CTA junks Tadeco's P120-M refund claim
MANILA, Philippines — The Court of Tax Appeals has junked the petition of Tagum Agricultural Development Corp. (Tadeco) for a refund of P119.6-million creditable input value-added tax for 2012.
In an 18-page decision promulgated on October 13, the tax court's Third Division denied Tadeco's refund petition over its late filing on Oct. 30, 2014.
The court said the petition was filed three months beyond the 120+30-day period provided under Under Section 112(c) of the National Internal Revenue Code (NIRC).
“Well-settled is the rule that a claim for tax refund or credit, like a claim for tax exemption, is construed strictly against the taxpayer... In other words, strict compliance with the 120+30 day periods is necessary for such a claim to prosper,” the tax court said.
The decision was penned by Associate Justice Esperanza Fabon-Victorino with the concurrence of Associate Justices Lovell Bautista.
The Third Division said that under the Section 112(c) of the NIRC, Tadeco has 120 days to question the BIR's inaction on its tax refund claim. The Third Division said that since Tadeco's refund petition was filed before the BIR on Feb. 18, 2014, the 120-day period plus an additional 30 days to bring the matter before the CTA had already lapsed on July 18, 2014.
Due to the delayed filing, the Third Division no longer discussed the merits of Tadeco's claim that it is entitled to a refund as the BIR supposedly levied excess input VAT on the goods that the company purchased for the production of cavendish bananas for export.
Tadeco is the world’s largest contiguous banana plantation. It is engaged in the production and export of Cavendish bananas to Japan, Hong Kong, China, Korea, Middle East, Russia, Malaysia and Singapore under the Del Monte and Dole brands.
Tadeco became controversial following House Speaker Pantaleon Alvarez' filing of a graft complaint before the Office of the Ombudsman against Davao del Norte 2nd District Rep. Antonio Floirendo Jr., whose family holds majority shares in the company.
Alvarez alleged that Floirendo, the biggest financier of President Rodrigo Duterte’s presidential bid, continues to become a board member of Tadeco despite his election as congressman.
In a resolution issued last month, the ombudsman sided with Alvarez that Floirendo's failure to divest his shares in Tadeco is a violation of Section 3(h) of Republic Act 3019 or the Anti-Graft and Corrupt Practices Act.
Section 3 (h) of RA 3019 prohibits a government official from “directly or indirectly having financial or pecuniary interest in any business, contract or transaction” in which he has the official capacity to intervene or in which he is prohibited by the Constitution or by any law from having any interest.
The ombudsman ordered the filing of a graft case against Floirendo before the Sandiganbayan but up to date, no charges has yet been filed.
Tadeco entered into a joint venture agreement (JVA) with the Bureau of Corrections (BuCor) in 1969 which allowed the firm to lease 3,000 hectares of land in the Davao Penal Colony for a banana plantation. The agreement was extended in May 2003 for another 25 years.
The Commission on Audit had earlier recommended the cancellation of the Tadeco-BuCor agreement for supposedly violating the constitutional limits on the area of leasable public agricultural land.
In its six-page Audit Observation Memorandum (AOM) dated April 25, 2017, the special team created by COA to investigate the BuCor-Tadeco deal, said the joint venture deal, which is in the form of a Leasehold and Share Tenancy Agreement, is violative both of the 1935 and the 1987 Constitutions.
“The contract or agreement entered into by Tadeco and BuCor, whether it is worded as Agreement, Leasehold Share and Tenancy, or JVA, does not matter. What is obvious is the excessive holding of agricultural land by Tadeco...This being so, the JVA is unconstitutional,” the AOM signed by audit team leader Josefina Gonzales and supervising auditor Flordeliza Ares read.