SC affirms its ruling on Kepco’s R443-M tax refund for 2000

The Supreme Court (SC) yesterday denied with finality the motion filed by the Bureau of Internal Revenue (BIR) to reconsider its decision that affirmed the ruling of the Court of Tax Appeals (CTA) which awarded Korea Electric Power Corp. (Kepco Ilijan Corp.) a tax refund of R443.4 million in 2000.

On June 21, 2016, the SC dismissed BIR’s petition against the resolutions dated July 27, 2011 and Nov. 15, 2011 issued by the CTA in favor of Kepco Ilijan Corp.

In a press briefing, SC’s public information chief Theodore O. Te said the CTA resolutions “had denied the BIR’s petition to annul a judgment awarding respondent Kepco a refund in the amount of R443,447,184 representing unutilized input VAT paid on its domestic purchases and importation of capital goods for the first and second quarters of the year 2000.”

The SC’s 2016 decision directed the BIR to come up with mechanisms and measures that can effectively monitor the progress of cases being handled by its counsels to prevent similar incidents in the future.

“The Ombudsman is directed to conduct an in-depth investigation to determine who were responsible for the apparent mishandling of the present case that resulted in the loss of almost half-a-billion pesos, which the government could have used to finance its much-needed infrastructure, livelihood projects, and other equally important projects,” the SC said.

Then BIR Commissioner Kim Jacinto-Henares asked the SC to set aside the CTA’s denial of its petition to annul judgment and order the tax court to re-open the case to allow the agency to submit its memoranda detailing its legal defenses.