Posted by: Eileen Shiella A. Dialimas | July 30, 2018
FACTS:
MPC is a domestic firm engaged in the generation of power which it sells to the National Power Corporation (NPC). For the construction of the electrical and mechanical equipment portion of its Pagbilao, Quezon plant, which appears to have been undertaken from 1993 to 1996, MPC secured the services of Mitsubishi Corporation (Mitsubishi) of Japan.
In the light of the NPCs tax exempt status, MPC, on the belief that its sale of power generation services to NPC is, pursuant to the Tax Code, zero-rated for VAT purposes, filed an Application for Effective Zero Rating. The application covered the construction and operation of its Pagbilao power station under a Build, Operate, and Transfer scheme.
MPC opted not to pay the VAT component of the progress billings from Mitsubishi for the period covering April 1993 to September 1996 for the E & M Equipment Erection Portion of MPCs contract with Mitsubishi. Apparently, it was only on April 14, 1998 that MPC paid Mitsubishi the VAT component for the progress billings from April 1993 to September 1996, with the aggregate amount of PhP 135,993,570.
On December 20, 1999, MPC filed on an administrative claim for refund of unutilized input VAT in the amount of PhP 148,003,047.62 which was denied by the BIR because MPCs sale of electricity to NPC is not zero-rated for its failure to secure an approved application for zero-rating. MPC went to the CTA via a petition for review, which granted its claim for input VAT refund or credit, but only for the amount of PhP 10,766,939.48. Aggrieved, MPC appealed the CTAs Decision to the CA via a petition for review under Rule 43. The CA agreed with the CTA on MPCs entitlement to (1) a zero-rating for VAT purposes for its sales and services to tax-exempt NPC; and (2) a refund or tax credit for its unutilized input VAT for the second quarter of 1998. However, CA brushed aside the CTAs ruling and disquisition casting doubt on the veracity and genuineness of the Mitsubishi-issued OR. Their disagreement, however, centered on the issue of proper documentation, particularly the evidentiary value of OR No. 0189. CA denied petitioners motion for reconsideration. Hence, his Petition.
ISSUE:
Whether or not the SC may review questions of fact.
RULING:
As a matter of sound practice, the Court refrains from reviewing the factual determinations of the CA or reevaluate the evidence upon which its decision is founded. One exception to this rule is when the CA and the trial court diametrically differ in their finding, as here. In such a case, it is incumbent upon the Court to review and determine if the CA might have overlooked, misunderstood, or misinterpreted certain facts or circumstances of weight, which, if properly considered, would justify a different conclusion.
In the instant case, the CTA, unlike the CA, doubted the veracity of OR No. 0189 and did not appreciate the same to support MPCs claim for tax refund or credit.
FACTS:
MPC is a domestic firm engaged in the generation of power which it sells to the National Power Corporation (NPC). For the construction of the electrical and mechanical equipment portion of its Pagbilao, Quezon plant, which appears to have been undertaken from 1993 to 1996, MPC secured the services of Mitsubishi Corporation (Mitsubishi) of Japan.
In the light of the NPCs tax exempt status, MPC, on the belief that its sale of power generation services to NPC is, pursuant to the Tax Code, zero-rated for VAT purposes, filed an Application for Effective Zero Rating. The application covered the construction and operation of its Pagbilao power station under a Build, Operate, and Transfer scheme.
MPC opted not to pay the VAT component of the progress billings from Mitsubishi for the period covering April 1993 to September 1996 for the E & M Equipment Erection Portion of MPCs contract with Mitsubishi. Apparently, it was only on April 14, 1998 that MPC paid Mitsubishi the VAT component for the progress billings from April 1993 to September 1996, with the aggregate amount of PhP 135,993,570.
On December 20, 1999, MPC filed on an administrative claim for refund of unutilized input VAT in the amount of PhP 148,003,047.62 which was denied by the BIR because MPCs sale of electricity to NPC is not zero-rated for its failure to secure an approved application for zero-rating. MPC went to the CTA via a petition for review, which granted its claim for input VAT refund or credit, but only for the amount of PhP 10,766,939.48. Aggrieved, MPC appealed the CTAs Decision to the CA via a petition for review under Rule 43. The CA agreed with the CTA on MPCs entitlement to (1) a zero-rating for VAT purposes for its sales and services to tax-exempt NPC; and (2) a refund or tax credit for its unutilized input VAT for the second quarter of 1998. However, CA brushed aside the CTAs ruling and disquisition casting doubt on the veracity and genuineness of the Mitsubishi-issued OR. Their disagreement, however, centered on the issue of proper documentation, particularly the evidentiary value of OR No. 0189. CA denied petitioners motion for reconsideration. Hence, his Petition.
ISSUE:
Whether or not the SC may review questions of fact.
RULING:
As a matter of sound practice, the Court refrains from reviewing the factual determinations of the CA or reevaluate the evidence upon which its decision is founded. One exception to this rule is when the CA and the trial court diametrically differ in their finding, as here. In such a case, it is incumbent upon the Court to review and determine if the CA might have overlooked, misunderstood, or misinterpreted certain facts or circumstances of weight, which, if properly considered, would justify a different conclusion.
In the instant case, the CTA, unlike the CA, doubted the veracity of OR No. 0189 and did not appreciate the same to support MPCs claim for tax refund or credit.
