CIR v.

San Roque Power Corporation

G.R. No. 187485 February 12, 2013
Facts:
San Roque Power entered into an agreement with the National Power
Corporation by building the San Roque Multi-Purpose Project located in San Miguel,
Pangasinan. Such project includes the construction of a dam, spillway, and power
plant; San Roque allegedly incurred, excess input VAT in the amount of
₱559,709,337.54 for taxable year 2001 which it declared in its Quarterly VAT Returns
for the same year. San Roque filed with the BIR separate claims for refund for the
same amount, representing unutilized input taxes as declared in its VAT returns for
the taxable year 2001. On March 28, 2003, San Roque filed amended Quarterly VAT
Returns for the year 2001, since it increased its unutilized input VAT to the amount
of ₱560,200,283.14. Consequently, it filed a separate amended claim for refund the
same amount.

CIR’s inaction on the subject claims led to the filing by San Roque of the
Petition for Review with the Court of Tax Appeals on April 10, 2013. CTA Second
division initially denied the claim, but upon reconsideration the petition was partially
granted. The CTA en Banc dismissed the CIR’s petition for review and affirmed the
earlier decision.

Issue:
Whether or not the CTA en Banc erred in affirming the decision in partially
granting San Roque’s claim for refund.

Held:
Yes. San Roque failed to comply with the 120-day waiting period, the time
expressly given by law to the Commissioner to decide whether to grant or deny San
Roque’s application for tax refund or credit. It is undisputable that compliance with
the 120-day waiting period is mandatory and jurisdictional. For violation a mandatory
provision of law in filling its petition with the CTA, San Roque cannot claim any right
arising from such void petition.

Taxes are the lifeblood of the nation. This Court cannot turn a blind eye to the
economic malaise by being unduly liberal to taxpayers who do not comply with
statutory requirements for tax refunds or credits since it is a well-settled principle
that tax refunds are strictly construed against the taxpayer.