CASE DIGEST
COMMISSIONER OF
INTERNAL REVENUE V. PHILEX MINING CORP.
G.R. No. 230016,
[November 23, 2020]
SECOND, LOPEZ, M.V
Value Added Tax; VAT
mandatory compliances; VAT Refund
While the tax law requires mandatory compliance with the keeping of subsidiary journals and the filing of monthly value-added tax (VAT) declarations, the Court will not deny the request for refund on the sole basis that the taxpayer failed to comply with these requirements when the law does not provide for its compliance by the taxpayer to be entitled for refund. The Court may not construe a statute that is free from doubt; neither can we impose conditions or limitations when none is provided for.
Philex Mining Corporation, a
VAT-registered taxpayer engaged in mining, sought a refund of ₱51,734,898.99
for unutilized input VAT attributed to its zero-rated sales during the second
and third quarters of taxable year 2010. The Commissioner of Internal Revenue
(CIR) contested the refund claim, asserting that Philex Mining failed to comply
with the accounting requirements of maintaining subsidiary sales and purchase
journals and filing monthly VAT declarations.
Whether Philex Mining is entitled to a
refund of unutilized input VAT despite its alleged non-compliance with
subsidiary journal-keeping and monthly VAT declaration filing requirements.
YES. The Court ruled in favor of Philex Mining, holding that the absence of subsidiary sales and purchase journals and monthly VAT declarations is not sufficient to deny the refund. The Court emphasized that the Tax Code does not explicitly require compliance with these specific accounting requirements as a condition for a refund. It clarified that strict construction is required for tax exemptions, but tax statutes should be construed strictly against the taxing authority and liberally in favor of the taxpayer.
In this case, Philex Mining's refund
claim was granted, stating that the taxpayer had sufficiently proven its
entitlement to the refund. The absence of subsidiary sales journal, subsidiary
purchase journal, and monthly VAT declarations is not sufficient to deprive
Philex Mining of its right to a refund. The Court maintained that Philex Mining
adequately demonstrated its entitlement to the refund by providing the
necessary documents such as official receipts, quarterly VAT returns, and
import entry declarations. In all, Philex Mining's failure to maintain
subsidiary sales and purchase journals or to file the monthly VAT declarations
should not result in the outright denial of its claim for refund or credit of
unutilized input VAT attributable to its zero-rated sales.
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