed the CIR's petition for lack of merit.
[G.R. NO. 202922, JUNE 19, 2017]
• ISSUE:
• WON the CTA erred in holding that the transaction of sale or importation of coal is exempt
from VAT.
[G.R. NO. 202922, JUNE 19, 2017]
• HELD:
• NO, CTA DID NOT ERRED IN HOLDING THAT THE TRANSACTION OF SALE OR
IMPORTATION OF COAL IS EXEMPT FROM VAT.
• SMC's claim for VAT exemption is anchored not on the paragraph deleted by RA No.
9337 from the list of VAT exempt transactions under Section 109 of the Tax Code, but on the
tax incentives granted to operators of COCs executed pursuant to PD No. 972.
• SEC. 16. Incentives to Operators. — The provisions of any law to the contrary notwithstanding, a
contract executed under this Decree may provide that the operator shall have the following
incentives:
• Exemption from all taxes except income tax;
[G.R. NO. 202922, JUNE 19, 2017]
• As VAT is one of the national internal revenue taxes, it falls within the tax exemptions provided under PD No. 972.
• Section 16 of PD No. 972 was, in turn, incorporated in the terms and conditions of SMC's COC, to wit:
SECTION V — RIGHTS AND OBLIGATIONS OF THE PARTIES
xxx xxx xxx
5.2 The OPERATOR shall have the following rights:
a) Exemption from all taxes (national and local) except income tax;
• The Court agrees with the CTA that the tax exemption provided under Section 16 of PD No. 972 was not revoked, withdrawn
or repealed — expressly or impliedly — by Congress with the enactment of RA No. 9337.
• It is a fundamental rule in statutory construction that a special law cannot be repealed or modified by a subsequently enacted
general law in the absence of any express provision in the latter law to that effect. A special law must be interpreted to
constitute an exception to the general law in the absence of special circumstances warranting a contrary conclusion. The
repealing clause of RA No. 9337, a general law, did not provide for the express repeal of PD No. 972, a special law.
PROCTER & GAMBLE ASIA PTE. LTD.VS.
CIR
[G.R. NO. 205652, SEPTEMBER 6, 2017]
PROCTER & GAMBLE ASIA PTE. LTD.VS. CIR
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• DOCTRINES:
• Section 112 of the Tax Code, provides for the rules on claiming refunds or tax credits of
unutilized input VAT.
• In San Roque Case (2013), while the SC reiterated the mandatory and jurisdictional nature of
the 120+30-day periods, it recognized as an exception BIR Ruling No. DA-489-03, issued prior
to the promulgation of the Aichi Forging Case (2010), where the BIR expressly allowed the filing
of judicial claims with the CTA even before the lapse of the one hundred twenty (120)-day
period.
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• FACTS:
• P&G filed its Monthly VAT Declarations and Quarterly VAT Returns on the following dates.
VAT RETURN/ DATE FILED DATE FILED
DECLARATION (ORIGINAL) (AMENDED)
January (Monthly) February 21, 2005
February (Monthly) March 18, 2005
Ending March (Quarterly) April 25, 2005 March 19, 2007
April (Monthly) May 20, 2005
May (Monthly) June 21, 2005
Ending June (Quarterly) July 26, 2005 March 20, 2007
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• On March 22, 2007 and May 2, 2007, P&G filed applications and letters addressed to the
BIR requesting the refund or issuance of TCCs of its input VAT attributable to its zero-rated
sales covering the taxable periods of January 2005 to March 2005, and April 2005 to
June 2005.
• On March 28, 2007, P&G filed a petition for review* with the CTA seeking the refund or
issuance of TCC representing input VAT paid on goods or services attributable to its zero-
rated sales for the first quarter of taxable year 2005. (*Sec. 7(a)(2) and Sec. 11, RA 1125,
as amended / Rule 42, ROC)
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• On June 8, 2007, P&G filed with the CTA another judicial claim for refund or issuance of
TCC representing its unutilized input VAT paid on goods and services attributable to its zero-
rated sales for the second quarter of taxable year 2005.
• On October 6, 2010, while P&G's claim for refund or tax credit was pending before the
CTA Division, the SC promulgated the Aichi Forging Case In that case, the Court held that
compliance with the 120-day period granted to the CIR, within which to act on an
administrative claim for refund or credit of unutilized input VAT, as provided under Section
112 (C) of the National Internal Revenue Code of 1997 (NIRC), as amended, is mandatory
and jurisdictional in filing an appeal with the CTA.
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• CTA Division
• Dismissed P&G's judicial claim, for having been prematurely filed.
• Its judicial claims were prematurely filed with the CTA on March 28, 2007 (CTA Case No.
7581) and June 8, 2007 (CTA Case No. 7639), or only six (6) days and thirty-seven (37) days,
respectively, from the filing of the applications at the administrative level.
• Thus, the CTA Division ruled that inasmuch as P&G's petitions were prematurely filed, it did
not acquire jurisdiction over the same.
• P&G moved for reconsideration* but this was denied by the CTA Division in its Resolution.
(*Sec. 11, 3rd par., RA 1125, as amended)
• P&G appealed** to the CTA En Banc. (**Sec. 18, RA 1125, as amended)
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• CTA en banc
• P&G argued that the Court's ruling in Aichi should not be given a retroactive effect.
• CTA En Banc rendered the assailed Decision affirming in toto the CTA Division's Decision and
Resolution. It agreed with the CTA Division in applying the ruling in Aichi which warranted the
dismissal of P&G's judicial claim for refund on the ground of prematurity.
• P&G moved for reconsideration, but the same was denied by the Court En Banc for lack of merit.
• In the meantime, on February 12, 2013, SC decided the consolidated cases of CIR vs. San Roque
Power Corporation,Taganito Mining Corporation vs. CIR, and Philex Mining Corporation v. CIR (San Roque),
where the Court recognized BIR Ruling No. DA-489-03 as an exception to the mandatory
and jurisdictional nature of the 120-day waiting period.
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• ISSUE:
• WON the CTA En Banc erred in dismissing P&G's judicial claims for refund on the ground of
prematurity?
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• HELD:
• YES, CTA EN BANC ERRED IN DISMISSING P&G'S JUDICIAL CLAIMS FOR REFUND ON THE
GROUND OF PREMATURITY.
• RULE: In Aichi, the Court ruled that compliance with the 120+30-day periods is mandatory and
jurisdictional and is fatal to the filing of a judicial claim with the CTA.
• EXCEPTION: Subsequently, however, in San Roque, while the Court reiterated the mandatory and
jurisdictional nature of the 120+30-day periods, it recognized as an exception BIR Ruling No. DA-
489-03, issued prior to the promulgation of Aichi, where the BIR expressly allowed the filing of
judicial claims with the CTA even before the lapse of the 120-day period.
• The Court held that BIR Ruling No. DA-489-03 furnishes a valid basis to hold the CIR in estoppel
because the CIR had misled taxpayers into filing judicial claims with the CTA even before the lapse
of the 120-day period.
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• Summary:
• When to file an administrative claim with the CIR:
• General rule — Section 112(A) and Mirant - within 2 years from the close
of the taxable quarter when the sales were made.
• Exception — Atlas - Within 2 years from the date of payment of the output
VAT, if the administrative claim was filed from June 8, 2007 (promulgation
of Atlas) to September 12, 2008 (promulgation of Mirant).
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• Summary:
• When to file an administrative claim with the CIR:
• General rule — Section 112(A) and Mirant - within 2 years from the close
of the taxable quarter when the sales were made.
• Exception — Atlas - Within 2 years from the date of payment of the output
VAT, if the administrative claim was filed from June 8, 2007 (promulgation
of Atlas) to September 12, 2008 (promulgation of Mirant).
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• Summary:
• When to file a judicial claim with the CTA:
• General rule — Section 112(D); not Section 229
• Within 30 days from the full or partial denial of the administrative claim by the CIR; or
• Within 30 days from the expiration of the 120-day period provided to the CIR to decide on
the claim. This is mandatory and jurisdictional beginning January 1, 1998 (effectivity of 1997
NIRC).
• Exception — BIR Ruling No. DA-489-03
• The judicial claim need not await the expiration of the 120-day period, if such was filed from
December 10, 2003 (issuance of BIR Ruling No. DA-489-03) to October 6, 2010 (promulgation
of Aichi).
[G.R. NO. 205652, SEPTEMBER 6, 2017]
• In this case, records show that P&G filed its judicial claims for refund on March 28,
2007 and June 8, 2007, respectively, or after the issuance of BIR Ruling No. DA-489-03,
but before the date when Aichi was promulgated.
• Thus, even though P&G filed its judicial claim without waiting for the expiration of the
120-day mandatory period, the CTA may still take cognizance of the case because the
claim was filed within the excepted period stated in San Roque.
• In other words, P&G's judicial claims were deemed timely filed and should not have been
dismissed by the CTA.
BEAUMONT HOLDINGS CORP. VS. REYES
[G.R. NO. 207306, AUGUST 7, 2017]
BEAUMONT HOLDINGS CORP.VS. REYES
[G.R. NO. 207306, AUGUST 7, 2017]
• DOCTRINES:
• Section 267 operates only within the purview of real property taxation (Title II). The
pertinent tax involved is only real property tax or realty tax. Thus, the reason for the “sale at
public auction of the real property or rights therein” in Section 267 is obviously because of
nonpayment of realty tax and no other. Accordingly, the precondition for the operation of
Section 267 is the realty tax delinquency of the property. If the property is current in its realty
tax or not realty tax delinquent, then it should not be the subject of a sale at public auction as
contemplated in Section 267.
[G.R. NO. 207306, AUGUST 7, 2017]
• FACTS:
• This case calls for the interpretation and application of Section 267, Title II (Real Property Taxation),
Book II of the LGC, to wit:
• SEC. 267. Action Assailing Validity of Tax Sale. — No court shall entertain any action assailing the validity of any sale
at public auction of real property or rights therein under this Title until the taxpayer shall have deposited with
the court the amount for which the real property was sold, together with interest of two percent (2%) per
month from the date of sale to the time of the institution of the action. The amount so deposited shall be paid to
the purchaser at the auction sale if the deed is declared invalid but it shall be returned to the depositor if the
action fails.
• Neither shall any court declare a sale at public auction invalid by reason of irregularities or informalities in the
proceedings unless the substantive rights of the delinquent owner of the real property or the person having legal
interest therein have been impaired. (Underscoring and emphasis supplied)
[G.R. NO. 207306, AUGUST 7, 2017]
• BHC is the registered owner of two parcels of land located in Fort Bonifacio, Taguig City.
• The City Government of Taguig (Taguig City) sent two letters dated November 6, 2007 to BHC,
requiring the settlement of real property taxes on the subject two lots for the years 2005, 2006, and
the 4th quarter of 2007.
• BHC paid P825,370.86 to the City Treasurer's Office of Taguig City for which Official Receipt No.
8625735 V dated November 29, 2007 was issue.
• Even prior to the November 6, 2007 letters, the subject two lots had already been declared
delinquent pursuant to a Notice of Delinquency, levied upon through a Warrant of Levy, advertised for
sale by public auction to satisfy the taxes, penalties due and costs of sale in the amounts of P224,670.48
and P223,100.73 for the subject two lots, respectively, and were sold at public auction to respondent
Mark Anthony M. Litonjua (Litonjua) on November 15, 2007.
[G.R. NO. 207306, AUGUST 7, 2017]
• On May 25, 2010, BHC filed a Complaint before the RTC alleging that there was no valid
justification to sell the subject two lots at public auction given the fact that it had paid and
settled the required real property taxes within the month of November 2007 pursuant to the
letters sent by Taguig City.
• Respondent city officials filed an Answer seeking the dismissal of the Complaint for lack of
merit.
• Litonjua filed a Motion to Dismiss wherein he sought the dismissal of the Complaint for lack
of jurisdiction for non-compliance with the requirements for an action to assail the validity of
a tax delinquency sale under Section 267.
[G.R. NO. 207306, AUGUST 7, 2017]
• RTC
• RTC dismissed the Complaint for lack of jurisdiction.
• Whether or not the plaintiff is a delinquent taxpayer is of no moment in determining whether
Section 267 is applicable herein. So long as the plaintiff assails the validity of the tax sale at public
auction then Section 267 is applicable. As such, the plaintiff must deposit with the Court the amount
for which the real property was sold together with interest of Two Percent (2%) per month from
the date of sale to the time of the institution of the action. This had been so required by the
Supreme Court in the case of National Housing Authority vs[.] Iloilo City, et al.
[G.R. NO. 207306, AUGUST 7, 2017]
• CA
• BHC appealed to the CA the RTC Resolution
• The CA, in a Decision, affirmed the ruling of the RTC.
• The CA explained that the deposit required in Section 267 is a jurisdictional requirement, the
non-payment of which warrants the dismissal of the action assailing the validity of the tax sale.
• BHC's Motion for Reconsideration was denied by the CA in a Resolution.
[G.R. NO. 207306, AUGUST 7, 2017]
• ISSUE:
• WON the CA erred in rendering the assailed Decision and Resolution?
[G.R. NO. 207306, AUGUST 7, 2017]
• HELD:
• YES, CA ERRED IN RENDERING THE ASSAILED DECISION AND RESOLUTION.
• The ratio behind the deposit requirement as succinctly espoused in NHA is to ensure and
guarantee the collection and satisfaction of the tax delinquency.
• In the present case, the very issue raised in the Petition is the invalidity of the auction sales on
the ground that the subject properties are not tax delinquent. On the assumption that the subject
two lots are not tax delinquent, then there is no need for the deposit requirement under
Section 267 because the realty taxes due on the subject two lots have already been paid and
there are no tax delinquencies to be collected or satisfied.
[G.R. NO. 207306, AUGUST 7, 2017]
• The required deposit under Section 267 becomes jurisdictional only if there is no
dispute that the real property is tax delinquent. In that instance, the deposit will serve its
intended purpose. However, where the property sold at a public auction sale is not tax
delinquent, then the envisioned purpose becomes irrelevant, if not oppressive.
• In support of BHC's contention that the subject two lots are not real property tax
delinquent, it specifically made the following averments in its Complaint:
• Per Letter “for settlement within the month of November 2007”.
• Please settle this amount within the month of November to avoid penalties of 2% per
month. This applies to current accounts only.
[G.R. NO. 207306, AUGUST 7, 2017]
• The payment was made by BHC on November 29, 2007 which was well within the
due date for the payment of the installment for the 4th quarter of 2007 pursuant to
Section 250 of the LGC.
• With the presentation of the Official Receipts, showing payment of the unpaid realty
taxes within the period prescribed, the delinquent status of the subject two lots is
negated. Thus, Section 267 is not being circumvented, and that, in this case,
is inapplicable because there appears to be no tax delinquency.
• Following the Court's ruling in NHA, the case must be remanded to the RTC for further
proceedings to afford Taguig City the opportunity to dispute BHC's claim that it is not a
delinquent taxpayer in relation to the subject two lots.
CONFEDERATION FOR UNITY, RECOGNITION
AND ADVANCEMENT OF GOVERNMENT
EMPLOYEES VS. CIR
[G.R. NOS. 213446 & 213658, JULY 3, 2018]
CONFEDERATION FOR UNITY, RECOGNITION AND
ADVANCEMENT OF GOVERNMENT EMPLOYEES VS. CIR
[G.R. NOS. 213446 & 213658, JULY 3, 2018]
• DOCTRINES:
• A taxpayer is granted a period of thirty (30) days from receipt of the adverse ruling of the CIR
to file with the Office of the Secretary of Finance a request for review in writing and under
oath.
• Section 4 of the NIRC of 1997, as amended, grants the CIR the power to issue rulings or
opinions interpreting the provisions of the NIRC or other tax laws. However, the CIR cannot,
in the exercise of such power, issue administrative rulings or circulars inconsistent with the
law sought to be applied. Indeed, administrative issuances must not override, supplant or
modify the law, but must remain consistent with the law they intend to carry out.
[G.R. NOS. 213446 & 213658, JULY 3, 2018]
• ISSUE:
• WON RMO No. 23-2014 ("Reiteration of the Responsibilities of the Officials and Employees of
Government Offices for the Withholding of Applicable Taxes on Certain Income Payments and the
Imposition of Penalties for Non-Compliance Thereof,“) is ultra vires insofar as Sections VI (Persons
Responsible for Withholding) and VII (Penalty Provision) thereof define new offenses and
prescribe penalties therefor, particularly upon government officials?
[G.R. NOS. 213446 & 213658, JULY 3, 2018]
• HELD:
• Partly Meritorious.
• VALID: Section VII (Penalty Provisions) of RMO No. 23-2014 does not define a crime and
prescribe a penalty therefor. Section VII simply mirrors the relevant provisions of the NIRC of
1997, as amended, on the penalties for the failure of the withholding agent to withhold and
remit the correct amount of taxes, as implemented by RR No. 2-98.
• INVALID: With respect to Section VI (Persons Responsible for Withholding) of the assailed
RMO, the Court finds that the CIR overstepped the boundaries of its authority to interpret
existing provisions of the NIRC of 1997, as amended.
[G.R. NOS. 213446 & 213658, JULY 3, 2018]
• Section 82 of the NIRC of 1997, as amended, states that the return of the amount
deducted and withheld upon any wage paid to government employees shall be made by
the officer or employee having control of the payments or by any officer or employee
duly designated for such purpose.
• Consequently, RR No. 2-98 identifies the Provincial Treasurer in provinces, the City Treasurer in
cities, the Municipal Treasurer in municipalities, Barangay Treasurer in barangays,Treasurers of
government-owned or -controlled corporations (GOCCs), and the Chief Accountant or any person
holding similar position and performing similar function in national government offices, as
persons required to deduct and withhold the appropriate taxes on the income payments
made by the government.
[G.R. NOS. 213446 & 213658, JULY 3, 2018]
• Nowhere in the NIRC of 1997, as amended, or in RR No. 2-98, as amended, would one
find the Provincial Governor, Mayor, Barangay Captain and the Head of Government
Office or the "Official holding the highest position (such as the President, Chief Executive
Officer, Governor, General Manager)" in an Agency or GOCC as one of the officials
required to deduct, withhold and remit the correct amount of withholding taxes.
• The CIR, in imposing upon these officials the obligation not found in law nor in the
implementing rules, did not merely issue an interpretative rule designed to provide
guidelines to the law which it is in charge of enforcing; but instead, supplanted details
thereon — a power duly vested by law only to respondent Secretary of Finance under
Section 244 of the NIRC of 1997, as amended.
MINDANAO I GEOTHERMAL
PARTNERSHIP VS. CIR
[G.R. NO. 197519, NOVEMBER 8, 2017]
MINDANAO I GEOTHERMAL PARTNERSHIP VS. CIR
[G.R. NO. 197519, NOVEMBER 8, 2017]
• DOCTRINES:
• Section 112 of the National Internal Revenue Code (NIRC) provides the procedure for filing
claims for VAT refunds, and prescribes the corresponding periods therefor.
• The 2013 Consolidated Cases summarized the relevant periods under Section 112, as follows:
• An administrative claim must be filed with the CIR within two [2] years after the close of the
taxable quarter when the zero-rated or effectively zero-rated sales were made.
• The CIR has [one hundred twenty (120)] days from the date of submission of complete documents in
support of the administrative claim within which to decide whether to grant a refund or issue a tax credit
certificate.
• The [one hundred twenty (120)]-day period may extend beyond the two [2]-year period from
the filing of the administrative claim if the claim is filed in the later part of the two [2]-year period.
[G.R. NO. 197519, NOVEMBER 8, 2017]
(cont.)
• If the [one hundred twenty (120)]-day period expires without any decision from the CIR, then
the administrative claim may be considered to be denied by inaction.
• A judicial claim must be filed with the CTA within [thirty] 30 days:
• from the receipt of the CIR’s decision denying the administrative claim; or
• from the expiration of the [one hundred twenty (120)]-day period without any action from the CIR.
[G.R. NO. 197519, NOVEMBER 8, 2017]
(cont.)
• All taxpayers, however, can rely on BIR Ruling No. DA-489-03 from the time of its issuance on
[December 10, 2003] up to its reversal by this Court in Aichi on [October 6, 2010], as an exception to
the mandatory and jurisdictional 120+30 day periods.
[G.R. NO. 197519, NOVEMBER 8, 2017]
• FACTS:
• For the second to fourth quarters of taxable year 2004, [M1] filed its Quarterly VAT
Returns on the following dates.
Quarter Date filed Date Amended
Second July 22, 2004 June 22, 2005
Third October 22, 2004 June 22, 2005
Fourth January 25, 2005 June 22, 2005

[G.R. NO. 197519, NOVEMBER 8, 2017]
• FACTS:
• On August 16, 2005, [M1] filed a letter-request for the issuance of TCC with the BIR arising
from its excess and unutilized creditable input taxes accumulated from the first to fourth
quarters of taxable year 2004.
• However, said application for issuance of TCC remains unacted (sic) upon by respondent CIR
despite the lapse of the one hundred twenty (120)-day period provided under Section 112 (D)
of the Tax Code.
• On July 21, 2006, [M1] filed [its] Petition for Review, praying for the issuance of [a TCC]
which covers merely the second to fourth quarters of taxable year 2004.
[G.R. NO. 197519, NOVEMBER 8, 2017]
• CTA Division
• The CTA First Division granted M1's claim for unutilized input value-added tax (VAT) for
the third and fourth quarters of 2004, but denied M1's claim corresponding to the
second quarter of the same year for having been filed out of time.
[G.R. NO. 197519, NOVEMBER 8, 2017]
• CTA en banc
• CTA En Banc granted CIR's Petition for Review through the Assailed Decision by dismissing
the Petition for Review filed for having been filed late.
• M1 failed to comply with Section 112 (C),since M1 elevated its judicial claim before the CTA
beyond the thirty (30)-day period following the expiration of the CIR's period to act.
[G.R. NO. 197519, NOVEMBER 8, 2017]
• ISSUE:
• WON the CTA En Banc erred when it dismissed M1's judicial claim for being filed out of time?
[G.R. NO. 197519, NOVEMBER 8, 2017]
• HELD:
• NO, CTA DID NOT ERRED WHEN IT DISMISSED M1'S JUDICIAL CLAIM FOR BEING
FILED OUT OF TIME
• M1's judicial claim for the second, third and fourth
• quarters of 2004 were filed out of time. The Court notes the following relevant dates.
Within 2 Years Within 120 + 30 days Days November 19, 2005
Quarter Close of Taxable Amended Expiration of CIR's period to Judicial Claim
Quarter Administrative Act
Claim
Second June 30, 2004 June 22, 2005 October 20, 2005 July 21, 2006
Third September 30, 2004 June 22, 2005 October 20, 2005 July 21, 2006
Fourth December 31, 2004 June 22, 2005 October 20, 2005 July 21, 2006
SITEL PHILIPPINES CORP. VS. CIR
[G.R. No. 201326, February 8, 2017]
[G.R. NO. 201326, FEBRUARY 8, 2017]
• DOCTRINES:
• The CIR is given one hundred twenty (120) days within which to grant or deny a claim for
refund. Upon receipt of CIR’s decision or ruling denying the said claim, or upon the expiration
of the 120-day period without action from the CIR, the taxpayer has thirty (30) days within
which to file a petition for review with the CTA.
• In San Roque Case (2013), the Court clarified that the one hundred twenty (120)-day period
does not apply to claims for refund that were prematurely filed during the period from the
issuance of BIR Ruling No. DA-489-03, on December 10, 2003, until October 6, 2010, when
Aichi Forging Case, was promulgated.
[G.R. NO. 201326, FEBRUARY 8, 2017]
• As a specialized court dedicated exclusively to the resolution of tax problems, the CTA has
accordingly developed an expertise on the subject of taxation. Thus, its decisions are
presumed valid in every aspect and will not be overturned on appeal, unless the Court finds
that the questioned decision is not supported by substantial evidence or there has been an
abuse or improvident exercise of authority on the part of the tax court.
• A taxpayer claiming for a VAT refund or credit under Section 108(B)* has the burden to prove
not only that the recipient of the service is a foreign corporation, but also that said
corporation is doing business outside the Philippines. (*Transactions Subject to 0% Rate)
[G.R. NO. 201326, FEBRUARY 8, 2017]
• FACTS:
• Sitel, a corporation organized and existing under the laws of the Philippines, is engaged in the
business of providing call center services from the Philippines to domestic and offshore
businesses.
• For the period from January 1, 2004 to December 31, 2004, Sitel filed with the BIR its
Quarterly VAT Returns as follows:
Period Covered Date Filed
1st Quarter 2004 26 April 2004
2nd Quarter 2004 26 July 2004
3rd Quarter 2004 25 October 2004
4th Quarter 2004 25 January 2005
[G.R. NO. 201326, FEBRUARY 8, 2017]
• FACTS:
• Sitel's Amended Quarterly VAT Returns for the first to fourth quarters of 2004.
• On March 28, 2006, Sitel filed separate formal claims for refund or issuance of tax
credit with the One-Stop Shop Inter-Agency Tax Credit and Duty Drawback Center of the
DOF for its unutilized input VAT arising from domestic purchases of goods and services
attributed to zero-rated transactions and purchases/importations of capital goods for the 1st,
2nd, 3rd and 4th quarters of 2004.
• On March 30, 2006, Sitel filed a judicial claim for refund or tax credit via a petition for
review before the CTA
[G.R. NO. 201326, FEBRUARY 8, 2017]
• CTA Division
• CTA Division rendered a Decision partially granting (11M out of 23M) Sitel's claim for VAT
refund or tax credit.
• The CTA Division denied Sitel's claim for unutilized input VAT attributable to its zero-rated
sales for the four quarters of 2004.
• The CTA Division found that Sitel failed to prove that the recipients of its services are doing
business outside the Philippines, as required under Section 108 (B) (2) of the Tax Code.
• The CTA Division also disallowed the input VAT paid on capital goods purchased for taxable
year 2004 for failure to comply with the invoicing requirements*. (*Sec. 113 (A), Tax Code –
Invoicing Requirements)
• Sitel filed a motion for partial reconsideration, which was denied.
[G.R. NO. 201326, FEBRUARY 8, 2017]
• CTA en banc
• CTA En Banc reversed and set aside the ruling of the CTA Division.
• Citing the case of Aichi Case, the CTA En Banc ruled that the 120-day period for the CIR to act
on the administrative claim for refund or tax credit, under Section 112 (D) of the Tax Code, is
mandatory and jurisdictional.
• Considering that Sitel filed its judicial claim for VAT refund or credit without waiting for the
lapse of the 120-day period for the CIR to act on its administrative claim, the CTA did not
acquire jurisdiction as there was no decision or inaction to speak of.
• Thus, the CTA En Banc denied Sitel's entire refund claim on the ground of prematurity.
[G.R. NO. 201326, FEBRUARY 8, 2017]
• ISSUE:
• WON Sitel's Judicial Claim for VAT Refund was deemed timely filed pursuant to the Court's
pronouncement in San Roque?
[G.R. NO. 201326, FEBRUARY 8, 2017]
• HELD:
• YES, SITEL'S JUDICIAL CLAIM FOR VAT REFUND WAS DEEMED TIMELY FILED PURSUANT TO
THE COURT'S PRONOUNCEMENT IN SAN ROQUE.
• Records show that Sitel filed its administrative and judicial claim for refund on March 28, 2006 and
March 30, 2006, respectively, or after the issuance of BIR Ruling No. DA-489-03 (December 10,
2003 until October 6, 2010) but before the date when Aichi was promulgated.
• Thus, even though Sitel filed its judicial claim prematurely, i.e.,without waiting for the expiration of
the 120-day mandatory period, the CTA may still take cognizance of the case because the claim was
filed within the excepted period stated in San Roque.
• In other words, Sitel's judicial claim was deemed timely filed and should have not been dismissed by
the CTA En Banc.
CIR VS. HEDCOR SIBULAN, INC.
[SEPTEMBER 27, 2017, G.R. NO. 209306]
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• DOCTRINES:
• Under Section 112(C) of the Tax Code, the CIR is given a period of one hundred twenty (120)
days within which to grant or deny a claim for refund. Upon receipt of the CIR’s decision or
ruling denying the said claim, or upon the expiration of the 120-day period without action
from the CIR, the taxpayer has thirty (30) days within which to file a petition for review with
the CTA.
• The CIR may delegate* the powers vested in him under the pertinent provisions of the Tax
Code to any or such subordinate officials with the rank equivalent to a division chief or higher,
subject to such limitations and restrictions as may be imposed under rules and regulations to
be promulgated by the Secretary of Finance, upon recommendation of the CIR. (*Sec. 7, Tax
Code – Authority of the Commissioner to Delegate Power, Exceptions)
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• FACTS:
• HSI is a domestic corporation duly organized and existing under Philippine laws and is principally
engaged in the business of power generation through hydropower and subsequent sale of generated
power to the Davao Light and Power Company, Inc.
• On April 21, 2008, HSI filed with the BIR its Original Quarterly VAT Returns for the first
quarter of 2008.
• On May 20, 2008, HSI filed with the BIR its Amended Quarterly VAT Returns for the first
quarter of 2008, which showed that it incurred unutilized input VAT from its domestic purchases
of goods and services attributable to its zero-rated sales of generated power.
• HSI allegedly did not have any local sales subject to VAT at 12%,which means that HSI did not have
any output VAT liability against which its unutilized input VAT could be applied or credited.
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• On March 29, 2010, HSI filed its administrative claim for refund of unutilized input VAT for
the first quarter of taxable year 2008.
• On March 30, 2010, or one day after filing its administrative claim, HSI filed its judicial claim
for refund with the CTA.
• Meanwhile, on October 6, 2010, while HSI's claim for refund or issuance of TCC was
pending before the CTA Division, this Court promulgated Aichi Forging Case where the
Court held that compliance with the 120-day period granted to the CIR, within which to act
on an administrative claim for refund or credit of unutilized input VAT, as provided under
Section 112 (C) of the Tax Code, is mandatory and jurisdictional in filing an appeal with the
CTA.
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• CTA Division
• Following Aichi, the CTA Division, in its Decision, dismissed HSI's judicial claim for having been
prematurely filed.
• HSI filed a motion for reconsideration which the CTA Division denied for lack of merit.
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• CTA en banc
• CTA En Banc rendered a Decision affirming the CTA Division's Decision and Resolution.
• The CTA En Banc emphasized that following the principle of stare decisis et non quieta movere,
the principles laid down in Aichi needed to be applied for the purpose of maintaining
consistency in jurisprudence.
• On January 2, 2013, HSI filed a Motion for Reconsideration.
• On February 12, 2013, during the pendency of said motion with the CTA En Banc, the SC the
consolidated cases of San Roque Cases, where BIR Ruling No. DA-489-03 was recognized as an
exception to the mandatory and jurisdictional nature of the 120-day waiting period under
Section 112 (C) of the Tax Code.
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• CTA en banc
• In view of this Court's pronouncements in San Roque,t he CTA En Banc,on May 30, 2013,
rendered the assailed Amended Decision reversing and setting aside its Decision and
remanding the case to the CTA Division for a complete determination of HSI's full
compliance with the other legal requirements relative to its claim for refund or tax credit of
its alleged unutilized input VAT for the first quarter of calendar year 2008.
• The CIR filed a motion for reconsideration, which the CTA En Banc denied.
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• ISSUE:
• WON HSI timely filed its judicial claim for refund/credit on March 30, 2010, a day after filing
its administrative claim?
[SEPTEMBER 27, 2017, G.R. NO. 209306]
• HELD:
• YES, HSI TIMELY FILED ITS JUDICIAL CLAIM FOR REFUND/CREDIT ON MARCH 30, 2010, A
DAY AFTER FILING ITS ADMINISTRATIVE CLAIM.
• Records show that HSI filed its judicial claim for refund on March 30, 2010, or after the issuance
of BIR Ruling No. DA-489-03, but before the date when Aichi was promulgated. Thus, even though
HSI's claim was filed without waiting for the expiration of the 120-day mandatory period, the CTA
may still take cognizance of the case because the claim was filed within the excepted period stated
in San Roque.
• BIR Ruling No. DA-489-03 effectively shielded the filing of HSI's judicial claim from the vice of
prematurity.The CTA En Banc was therefore correct in setting aside its earlier Decision dismissing
HSI's claim on the ground of prematurity; and remanding the case to the CTA Division for a
complete determination of HSI's entitlement to the claimed VAT refund, if any.
GENTLE REMINDERS….
• “The Bar exam does not define you. The people who truly love you will continue to do so
no matter the outcome of a single test.”
• “The Bar exam is a marathon and not a sprint”
• “Tough times never last, but tough people do!”

ALL THE BEST TO OUR DEAR FUTURE
LAWYERS!!!
THAT IN ALL THINGS, GOD MAY BE

GLORIFIED!
Thank you for your time and listening!!!

Atty. Recuenco - 2022 Chair's Cases in Taxation Law 09022022 (Final)

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CHAIR’S CASES IN

• Remedial Law and Legal Ethics

No. Case Title Topic

No. Case Title Topic

No. Case Title Topic

• As to deficiency withholding tax on Fringe Benefits, PAGCOR, as the employer-

• WON PAGCOR is liable for payment of withholding taxes on fringe benefits?

• WON PAGCOR is exempt from payment of VAT.

(**Sec. 7(a)(1) and Sec. 11, RA 1125, as amended / Rule 42,ROC)

• Application and validity of BIR Ruling No. DA-489-03.

• Portion BIR Ruling No. DA-489-03.

Quarter Date filed Date Amended

Second July 22, 2004 June 22, 2005

Third October 22, 2004 June 22, 2005

Fourth January 25, 2005 June 22, 2005

• “The Bar exam is a marathon and not a sprint”

• “Tough times never last, but tough people do!”

THAT IN ALL THINGS, GOD MAY BE

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