The Commissioner of Internal Revenue v. Visayas Geothermal Power Company, Inc., G.R. No. 181276, 11 November 2013
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Decision, Mendoza [J]
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Dissenting Opinion, Leonen [J]
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 181276 November 11, 2013
THE COMMISSIONER OF INTERNAL REVENUE, Petitioner,
vs.
VISAYAS GEOTHERMAL POWER COMPANY, INC., Respondent.
DISSENTING OPINION
LEONEN, J.:
I dissent with respect to the claim pertaining to CTA Case No. 6838.1 Consistent with my dissent in Commissioner of Internal Revenue v. San Roque Power Corporation2 and its consolidated cases, am of the view that; the Court of Tax Appeals CT A) cannot acquire jurisdiction without waiting lor the lapse of the 120-day period or the denial by the Commissioner of Internal Revenue within that period. The 120+ 30-day periods are mandatory and jurisdictional.3 Section l12 D) of the National Internal Revenue Code NIRC)4 was always clear.
Similar to the main opinion in San Roque, the ponencia allows for an exception for judicial claims tiled between December 10, 2003 and October 6, 2010, relying on Section 246 of the National Internal Revenue Code."5 The period provided corresponds with the issuance of BIR Ruling No. DA 489-03, which allows the filing of a judicial claim without waiting for the lapse of the 120-day period and the promulgation of the case of Aichi,6 which categorically ruled on the mandatory and jurisdictional nature or the waiting period. In San Roque, this Court said that:
Clearly, BIR Ruling No. DA-489-03 is a general interpretative rule. Thus, all taxpayers can rely on BIR Ruling No. DA-489-03 from the time of its issuance on 10 December 2003 up to its reversal by this Court in Aichi on 6 October 2010, where this Court held that the 120+30-day periods are mandatory and jurisdictional.7
This continues to allow private parties to rely on an erroneous interpretation of the text despite the clear language of the law.
As I have discussed in my dissent in San Roque, there can be no reliance in good faith by taxpayers on administrative interpretations of the law, which clearly contravene its text. No rights arc vested by a wrong construction of the law by administrative officials, and such docs not put the government in estoppel to correct the mistake.8 To reiterate:
BIR Ruling DA-489-03 x x x constitutes a clear disregard of the express and categorical provision or Section 112(D) or the NIRC.1âwphi1 Thus, the Commissioner's erroneous application or the law is not binding and conclusive upon this Court in a1iy way.9
Lastly, I underscore that the allowances we have given to the clearly erroneous reliance by lawyers of taxpayers on opinions of the Commissioner of Internal Revenue that contravene the text of the law cause damage to the government and its ability to do social justice. The costs or error arc better internalized by private parties rather than the public in general. After all, as observed in my dissent in CIR v. San Roque, government had no agency the choice of premature filing by the private parties.
In view of the discussion above, I vote to grant the Petition and to nullify the order of the Court of Tax Appeals to refund or to issue a tax credit to respondent in CTA Case No. 6838.
MARVIC MARIO VICTOR F. LEONEN
Associate Justice
Footnotes
1 Claim for refund or issuance of tax credit certificate in the amount of ₱19,070,378.18 covering the period of October 2001 to December 2002.
2 G.R. No. 187485, February 12, 2013, 690 SCRA 336. The Motions for Reconsideration tiled by San Roque Power Corporation in G.R. No. 187485 and the Commissioner of Internal Revenue in G.R. No. 196113 were denied with finality on October 8, 2013.
3 Commissioner of Internal Revenue v. Aichi Forging Company Of Asia inc., G.R. No. 184823, October 6, 2010, 632 SCRA 422 as cited in Commissioner of Internal Revenue v. San Roque, G.R. No. 187485, February 12 2013, 690 SCRA 336.
4 (D) Period Within Which Refund or Tax Credit of Input Taxes Shall be Made. - In proper cases, the Commissioner shall grant a refund or issue the tax credit certificate for creditable input taxes within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordance with Subsections (A) and (B) hereof.
In case of full or partial denial of the claim for tax refund or tax credit, or the failure on the part of the Commissioner to act on the application within the period prescribed above, the taxpayer affected may, within thirty (30) days from the receipt of the decision denying the claim or after the expiration of the one hundred twenty day-period, appeal the decision or the unacted claim with the Court of Tax Appeals.
5 SEC. 246. Non-Retroactivity of Rulings. - Any revocation, modification or reversal of any of the rules and regulations promulgated in accordance with the preceding Sections or any of the rulings or circulars promulgated by the Commissioner shall not he given retroactive application in the revocation modification or reversal will be prejudicial to the taxpayers, except in the following cases:
(a) Where the taxpayer deliberately misstates or omits material facts from his return or any document required of him by the Bureau of Internal Revenue;
(b) Where the facts subsequently gathered by the Bureau of Internal Revenue arc materially different from the facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith.
6 Commissioner of Internal Revenue v. Aichi Forging Company of Asia. Inc., supra.
7 Commissioner of Internal Revenue v. San Roque Power Corporation, supra at 404.
8 Philippine Bank of Communications v. CIR. CTA and CA. 36 Phil. 916 (1999).
9 Commissioner of Internal Revenue v. San Roque Power Corporation, supra at 465, Leonen, J. Separate Opinion.
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