G.R. No. 212920, September 15, 2015
FACTS
Nippon
is a domestic corporation duly organized and existing under Philippine laws,
which is primarily engaged in the business of freight forwarding, and a VAT
registered entity. It filed its quarterly VAT returns for the year 2002 on
April 25, 2002, July 25, 2002, October 25, 2002, and January 27, 2003,
respectively. It maintained that
during the said period it incurred input VAT attributable to its zero-rated
sales in the amount of P28,405,167.60, from which only P3,760,660.74 was applied
as tax credit, thus, reflecting refundable excess input VAT in the amount of
P24,644,506.86. Nippon filed an administrative claim for refund of its unutilized input VAT in the
amount of P24,644,506.86 for the year 2002 before the BIR. A day later, it filed a judicial claim
for tax refund, by way of petition for review, before the CTA. For its part,
petitioner CIR asserted that the amounts being claimed as unutilized input VAT
were not properly documented, hence, should be denied.
ISSUE
Whether the CTA properly granted Nippon's
motion to withdraw.
RULING
No. The primary reason that militates against the granting of
the motion to withdraw is the fact that the CTA Division had already determined
that Nippon was only entitled to refund the reduced amount of P2,614,296.84 since it failed to prove that the
recipients of its services were non-residents "doing business outside the
Philippines". Markedly different from this is the BIR's determination that
Nippon should receive P21,675,128.91, which is larger
than the amount found due by the CTA Division. Therefore, the massive
discrepancy alone between the administrative and judicial determinations of the
amount to be refunded to Nippon should have already raised a red flag to the
CTA Division. Clearly, the interest of the government, and, more significantly,
the public, will be greatly prejudiced by the erroneous grant of refund - at a
substantial amount at that - in favor of Nippon. Hence, under these
circumstances, the CTA Division should not have granted the motion to withdraw.
In matters of taxation, the government cannot be estopped by the mistakes,
errors or omissions of its agents for upon it depends the ability of the
government to serve the people for whose benefit taxes are collected.
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