CIR v. BURMEISTER GR No. 190021, Oct 22, 2014 J. PERLAS-BERNABE; VAT, Tax Remedies, Tax Credit/Refund


Respondent Burmeister And Wain Scandinavian Contractor Mindanao, Inc., is a VAT registered corporation primarily engaged in industrial and power-generating plants and related facilities for the conversion into electricity of coal distillate, and other fuels. 

Respondent subcontracted from a consortium of non-resident foreign corporations the actual operation and maintenance of two 100-megawatt power barges owned by the National Power Corporation, which services are subject to 0% VAT.

Respondent indicated zero-rated sales and input VAT paid on its domestic purchases of goods and services in its Quarterly VAT Return for the fourth quarter of taxable year 1998.

Respondent filed an Application for Tax Credit/Refund of VAT Paid for the period July to December 1998, which was not acted upon by the CIR.

Respondent filed a petition for review before the CTA. The petition was denied. However, on appeal before the CA, the case was remanded to the CTA.

The CTA First Division rendered a Decision ordering the CIR to refund or issue a tax credit certificate in favor of respondent in the amount representing the latter’s valid claim. 

The CIR filed a petition for review  before the CTA En Banc. The CTA En Banc dismissed the petition.

The CIR’s MR was denied, hence, the present petition.


Whether or not respondent is entitled to its judicial claim of Tax Credit/Refund.


Section 112 of RA 8424, provides that the taxpayer can file its administrative claim for refund or credit at any time within the two-year prescriptive period. If it files its claim on the last day of said period, it is still filed on time.

The CIR will have 120 days from such filing to decide the claim. If the CIR decides the claim on the 120th day, or does not decide it on that day, the taxpayer still has 30 days to file its judicial claim with the CTA; otherwise, the judicial claim would be dismissed for being filed out of time.

It bears emphasis that Section 112 (D) of RA 8424, which is explicit on the mandatory and jurisdictional nature of the 120+30-day period, was already effective on January 1, 1998. Notwithstanding the fact that respondent’s administrative claim had been timely filed, the Court is nonetheless constrained to deny the averred tax refund or credit, as its judicial claim therefor was filed beyond the 120+30-day period, and hence – as earlier stated – deemed to be filed out of time.

As the records would show, the administrative claim was filed on July 21, 1999. The CIR had 120 days or until November 18, 1999, to decide on respondent’s application. 

Since the CIR did not act at all, respondent had until December 18, 1999, the last day of the 30-day period, to file its judicial claim. However, respondent filed its petition for review with the CTA only on January 9, 2001 and, thus, was one year and 22 days late. As a consequence of the late filing of said petition, the CTA did not properly acquire jurisdiction over the claim.

Indeed, it has been pronounced time and again that taxes are the lifeblood of the government and, consequently, tax laws must be faithfully and strictly implemented as they are not intended to be liberally construed. 

The Court so holds that the CTA En Banc committed reversible error when it granted respondent’s claim for refund or tax credit despite its non-compliance with the mandatory periods under Section 112 (D) (now renumbered as Section 112[C]) of RA 8424. Accordingly, the claim for refund/tax credit must be denied.

Leave a Reply

Your email address will not be published. Required fields are marked *