CIR v SAN ROQUE POWER CORPORATION,

February 12, 2013, GR No. 187485,

En Banc, Carpio, J:
FACTS:
On October 11, 1997, San Roque entered into a Power Purchase Agreement ("PPA")
with the NAPOCOR to develop hydro-potential of the Lower Agno River and generate
additional power and energy for the Luzon Power Grid, by building the San Roque
Multi-Purpose Project located in Pangasinan. During the cooperation period of twentyfive (25) years commencing from the completion date of the Power Station, NPC will
take and pay for all electricity available from the Power Station.
San Roque allegedly incurred, excess input VAT in the amount of 559,709,337.54 for
taxable year 2001 which it declared in its Quarterly VAT Returns filed for the same
year. San Roque duly filed with the BIR separate claims for refund, in the total amount
of 559,709,337.54, representing unutilized input taxes as declared in its VAT returns
for taxable year 2001.
On March 28, 2003, San Roque filed amended Quarterly VAT Returns for the year 2001
since it increased its unutilized input VAT to the amount of 560,200,283.14.
Consequently, San Roque filed with the BIR on even date, separate amended claims
for refund.
ISSUE:
Whether or not San Roques claim for refund was prematurely filed.
HELD:
YES. It was premature.
Sec. 112. Refunds or Tax Credits of Input Tax.

(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 Subsection (A) and (B) hereof.
On 10 April 2003, a mere 13 days after it filed its amended administrative claim with
the Commissioner on 28 March 2003, San Roque filed a Petition for Review with the
CTA. From this we gather two crucial facts: first, San Roque did not wait for the 120day period to lapse before filing its judicial claim; second, San Roque filed its judicial
claim more than four (4) years before the Atlas doctrine, promulgated by the Court
on 8 June 2007.
Clearly, San Roque failed to comply with the 120-day waiting period, the time
expressly given by law to the Commissioner to decide whether to grant or deny San
Roques application for tax refund or credit. It is indisputable that compliance with the
120-day waiting period is mandatory and jurisdictional. The waiting period was
extended to 120 days effective 1 January 1998 under RA 8424 or the Tax Reform Act
of 1997. Thus, the waiting period has been in our statute books for more
than fifteen (15) years before San Roque filed its judicial claim. Failure to
comply with the 120-day waiting period violates a mandatory provision of law. It
violates the doctrine of exhaustion of administrative remedies and renders the

petition premature and thus without a cause of action, with the effect that the CTA
does not acquire jurisdiction over the taxpayers petition.
ACCENTURE, INC. VS. CIR,
July 11, 2012, G.R. No. 190102,
Second Division, Sereno, CJ:
Facts:
Accenture, Inc. (Accenture) is a corporation engaged in the business of providing
management consulting, business strategies development, and selling and/or
licensing of software. It is duly registered with the Bureau of Internal Revenue
(BIR) as a Value Added Tax (VAT) taxpayer or enterprise in accordance with
Section 236 of the National Internal Revenue Code (Tax Code)
On July 1, 2004, Accenture filed with the DOF a claim for the refund or the issuance of
a Tax Credit Certificate (TCC). But, the DOF did not act on the claim of Accenture.
Hence, on August 31, 2004, the latter filed a Petition for Review with the First Division
of the Court of Tax Appeals (Division), praying for the issuance of a TCC in its favor in
the amount of P35,178,844.21. The CTA however denied the petition of Accenture for
failing to prove that the latters sale of services to the alleged foreign clients qualified
for zero percent VAT. Accenture filed an MR but was denied. When it filed an appeal
before the CTA En Banc, it was also denied.
The CTA En Banc concluded that Accenture failed to discharge the burden of proving
the latters allegation that its clients were foreign-based. Resolute, Accenture filed a
Petition for Review with the CTA En Banc, but the latter affirmed the Divisions
Decision and Resolution. A subsequent MR was also denied. Hence, this Petition for
Review under Rule 45.
Issue:
Is the claim of Accenture for tax refund or credit tenable?
Ruling:
No. The Court ruled that the recipient of the service must be doing business
outside the Philippines for the transaction to qualify for zero-rating under Section
108(B) of the Tax Code.
The evidence presented by Accenture may have established that its clients are
foreign. This fact does not automatically mean, however, that these clients were
doing business outside the Philippines.
Consequently, to come within the purview of Section 108(B)(2), it is not enough that
the recipient of the service be proven to be a foreign corporation; rather, it must be
specifically proven to be a nonresident foreign corporation. A taxpayer
claiming a tax credit or refund has the burden of proof to establish the factual basis of
that claim. Tax refunds, like tax exemptions, are construed strictly against the
taxpayer.
Unfortunately, Accenture failed to discharge this burden. It alleged and presented
evidence to prove only that its clients were foreign entities. However, as found by
both the CTA Division and the CTA En Banc, no evidence was presented by Accenture
to prove the fact that the foreign clients to whom petitioner rendered its services were
clients doing business outside the Philippines. As ruled by the CTA En Banc, the

Official Receipts, Intercompany Payment Requests, Billing Statements, Memo

Invoices-Receivable, Memo Invoices-Payable, and Bank Statements presented by
Accenture merely substantiated the existence of sales, receipt of foreign currency
payments, and inward remittance of the proceeds of such sales duly accounted for in
accordance with BSP rules, all of these were devoid of any evidence that the clients
were doing business outside of the Philippines.