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Tax Case Digest: CIR v. Aichi Forging Company (2010)

CIR v. Aichi Forging Company (2010)
G.R. No. 184823  October 6, 2010

Lessons Applicable: Legal Period: 1 year = 12 months, Exhaust Administrative Claim Before Judicial Claim, Lex Posterioni Derogati Priori

Laws Applicable:

  • Aichi forging, a VAT entity filed a claim for refund of input  VAT for its zero-rated sales with the Dept. of Finance One-Stop Inter-Agency Tax Credit and Duty Drawback Center on Sept 30, 2004.
  • On the same date, it filed a Petition for Review with the CTA
  • CTA partially granted the refund by reducing the leaseless claims. 
  • CIR filed a Motion for Reconsideration insisting that they were filed beyond the prescriptive period in accordance to Art. 13 that: 1 year = 365 days and that filing an administrative claim is a condition precedent before a judicial claim can be filed with the CTA.
  • CTA and CTA En Banc denied petition.
1. W/N the claim was filed with the prescriptive period of 2 year provided under Sec. 112 (A) NIRC
2. W/N filing an administrative claim is a condition precedent to a judicial claim for refund.

1. Yes. Sec. 204 (c) and 229 are applied only in instances of erroneous payment and illegal collection.  Sec. 112 (A) of NIRC applies here.  Sec. 31 Chapter VIII Book I of the Administrative Code of 1987 being the more recent law governing legal period applies making 1 year = 12 months.  The principle of Lex Posterioni Derogati Priori applies.  Thus, since it is filed on exactly Sept. 30, 2004 filing is timely.

2. Yes. Sec. 112 (D) of the NIRC clearly provides that the CIR has 120 days from date of the submission of the complete documents in support of the application within which to grant or deny the claim.  In case of full or partial denial by the CIR, the recourse is to appeal before the CTA within 30 days from receipt of the decision of the CIR.  However, if after the 120-day period the CIR fails to act on the application for tax refund, the remedy is to appeal the inaction of the CIR to the CTA within 30 days.