Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue 546 SCRA 150, February 18, 2008

ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION, petitioner,
vs.
COMMISSIONER OF INTERNAL REVENUE, respondent.
G.R. No. 159490 February 18, 2008
Facts:
1. Atlas applied with the BIR for the issuance of a tax credit certificate or refund under
Section 106(b) of the Tax Code. The certificate would represent the VAT it paid for the
first quarter of 1993 in the amount of PhP 7,907,662.53, which corresponded to the input
taxes not applied against any output VAT.
2. Atlas presented in evidence the summary presented with the certification by an
independent Certified Public Accountant (CPA) and the testimony of Atlas Accounting
and Finance Manager
Main Issue:
Whether or not the Court can determine the determine the veracity of the input VAT Atlas has
paid and to prove actual export sales based on the evidence presented?
Held:
No.
Sec. 349 of Rule 132, Revised Rules on Evidence provides that: no evidence which has not
been formally offered shall be considered.
Thus,
1. where the pertinent invoices or receipts purportedly evidencing the VAT paid by Atlas
were not submitted, the courts a quo evidently could not determine the veracity of the
input VAT Atlas has paid.
2. when Atlas likewise failed to submit pertinent export documents to prove actual export
sales with due certification from accredited banks on the export proceeds in foreign
currency with the corresponding conversion rate into Philippine currency, the courts a
quo likewise could not determine the veracity of the export sales as indicated in Atlas
amended VAT return.
Question: Why do you need to adduce and present the most competent evidence?
The most competent evidence must be adduced and presented

to prove the allegations in a complaint, petition, or protest before a judicial court.
And where the best evidence cannot be submitted, secondary evidence may be
presented. In the instant case, the pertinent documents which are the best pieces of
evidence were not presented.
Third, the summary presented by Atlas does not replace the pertinent invoices, receipts,
and export sales documents as competent evidence to prove the fact of refundable or
creditable input VAT. Indeed, the summary presented with the certification by an independent
Certified Public Accountant (CPA) and the testimony of Atlas Accounting and Finance Manager
are merely corroborative of the actual input VAT it paid and the actual export sales. Otherwise,
the pertinent invoices, receipts, and export sales documents are the best and competent pieces
of evidence required to substantiate Atlas claim for tax credit or refund which is merely
corroborated by the summary duly certified by a CPA and the testimony of Atlas employee on the
export sales. And when these pertinent documents are not presented, these could not be
corroborated as is true in the instant case.
Fourth, Atlas mere allegations of the figures in its amended VAT return for the first
quarter of 1993 as well as in its petition before the CTA are not sufficient proof of the
amount of its refund entitlement. They do not even constitute evidence10 adverse to CIR
against whom they are being presented.11 While Atlas indeed submitted several documents,
still, the CTA could not ascertain from them the veracity of the figures as the documents
presented by Atlas were not sufficient to prove its action for tax credit or refund. Atlas has failed
to meet the burden of proof required in order to establish the factual basis of its claim for a tax
credit or refund. Neither can we ascertain the veracity of Atlas alleged input VAT taxes which are
refundable nor the alleged actual export sales indicated in the amended VAT return.
Clearly, it would not be proper to allow Atlas to simply prevail and compel a tax credit or refund in
the amount it claims without proving the amount of its claim. After all, "[t]ax refunds are in the
nature of tax exemptions,"12 and are to be construed strictissimi juris against the taxpayer.
Fifth, it is thus academic whether compliance with the documentary requirements of RR 3-

88 is necessary. Suffice it to say that a revenue regulation is binding on the courts as long as
the procedure fixed for its promulgation is followed.13 It has not been disputed that RR 3-88 has
been duly promulgated pursuant to the rule-making power of the Secretary of Finance upon the
recommendation of the CIR. As aptly held by the courts a quo, citing Eslao,14 these RRs or
administrative issuances have the force of law and are entitled to great weight.
Sixth, it would not be amiss to point out that Atlas contention on the applicability of CTA Circular
No. 10-97 is misplaced. For one, said circular amended CTA Circular No. 1-95 only in 1997
whereas the proceedings of the instant case were conducted prior to 1997. In fact, Atlas Formal
Offer of Evidence15 was filed before the CTA on September 2, 1996. For another, even if said
circular is retroactively applied for being procedural, still, it does not afford Atlas relief as the
documentary and testimonial pieces of evidence adduced before the CTA are insufficient to
prove the claim for refund or tax credit.

Atlas Consolidated Mining and Development Corporation vs. Commissioner of Internal Revenue 546 SCRA 150, February 18, 2008

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ATLAS CONSOLIDATED MINING AND DEVELOPMENT CORPORATION, petitioner,

G.R. No. 159490 February 18, 2008

The most competent evidence must be adduced and presented

Fifth, it is thus academic whether compliance with the documentary requirements of RR 3-

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