TAXATION - "verba legis doctrine"
G.R. No. 197760. January 13, 2014
Team Energy Corporation (formerly Mirant Pagbilao Corp.)
Vs. Commissioner of Internal Revenue
Recently, however, in the consolidated cases of Commissioner of Internal Revenue v. San Roque Power Corporation10(San Roque ponencia),this Court emphasized that Section 112(A) and (C)of the Tax Code must be interpreted according to its clear,plainand unequivocal language. In said case, we held that the taxpayer can file his administrative claim for refund or issuance of tax credit certificate anytime within the two-year prescriptive period. If he files his claim on the last day of the two-year prescriptive period, his claim is still filed on time. The Commissioner will then have 120 days from such filing to decide the claim. If the Commissioner decides the claim on the 120thday or does not decide it on that day, the taxpayer still has 30 days to file his judicial claim with the CTA. Thus, the Court expounded
This law is clear, plain and unequivocal. Following the well-settled verbalegis doctrine, this law should be applied exactly as worded since it is clear, plain and unequivocal. As this law states, the taxpayer may, if he wishes, appeal the decision of the Commissionerto the CTA within 30 days from receipt of the Commissioner’s decision, or if the Commissioner does not act on the taxpayer’s claim within the 120-day period, the taxpayer may appeal to the CTA within 30 days from the expiration of the 120-day period
First, Section 112 clearly, plainly and unequivocally provides that the taxpayer “may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refundof the creditable input tax due or paid to such sales.”In short, the law states that the taxpayer may apply with the Commissioner for a refund or credit “within two (2) years,” which means at anytime within two years. Thus, the applicationfor refund or credit may be filed by the taxpayer with the Commissioner on the last day of the two-year prescriptive period and it will still strictly comply with the law.The two-year prescriptive period is a grace period in favor of the taxpayer and he can avail of the full period before his right to apply for a tax refund or credit is barred by prescription
Second, Section 112(C) provides that the Commissioner shall decide the application for refund or credit “within one hundred twenty (120) days from the date of submission of complete documents in support of the application filed in accordancewith Subsection (A).”The reference in Section 112(C) of the submission of documents “in support of the application filed in accordance with Subsection (A)” means that the application in Section 112(A) is theadministrative claim that the Commissioner must decide within the 120-day period. In short, the two-year prescriptive periodin Section 112(A) refers to the period within which the taxpayer can file an administrative claim for tax refund or credit.Stated otherwise, the two-year prescriptive period does not refer to the filing of the judicial claim with the CTA but to the filing of the administrative claim with the Commissioner. As held in Aichi, the “phrase ‘within two years x x x apply for the issuance of a tax credit or refund” refers to applications for refund/credit with the CIR and not to appeals made to the CTA.”
