REPUBLIC OF TH E PHILIPPINES

Court ofTax Appeals

QUEZO N CITY

En Bane
COMMISSIONER OF INTERNAL CTAEB N0.1493
REVENUE, (CTA Case No. 8819)
Petitioner,
Present:
Del Rosario, P.J.,
Castaneda, Jr.,
Bautista,
Uy,
-versus- Casanova,
Fa bon-Victorino,
Mindaro-Grulla,
Ringpis-Liban, and
Manahan, Jl.

PHILEX MINING CORPORATION, Promulgated:

Respondent.

X ---------------------------------------------------------------------------------------------------- ----------------- X

DECISION

BAUTISTA, J:

The Case

Before the Court of Tax Appeals ("CTA") En Bane ("Court En

Bane ") is a Petition for Review1 filed under ·Section 3(b), Rule 8 of the
Revised Rules of the Court of Tax Appeals2 ("RRCTA") praying for the
f
1 Rollo, CTA EB No. 1493, Petition for Review ("PFR "), pp. 5-48, with annexes.
2 SECTION 3. Who May Appeal; Period to File Petition. - xxx
XXX XXX XXX
(b) A party adversely affected by a decision or resolution of a Division of the
Court on a motion for reconsideration or new trial may appeal to the Court by
filing before it a petition for review within fifteen days from receipt of a copy of
the questioned decision or resolution. Upon proper motion and the payment of
the full amount of the docket and other lawful fees and deposit for costs before the
expiration of the reglementary period herein fixed, the Court may grant an
additional period not exceeding fifteen days from the expiration of the original
period within which to file the petition for review.
DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page2of13

Court En Bane to reverse and set aside the Decision3 promulgated on

May 20, 2016 and the Resolution4 promulgated on July 7, 2016, both
rendered by the Second Division of the CTA ("Court in Division"); and
to render a decision denying the claim for refund. 5

The Parties6

Petitioner Commissioner of Internal Revenue ("CIR") is the duly

appointed Commissioner of the Bureau of Internal Revenue ("BIR")
vested with authority, among others, to act upon and to approve
claims for refund or for tax credit of overpaid or erroneously paid
internal revenue taxes. He holds office at the BIR National Office
Building, Agham Road, Diliman, Quezon City.

Respondent Philex Mining Corporation is a domestic

corporation organized under Philippine laws, with principal office at
27 Brixton St. Pasig City. It is engaged in the business of mining, which
includes exploration, development, and operation of mining
properties for commercial production, and the marketing of mine
products, consisting of gold bullion and copper ore concentrates.
Respondent is Value-Added Tax ("VAT")-registered with Taxpayer's
Identification No. 000-283-731-000, as evidenced by its BIR Certificate
of Registration No. OCN8RC0000041684.

The Facts

On March 11, 2004, respondent and Pan Pacific Copper Co., Ltd.
of Tokyo, Japan ("PPCCLTJ") executed a Long Term Gold and Copper
Concentrates Sales Agreement for the sale by the former of copper
concentrates to the latter? On August 16, 2007, respondent entered into
a similar contract with Louis Dreyfus Commodities Metals Suisse SA
of Switzerland ("LDCMSSAS").s
(
3 Records, CTA Case No. 8819, Decision, pp. 190-212; penned by Associate Justice Amelia R.
Cotangco-Manalastas, with Associate Justices Juanito C. Castaneda and Caesar A. Casanova
concurring.
4 Id., Resolution, pp. 229-232; penned by Associate Justice Amelia R. Cotangco-Manalastas, with

Associate Justice Juanito C. Castaneda concurring.

s Rollo, PFR, Prayer, p. 13.
6 Records, Decision, Facts, pp. 190-191.
7 Id., Facts, p. 191.
8 Id.
DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page3 of13

Respondent filed its Quarterly VAT Returns for the second and
the third quarters of 2012 on the following dates:

QUARTERLY RETURN FILING DUE DATE DATE OF ACTUAL FILING

July18,2012(origbGal)
Second Quarter July 25, 2012
Septennber25,2013(annended)
October 19, 2012 (original)
Third Quarter October 25,2012
Septennber25,2013(annended)9

On December 17,2013, respondent filed an administrative claim

for refund or for tax credit with the One-Stop Shop InterAgency Tax
Credit and Duty Drawback Center of the Department of Finance
("DOF-OSS") for its alleged excess and unutilized input VAT in the
amounts of Php43,969,988.40 for the second quarter and
Php42,125,610.72 for the third quarter of 2012.

Due to the inaction of petitioner on respondent's administrative

claim for refund, respondent filed a Petition for Review before the
Court in Division on May 15, 2014; to which petitioner filed an Answer
on July 4, 2014.10

On May 20, 2016, the Court in Division promulgated the assailed

Decision11 , the dispositive portion thereof reads as follows:

WHEREFORE, premises considered, the instant Petition

for Review is PARTIALLY GRANTED. Accordingly,
[petitioner] is ORDERED to REFUND or to ISSUE A TAX
CREDIT CERTIFICATE in favor of [respondent] the amount
of [Php]57,910,100.80, representing its unutilized excess input
VAT for the 2nd and 3rd quarters of 2012 attributable to its zero-
rated receipts for the same period.

SO ORDERED.12

In the assailed Decision, the Court in Division listed the

requisites for the refund or the tax credit of unutilized input VAT
attributable to zero-rated or effectively zero-rated sales, viz.: (1) there
must be zero-rated or effectively zero-rated sales; (2) input taxes were
incurred or paid; (3) such input taxes were attributable to zero-rated

9
1o
Records, Decision, Facts, p. 191.
Id.
!
u Id., Decision, pp. 190-212.
12 Emphases retained.
DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page4of13

or effectively zero-rated sales; (4) the input taxes were not applied
against any output VAT liability; and (5) the claim for refund was filed
within the two (2)-year prescriptive period.

After determining that respondent complied with the fifth

requirement, the Court in Division found that respondent's export
sales of USD83,666,415.15 (Php3,565,404,402.91) and USD40,075,634.00
(Php1,681,431,361.70) for the second and the third quarters of 2012
qualify for VAT zero-rating, satisfying the first condition. For the
second and third requisites, the Court declared that only the input
VAT of Php57,910,100.80 can be attributed to valid zero-rated sales. As
to the fourth condition, the Court found that the same was met since
input taxes were not applied against any output VAT liability.

Not satisfied with the Decision, petitioner filed his Motion for
Reconsideration (on the Decision of the Honorable Court dated May
20, 2016)13 on June 7, 2016, countered by respondent's
Comment/Opposition14 filed on June 28, 2016.

On July 7, 2016, the Court in Division resolved15 the Motion for

Reconsideration in the following manner:

WHEREFORE, premises considered, the instant Motion

for Reconsideration is DENIED for lack of merit.

SO ORDERED.16

After being granted an extension,17 petitioner raised an appeal to

the Court En Bane when he filed the present Petition for Review18 on
August 18, 2016; to which respondent filed its Comment19 on October
6, 2016.

13 Records, Motion for Reconsideration (on the Decision of the Honorable Court dated May 20, 2016), pp.
213-220.
14 Id., Comment/Opposition, pp. 223-228.
1s Id., Resolution, pp. 229-232
16 Emphases retained.
17 Rollo, pp. 1-4.
1s Id., PFR, pp. 5-48, with annexes.
19 Id., Comment, pp. 52-58.
DECISION
CTA EB NO. 1493 (CT A Case No. 8819)
Page5of13

On October 21, 2016, the Court En Bane gave due course to the
Petition for Review and submitted the case for decision;20 hence, this
Decision.

The Assigned Errors21

THE COURT IN DIVISION ERRED IN NOT CONSIDERING

RESPONDENT'S FAILURE TO PROVE THAT IT SUBMITTED WITH
THE ONE STOP SHOP THE COMPLETE DOCUMENTS IN
SUPPORT OF ITS ADMINISTRATIVE CLAIM FOR REFUND,
HENCE, THE EVIDENCE IS INSUFFICIENT TO JUSTIFY THE
DECISION;

THE COURT IN DIVISION ERRED IN NOT DECLARING

RESPONDENT'S JUDICIAL CLAIM FOR REFUND AS
PREMATURELY FILED;

THE COURT IN DIVISION ERRED WHEN IT CONSIDERED

AS VALID ALL THE FINAL INVOICES BEARING DATES LATER
THAN THE DATES OF SALE OF RESPONDENT'S PRODUCTS;

THE COURT IN DIVISION ERRED IN NOT DENYING THE

CLAIM FOR REFUND FOR FAILURE OF RESPONDENT TO
SUBMIT ITS SUBSIDIARY SALES JOURNAL AND ITS SUBSIDIARY
PURCHASE JOURNAL; AND

THE COURT IN DIVISION ERRED WHEN IT DID NOT

STRICTLY CONSTRUE AGAINST RESPONDENT IN THE
DETERMINATION OF THE SUFFICIENCY OF EVIDENCE
SUBMITTED IN SUPPORT OF ITS CLAIM.

The Ruling of the Court En Bane

The Court En Bane finds no merit in the instant Petition for

Review.

The Court in Division properly

received, evaluated and

20 Rollo, pp. 60-61.

21 Id., PFR, Grounds, pp. 7-8.
DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page 6of13

appreciated the evidence

submitted before it.

The Court in Division correctly

declared that respondent's
judicial claim for refund was
timely filed.

Petitioner contends that the Court in Division erred in not

considering respondent's failure to present evidence showing that it
submitted with the DOF-OSS complete documents in support of its
claim for refund; that while respondent presented a Letter dated
December 11, 2013 enumerating the documents allegedly submitted,
the same may not be considered by the Court in Division as it was
dated a week before the filing of the administrative claim on December
17, 2013; and that, more importantly, the document does not bear a
receiving stamp, does not show that it is in accordance with the DOF-
OSS checklist, and does not prove that respondent submitted complete
documents. Petitioner likewise posits that since respondent failed to
prove submission of complete documents in support of its claim for
refund, the counting of the one hundred and twenty (120)-day period
for the CIR to grant or to deny the same has not commenced to run;
and, consequently, that the judicial claim filed with the Court in
Division was filed prematurely.

Respondent argues that the testimony of its witness, Ms. Sylvia

Delos Santos ("Ms. Delos Santos"), belied petitioner's assertions; that
Ms. Delos Santos identified two (2) letters from respondent addressed
to the DOF-OSS, which contained a summary or list of documents that
accompanied the filing of the Claimant Information Sheets; that she
also identified the DOF official receipt evidencing respondent's
payment of the filing and processing fees for each claim; that the DOF-
OSS would not have issued the said official receipt if there were no
supporting documents accompanying the filing of the claims; and that
petitioner's counsel filed a Compliance with the Court in Division
dated July 6, 2015, transmitting the BIR Records of the case, which
contained the documents that respondent filed with the DOF-OSS.
Respondent likewise avers that the Court En Bane has already ruled
that the completeness of documents to support an administrative
claim for refund is determined by the taxpayer and not by the BIR.

The Court En Bane finds no merit in petitioner's contentions. /

DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page 7of13

The term "relevant supporting documents" refers to those

documents necessary to support the legal basis in disputing a tax
assessment or in proving the claim for refund, as determined by the
taxpayer and not by the BIR, who can only inform the taxpayer to
submit additional documents but cannot demand what type of
supporting documents to be submitted. 22 Moreover, a taxpayer's
failure to comply with the requirements listed under Revenue
Memorandum Order (fRMO") No. 53-98 is not fatal to its claim for tax
credit or refund of excess unutilized excess VAT, especially when the
application has arrived at the judiciallevel.23 Once the claim for refund
has been elevated to the Court, the admissibility, materiality,
relevancy, probative value and weight of evidence presented therein
become subject to the Rules of Court;24 and the question of whether or
not the evidence submitted by a party is sufficient to warrant the grant
of a claim for refund lies within the sound discretion and judgment of
the Court. 25

As to the prescriptive periods involved, Section 112(A) of the 1997

NIRC states that a taxpayer has two (2) years from the close of the
taxable quarter when the sales were made to file an administrative
claim with the CIR. The latter is given one hundred and twenty (120)
days from submission of complete supporting documents to decide on
the claim. In case of inaction by the CIR after one hundred and twenty
(120) days from the date of submission of the application with
complete documents, Section 112(C) of the 1997 NIRC, in relation to
Revenue Regulations ("RR") No. 16-2005, grants the taxpayer thirty (30)
days to file a judicial claim with the CTA.

The periods covered by respondent's claim are the second and

the third quarters of 2012. Following its calendar year, the end of the
taxable quarters fall on June 30, 2012 and September 30, 2012,
respectively. Consequently, the due dates for the filing of the
administrative claims for refund are June 30,2014 and September 30,
2014, respectively, making the administrative claim for refund filed on
December 17, 2013 timely made. Thereafter, petitioner had one
hundred and twenty (120) days or until April16, 2014 to grant or deny
the same. Due to petitioner's inaction, respondent had thirty (30) days/

22 Commissioner of Internal Revenue v. First Express Pawnshop Company, Inc., G.R. Nos. 172045-46, June
16, 2009, 589 SCRA 253.
23 Pilipinas Total Gas, Inc. v. Commissioner of Internal Revenue, G.R. No. 207112, December 8, 2015.
24 Id.
25 Id.
 DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page 8 of13

or until May 16, 2014 to file a petition for review with the Court in
Division. Records reveal that respondent filed its Petition for Review
on May 15,2014. Hence, the administrative and the judicial claims for
refund were filed within the reglementary periods provided by law, to
wit:

END OF TAXABLE ADMINISTRATIVE ACTUAL DATE LAST DAY FOR JUDICIAL FILING
PERIOD
QUARTER FILING DUE DATE OF FILING CIR TO DECIDE DUE DATE
Second Quarter 2012 30-Jun-12 30-Jun-14
17-Dec-13 16-Apr-14 16-May-14
Third Quarter 2012 30-Sep-12 30-Sep-14

The Court in Division was correct

in considering as valid all the
final invoices bearing dates later
than the dates of sale of
respondent's products.

The Court in Division properly

held that the submission of the
subsidiary sales journal and the
subsidiary purchase journal is not
a requirement in the present
claim.

The Court in Division did not err

in finding that respondent
presented sufficient evidence in
support of its claim, albeit partial
leading to a refund in the reduced
amount.

Petitioner avers that respondent failed to comply with the

accounting requirements under Section 133(C) of the 1997 NIRC and
Section 4.133.3 of RR No. 16-2005; that respondent failed to prove that
the documents it submitted in support of its claim are sufficient,
despite non-submission of its subsidiary sales journal and subsidiary
purchase journal; and that the Court in Division failed to adhere to the
doctrine that a claim for refund is strictly construed against the
claimant in considering the evidence of respondent.

In its defense, respondent counters that the Court in Division has

thoroughly considered and discussed this item; that the issuance of a
final invoice at a later date was necessitated by the fact that to
I
DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page 9of13

determine the final settlement and final prices for payable copper,
payable gold and payable silver and from the very nature of the
products, their final prices cannot be determined on the date of
shipment for they have to undergo certain intricate procedures at the
buyer's smelting or refinery plant at the port of discharge abroad; and
that it is for this reason why only a provisional invoice is issued on the
date of shipment covering ninety percent (90%) of the estimated or
provisional price, and a final invoice is issued after the procedures
were completed and the final prices were determined.

Respondent cited the case of Commissioner of Internal Revenue v.

Philex Mining Corporation, wherein the Court En Bane already ruled
that presentation before the court of the subsidiary sales journal and
subsidiary purchase journal is not required; and that while it is true
that claims for refund are strictly construed against the taxpayer,
where there is undisputed and sufficient evidence presented, the
Court must order a refund to the extent supported by evidence.

At the outset, the Court En Bane finds it necessary to refer to the

case of Philex Mining Corporation v. Commissioner of Internal Revenue 26
('PMC v. CIR"), docketed as CTA Case No. 8228, which deals with the
same parties and issues as the present case. PMC v. CIR originated
from the Second Division of the CTA ("Second Division"), wherein the
CIR maintained that the taxpayer failed to prove with certainty that
the accounting requirements mandated in RR No. 16-2005 and Section
114(A) of the 1997 NIRC were strictly complied with. It must be noted,
at this point, that the sales in PMC v. CIR also arose from the Long
Term Gold and Copper Concentrates Sales Agreement with PPCCLTJ,
as in the present case. In partially granting the taxpayer's claim for
refund, the Second Division noted that the final invoices submitted by
the taxpayer bear dates much later than the dates of shipment
indicated in the bills of lading and provisional invoices. However, the
taxpayer was able to sufficiently explain that in its direct exports of
copper concentrates, it issues two (2) invoices to the buyer, viz.: (1) a
Provisional Invoice covering ninety percent (90%) of the estimated
value of the shipment, issued upon shipment, and (2) a Final Invoice,
issued when the parties reach an agreement regarding the final
settlement weights, assays and quotations and the final price of the
shipment. Consequently, the Second Division held that the actual
shipment date of the mineral products, as appearing in the bills of
lading, should be regarded as the actual date when the export sales
took place. (

26 CTA Case No. 8228, May 31,2012.

DECISION
CTA EB NO. 1493 (CIA Case No. 8819)
Page 10of13

After the CIR' s motion for reconsideration was denied in PMC v.

CIR, he filed a Petition for Review with the Court En Bane docketed as
CTA EB Case No. 923 entitled Commissioner of Internal Revenue v. Philex
Mining Corporation (~CIR v. PMC"). On January 7, 2013, the Court En
Bane promulgated a Decision in CIR v. PMC stating that the Second
Division has already fully and exhaustively resolved the issue in
relation to the arguments or grounds raised in the Petition for Review,
which are mere rehashes of the arguments proffered in the Motion for
Reconsideration. Hence, the Petition for Review was denied for lack of
merit. After his motion for reconsideration in CIR v. PMC was denied,
the CIR raised an appeal with the Supreme Court in Commissioner of
Internal Revenue v. Philex Mining Corporation, docketed as G.R. No.
207049. The Highest Tribunal likewise denied the same and affirmed
the ruling of the Court En Bane on November 11,2013.

It must be stressed that a sales invoice is a written account of

goods sold or services rendered, indicating the prices charged therefor
or a list by whatever name it is known, which is used in the ordinary
course of business evidencing sale and transfer or agreement to sell or
transfer goods and services. 27 A sales invoice is necessary to
substantiate the actual amount or quantity of goods sold and their
selling price, and taken collectively are the best means to prove the
input VAT payments. 28 Moreover, a VAT invoice is the seller's best
proof of the sale of goods or services to the buyer. 29

It is clear that the export sales actually transpired during the

period of the claim, as evidenced by respondent's bills of lading and
provisional receipts. To consider them as sales in the subsequent year
due merely to the issuance of final invoices is illogical. To record the
sale in the year of delivery is likewise in accord with the accrual
method of accounting, wherein income is recorded when goods are
shipped and delivered, unless there is an agreement to the contrary.

As to petitioner's claim that respondent's non-submission of its

subsidiary sales journal and subsidiary purchase journal is fatal to its
claim, the Court En Bane does not agree. (

27 Commissioner of Internal Revenue v. Manila Mining Corporation, G.R. No. 153204, August 31, 2005,
468 SCRA 571, citing Deoferio and Mamalateo, The Value Added Tax in the Philippines, 151 ed.,
2000.
2B !d.
29 Northern Mindanao Power Corporation v. Commissioner of Internal Revenue, G.R. No. 185115

February 18, 2015, 750 SCRA 733.

DECISION
CTA EB NO. 1493 (CT A Case No. 8819)
Pagell of13

Certain requisites have been jurisprudentially developed which

a taxpayer-applicant must comply with to successfully obtain a credit
or a refund of excess input VAT. The said requisites are:

1. the claim is filed with the CIR within two (2) years after the
close of the taxable quarter when the sales were made;30

2. in case of full or partial denial of the refund claim, or the

failure on the part of the CIR to act on the said claim within a period
of 120 days, the judicial claim has been filed with the Court, within
thirty (30) days from receipt of the decision or after the expiration of
the said one hundred and twenty (120)-day period;31

3. the taxpayer is VAT-registered;32

4. the taxpayer is engaged in zero-rated or effectively zero-

rated sales;33

5. for zero-rated sales under Sections 106(A)(2)(a)(1), (2) and

(b), and 108(B)(1) and (2), the acceptable foreign currency exchange
proceeds have been duly accounted for in accordance with BSP rules
and regulations;34

6. the input taxes are due or paid;3s

7. the input taxes are not transitional input taxes;36

8. the input taxes claimed are attributable to zero-rated or

effectively zero-rated sales;37 V

30 Intel Technology Philippines, Inc. v. Commissioner of Internal Revenue, G.R. No. 166732, April 27,
2007, 522 SCRA 657; San Roque Pmver Corporation v. Commissioner of Internal Revenue, G.R. No.
180345, November 25, 2009, 605 SCRA 536; AT&T Communications Services Philippines, Inc. v.
Commissioner of Internal Revenue, G.R. No. 182364, August 3, 2010, 626 SCRA 567.
3l Rohm Apollo Semiconductor Philippines v. Commissioner of Internal Revenue, G.R. No. 168950,
January 14, 2015.
32 Supra note 30.
33 Id.
34 Id.
35 Id.
36 Id.
37 Id.
DECISION
CTA EB NO. 1493 (CTA Case No. 8819)
Page 12of13

9. where there are both zero-rated or effectively zero-rated

sales and taxable or exempt sales, and the input taxes cannot be
directly and entirely attributable to any of these sales, the input taxes
shall be proportionately allocated on the basis of sales volume;3s and

10. the input taxes have not been applied against output taxes
during and in the succeeding quarters.39

There is nothing in law and jurisprudence which compels the

presentation of the subsidiary sales journal and the subsidiary
purchase journal of a taxpayer in a claim for a credit or a refund of
excess input VAT. Hence, the Court En Bane finds that the Court in
Division is justified in not requiring the said documents from
respondent in the present case.

While basic is the rule that tax refunds are in the nature of tax
exemptions and are to be construed strictissimi juris against the entity
claiming the same,4o this rule is not absolute. A taxpayer who seeks for
refund can justify the claim by words too plain to be mistaken and too
categorical to be misinterpreted. 41 The Court En Bane finds no reason
to reverse the findings of the Court in Division, which merely
considered the evidence presented by respondent in arriving at its
Decision. In fact, due to the rule that refunds are construed strictly
against the taxpayer, the Court in Division did not award respondent
the full refund it prayed for and only granted a portion thereof which
is supported by evidence.

WHEREFORE, the instant Petition for Review is hereby

DENIED for lack of merit. Accordingly, the Decision promulgated on
May 20, 2016 and the Resolution promulgated on July 7, 2016 both
rendered by the Court in Division are hereby AFFIRMED.

SO ORDERED.

LOVELL (.BAUTISTA
Associate Justice

38 Supra note 30.

39 Id.
40 Philippine Geothermal, Inc. v. Commissioner of Internal Revenue, G.R. No. 154028, July 29, 2005 456,

SCRA308.
41 Sea-land Service, Inc. v. Court of Appeals, G.R. No. 122605, April30, 2001,357 SCRA 441.
 DECISION
CT A EB NO. 1493 (CT A Case No. 8819)
Page 13 o£13

WE CONCUR:

Presiding Justice
..
~~ (}_ .Qsr~ 'Q_.
JlfANITO c. CASTANEWA, JR. ERL~.UY
Associate Justice Associate Justice

CAESAR A. CASANOVA . FABON-VICTORINO

Associate Justice

~ " '--
~. u~~-c~
..)
CitJ;
CIELITO N. MINDARO-GRULLA
~.-T~
/}

MA. BELEN M. RINGPIS-LIBAN

Associate Justice Associate Justice

~·]'.~
CATHERINE T. MANAHAN
Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby

certified that the conclusions in the above Decision were reached in
consultation before the case was assigned to the writer of the opinion
of the Court.

Presiding Justice
 REPUBLIC OF THE PHILIPPINES
Court of Tax Appeals
QUEZON CITY

En Bane

COMMISSIONER OF INTERNAL CTA EB NO. 1493

REVENUE, (CTA Case No . 8819)
Petitioner,
Present:

Del Rosario , P.J. ,

Castaneda , Jr.,
Bautista ,
Uy,
-versus- Casanova ,
Fabon-Victorino ,
Mindaro-Grulla ,
Ringpis-Liban, and
Manahan, JJ.

PHILEX MINING CORPORATION,

Respondent.
X------------------------------------------------------------------- --------------------X

CONCURRING OPINION

DEL ROSARIO, P.J.:

I concur in the ponencia's denial of the Petition for Review filed

by the Commissioner of Internal Revenue for lack of merit. I deem it
imperative, however, to address petitioner's argument that the Court
in Division should not have partially granted respondent's claim fo r
refund in view of the latter's submission of insufficient evidence at the
administrative level.

In my Concurring Opinion in Commissioner of Internal Revenue

vs. Deutsche Knowledge Services Pte, Ltd. (Deutsche case), 1 I
addressed this similar argument raised by petitioner, in this wise :

1 CTA EB Nos. 1262 & 1263, Ju ly 15, 20 16; reiterating the Concurring Opi nion in Commissioner

of Internal Revenue vs. Deutsche Knowledge Services Pte. Ltd , CTA EB Nos. 1266 & 1267,
February 17, 201 6.
Concurring Opinion
CTA EB NO. 1493 (CTA Case No. 8819)
Page 2 of 5

"I find it necessary to address the argument raised

by the CIR in her Answer that OKS did not observe the
doctrine of exhaustion of administrative remedies as it
failed to submit complete documents required under
Revenue Memorandum Order (RMO) No. 53-98. The CIR
argues that OKS' failure to submit complete supporting
documents warrants the dismissal of the petition for lack
of jurisdiction. She also insists in her petition that it is
mandatory for OKS to have proven before the Court in
Division that it has strictly complied with the submission of
documents provided under RMO No. 53-98 to justify the
grant of its claim for refund.

The issue involved in this case is not novel. In the

earlier case of Commissioner of Internal Revenue vs.
Deutsche Knowledge Services Pte, Ltd. 2 involving the
same parties but pertaining to a different quarter for the
taxable year 2009, I had the occasion to expound on this
very point, viz:

The ponencia is correct in rejecting the CIR's

contention, citing Commissioner of Internal
Revenue vs. Team Sua/ Corporation (Formerly
Mirant Sua/ Corporation), 3 that submission of
documents enumerated in RMO No. 53-98 is not a
requirement for a grant of tax refund.

Moreover, there is no showing that the CIR

sent a written notice requiring OKS to submit
additional documents a process that is
indispensable in computing the 120+30 day period.
The recent Pilipinas Total Gas, Inc. vs.
Commissioner of Internal Revenue (Total Gas
case) 4 is instructive on this point, viz:

To summarize, for the just disposition of the

subject controversy, the rule is that from the date an
administrative claim for excess unutilized VAT is filed,
a taxpayer has thirty (30) days within which to submit
the documentary requirements sufficient to support
his claim, unless given further extension by the CIR.
Then, upon filing by the taxpayer of his complete
documents to support his application, or expiration of
the period given, the CIR has 120 days within which
to decide the claim for tax credit or refund. Should the
taxpayer, on the date of his filing, manifest that he no
longer wishes to submit any other addition documents

2 CTA EB No. 1266 & 1267, February 17, 2016.

3 G. R. No. 205055, July 18, 2014.
4 G. R. No. 207112, December 8, 2015.
Concurring Opinion
CTA EB NO. 1493 (CTA Case No. 8819)
Page 3 of 5

to complete his administrative claim, the 120-day

period allowed to the CIR begins to run from the date
of filing.

xxx First, the 120-day period had commenced

to run and the 120+30-day period was, in fact,
complied with. As already discussed, it is the
taxpayer who determines when complete
documents have been submitted for the purpose
of the running of the 120- day period. It must
again be pointed out that this in no way precludes
the CIR from requiring additional documents
necessary to decide the claim, or even denying
the claim if the taxpayer fails to submit the
additional documents requested.

Second, the CIR sent no written notice

informing Total Gas that the documents were
incomplete or required it to submit additional
documents. As stated above, such notice by way of
a written request is required by the CIR to be sent to
Total Gas. Neither was there any decision made
denying the administrative claim of Total Gas on the
ground that it had failed to submit all the required
documents. It was precisely the inaction of the BIR
which prompted Total Gas to file the judicial claim.
Thus, by failing to inform Total Gas of the need to
submit any additional document, the BIR cannot
now argue that the judicial claim should be
dismissed because it failed to submit complete
documents." (Boldfacing in the original)

If petitioner truly believed that respondent submitted insufficient

documents in support of its administrative claim for refund, then
petitioner should have notified respondent of the necessary
documents needed to ascertain the validity of its refund claim.
Interestingly, records of the case reveal that no such action was
taken by petitioner. 5 Consequently, denial of respondent's refund
claim on the ground that it did not submit complete supporting
documents would be contrary to fair play and basic tenets of justice.

Similar to the Deutsche case, supra, the present petition arose

from the inaction of the CIR on respondent's claim for refund. In the
cited Concurring Opinion, supra, I noted the distinction made in the
Total Gas case between an appeal from the CIR's decision on the
merits and inaction on the taxpayer's claim for refund:

"Novel in the Total Gas case is the distinction

between an appeal from the CIR's decision on the merits

5 Resolution dated July 7, 2016, CTA EB No. 1493 Docket, p. 44.

Concurring Opinion
CTA EB NO. 1493 (CTA Case No. 8819)
Page 4 of 5

and inaction on the taxpayer's claim for refund involving

input Value-Added Tax (VAT), viz:

A distinction must, thus, be made between

administrative cases appealed due to inaction and
those dismissed at the administrative level due to
the failure of the taxpayer to submit supporting
documents. If an administrative claim was
dismissed by the CIR due to the taxpayer's
failure to submit complete documents despite
notice/request, then the judicial claim before the
CTA would be dismissible, not for lack of
jurisdiction, but for the taxpayer's failure to
substantiate the claim at the administrative level.
When a judicial claim for refund or tax credit in
the CTA is an appeal of an unsuccessful
administrative claim, the taxpayer has to
convince the CTA that the CIR had no reason to
deny its claim. It, thus, becomes imperative for
the taxpayer to show the CTA that not only is he
entitled under substantive law to his claim for
refund or tax credit, but also that he satisfied all
the documentary and evidentiary requirements
for an administrative claim. It is, thus, crucial for a
taxpayer in a judicial claim for refund or tax credit to
show that its administrative claim should have been
granted in the first place. Consequently, a
taxpayer cannot cure its failure to submit a
document requested by the BIR at the
administrative level by filing the said document
before the CTA.

In the present case, however, Total Gas filed

its judicial claim due to the inaction of the BIR.
Considering that the administrative claim was never
acted upon; there was no decision for the CTA to
review on appeal per se. Consequently, the CTA
may give credence to all evidence presented by
Total Gas, including those that may not have
been submitted to the CIR as the case is being
essentially decided in the first instance. The
Total Gas must prove every minute aspect of its
case by presenting and formally offering its
evidence to the CTA, which must necessarily
include whatever is required for the successful
prosecution of an administrative claim.
Concurring Opinion
CTA EB NO. 1493 (CTA Case No. 8819)
Page 5 of 5

In other words, if the appeal was made from

the CIR's decision on the merits, it is crucial for the
taxpayer to have submitted all the documents in the
administrative level. Failure to do so would bar the
taxpayer from presenting additional documents to
this Court. If the appeal was made due to the CIR's
inaction, the taxpayer is not precluded from
submitting additional documents to prove its claim
for refund.

The appeal in this case involves the CIR's inaction.

Thus, OKS was allowed to present in evidence additional
documents not submitted in the administrative level and
such evidence was correctly considered by the Court in
Division in arriving at the assailed Decision dated
September 23, 2014 and Amended Decision dated
December 19, 2014 to refund or issue a Tax Credit
Certificate in favor of OKS." (Boldfacing in the original)

Considering that the present petition is a result of petitioner's

inaction on respondent's refund claim, respondent may submit as it
did, any document or evidence it deems necessary to support its
judicial claim. Thus, the Court in Division acted judiciously in giving
credence as it did albeit partially, to the pieces of evidence offered by
respondent.

All told, I VOTE to DENY petitioner's Petition for Review for lack
of merit.

Presiding Justice