For lack of jurisdiction, the Court of Tax Appeals (CTA) has denied the claim for P59.1 million additional tax refund sought by Franklin Baker Company of the Philippines for input value added tax (VAT) attributable to zero-rated sales for 2018.

Franklin Baker, a firm engaged in the global supply of desiccated coconut products, applied for tax credits or refund amounting to P87.8 million on July 15, 2020. A total of P28.7 million was granted by the Bureau of Internal Revenue (BIR) on Oct. 2, 2020.  

The firm's additional claim for the refund of P59.1 million was denied with the BIR's ruling that the firm failed to substantiate its claim. It elevated the issue before the CTA.  

In resolving the issue, the CTA cited the issue on "timeliness" of Franklin Baker's judicial appeal in relation to the provisions of the 1997 National Internal Revenue Code (NIRC).

It cited the Supreme Court's decision which states: " A final note, the taxpayers are reminded that when the 120-day (now 90-day) period lapses and there is inaction on the part of the CIR (Commissiner of Internal Revenue), they must no longer wait for it to come up with a decision thereafter. The CIR's inaction is the decision itself. It is already a denial of the refund claim. Thus, the taxpayer must file an appeal within 30 days from the lapse of the 120- day (now 90-day) waiting period."

It also said the SC ruled that "any claim filed in a period less than or beyond the 120+30 (now 90+30) days provided by the NIRC is outside the jurisdiction of the CTA. "'

In denying Franklin Baker's petition for lack of jurisdiction, the CTA ruled:

"Applying the above-quoted provisions and jurisprudence (the SC ruling) to the case at hand, Franklin Baker filed its administrative claim on July 15, 2020. Counting 90 days therefrom, the CIR had until October 13, 2020 to decide on the refund claim.

"Consequently, counting 30 days from the expiration of the 90- day period within which to decide on the refund claim, or until October 13, 2020, Franklin Baker had until November 12, 2020 to file its judicial claim. Considering that the instant Petition for Review was only filed on November 20, 2020, the Court has no jurisdiction over the case."

CTA Associate Justice Catherine T. Manahan wrote the 10-page decision with the concurrence of Associate Justice Marian Ivy F. Reyes-Fajardo. Presiding Justice Roman G. Del Rosario, in his dissenting opinion, said the CTA should resolve Franklin Baker's petition to determine its merits.