G.R. No. 197980 . December 01, 2016
DEUTSCHE KNOWLEDGE SERVICES PTE LTD., PETITIONER, VS. COMMISSIONER OF INTERNAL REVENUE, RESPONDENT.

FACTS

Petitioner Deutsche Knowledge Services Pte. Ltd. filed an administrative claim for tax credit/refund of excess and unutilized input VAT for the first quarter of 2007 on March 31, 2009. Alleging inaction by the respondent Commissioner of Internal Revenue (CIR), petitioner filed a judicial Petition for Review with the Court of Tax Appeals (CTA) on April 17, 2009, or 17 days later. The CIR moved to dismiss the petition on the ground of prescription, citing Section 112(C) of the National Internal Revenue Code (NIRC) and the ruling in Commissioner of Internal Revenue v. Mirant Pagbilao Corporation.
The CTA’s Former Second Division granted the motion to dismiss. Petitioner’s motion for reconsideration was subsequently denied by the same Division despite an earlier order transferring the case to the Third Division. The CTA En Banc affirmed the dismissal but on a different ground. It held that the judicial claim was prematurely filed because petitioner did not wait for the expiration of the 120-day period given to the CIR to act on the administrative claim, as mandated by Section 112(C) of the NIRC and interpreted in Commissioner of Internal Revenue v. Aichi Forging Company of Asia, Inc.

ISSUE

Whether the CTA En Banc erred in dismissing the judicial claim for refund for having been prematurely filed.

RULING

Yes. The Supreme Court reversed the CTA En Banc and reinstated the petition. The Court applied the doctrine established in Commissioner of Internal Revenue v. San Roque Power Corporation, which reconciled the mandatory nature of the 120+30-day periods under Section 112(C) with the principle of equitable estoppel against the government. The San Roque ruling created an exception: taxpayers who filed their judicial claims after the issuance of BIR Ruling No. DA-489-03 on December 10, 2003, but before the promulgation of the Aichi decision on October 6, 2010, cannot be penalized for premature filing.
The Court found that petitioner filed its judicial claim on April 17, 2009, which falls squarely within this protected period. During this time, the BIR itself, through Ruling No. DA-489-03, had expressly stated that the 120-day period was not jurisdictional and that a taxpayer could appeal to the CTA immediately after the 120-day period lapsed. The government is estopped from asserting a contrary interpretation to the prejudice of the taxpayer who relied in good faith on the BIR’s own pronouncement. Consequently, petitioner’s judicial claim was timely filed. The case was remanded to the CTA for further proceedings.