Visayas Geothermal Power v.

CIR
GR No. 197525 / 4 Jun 2014 / J. Mendoza
FACTS
VGPC filed an administrative claim on 6 Dec 2006 for refund for about 14.2

million in unutilized input VAT payments for the four quarters of taxable year
2005, pursuant to RA 9136 that prescribed a 0% rate on sales of generated
power.
On 3 Jan 2007 while the admin claim was pending, VGPC filed its judicial

claim via a petition for review with the CTA for the same amount.
CTA division granted the refund in the amount of 7.7 million finding that this

was the only amount duly substantiated with the required evidence. Both CIR
and VGPC moved for MR (denied) and appealed.
CTA en banc reversed and dismissed the original petition for review for being

filed prematurely. It held that since the judicial claim was filed 28 days after the
petitioner filed its admin claim, without waiting for the expiration of the 120day period, it was premature and thus the CTA acquired no jurisdiction. This
cited the case of CIR v. Aichi Forging Company.
VGPC filed MR, citing Atlas Consolidated Mining v. CIR, but the CTA en banc

denied saying that Atlas had long been abandoned.

ISSUE / HELD
W/N the filing of the judicial claim was premature. NO

RATIO
There are actually two sub-issues on when judicial claims are premature.

First, on when the two-year period starts (applicability of Atlas which was later
reversed in CIR v. Mirant Pagbilao) and second, whether the 120-day period is
mandatory and jurisdictional (applicability of Aichi vs. BIR Ruling DA-489-03). In
this case, only the second issue is applicable since the claim was clearly filed
before the two year period in either case.
Key finding is when the judicial claim was filed. Since it was filed on 3 Jan

2007, BIR Ruling DA-489-03 applies, and not Aichi which only applies to judicial
claims made after 6 Oct 2010 or the promulgation of Aichi. Thus, applying the
said ruling, the taxpayer 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.
The judicial claim therefore in this case was not premature.
The Court however further discussed the final rules in VAT refunds cases

which were summarized in CIR v. San Roque.

a.
When to file an administrative claim with the CIR:
i.
General rule - Sec. 112(A) and Mirant - within 2 years from the
close of the taxable quarter when the sales were made
ii.
Exception - Atlas - within 2 years from the date of the payment
of the output VAT, if the administrative claim was filed from 8 Jun
2007 (promulgation of Atlas) to 12 Sep 2008 (promulgation of Mirant)
b When to file a judicial claim with the CTA:
i.
General rule - Sec. 112(D); not Section 229

1.

ii

Within 30 days from the full or partial denial of the

administrative claim by the CIR; or
2.
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 1 January 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 10
Dec 2003 (issuance of BIR Ruling No. DA-489-03) to 6 Oct 2010
(promulgation of Aichi)