ATLAS CONSOLIDATED CONSOL IDATED MINING v. CIR FACTS: Petitioner corporation is engaged in the business of mining, production, and sale of various mineral produc products, ts, such as gold, pyrite, and copper concentrates. It is a AT!registered ta"payer. Petitioner corporation #led $ith the %I& the application for the refund'credit of its input AT on its purchases of capital goods and on its (ero!rated sales. )hen its application for refund'credit remained unresolved by the %I&, petitioner #led a Petition for &evie$ $ith the CTA. The CTA denied the claims on the grounds that for (ero!rating to apply, *+ of the company-s sales must consists of e"ports, that the same $ere not #led $ithin the !year prescriptive period /the claim for 011 2uarterly returns $ere 3udicially #led only on April +, 01145, and that petitioner failed to submit substantial evidence to support its claim for refund'credit. The petitioner, on the other hand, contends that CTA failed to consider the follo$ing: sales to PASA& and P6I7P8S $ithin the 9"port Processing one Authority /9PA5 as (ero!rated e"port sales; the !year prescriptive period should be counted from the date of #ling of the last ad3ustment return $hich $as April 0<, 011=, and not on every end of the applicable 2uarters; and that the certi#cation of the independent CPA attesting to the correctness of the contents of the summary of suppliers> invoices or receipts e"amined, evaluated and audited by said CPA should substantiate substantiat e its claims. ISS?9S: 0. )hether or not the claims claims $ere $ere #led $ithin $ithin the !year !year prescriptive prescriptive period period . )hether or not not the claims for for refund'credit refund'credit of input input A AT of petitioner corporation have su@cient legal bases =. )hether or or not petitioner su@ciently su@ciently established the factual factual bases for its applications for refund'credit of input AT 697: 0. B9S. The #ling of a 2uarterly income ta" returns re2uired in Section < /no$ Section D5 and implemented per %I& Form 0*+!E and payment of 2uarterly income ta" should only be considered mere installments of the annual ta" due. These 2uarterly 2uarterly ta" payments $hich $hich are are computed based on the cumulative cumulative #gures of gross receipts and deductions in order to arrive at a net ta"able income, should be treated as advances or portions of the annual income ta" due, to be ad3usted at the end of the calendar or #scal year. This is reinforced by Section * /no$ Section D15 $hich provides for the #ling of ad3ustment returns and #nal payment of income ta". Conse2uently, the t$o!year prescriptive period provided in Section 1 /no$ Section =+5 of the Ta" Code should be computed from the time of #ling the Ad3ustment &eturn or Annual Income Ta" &eturn and #nal payment of income ta". . B9S. Section 0+D/b5/5, in relation to Section 0++/a5/5 of the Ta" Code of 01**, as amended, allo$ed the refund'credit of input AT on e"port sales to enterprises operating $ithin e"port processing (ones and registered $ith the 9PA, since such e"port sales $ere deemed to be eectively (ero!rated sales. Ta" treatment of Ta" of goods brought brought into the the e"port processing processing (ones (ones is only consistent $ith the estination Principle and Cross %order octrine to $hich the Philippine AT system adheres. According to the Destination Principle goods and services are ta!ed onl" in the co#ntr" $here these are cons#%ed. In
connection $ith the said principle the Cross &order Doctrine %andates that no 'AT shall (e i%posed to )or% part o) the cost o) the goods destined )or cons#%ption o#tside the territorial (order o) the ta!ing a#thorit". *ence act#al e!port o) goods and services )ro% the Philippines to a )oreign co#ntr" %#st (e )ree o) 'AT $hile those destined )or #se or cons#%ption $ithin the Philippines shall (e i%posed $ith +,- 'AT. E!port processing ones are to (e %anaged as a separate c#sto%s territor" )ro% the rest o) the Philippines and th#s )or ta! p#rposes are e/ectivel" considered as )oreign territor". For this reason, sales by persons from the Philippine customs territory to those inside the e"port processing (ones are already ta"ed as e"ports. =. G8. For a 3udicial claim for refund to prosper, ho$ever, respondent must not only prove that it is a AT registered entity and that it #led its claims $ithin the prescriptive period. It must substantiate the input VAT paid by purchase invoices or ofcial receipts. This respondent failed to do. Petitioner corporation failed to present together $ith its application the re2uired supporting documents, $hether before the %I& or the CTA.
Ta! re)#nds are in the nat#re o) ta! e!e%ptions. It is regarded as in derogation o) the sovereign a#thorit" and sho#ld (e constr#ed in strictissimi juris against the person or entit" clai%ing the e!e%ption. The ta!pa"er $ho clai%s )or e!e%ption %#st 0#sti)" his clai% (" the clearest grant o) organic or stat#te la$ and sho#ld not (e per%itted to stand on vag#e i%plications.
