G.R. No. 207112. December 8, 2015.

PILIPINAS TOTAL GAS, INC., petitioner, vs.

COMMISSIONER OF INTERNAL REVENUE, respondent.

Taxation; Tax Credit; Tax Refund; The Commissioner of

Internal Revenue (CIR) has one hundred twenty (120) days from the
date of submission of complete documents to decide a claim for tax
credit or refund of creditable input taxes. The taxpayer may, within
thirty (30) days from receipt of the denial of the claim or after the
expiration of the 120-day period, which is considered a „denial due
to inaction,‰ appeal the decision or unacted claim to the Court of Tax
Appeals (CTA).·It is apparent that the CIR has 120 days from the
date of submission of complete documents to decide a claim for
tax credit or refund of creditable input taxes. The taxpayer may,
within 30 days from receipt of the denial of the claim or after the
expiration of the 120-day period, which is considered a „denial due
to inaction,‰ appeal the decision or unacted claim to the CTA. To be
clear, Section 112(C) categorically provides that the 120-day period
is counted „from the date of submission of complete
documents in support of the application.‰ Contrary to this
mandate, the CTA En Banc counted the running of the period from
the date the application for refund was filed or May 15, 2008, and,
thus, ruled that the judicial claim was belatedly filed.
Same; Same; Same; The one hundred twenty (120)-day period
granted to the Commissioner of Internal Revenue (CIR) to decide the
administrative claim under the Section 112 is primarily intended to
benefit the taxpayer, to ensure that his claim is decided judiciously
and expeditiously.·Indeed, the 120-day period granted to the CIR
to decide the administrative claim under the Section 112 is
primarily intended to benefit the taxpayer, to ensure that his claim
is decided judiciously and expeditiously. After all, the sooner the
taxpayer successfully processes his refund, the sooner can such
resources be further reinvested to the business translating to
greater efficiencies and productivities that would ultimately uplift
the general welfare. To allow the CIR to determine the
completeness of the documents
_______________

* EN BANC.

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submitted and, thus, dictate the running of the 120-day period,

would undermine these objectives, as it would provide the CIR the
unbridled power to indefinitely delay the administrative claim,
which would ultimately prevent the filing of a judicial claim with
the CTA.
Same; Same; Same; For purposes of determining when the
supporting documents have been completed · it is the taxpayer who
ultimately determines when complete documents have been
submitted for the purpose of commencing and continuing the
running of the one hundred twenty (120)-day period.·With the
amendments only with respect to its place under Section 112, the
Court finds that RMC No. 49-2003 should still be observed. Thus,
taking the foregoing changes to the law altogether, it becomes
apparent that, for purposes of determining when the supporting
documents have been completed · it is the taxpayer who ultimately
determines when complete documents have been submitted for the
purpose of commencing and continuing the running of the 120-day
period. After all, he may have already completed the necessary
documents the moment he filed his administrative claim, in which
case, the 120-day period is reckoned from the date of filing. The
taxpayer may have also filed the complete documents on the 30th
day from filing of his application, pursuant to RMC No. 49-2003. He
may very well have filed his supporting documents on the first day
he was notified by the BIR of the lack of the necessary documents.
In such cases, the 120-day period is computed from the date the
taxpayer is able to submit the complete documents in support of his
application.
Same; Same; Same; In a claim for tax credit or refund, it is the
taxpayer who has the burden to prove his cause of action. As such, he
enjoys relative freedom to submit such evidence to prove his claim.·
Except in those instances where the BIR would require additional
documents in order to fully appreciate a claim for tax credit or
refund, in terms what additional document must be presented in
support of a claim for tax credit or refund · it is the taxpayer who
has that right and the burden of providing any and all documents
that would support his claim for tax credit or refund. After all, in a
claim for tax credit or refund, it is the taxpayer who has the burden
to prove his cause of action. As such, he enjoys relative freedom to
submit such evidence to prove his claim.

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Same; Same; Same; Under Section 112(A) of the National

Internal Revenue Code (NIRC), as amended by Republic Act (RA)
No. 9337, a taxpayer has two (2) years, after the close of the taxable
quarter when the sales were made, to apply for the issuance of a tax
credit certificate or refund of creditable input tax due or paid
attributable to such sales.·Under Section 112(A) of the NIRC, as
amended by R.A. No. 9337, a taxpayer has two (2) years, after the
close of the taxable quarter when the sales were made, to apply for
the issuance of a tax credit certificate or refund of creditable input
tax due or paid attributable to such sales. Thus, before the
administrative claim is barred by prescription, the taxpayer must
be able to submit his complete documents in support of the
application filed. This is because, it is upon the complete submission
of his documents in support of his application that it can be said
that the application was, „officially received‰ as provided under
RMC No. 49-2003.
Same; Same; Same; From the date an administrative claim for
excess unutilized value-added tax (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 Commissioner of Internal Revenue (CIR).·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 to complete his
administrative claim, the 120-day period allowed to the CIR begins
to run from the date of filing.
Same; Same; Same; In all cases, whatever documents a
taxpayer intends to file to support his claim must be completed
within the two (2)-year period under Section 112(A) of the National
Internal Revenue Code (NIRC).·In all cases, whatever documents a
taxpayer intends to file to support his claim must be completed
within the two-year period under Section 112(A) of the NIRC. The
30-day period from denial of the claim or from the expiration of the
120-day period

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within which to appeal the denial or inaction of the CIR to the

CTA must also be respected.
Same; Same; Same; Under the current rule, the reckoning of the
one hundred twenty (120)-day period has been withdrawn from the
taxpayer by Revenue Memorandum Circular (RMC) No. 54-2014,
since it requires him at the time he files his claim to complete his
supporting documents and attest that he will no longer submit any
other document to prove his claim.·Under the current rule, the
reckoning of the 120-day period has been withdrawn from the
taxpayer by RMC No. 54-2014, since it requires him at the time he
files his claim to complete his supporting documents and attest that
he will no longer submit any other document to prove his claim.
Further, the taxpayer is barred from submitting additional
documents after he has filed his administrative claim. On this
score, the Court finds that the foregoing issuance cannot be
applied retroactively to the case at bar since it imposes new
obligations upon taxpayers in order to perfect their administrative
claim, that is, [1] compliance with the mandate to submit the
„supporting documents‰ enumerated under RMC No. 54-2014 under
its „Annex A‰; and [2] the filing of „a statement under oath attesting
to the completeness of the submitted documents,‰ referred to in
RMC No. 54-2014 as „Annex B.‰ This should not prejudice
taxpayers who have every right to pursue their claims in the
manner provided by existing regulations at the time it was filed.
Same; Same; Same; Revenue Memorandum Order (RMO) No.
53-98 is addressed to internal revenue officers and employees, for
purposes of equity and uniformity, to guide them as to what
documents they may require taxpayers to present upon audit of their
tax liabilities.·As can be gleaned from the above, RMO No. 53-98 is
addressed to internal revenue officers and employees, for purposes
of equity and uniformity, to guide them as to what documents they
may require taxpayers to present upon audit of their tax
liabilities. Nothing stated in the issuance would show that it was
intended to be a benchmark in determining whether the documents
submitted by a taxpayer are actually complete to support a claim
for tax credit or refund of excess unutilized excess VAT.
Same; Same; Same; A taxpayerÊs failure with the requirements
listed under Revenue Memorandum Order (RMO) No. 53-98 is not

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fatal to its claim for tax credit or refund of excess unutilized

excess value-added tax (VAT).·Indeed, a taxpayerÊs failure with the
requirements listed under RMO No. 53-98 is not fatal to its claim
for tax credit or refund of excess unutilized excess VAT. This holds
especially true when the application for tax credit or refund of
excess unutilized excess VAT has arrived at the judicial level. After
all, in the judicial level or when the case is elevated to the Court,
the Rules of Court governs. Simply put, the question of whether the
evidence submitted by a party is sufficient to warrant the granting
of its prayer lies within the sound discretion and judgment of the
Court.
Same; Same; Same; While it is still true a taxpayer must prove
not only his entitlement to a refund but also his compliance with the
procedural due process · it is also true that when the law or rule
mandates that a party or authority must comply with a specific
obligation to perform an act for the benefit of another, the
noncompliance thereof by the former should not operate to prejudice
the latter, lest it render the nugatory the objective of the rule.·While
it is still true a taxpayer must prove not only his entitlement to a
refund but also his compliance with the procedural due process · it
is also true that when the law or rule mandates that a party or
authority must comply with a specific obligation to perform an act
for the benefit of another, the noncompliance thereof by the former
should not operate to prejudice the latter, lest it render the
nugatory the objective of the rule. Such is the situation in case at
bar.
Same; Same; Same; It is the taxpayer who determines when
complete documents have been submitted for the purpose of the
running of the one hundred twenty (120)-day period.·The alleged
failure of Total Gas to submit the complete documents at the
administrative level did not render its petition for review with the
CTA dismissible for lack of jurisdiction. 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.

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Same; Same; Same; A distinction must 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.·A distinction must 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 taxpayerÊs 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 taxpayerÊs 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.

LEONEN, J., Concurring Opinion:

Taxation; Tax Credit; Tax Refund; View that it is the taxpayerÊs

burden to determine whether complete documents have been
submitted for purposes of computing the one hundred twenty (120)-
day period for the Commissioner to decide administrative claims.·I
concur with the ponencia in the result. I agree that it is the
taxpayerÊs burden to determine whether complete documents have
been submitted for purposes of computing the 120-day period for
the Commissioner to decide administrative claims. Between the
taxpayer and the Commissioner, it is the former that has the
greater incentive to (a) have its case decided expeditiously by the
Bureau of Internal Revenue, and (b) in cases where it prefers to
have the Court of Tax Appeals rule on its case, have the
administrative period lapse. Besides, the sooner the taxpayer is
able to get a refund, the sooner its resources can be further
reinvested into our economy, thus trans-

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 lating to greater efficiencies, productivities, and an increase in
overall welfare.
Same; Same; Same; View that it is not to the governmentÊs
interest to allow the Bureau of Internal Revenue (BIR) to determine
whether the documents are complete.·It is not to the governmentÊs
interest to allow the Bureau of Internal Revenue to determine
whether the documents are complete. Otherwise, we would sanction
bias on its part with the corresponding opportunities for illicit rent-
seeking that deters honest investors and prudent entrepreneurship.
Should the documents, in the opinion of the Commissioner, be
incomplete, then the Commissioner should simply proceed to decide
on the administrative claim. The sooner it is resolved, the better its
effect on our economy. After all, it is truly the taxpayer that has the
burden of proving its basis for a claim for tax exemptions and VAT
refunds.
Same; Same; Same; View that any attempt on the part of the
taxpayer to amend or add to the documents it initially submitted
after an administrative finding by the Commissioner would,
therefore, be unacceptable.·Any attempt on the part of the
taxpayer to amend or add to the documents it initially submitted
after an administrative finding by the Commissioner would,
therefore, be unacceptable. This way, the prerogative of the
taxpayer and the interest of the state, in not making the regulatory
period of 120 days in Section 112(D) flexible, could be met.
Therefore, I do not agree that the effect of Revenue Memorandum
Circular No. 54-2014 and its validity should be decided in this case
to arrive at the required result.

PETITION for review on certiorari of the decision and

resolution of the Court of Tax Appeals En Banc.
The facts are stated in the opinion of the Court.
Jesus Clint O. Aranas for petitioner.
The Solicitor General for respondent.

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MENDOZA, J.:
 Before the Court is a petition for review on certiorari1
under Rule 45 of the Rules of Court assailing the October
11, 2012 Decision2 and the May 8, 2013 Resolution3 of the
Court of Tax Appeals (CTA) En Banc, in C.T.A. E.B. Case
No. 776, which affirmed the January 13, 2011 Decision4 of
the CTA Third Division (CTA Division) in CTA Case No.
7863.

The Facts

Petitioner Pilipinas Total Gas, Inc. (Total Gas) is

engaged in the business of selling, transporting and
distributing industrial gas. It is also engaged in the sale of
gas equipment and other related businesses. For this
purpose, Total Gas registered itself with the Bureau of
Internal Revenue (BIR) as a Value-Added Tax (VAT)
taxpayer.
On April 20, 2007 and July 20, 2007, Total Gas filed its
Original Quarterly VAT Returns for the First and Second
quarters of 2007, respectively with the BIR.
On May 20, 2008, it filed its Amended Quarterly VAT
Returns for the first two quarters of 2007 reflecting its
sales subject to VAT, zero-rated sales, and domestic
purchases of noncapital goods and services.
For the First and Second quarters of 2007, Total Gas
claimed it incurred unutilized input VAT credits from its
domestic purchases of noncapital goods and services in the

_______________

1 Rollo, pp. 11-394.

2 Id., at pp. 39-60; penned by Associate Justices Esperanza R. Fabon-
Victorino, with Associate Justices Ernesto D. Acosta, Juanito C.
Castañeda, Jr., Caesar A. Casanova, Olga Palanca-Enriquez, and Cielito
N. Mindaro-Grulla, concurring; Associate Justice Lovell R. Bautista,
dissenting; and Associate Justices Erlinda P. Uy and Amelia R.
Cotangco-Manalastas, on leave.
3 Id., at pp. 62-65.
4 Id., at pp. 93-108.

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total amount of P8,124,400.35. Of this total accumulated

input VAT, Total Gas claimed that it had P7,898,433.98
excess unutilized input VAT.
On May 15, 2008, Total Gas filed an administrative
claim for refund of unutilized input VAT for the first two
quarters of taxable year 2007, inclusive of supporting
documents.
On August 28, 2008, Total Gas submitted additional
supporting documents to the BIR.
On January 23, 2009, Total Gas elevated the matter to
the CTA in view of the inaction of the Commissioner of
Internal Revenue (CIR).
During the hearing, Total Gas presented, as witnesses,
Rosalia T. Yu and Richard Go, who identified documentary
evidence marked as Exhibits „A‰ to „ZZ-1,‰ all of which
were admitted. Respondent CIR, on the other hand, did not
adduce any evidence and had the case submitted for
decision.

Ruling of the CTA Division

In its January 13, 2011 Decision,5 the CTA Division

dismissed the petition for being prematurely filed. It
explained that Total Gas failed to complete the necessary
documents to substantiate a claim for refund of unutilized
input VAT on purchases of goods and services enumerated
under Revenue Memorandum Order (RMO) No. 53-98. Of
note were the lack of Summary List of Local Purchases and
the certifications from the Office of the Board of
Investment (BOD), the Bureau of Customs (BOC), and the
Philippine Economic Zone Authority (PEZA) that the
taxpayer had not filed any similar claim for refund
covering the same period.6
Believing that Total Gas failed to complete the necessary
documents to substantiate its claim for refund, the CTA
Divi-

_______________

5 Id.
6 Id., at pp. 102-105.
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sion was of the view that the 120-day period allowed to

the CIR to decide its claim under Section 112(C) of the
National Internal Revenue Code of 1997 (NIRC), had not
even started to run. With this, the CTA Division opined
that the petition for review was prematurely filed because
Total Gas failed to exhaust the appropriate administrative
remedies. The CTA Division stressed that tax refunds
partake of the nature of an exemption, putting into
operation the rule of strict interpretation, with the
taxpayer being charged with the burden of proving that he
had satisfied all the statutory and administrative
requirements.7
Total Gas sought for reconsideration8 from the CTA
Division, but its motion was denied for lack of merit in a
Resolution, dated April 19, 2011.9 In the same resolution, it
reiterated that „that the complete supporting documents
should be submitted to the BIR before the 120-day period
for the Commissioner to decide the claim for refund shall
commence to run. It is only upon the lapse of the 120-day
period that the taxpayer can appeal the inaction [to the
CTA.]‰10 It noted that RMO No. 53-98, which provides a
checklist of documents for the BIR to consider in granting
claims for refund, also serves as a guideline for the courts
to determine if the taxpayer had submitted complete
supporting documents.11 It also stated that Total Gas could
not invoke Revenue Memorandum Circular (RMC) No. 29-
09 because it was issued after the administrative claim was
filed and could not be applied retroactively.12 Thus, the CTA
Division disposed:

WHEREFORE, premises considered, the present

Petition for Review is hereby DENIED DUE
COURSE,

_______________
 7 Id., at pp. 106-107.
8 Id., at pp. 114-126.
9 Id., at pp. 128-133.
10 Id., at p. 130.
11 Id.
12 Id.

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and accordingly DISMISSED for having been

prematurely filed.
SO ORDERED.13

Ruling of the CTA En Banc

In its assailed decision, the CTA En Banc likewise

denied the petition for review of Total Gas for lack of merit.
It condensed its arguments into two core issues, to wit: (1)
whether Total Gas seasonably filed its judicial claim for
refund; and (2) whether it was unable to substantiate its
administrative claim for refund by failing to submit the
required documents that would allow respondent to act on
it.14
As to the first issue, the CTA En Banc ruled that the
CTA Division had no jurisdiction over the case because
Total Gas failed to seasonably file its petition. Counting
from the date it filed its administrative claim on May 15,
2008, the CTA En Banc explained that the CIR had 120
days to act on the claim (until September 12, 2008), and
Total Gas had 30 days from then, or until October 12, 2008,
to question the inaction before the CTA. Considering that
Total Gas only filed its petition on January 23, 2009, the
CTA En Banc concluded that the petition for review was
belatedly filed. For the tax court, the 120-day period could
not commence on the day Total Gas filed its last supporting
document on August 28, 2008, because to allow such would
give the taxpayer unlimited discretion to indefinitely
extend the 120-day period by simply filing the required
documents piecemeal.15
As to the second issue, the CTA En Banc affirmed the
CTA Division that Total Gas failed to submit the complete
supporting documents to warrant the grant of its
application for refund. Quoting the pertinent portion of the
decision of its divi-

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13 Id., at p. 107.
14 Id., at p. 52.
15 Id., at pp. 56-57.

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sion, the CTA En Banc likewise concurred in its finding

that the judicial claim of Total Gas was prematurely filed
because the 120-day period for the CIR to decide the claim
had yet to commence to run due to the lack of essential
documents.16
Total Gas filed a motion for reconsideration,17 but it was
denied in the assailed resolution of the CTA En Banc.18
Hence, the present petition.

Issues

 whether the judicial claim for refund

(a) 
was belatedly filed on 23 January 2009, or way
beyond the 30-day period to appeal as provided
in Section 112(c) of the Tax Code, as amended;
and
 whether the submission of incomplete
(b) 
documents at the administrative level (BIR)
renders the judicial claim premature and
dismissible for lack of jurisdiction.19

In its petition, Total Gas argues that its judicial claim

was filed within the prescriptive period for claiming excess
unutilized input VAT refund as provided under Section 112
of the NIRC and expounded in the CourtÊs ruling in CIR v.
Aichi Forging Company of Asia20 (Aichi) and in compliance
with Section 112 of the NIRC. In addition to citing Section
112(C) of the Tax Code, Total Gas points out that in one of
its previous claims for refund of excess unutilized input
VAT, the CTA En Banc in CTA En Banc Case No. 674,21
faulted the BIR in

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16 Id., at pp. 57-58.

17 Id., at pp. 157-169.
18 Id., at pp. 62-65.
19 Id., at p. 18.
20 646 Phil. 710; 632 SCRA 422 (2010).
21 Affirmed by the Third Division of this Court in G.R. No. 201920
via Resolutions dated October 14, 2013 and February 10, 2014; see Rollo
(G.R. No. 201920), pp. 302 and 320.

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not considering that the reckoning period for the 120-

day period should be counted from the date of submission
of complete documents.22 It then adds that the previous
ruling of the CTA En Banc was in accordance with law
because Section 112(C) of the Tax Code is clear in providing
that the 120-day period should be counted from the date of
its submission of the complete documents or from August
28, 2008 and not from the date it filed its administrative
claim on May 15, 2008.23 Total Gas argues that, since its
claim was filed within the period of exception provided in
CIR v. San Roque Power Corporation24 (San Roque), it did
not have to strictly comply with 120+30-day period before it
could seek judicial relief.25
Moreover, Total Gas questions the logic of the CTA En
Banc which stated that the petition was filed both
belatedly and prematurely. Total Gas points out that on the
one hand, the CTA En Banc ruled that it filed the judicial
claim belatedly as it was way beyond the 120+30-day
period. Yet, it also affirmed the findings of its division that
its petition for review was prematurely filed since the 120-
day period did not even commence to run for lack of
complete supporting documents.26
For Total Gas, the CTA En Banc violated the doctrine of
stare decisis because the tax tribunal had, on numerous
occasions, held that the submission of incomplete
supporting documents should not make the judicial appeal
premature and dismissible for lack of jurisdiction. In these
decisions, the CTA En Banc had previously held that
noncompliance with RMO No. 53-98 should not be fatal
since the requirements listed therein refer to requirements
for refund or tax credit in the administrative level for
purposes of establishing the authenticity of a taxpayerÊs
claim; and that in the judicial level, it is the Rules of Court
that govern and, thus, whether or not

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22 Rollo, pp. 20-21.

23 Id., at p. 21.
24 G.R. No. 187485, February 12, 2013, 690 SCRA 336.
25 Rollo, pp. 21-22.
26 Id., at p. 23.

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the evidence submitted by the party to the court is

sufficient lies within the sound discretion of the court. Total
Gas emphasizes that RMO No. 53-98 does not state that
non-sub​mission of supporting documents will nullify the
judicial claim. It posits that once a judicial claim is filed,
what should be examined are the evidence formally offered
in the judicial proceedings.27
Even assuming that the supporting documents
submitted to the BIR were incomplete, Total Gas argues
that there was no legal basis to hold that the CIR could not
decide or act on the claim for refund without the complete
supporting documents. It argues that under RMC No. 29-
09, the BIR is tasked with the duty to notify the taxpayer
of the incompleteness of its supporting documents and, if
the taxpayer fails to complete the supporting documents
despite such notice, the same shall be denied. The same
regulation provides that for purposes of computing the 120-
day period, it should be considered tolled when the
taxpayer is notified. Total Gas, however, insists that it was
never notified and, therefore, was justified in seeking
judicial relief.28
Although Total Gas admits that RMC No. 29-09 was not
yet issued at the time it filed its administrative claim, the
BIR still erred for not notifying them of their lack of
supporting documents. According to Total Gas, the power to
notify a taxpayer of lacking documents and to deny its
claim if the latter would not comply is inherent in the CIRÊs
power to decide refund cases pursuant to Section 4 of the
NIRC. It adds „[s]ound policy also dictates that it should be
the taxpayer who should determine whether he has already
submitted all documents pertinent to his claim. To rule
otherwise would result into a never-ending conflict/issue as
to the completeness of documents which, in turn, would
delay the taxpayerÊs

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27 Id., at pp. 23-25.

28 Id., at pp. 25-26.

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claim, and would put to naught the protection afforded

by Section 112(C) of the Tax Code.‰29
In her Comment,30 the CIR echoed the ruling of the CTA
En Banc, that Total Gas filed its petition out of time. She
countered that the 120-day period could not be counted
from the time Total Gas submitted its additional
documents on August 28, 2008 because such an
interpretation of Section 112(D) would indefinitely extend
the prescriptive period as provided in favor of the taxpayer.
In its Reply,31 Total Gas insisted that Section 112(C)
stated that the 120-day period should be reckoned from the
date of submission of complete documents, and not from
the date of the filing of the administrative claim.

Ruling of the Court

The petition has merit.

Judicial claim timely filed

Section 112(C) of the NIRC provides:

SEC.  112.   Refunds or Tax Credits of Input

Tax.·
xxxx
(C) 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 Subsections
(A) and (B) hereof.

_______________

29 Id., at p. 28.
30 Id., at pp. 426-433.
31 Id., at pp. 436-440.

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In case of full or partial denial of the claim for tax

 refund or tax credit, or the failure on the part of the
Commissioner to act on the application within the
period prescribed above, the taxpayer affected may,
within thirty (30) days from the receipt of the decision
denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the
unacted claim with the Court of Tax Appeals.
xxxx
[Emphasis and underscoring supplied]

From the above, it is apparent that the CIR has 120

days from the date of submission of complete
documents to decide a claim for tax credit or refund of
creditable input taxes. The taxpayer may, within 30 days
from receipt of the denial of the claim or after the
expiration of the 120-day period, which is considered a
„denial due to inaction,‰ appeal the decision or unacted
claim to the CTA.
To be clear, Section 112(C) categorically provides that
the 120-day period is counted „from the date of
submission of complete documents in support of the
application.‰ Contrary to this mandate, the CTA En Banc
counted the running of the period from the date the
application for refund was filed or May 15, 2008, and, thus,
ruled that the judicial claim was belatedly filed.
This should be corrected.
Indeed, the 120-day period granted to the CIR to decide
the administrative claim under the Section 112 is primarily
intended to benefit the taxpayer, to ensure that his claim is
decided judiciously and expeditiously. After all, the sooner
the taxpayer successfully processes his refund, the sooner
can such resources be further reinvested to the business
translating to greater efficiencies and productivities that
would ultimately uplift the general welfare. To allow the
CIR to determine the completeness of the documents
submitted and, thus, dictate the running of the 120-day
period, would undermine these objectives, as it would
provide the CIR the unbridled

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power to indefinitely delay the administrative claim,

which would ultimately prevent the filing of a judicial
claim with the CTA.
A hypothetical situation illustrates the hazards of
granting the CIR the authority to decide when complete
documents have been submitted · A taxpayer files its
administrative claim for VAT refund/credit with supporting
documents. After 121 days, the CIR informs the taxpayer
that it must submit additional documents. Considering
that the CIR had determined that complete documents
have not yet been submitted, the 120-day period to decide
the administrative claim has not yet begun to run. In the
meantime, more than 120 days have already passed since
the application with the supporting documents was filed to
the detriment of the taxpayer, who has no opportunity to
file a judicial claim until the lapse of the 120+30-day period
in Section 112(C). With no limitation to the period for the
CIR to determine when complete documents have been
submitted, the taxpayer may be left in a limbo and at the
mercy of the CIR, with no adequate remedy available to
hasten the processing of its administrative claim.
Thus, the question must be asked: In an administrative
claim for tax credit or refund of creditable input VAT, from
what point does the law allow the CIR to determine when it
should decide an application for refund? Or stated
differently: Under present law, when should the submission
of documents be deemed „completed‰ for purposes of
determining the running of the 120-day period?
Ideally, upon filing his administrative claim, a taxpayer
should complete the necessary documents to support his
claim for tax credit or refund or for excess utilized VAT.
After all, should the taxpayer decide to submit additional
documents and effectively extend the 120-day period, it
grants the CIR more time to decide the claim. Moreover, it
would be prejudicial to the interest of a taxpayer to prolong
the period of processing of his application before he may
reap the benefits of his claim. Therefore, ideally, the CIR
has a period of 120 days

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Pilipinas Total Gas, Inc. vs. Commissioner of Internal
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from the date an administrative claim is filed within

which to decide if a claim for tax credit or refund of excess
unutilized VAT has merit.
Thus, when the VAT was first introduced through
Executive Order No. 273,32 the pertinent rule was that:

(e) Period within which refund of input taxes may

be made by the Commissioner.·The Commissioner
shall refund input taxes within 60 days from the
date the application for refund was filed with
him or his duly authorized representative. No refund
or input taxes shall be allowed unless the VAT-
registered person files an application for refund
within the period prescribed in paragraphs (a), (b)
and (c), as the case may be.
[Emphasis supplied]

Here, the CIR was not only given 60 days within which
to decide an administrative claim for refund of input taxes,
but the beginning of the period was reckoned „from the
date the application for refund was filed.‰
When Republic Act (R.A.) No. 771633 was, however,
enacted on May 5, 1994, the law was amended to read:

(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 for creditable input taxes within sixty (60) days
from the date of submission of complete
documents in support of the application filed in
accordance with sub-

_______________

32 Titled „Adopting a Value-Added Tax, Amending for this Purpose

Certain Provisions of the National Internal Revenue Code, and for Other
Purposes.‰
33 Titled „An Act Restructuring the Value-Added Tax (VAT) System,
Widening its Tax Base and Enhancing its Administration, and for these
Purposes Amending and Repealing the Relevant Provisions of the
National Internal Revenue Code, as amended, and for Other Purposes.‰
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paragraphs (a) and (b) hereof. In case of full or

partial denial of the claim for tax refund or tax credit,
or the failure on the part of the Commissioner to act
on the application within the period prescribed above,
the taxpayer affected may, within thirty (30) days
from the receipt of the decision denying the claim or
after the expiration of the sixty-day period, appeal the
decision or the unacted claim with the Court of Tax
Appeals.
[Emphasis supplied]

Again, while the CIR was given only 60 days within

which to act upon an administrative claim for refund or tax
credit, the period came to be reckoned „from the date of
submission of complete documents in support of the
application.‰ With this amendment, the date when a
taxpayer made its submission of complete documents
became relevant. In order to ensure that such date was at
least determinable, RMO No. 4-94 provides:

REVENUE MEMORANDUM ORDER NO. 40-94

SUBJECT : Prescribing the Modified Procedures on

the Processing of Claims for Value-Added Tax
Credit/Refund

III. Procedures
REGIONAL OFFICEA
Revenue District Office
In General:

1. Ascertain the completeness of the supporting

documents prior to the receipt of the application for
VAT credit/refund from the taxpayer.

2. Receive application for VAT Credit/Refund (BIR

 Form No. 2552) in three (3) copies in the following
manner:
a. stamp the word „RECEIVED‰ on the
appropriate space provided in all copies of
application;
b. indicate the claim number;
 indicate the date of receipt; and
c. 

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d. initial by receiving officer.

The application shall be received only if the
required attachments prescribed in RAMO 1-91 have
been fully complied with. x x x

Then, when the NIRC34 was enacted on January 1, 1998,

the rule was once more amended to read:

(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 Subsections
(A) and (B) hereof.
In case of full or partial denial of the claim for tax
refund or tax credit, or the failure on the part of the
Commissioner to act on the application within the
period prescribed above, the taxpayer affected may,
within thirty (30) days from the receipt of the decision
denying the claim or after the expiration of the one
hundred twenty-day period, appeal the decision or the
unacted claim with the Court of Tax Appeals.
[Emphasis supplied]

This time, the period granted to the CIR to act upon an

administrative claim for refund was extended to 120 days.
The reckoning point however, remained „from the date of
submission of complete documents.‰
Aware that not all taxpayers were able to file the
complete documents to allow the CIR to properly evaluate
an administrative claim for tax credit or refund of
creditable input taxes, the CIR issued RMC No. 49-2003,
which provided:

_______________

34 Otherwise known as R.A. No. 8424.

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Q-18: For pending claims with incomplete

documents, what is the period within which to submit
the supporting documents required by the
investigating/pro​cessing office? When should the
investigating/processing office officially receive claims
for tax credit/refund and what is the period required to
process such claims?
A-18: For pending claims which have not been
acted upon by the investigating/processing office due
to incomplete documentation, the taxpayer-
claimants are given thirty (30) days within
which to submit the documentary requirements
unless given further extension by the head of
the processing unit, but such extension should
not exceed thirty (30) days.
For claims to be filed by claimants with the
respective investigating/processing office of the
administrative agency, the same shall be officially
received only upon submission of complete
documents.
For current and future claims for tax credit/refund,
the same shall be processed within one hundred
twenty (120) days from receipt of the complete
documents. If, in the course of the investigation and
processing of the claim, additional documents are
 required for the proper determination of the
legitimate amount of claim, the taxpayer-claimants
shall submit such documents within thirty (30)
days from request of the
investigating/processing office, which shall be
construed as within the one hundred twenty
(120) day period.
[Emphases supplied]

Consequently, upon filing of his application for tax credit

or refund for excess creditable input taxes, the taxpayer-
claimant is given thirty (30) days within which to complete
the required documents, unless given further extension by
the head of the processing unit. If, in the course of the
investigation and processing of the claim, additional
documents are required for the proper determination of the
legitimate amount of claim, the taxpayer-claimants shall
submit such documents within

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thirty (30) days from request of the

investigating/processing office. Notice, by way of a request
from the tax collection authority to produce the complete
documents in these cases, became essential. It is only upon
the submission of these documents that the 120-day period
would begin to run.
Then, when R.A. No. 933735 was passed on July 1, 2005,
the same provision under the NIRC was retained. With the
amend​ment to Section 112, particularly the deletion of
what was once Section 112(B) of the NIRC, Section 112(D)
was amended and renamed 112(C). Thus:

(C) 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) hereof.
In case of full or partial denial of the claim for tax
refund or tax credit, or the failure on the part of the
Commissioner to act on the application within the
period prescribed above, the taxpayer affected may,
within thirty (30) days from the receipt of the decision
denying the claim or after the expiration of the one
hundred twenty day-period, appeal the decision or the
unacted claim with the Court of Tax Appeals.

With the amendments only with respect to its place

under Section 112, the Court finds that RMC No. 49-2003
should still be observed. Thus, taking the foregoing
changes to the law altogether, it becomes apparent that, for
purposes of determining when the supporting documents
have been completed · it is the taxpayer who ultimately
determines when

_______________

35 Titled „An Act Amending Sections 27, 28, 34, 106, 107, 108, 109,
110, 111, 112, 113, 114, 116, 117, 119, 121, 148, 151, 236, 237 and 288 of
the National Internal Revenue Code of 1997, as Amended, and for Other
Purposes.

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complete documents have been submitted for the purpose

of commencing and continuing the running of the 120-day
period. After all, he may have already completed the
necessary documents the moment he filed his
administrative claim, in which case, the 120-day period is
reckoned from the date of filing. The taxpayer may have
also filed the complete documents on the 30th day from
filing of his application, pursuant to RMC No. 49-2003. He
may very well have filed his supporting documents on the
first day he was notified by the BIR of the lack of the
necessary documents. In such cases, the 120-day period is
computed from the date the taxpayer is able to submit the
complete documents in support of his application.
Then, except in those instances where the BIR would
require additional documents in order to fully appreciate a
claim for tax credit or refund, in terms what additional
document must be presented in support of a claim for tax
credit or refund · it is the taxpayer who has that right and
the burden of providing any and all documents that would
support his claim for tax credit or refund. After all, in a
claim for tax credit or refund, it is the taxpayer who has
the burden to prove his cause of action. As such, he enjoys
relative freedom to submit such evidence to prove his
claim.
The foregoing conclusion is but a logical consequence of
the due process guarantee under the Constitution.
Corollary to the guarantee that one be afforded the
opportunity to be heard, it goes without saying that the
applicant should be allowed reasonable freedom as to when
and how to present his claim within the allowable period.
Thereafter, whether these documents are actually
complete as required by law · is for the CIR and the
courts to determine. Besides, as between a taxpayer-
applicant, who seeks the refund of his creditable input tax
and the CIR, it cannot be denied that the former has
greater interest in ensuring that the complete set of
documentary evidence is provided for proper evaluation of
the State.

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Lest it be misunderstood, the benefit given to the

taxpayer to determine when it should complete its
submission of documents is not unbridled. Under RMC No.
49-2003, if in the course of the investigation and processing
of the claim, additional documents are required for the
proper determination of the legitimacy of the claim, the
taxpayer-claimants shall submit such documents within
thirty (30) days from request of the
investigating/processing office. Again, notice, by way of
a request from the tax collection authority to
produce the complete documents in these cases, is
essential.
Moreover, under Section 112(A) of the NIRC,36 as
amended by R.A. No. 9337, a taxpayer has two (2) years,
after the close of the taxable quarter when the sales were
made, to apply for the issuance of a tax credit certificate or
refund of creditable input tax due or paid attributable to
such sales. Thus, before the administrative claim is barred
by prescription, the tax-

_______________

36 (A) Zero-Rated or Effectively Zero-Rated Sales.·Any VAT-

registered person, whose sales are zero-rated or effectively zero-rated
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
refund of creditable input tax due or paid attributable to such sales,
except transitional input tax, to the extent that such input tax has not
been applied against output tax: Provided, however, That in the case of
zero-rated sales under Section 106(A)(2)(a)(1), (2) and (b) and Section
108(B)(1) and (2), the acceptable foreign currency exchange proceeds
thereof had been duly accounted for in accordance with the rules and
regulations of the Bangko Sentral ng Pilipinas (BSP): Provided, further,
That where the taxpayer is engaged in zero-rated or effectively zero-
rated sale and also in taxable or exempt sale of goods of properties or
services, and the amount of creditable input tax due or paid cannot be
directly and entirely attributed to any one of the transactions, it shall be
allocated proportionately on the basis of the volume of sales: Provided,
finally, That for a person making sales that are zero-rated under Section
108(B)(6), the input taxes shall be allocated ratably between his zero-
rated and non-zero-rated sales.

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payer must be able to submit his complete documents in

support of the application filed. This is because, it is upon
the complete submission of his documents in support of his
application that it can be said that the application was,
„officially received‰ as provided under RMC No. 49-2003.
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 to complete his administrative claim,
the 120-day period allowed to the CIR begins to run from
the date of filing.
In all cases, whatever documents a taxpayer intends to
file to support his claim must be completed within the two-
year period under Section 112(A) of the NIRC. The 30-day
period from denial of the claim or from the expiration of the
120-day period within which to appeal the denial or
inaction of the CIR to the CTA must also be respected.
It bears mentioning at this point that the foregoing
summation of the rules should only be made applicable to
those claims for tax credit or refund filed prior to June 11,
2014, such as the claim at bench. As it now stands, RMC
54-2014 dated June 11, 2014 mandates that:

The application for VAT refund/tax credit must be

accompanied by complete supporting
documents as enumerated in Annex „A‰ hereof. In
addition, the taxpayer shall attach a statement
under oath attesting to the completeness of the
submitted documents (Annex B). The affidavit shall
further state that the said documents are the only
documents which the taxpayer will present

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 to support the claim. If the taxpayer is a juridical
person, there should be a sworn statement that the
officer signing the affidavit (i.e., at the very least, the
Chief Financial Officer) has been authorized by the
Board of Directors of the company.
Upon submission of the administrative claim and
its supporting documents, the claim shall be
processed and no other documents shall be
accepted/required from the taxpayer in the course of
its evaluation. A decision shall be rendered by the
Commissioner based only on the documents
submitted by the taxpayer. The application for tax
refund/tax credit shall be denied where the
taxpayer/claimant failed to submit the complete
supporting documents. For this purpose, the
concerned processing/
in​vestigating office shall prepare and issue the
corresponding Denial Letter to the
taxpayer/claimant.‰

Thus, under the current rule, the reckoning of the 120-

day period has been withdrawn from the taxpayer by RMC
No. 54-2014, since it requires him at the time he files his
claim to complete his supporting documents and attest that
he will no longer submit any other document to prove his
claim. Further, the taxpayer is barred from submitting
additional documents after he has filed his administrative
claim.
On this score, the Court finds that the foregoing
issuance cannot be applied retroactively to the case
at bar since it imposes new obligations upon taxpayers in
order to perfect their administrative claim, that is, [1]
compliance with the mandate to submit the „supporting
documents‰ enumerated under RMC No. 54-2014 under its
„Annex A‰; and [2] the filing of „a statement under oath
attesting to the completeness of the submitted documents,‰
referred to in RMC No. 54-2014 as „Annex B.‰ This should
not prejudice taxpayers who have every right to pursue
their claims in the manner provided by existing regulations
at the time it was filed.
As provided under Section 246 of the Tax Code:

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SEC.  246.  Non-Retroactivity of Rulings.·
Any revocation, modification or reversal of any of the
rules and regulations promulgated in accordance with
the preceding Sections or any of the rulings or
circulars promulgated by the Commissioner shall not
be given retroactive application if the
revocation, modification or reversal will be
prejudicial to the taxpayers, except in the
following cases:
(a) Where the taxpayer deliberately misstates or
omits material facts from his return or any document
required of him by the Bureau of Internal Revenue;
(b) Where the facts subsequently gathered by the
Bureau of Internal Revenue are materially different
from the facts on which the ruling is based; or
(c) Where the taxpayer acted in bad faith.
[Emphasis and italics supplied]

Applying the foregoing precepts to the case at bench, it

is observed that the CIR made no effort to question the
inadequacy of the documents submitted by Total Gas. It
neither gave notice to Total Gas that its documents were
inadequate, nor ruled to deny its claim for failure to
adequately substantiate its claim. Thus, for purposes of
counting the 120-day period, it should be reckoned from
August 28, 2008, the date when Total Gas made its
„submission of complete documents to support its
application‰ for refund of excess unutilized input VAT.
Consequently, counting from this later date, the BIR had
120 days to decide the claim or until December 26, 2008.
With absolutely no action or notice on the part of the BIR
for 120 days, Total Gas had 30 days or until January 25,
2009 to file its judicial claim.
Total Gas, thus, timely filed its judicial claim on
January 23, 2009.
Anent RMO No. 53-98, the CTA Division found that the
said order provided a checklist of documents for the BIR to
consider in granting claims for refund, and served as a
guide
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for the courts in determining whether the taxpayer had

submitted complete supporting documents.
This should also be corrected.
To quote RMO No. 53-98:

REVENUE MEMORANDUM ORDER NO. 53-98

SUBJECT: Checklist of Documents to be Submitted

by a Taxpayer upon Audit of his Tax Liabilities as
well as of the Mandatory Reporting Requirements to
be Prepared by a Revenue Officer, all of which
Comprise a Complete Tax Docket.

TO: All Internal Revenue Officers, Employees and

Others Concerned
I. BACKGROUND
It has been observed that for the same kind of
tax audit case, Revenue Officers differ in their
request for requirements from taxpayers as well
as in the attachments to the dockets resulting to
tremendous complaints from taxpayers and
confusion among tax auditors and reviewers.
For equity and uniformity, this Bureau comes
up with a prescribed list of requirements from
taxpayers, per kind of tax, as well as of the
internally prepared reporting requirements, all
of which comprise a complete tax docket.
II. OBJECTIVE
This order is issued to:
a. Identify the documents to be required
from a taxpayer during audit, according to
particular kind of tax; and
b. Identify the different audit reporting
requirements to be prepared, submitted and
attached to a tax audit docket.

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III. LIST OF REQUIREMENTS PER TAX TYPE

Income Tax/Withholding Tax
– Annex A (3 pages)
Value-Added Tax
– Annex B (2 pages)
– Annex B-1 (5 pages)
xxxx

As can be gleaned from the above, RMO No. 53-98 is

addressed to internal revenue officers and employees, for
purposes of equity and uniformity, to guide them as to what
documents they may require taxpayers to present upon
audit of their tax liabilities. Nothing stated in the
issuance would show that it was intended to be a
benchmark in determining whether the documents
submitted by a taxpayer are actually complete to support a
claim for tax credit or refund of excess unutilized excess
VAT. As expounded in Commissioner of Internal Revenue v.
Team Sual Corporation (formerly Mirant Sual
37
Corporation):

The CIRÊs reliance on RMO 53-98 is misplaced.

There is nothing in Section 112 of the NIRC, RR 3-88
or RMO 53-98 itself that requires submission of the
complete documents enumerated in RMO 53-98 for a
grant of a refund or credit of input VAT. The subject of
RMO 53-98 states that it is a „Checklist of Documents
to be Submitted by a Taxpayer upon Audit of his Tax
Liabilities x x x.‰ In this case, TSC was applying for a
grant of refund or credit of its input tax. There was no
allegation of an audit being conducted by the CIR.
Even assuming that RMO 53-98 applies, it specifically
states that some documents are required to be
submitted by the taxpayer „if applicable.‰
Moreover, if TSC indeed failed to submit the
complete documents in support of its application, the
CIR
_______________

37 G.R. No. 205055, July 18, 2014, 730 SCRA 242.

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could have informed TSC of its failure, consistent

with Revenue Memorandum Circular No. (RMC) 42-
03. However, the CIR did not inform TSC of the
document it failed to submit, even up to the present
petition. The CIR likewise raised the issue of TSCÊs
alleged failure to submit the complete documents only
in its motion for reconsideration of the CTA Special
First DivisionÊs 4 March 2010 Decision. Accordingly,
we affirm the CTA EBÊs finding that TSC filed its
administrative claim on 21 December 2005, and
submitted the complete documents in support of its
application for refund or credit of its input tax at the
same time.
[Emphasis included. Underlining ours]

As explained earlier and underlined in Team Sual above,

taxpayers cannot simply be faulted for failing to submit the
complete documents enumerated in RMO No. 53-98, absent
notice from a revenue officer or employee that other
documents are required. Granting that the BIR found that
the documents submitted by Total Gas were inadequate, it
should have notified the latter of the inadequacy by
sending it a request to produce the necessary documents in
order to make a just and expeditious resolution of the
claim.
Indeed, a taxpayerÊs failure with the requirements listed
under RMO No. 53-98 is not fatal to its claim for tax credit
or refund of excess unutilized excess VAT. This holds
especially true when the application for tax credit or refund
of excess unutilized excess VAT has arrived at the judicial
level. After all, in the judicial level or when the case is
elevated to the Court, the Rules of Court governs. Simply
put, the question of whether the evidence submitted by a
party is sufficient to warrant the granting of its prayer lies
within the sound discretion and judgment of the Court.
At this point, it is worth emphasizing that the reckoning
of the 120-day period from August 28, 2008 cannot be
doubted. First, a review of the records of the case
undubitably show that Total Gas filed its supporting
documents on August 28,

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2008, together with a transmittal letter bearing the

same date. These documents were then stamped and signed
as received by the appropriate officer of the BIR. Second,
contrary to RMO No. 40-94, which mandates officials of the
BIR to indicate the date of receipt of documents received by
their office in every claim for refund or credit of VAT, the
receiving officer failed to indicate the precise date and time
when he received these documents. Clearly, the error is
attributable to the BIR officials and should not prejudice
Total Gas.
Third, it is observed that whether before the CTA or this
Court, the BIR had never questioned the date it received
the supporting documents filed by Total Gas, or the
propriety of the filing thereof. In contrast to the continuous
efforts of Total Gas to complete the necessary documents
needed to support its application, all that was insisted by
the CIR was that the reckoning period should be counted
from the date Total Gas filed its application for refund of
excess unutilized input VAT. There being no question as to
whether these documents were actually received on August
28, 2008, this Court shall not, by way of conjecture, cast
doubt on the truthfulness on such submission. Finally, in
consonance with the presumption that a person acts in
accordance with the ordinary course of business, it is
presumed that such documents were received on the date
stated therein.
Verily, should there be any doubt on whether Total Gas
filed its supporting documents on August 28, 2008, it is
incumbent upon the CIR to allege and prove such
assertion. As the saying goes, contra preferentum.
If only to settle any doubt, this Court is by no means
setting a precedent by leaving it to the mercy of the
taxpayer to determine when the 120-day reckoning period
should begin to run by providing absolute discretion as to
when he must comply with the mandate submitting
complete documents in support of his claim. In addition to
the limitations thoroughly discussed above, the peculiar
circumstance applicable herein, as to relieve Total Gas from
the application of the rule, is the

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Pilipinas Total Gas, Inc. vs. Commissioner of Internal
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obvious failure of the BIR to comply with the

specific directive, under RMO 40-94, to stamp the
date it received the supporting documents which
Total Gas had submitted to the BIR for its consideration in
the processing of its claim. The utter failure of the tax
administrative agency to comply with this simple mandate
to stamp the date it receive the documents submitted by
Total Gas · should not in any manner prejudice the
taxpayer by casting doubt as to when it was able to submit
its complete documents for purposes of determining the
120-day period.
While it is still true a taxpayer must prove not only his
entitlement to a refund but also his compliance with the
procedural due process38 · it is also true that when the
law or rule mandates that a party or authority must
comply with a specific obligation to perform an act for the
benefit of another, the noncompliance thereof by the former
should not operate to prejudice the latter, lest it render the
nugatory the objective of the rule. Such is the situation in
case at bar.

Judicial claim not prematurely filed

The CTA En Banc curiously ruled in the assailed

decision that the judicial claim of Total Gas was not only
belatedly filed, but prematurely filed as well, for failure of
Total Gas to prove that it had submitted the complete
supporting documents to warrant the grant of the tax
refund and to reckon the commencement of the 120-day
period. It asserted that Total Gas had failed to submit all
the required documents to the CIR and, thus, the 120-day
period for the CIR to decide the claim had not yet begun to
run, resulting in the premature filing of the judicial claim.
It wrote that the taxpayer must first submit the complete
supporting documents before the 120-day period could
commence, and that the CIR could

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38 CIR v. Aichi Forging Company of Asia, supra note 20 at p. 714, p.

425.

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not decide the claim for refund without the complete

supporting documents.
The Court disagrees.
The alleged failure of Total Gas to submit the complete
documents at the administrative level did not render its
petition for review with the CTA dismissible for lack of
jurisdiction. 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.
Finally, it should be mentioned that the appeal made by
Total Gas to the CTA cannot be said to be premature on the
ground that it did not observe the otherwise mandatory
and jurisdictional 120+30-day period. When Total Gas filed
its appeal with the CTA on January 23, 2009, it simply
relied on BIR Ruling No. DA-489-03, which, at that time,
was not yet struck down by the CourtÊs ruling in Aichi.
As explained in San Roque, this Court recognized a period
in time wherein the 120-day period need not be strictly
observed. Thus:

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To repeat, a claim for tax refund or credit, like a

claim for tax exemption, is construed strictly against
the taxpayer. One of the conditions for a judicial claim
of refund or credit under the VAT System is
compliance with the 120+30-day mandatory and
jurisdictional periods. Thus, strict compliance with
the 120+30-day period is necessary for such a claim to
prosper, whether before, during, or after the
effectivity of the Atlas doctrine, except for the
period from the issuance of BIR Ruling No. DA-
489-03 on 10 December 2003 to 6 October 2010
when the Aichi doctrine was adopted, which
again reinstated the 120+30-day period as
mandatory and jurisdictional.
xxxx
Clearly, BIR Ruling No. DA-489-03 is a general
interpretative rule. Thus, all taxpayers can rely on
 BIR Ruling No. DA-489-03 from the time of its
issuance on 10 December 2003 up to its reversal
by this Court in Aichi on 6 October 2010, where
this Court held that the 120+30-day period are
mandatory and jurisdictional.

At this stage, a review of the nature of a judicial claim

before the CTA is in order. In Atlas Consolidated Mining
and Development Corporation v. CIR, it was ruled ·

x x x First, a judicial claim for refund or tax credit

in the CTA is by no means an original action but
rather an appeal by way of petition for review of a
previous, unsuccessful administrative claim.
Therefore, as in every appeal or petition for review, a
petitioner has to convince the appellate court that the
quasi-judicial agency a quo did not have any reason to
deny its claims. In this case, it was necessary for
petitioner to show the CTA not only that it was
entitled under substantive law to the grant of its
claims but also that it satisfied all the documentary
and evidentiary requirements for an administrative
claim for refund or tax credit. Second, cases filed in
the CTA are litigated de novo. Thus, a petitioner
should prove every minute aspect of its case by
presenting, for-

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Pilipinas Total Gas, Inc. vs. Commissioner of Internal
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mally offering and submitting its evidence to the

CTA. Since it is crucial for a petitioner in a judicial
claim for refund or tax credit to show that its
administrative claim should have been granted in the
first place, part of the evidence to be submitted to the
CTA must necessarily include whatever is required
for the successful prosecution of an administrative
claim.39
[Underscoring supplied]
 A distinction must 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 taxpayerÊs 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 taxpayerÊs 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

_______________

39 Atlas Consolidated Mining and Development Corporation v. CIR,

547 Phil. 332, 339; 518 SCRA 425, 430-431 (2007).

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430 SUPREME COURT REPORTS ANNOTATED

Pilipinas Total Gas, Inc. vs. Commissioner of Internal
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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.40
The Court cannot, however, make a ruling on the issue
of whether Total Gas is entitled to a refund or tax credit
certificate in the amount of P7,898,433.98. Considering
that the judicial claim was denied due course and
dismissed by the CTA Division on the ground of premature
and/or belated filing, no ruling on the issue of Total Gas
entitlement to the refund was made. The Court is not a
trier of facts, especially when such facts have not been
ruled upon by the lower courts. The case shall, thus, be
remanded to the CTA Division for trial de novo.
WHEREFORE, the petition is PARTIALLY
GRANTED. The October 11, 2012 Decision and the May 8,
2013 Resolution of the Court of Tax Appeals En Banc, in
C.T.A. E.B. Case No. 776 are REVERSED and SET
ASIDE.
The case is REMANDED to the CTA Third Division for
trial de novo.
SO ORDERED.

Sereno (CJ.), Carpio, Velasco, Jr., Leonardo-De Castro,

Peralta, Bersamin, Del Castillo, Villarama, Jr., Perez, Reyes
and Perlas-Bernabe, JJ., concur.
Brion, J., On Leave.
Leonen, J., See Separate Concurring Opinion.
Jardeleza, J., No part.

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40 Id.

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CONCURRING OPINION
LEONEN, J.:

I concur with the ponencia in the result. I agree that it is

the taxpayerÊs burden to determine whether complete
documents have been submitted for purposes of computing
the 120-day period1 for the Commissioner to decide
administrative claims.
Between the taxpayer and the Commissioner, it is the
former that has the greater incentive to (a) have its case
decided expeditiously by the Bureau of Internal Revenue,
and (b) in cases where it prefers to have the Court of Tax
Appeals rule on its case, have the administrative period
lapse.
Besides, the sooner the taxpayer is able to get a refund,
the sooner its resources can be further reinvested into our
economy, thus translating to greater efficiencies,
productivities, and an increase in overall welfare.
Furthermore, in view of the nature of a judicial action
explained in Commissioner of Internal Revenue v. Aichi
Forging Company of Asia, Inc.2 and deftly emphasized
again in this case, it is the taxpayer that has the greater
incentive to present as complete a set of evidence as
possible to have the Commissioner rule and, should the
ruling be adverse, as basis for an appeal.
On the other hand, it is not to the governmentÊs interest
to allow the Bureau of Internal Revenue to determine
whether

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1 Tax Code, Sec. 112(D) provides, in part, that „[i]n 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) hereof[.]‰
2 646 Phil. 710; 632 SCRA 422 (2010) [Per J. Del Castillo, First
Division].

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 Pilipinas Total Gas, Inc. vs. Commissioner of Internal
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the documents are complete. Otherwise, we would

sanction bias on its part with the corresponding
opportunities for illicit rent-seeking that deters honest
investors and prudent entrepreneurship. Should the
documents, in the opinion of the Commissioner, be
incomplete, then the Commissioner should simply proceed
to decide on the administrative claim. The sooner it is
resolved, the better its effect on our economy. After all, it is
truly the taxpayer that has the burden of proving its basis
for a claim for tax exemptions3 and VAT refunds.4
Any attempt on the part of the taxpayer to amend or add
to the documents it initially submitted after an
administrative finding by the Commissioner would,
therefore, be unacceptable. This way, the prerogative of the
taxpayer and the interest of the state, in not making the
regulatory period of 120 days in Section 112(D) flexible,
could be met. Therefore, I do not agree that the effect of
Revenue Memorandum Circular No. 54-2014 and its
validity should be decided in this case to arrive at the
required result.

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3 See, for example, Smart Communications, Inc. v. City of Davao, 587

Phil. 20, 31; 565 SCRA 237, 248 (2008) [Per J. Nachura, Third Division];
Digital Telecommunications Philippines, Inc. v. City Government of
Batangas, 594 Phil. 269, 299; 573 SCRA 605, 636 (2008) [Per J. Carpio,
En Banc].
4 See, for example, Republic v. CST Philippines, Inc., G.R. No.
190872, October 17, 2013, 707 SCRA 695, 712 [Per J. Perlas-Bernabe, En
Banc]; Microsoft Philippines, Inc. v. Commissioner of Internal Revenue,
662 Phil. 762, 767; 647 SCRA 398, 403 (2011) [Per J. Carpio, Second
Division]; Bonifacio Water Corporation v. Commissioner of Internal
Revenue, G.R. No. 175142, July 22, 2013, 701 SCRA 574, 584 [Per J.
Peralta, Third Division], citing Western Mindanao Power v.
Commissioner of Internal Revenue, 687 Phil. 328; 672 SCRA 350 (2012)
[Per J. Sereno (now Chief Justice), Second Division]. See also
Commissioner of Internal Revenue v. San Roque, G.R. No. 187485,
February 12, 2013, 690 SCRA 336, 383 [Per J. Carpio, En Banc].
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The ambient facts in Hedcor, Inc. v. Commissioner of

Internal Revenu5 are different from this case. In Hedcor,
before the filing of a Petition for Review before the Court of
Tax Appeals, there was a letter of authority to the officials
of the Bureau of Internal Revenue to inspect the documents
of the taxpayer. In this case, there was none. It was the
taxpayer, on its own initiative, that sought to complete its
submissions. Parenthetically, the belated issuance of a
letter of authority for administrative claims for VAT
refunds in Hedcor seems to me, at best, strange. At worse,
it is irregular.

Petition partially granted, judgment and resolution

reversed and set aside.

Notes.·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 refund of
the creditable input tax due or paid to such sales.
(Commissioner of Internal Revenue vs. San Roque Power
Corporation, 690 SCRA 336 [2013])
A tax credit or refund, like tax exemption, is strictly
construed against the taxpayer. (Silicon Philippines, Inc.
[formerly Intel Philippines Manufacturing, Inc.] vs.
Commissioner of Internal Revenue, 754 SCRA 279 [2015])

··o0o··

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5 G.R. No. 207575, July 15, 2015, 763 SCRA 88 [Per CJ. Sereno, First
Division].
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