CIR VS MAGSAYSAY LINES, GR. 146984, July 28, 2006FACTS: 

Pursuant to a government program of privatization, NDC decided to sell to private enterprise all of its shares in its wholly-owned subsidiary the National Marine Corporation (NMC). The NDC decided to sell in one lot its NMC shares and five vessels. The NMC shares and the vessels were offered for public bidding. Among the stipulated terms and conditions for the public auction was that the winning bidder was to pay “a value added tax of 10% on the value of the vessels. Private respondent Magsaysay Lines, Inc. (Magsaysay Lines) offered to buy the shares and the vessels for P168,000,000.00. The bid was made by Magsaysay Lines, purportedly for a new company still to be formed composed of itself, Baliwag Navigation, Inc., and FIM Limited of the Marden Group based in Hongkong. The bid was approved by the Committee on Privatization, and a Notice of Award was issued to Magsaysay Lines.  Later, the implementing Contract of Sale was executed between NDC, on one hand, and Magsaysay Lines, Baliwag Navigation, and FIM Limited, on the other. Paragraph 11.02 of the contract stipulated that “[v]alue-added tax, if any, shall be for the account of the PURCHASER.”  By this time, a formal request for a ruling on whether or not the sale of the vessels was subject to VAT had already been filed with the Bureau of Internal Revenue (BIR) by a the law firm presumably in behalf of private respondents.

After sometime, private respondents through counsel received VAT Ruling from the BIR, holding that the sale of the vessels was subject to the 10% VAT. The ruling cited the fact that NDC was a VAT-registered enterprise, and thus its “transactions incident to its normal VAT registered activity of leasing out personal property including sale of its own assets that are movable, tangible objects which are appropriable or transferable are subject to the 10% [VAT].”   Private respondents filed an Appeal and Petition for Refund with the CTA. The Commissioner of Internal Revenue (CIR) opposed the petition. Among others, the CIR squarely defended the VAT rulings holding the sale of the vessels liable for VAT, especially citing Section 3 of Revenue Regulation No. 5-87 (R.R. No. 5-87), which provided that “[VAT] is imposed on any sale or transactions ‘deemed sale’ of taxable goods (including capital goods, irrespective of the date of acquisition).” The CIR argued that the sale of the vessels were among those transactions “deemed sale,” as enumerated in Section 4 of R.R. No. 5-87. It seems that the CIR particularly emphasized Section 4(E)(i) of the Regulation, which classified “change of ownership of business” as a circumstance that gave rise to a transaction “deemed sale.”  The CTA ruled that the sale of a vessel was an “isolated transaction,” not done in the ordinary course of NDC’s business, and was thus not subject to VAT, which under Section 99 of the Tax Code, was applied only to sales in the course of trade or business. The CTA further held that the sale of the vessels could not be “deemed sale,” and thus subject to VAT, as the transaction did not fall under the enumeration of transactions deemed sale as listed either in Section 100(b) of the Tax Code, or Section 4 of R.R. No. 5-87. Finally, the CTA ruled that any case of doubt should be resolved in favor of private respondents since Section 99 of the Tax Code which implemented VAT is not an exemption provision, but a classification provision which warranted the resolution of doubts in favor of the taxpayer.

 ISSUE: Wheter or not the transaction is subject to vat RULING: 

No. As affirmed by Section 99 of the Tax Code and its subsequent incarnations, the tax is levied only on the sale, barter or exchange of goods or services by persons who engage in such activities, in the course of trade or business. In this case, that the sale of the vessels was not in the ordinary course of trade or business of NDC was appreciated by both the CTA and the Court of Appeals. We cite with approval the CTA’s explanation on this point: 

In Imperial v. Collector of Internal Revenue, G.R. No. L-7924, September 30, 1955 (97 Phil. 992), the term “carrying on business” does not mean the performance of a single disconnected act, but means conducting, prosecuting and continuing business by performing progressively all the acts normally incident thereof; while “doing business” conveys the idea of business being done, not from time to time, but all the time. [J. Aranas, UPDATED NATIONAL INTERNAL REVENUE CODE (WITH ANNOTATIONS), p. 608-9 (1988)]. “Course of business” is what is usually done in the management of trade or business. [Idmi v. Weeks & Russel, 99 So. 761, 764, 135 Miss. 65, cited in Words & Phrases, Vol. 10, (1984)].

 What is clear therefore, based on the aforecited jurisprudence, is that

“course of business” or “doing business” connotes regularity of activity. In the instant case, the sale was an isolated transaction. The sale which was involuntary and made pursuant to the declared policy of Government for privatization could no longer be repeated or carried on with regularity. It should be emphasized that the normal VAT-registered activity of NDC is leasing personal property.

 This finding is confirmed by the Revised Charter of the NDC which bears no indication

that the NDC was created for the primary purpose of selling real property.  The conclusion that the sale was not in the course of trade or business, which the CIR

does not dispute before this Court, should have definitively settled the matter. Any sale, barter or exchange of goods or services not in the course of trade or business is not subject to VAT.           Section 100 of the Tax Code, which is implemented by Section 4(E)(i) of R.R. No. 5-87 now relied upon by the CIR, is captioned “Value-added tax on sale of goods,” and it expressly states that “[t]here shall be levied, assessed and collected on every sale, barter or exchange of goods, a value added tax  x x x.” Section 100 should be read in light of Section 99, which lays down the general rule on which persons are liable for VAT in the first place and on what transaction if at all. It may even be noted that Section 99 is the very first provision in Title IV of the Tax Code, the Title that covers VAT in the law. Before any portion of Section 100, or the rest of the law for that matter, may be applied in order to subject a transaction to VAT, it must first be satisfied that the taxpayer and transaction involved is liable for VAT in the first place under Section 99.           It would have been a different matter if Section 100 purported to define the phrase “in the course of trade or business” as expressed in Section 99. If that were so, reference to Section 100 would have been necessary as a means of ascertaining whether the sale of the

vessels  was  “in  the  course  of trade or business,” and thus subject to VAT. But that is not the case. What Section 100 and Section 4(E)(i) of R.R. No. 5-87 elaborate on is not the meaning of “in the course of trade or business,” but instead the identification of the transactions which may be deemed as sale. It would become necessary to ascertain whether under those two provisions the transaction may be deemed a sale, only if it is settled that the transaction occurred in the course of trade or business in the first place. If the transaction transpired outside the course of trade or business, it would be irrelevant for the purpose of determining VAT liability whether the transaction may be deemed sale, since it anyway is not subject to VAT.           Accordingly, the Court rules that given the undisputed finding that the transaction in question was not made in the course of trade or business of the seller, NDC that is, the sale is not subject to VAT pursuant to Section 99 of the Tax Code, no matter how the said sale may hew to those transactions deemed sale as defined under Section 100.           In any event, even if Section 100 or Section 4 of R.R. No. 5-87 were to find application in this case, the Court finds the discussions offered on this point by the CTA and the Court of Appeals (in its subsequent Resolution) essentially correct. Section 4 (E)(i) of R.R. No. 5-87 does classify as among the transactions deemed sale those involving “change of ownership of business.” However, Section 4(E) of R.R. No. 5-87, reflecting Section 100 of the Tax Code, clarifies that such “change of ownership” is only an attending circumstance to “retirement  from  or cessation of business[, ] with respect to all goods on hand [as] of the date of such retirement or cessation.” Indeed, Section 4(E) of R.R. No. 5-87 expressly characterizes the “change of ownership of business” as only a “circumstance” that attends those transactions “deemed sale,” which are otherwise stated in the same section.

CIR VS MIRANT PAGBILAO CORPORATION (GR 172129, OCTOBER 19, 2011)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. It was only on April 14, 1998 that MPC paid Mitsubishi the VAT component for the progress billings from April 1993 to September 1996, and for which Mitsubishi issued official receipt no. 0189. Pursuant to a VAT ruling issued on May 13, 1999, the supoply of electricity by MPC to NPC shall be subjected to zero percent vat.

MPC filed on December 20, 1999 an administrative claim for refund of unutilized input VAT. It is the allegation of MPC that since its sales to NPC is subject to zero percent vat, then the input vat must be refunded.  ISSUE:

a. Whether the 1998 receipt (receipt no. 0189.)can evidence paymnet of input vat corresponding to a 1993 to 1996 transaction

b. Whether the claim for refund for vat of MPC was filled within the reglementary periodc.

SC RULINGa. The official receipt constitutes sufficient proof of payment of creditable input vat for the

progress billings from Mitsubishi for the period covering April 7, 1993 to September 6, 1996. As the cpourt notes, the law considers a duly executed VAT invoice or receipt as sufficient eveidence to support a claim for input tax credit.

b. Claim for refund or tax credit filed out of time 

The claim for refund or tax credit for the creditable input VAT payment made by MPC embodied in OR No. 0189 was filed beyond the period provided by law for such claim. Sec. 112(A) of the NIRC pertinently reads:

(A) Zero-rated or Effectively Zero-rated Sales. – Any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two (2) years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales, except transitional input tax, to the extent that such input tax has not been applied against output tax.           The above proviso clearly provides in no uncertain terms that unutilized input VAT payments not otherwise used for any internal revenue tax due the taxpayer must be claimed within two years reckoned from the close of the taxable quarter when the relevant sales were made pertaining to the input VAT regardless of whether said tax was paid or not.  As the CA aptly puts it, albeit it erroneously applied the aforequoted Sec. 112(A), “[P]rescriptive period commences from the close of the taxable quarter when the sales were made and not from the time the input VAT was paid nor from the time the official receipt was issued.”  Thus, when a zero-rated VAT taxpayer pays its input VAT a year after the pertinent transaction, said taxpayer only has a year to file a claim for refund or tax credit of the unutilized creditable input VAT.  The reckoning frame would always be the end of the quarter when the pertinent sales or transaction was made, regardless when the input VAT was paid. Be that as it may, and given that the last creditable input VAT due for the period covering the progress billing of September 6, 1996 is the third quarter of 1996 ending on September 30, 1996, any claim for unutilized creditable input VAT refund or tax credit for said quarter prescribed two years after September 30, 1996 or, to be precise, on September 30, 1998.  Consequently, MPC’s claim for refund or tax credit filed on December 10, 1999 had already prescribed.

Reckoning for prescriptive period underSecs. 204(C) and 229 of the NIRC inapplicable To be sure, MPC cannot avail itself of the provisions of either Sec. 204(C) or 229 of the NIRC which, for the purpose of refund, prescribes a different starting point for the two-year prescriptive limit for the filing of a claim therefor.  Secs. 204(C) and 229 respectively provide: Sec. 204.  Authority of the Commissioner to Compromise, Abate and Refund or Credit Taxes.— The Commissioner may –x x x x 

(c)  Credit or refund taxes erroneously or illegally received or penalties imposed without authority, refund the value of internal revenue stamps when they are returned in good condition by the purchaser, and, in his discretion, redeem or change unused stamps that have been rendered unfit for use and refund their value upon proof of destruction.  No credit or refund of taxes or penalties shall be allowed unless the taxpayer files in writing with the Commissioner a claim for credit or refund within two (2) years after the payment of the tax or penalty:  Provided, however, That a return filed showing an overpayment shall be considered as a written claim for credit or refund. x x x x Sec. 229.  Recovery of Tax Erroneously or Illegally Collected.— No suit or proceeding shall be maintained in any court for the recovery of any national internal revenue tax hereafter alleged to have been erroneously or illegally assessed or collected, or of any penalty claimed to have been collected without authority, of any sum alleged to have been excessively or in any manner wrongfully collected without authority, or of any sum alleged to have been excessively or in any manner wrongfully collected, until a claim for refund or credit has been duly filed with the Commissioner; but such suit or proceeding may be maintained, whether or not such tax, penalty, or sum has been paid under protest or duress. In any case, no such suit or proceeding shall be filed after the expiration of two (2) years from the date of payment of the tax or penalty regardless of any supervening cause that may arise after payment: Provided, however, That the Commissioner may, even without a written claim therefor, refund or credit any tax, where on the face of the return upon which payment was made, such payment appears clearly to have been erroneously paid.  (Emphasis ours.)   Notably, the above provisions also set a two-year prescriptive period, reckoned from date of payment of the tax or penalty, for the filing of a claim of refund or tax credit. Notably too, both provisions apply only to instances of erroneous payment or illegal collection of internal revenue taxes.   

MPC’s creditable input VAT not erroneously paid 

For perspective, under Sec. 105 of the NIRC, creditable input VAT is an indirect tax which can be shifted or passed on to the buyer, transferee, or lessee of the goods, properties, or services of the taxpayer.  The fact that the subsequent sale or transaction involves a wholly-tax exempt client, resulting in a zero-rated or effectively zero-rated transaction, does not, standing alone, deprive the taxpayer of its right to a refund for any unutilized creditable input VAT, albeit the erroneous, illegal, or wrongful payment angle does not enter the equation. 

It is clear that Sec. 112(A) of the NIRC, providing a two-year prescriptive period reckoned from the close of the taxable quarter when the relevant sales or transactions were made pertaining to the creditable input VAT, applies to the instant case, and not to the other actions which refer to erroneous payment of taxes.  CIR v. AICHI FORGING COMPANY OF ASIA, INC.G.R. No. 184823 October 6, 2010

Doctrine:– The CIR has 120 days, from the date of the submission of the complete documents within which to grant or deny the claim for refund/credit of input vat. In case of full or partial denial by the CIR, the taxpayer’s recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days.

– A taxpayer is entitled to a refund either by authority of a statute expressly granting such right, privilege, or incentive in his favor, or under the principle of solutio indebiti requiring the return of taxes erroneously or illegally collected. In both cases, a taxpayer must prove not only his entitlement to a refund but also his compliance with the procedural due process.

– As between the Civil Code and the Administrative Code of 1987, it is the latter that must prevail being the more recent law, following the legal maxim, Lex posteriori derogat priori.

– The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund” under Subsection (A) of Section 112 of the NIRC refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA.

Facts:Petitioner filed a claim of refund/credit of input vat in relation to its zero-rated sales from

July 1, 2002 to September 30, 2002. The CTA 2nd Division partially granted respondent’s claim for refund/credit.

Petitioner filed a Motion for Partial Reconsideration, insisting that the administrative and the judicial claims were filed beyond the two-year period to claim a tax refund/credit provided for under Sections 112(A) and 229 of the NIRC. He reasoned that since the year 2004 was a leap year, the filing of the claim for tax refund/credit on September 30, 2004 was beyond the two-year period, which expired on September 29, 2004. He cited as basis Article 13 of the Civil Code, which provides that when the law speaks of a year, it is equivalent to 365 days. In addition, petitioner argued that the simultaneous filing of the administrative and the judicial claims contravenes Sections 112 and 229 of the NIRC. According to the petitioner, a prior filing of an administrative claim is a “condition precedent” before a judicial claim can be filed.

The CTA denied the MPR thus the case was elevated to the CTA En Banc for review. The decision was affirmed. Thus the case was elevated to the Supreme Court.

Respondent contends that the non-observance of the 120-day period given to the CIR to act on the claim for tax refund/credit in Section 112(D) is not fatal because what is important is that both claims are filed within the two-year prescriptive period. In support thereof, respondent cited Commissioner of Internal Revenue v. Victorias Milling Co., Inc. [130 Phil 12 (1968)] where it was ruled that “if the CIR takes time in deciding the claim, and the period of two years is about to end, the suit or proceeding must be started in the CTA before the end of the two-year period without awaiting the decision of the CIR.”

Issues:1. Whether or not the claim for refund was filed within the prescribed period

2. Whether or not the simultaneous filing of the administrative and the judicial claims contravenes Section 229 of the NIRC, which requires the prior filing of an administrative claim, and violates the doctrine of exhaustion of administrative remedies

Held:1. Yes. As ruled in the case of Commissioner of Internal Revenue v. Mirant Pagbilao Corporation (G.R. No. 172129, September 12, 2008), the two-year period should be reckoned from the close of the taxable quarter when the sales were made.

In Commissioner of Internal Revenue v. Primetown Property Group, Inc (G.R. No. 162155, August 28, 2007, 531 SCRA 436), we said that as between the Civil Code, which provides that a year is equivalent to 365 days, and the Administrative Code of 1987, which states that a year is composed of 12 calendar months, it is the latter that must prevail being the more recent law, following the legal maxim, Lex posteriori derogat priori.

Thus, applying this to the present case, the two-year period to file a claim for tax refund/credit for the period July 1, 2002 to September 30, 2002 expired on September 30, 2004. Hence, respondent’s administrative claim was timely filed.

2. Yes. We find the filing of the judicial claim with the CTA premature.Section 112(D) of the NIRC clearly provides that the CIR has “120 days, from the date of

the submission of the complete documents in support of the application [for tax refund/credit],” within which to grant or deny the claim. In case of full or partial denial by the CIR, the taxpayer’s recourse is to file an appeal before the CTA within 30 days from receipt of the decision of the CIR. However, if after the 120-day period the CIR fails to act on the application for tax refund/credit, the remedy of the taxpayer is to appeal the inaction of the CIR to CTA within 30 days.

Subsection (A) of Section 112 of the NIRC states that “any VAT-registered person, whose sales are zero-rated or effectively zero-rated may, within two years after the close of the taxable quarter when the sales were made, apply for the issuance of a tax credit certificate or refund of creditable input tax due or paid attributable to such sales.” The phrase “within two (2) years x x x apply for the issuance of a tax credit certificate or refund” refers to applications for refund/credit filed with the CIR and not to appeals made to the CTA.

The case of Commissioner of Internal Revenue v. Victorias Milling, Co., Inc. is inapplicable as the tax provision involved in that case is Section 306, now Section 229 of the NIRC. Section 229 does not apply to refunds/credits of input VAT.

The premature filing of respondent’s claim for refund/credit of input VAT before the CTA warrants a dismissal inasmuch as no jurisdiction was acquired by the CTA.

SOUTHERN PHILIPPINES POWER CORPORATION v CIR, October 19, 2011

FACTS: Petitioner Southern Philippines Power Corporation (SPP), a power company that

generates and sells electricity to the National Power Corporation (NPC), applied with the Bureau of Internal Revenue (BIR) for zero-rating of its transactions under Section 108(B)(3) of the National Internal Revenue Code (NIRC).  The BIR approved the application for taxable years 1999 and 2000.

  On June 20, 2000 SPP filed a claim with respondent Commissioner of Internal Revenue (CIR) for a  tax credit or refund for 1999.  On July 13, 2001 SPP filed a second claim for tax credit or refund for 2000.  The amounts of the claim represented unutilized input VAT attributable to SPP’s zero-rated sale of electricity to NPC.

The claim was denied contending among aothers that the receipts do not bear the words “zero-rated” in violation of RR 7-95.             The CTA En Banc also rejected SPP’s contention that its sales invoices reflected the words “zero-rated,” pointing out that it is on the official receipts that the law requires the printing of such words.  Moreover, SPP did not report in the corresponding quarterly VAT return the sales subject of its zero-rated receipts.  

ISSUE: Whether or not CTA is correct

RULING:The following criteria governing claims for refund or tax credit under Section 112(A) of the NIRC:

 (1)        The taxpayer is VAT-registered;(2)        The taxpayer is engaged in zero-rated or effectively zero-rated sales;(3)        The input taxes are due or paid;(4)        The input taxes are not transitional input taxes;(5)        The input taxes have not been applied against output taxes during

and in the succeeding quarters;(6)        The input taxes claimed are attributable to zero-rated or effectively

zero-rated sales;(7)        For zero-rated sales under Section 106(A)(2)(1) and (2); 106(B); and

108(B)(1) and (2), the acceptable foreign currency exchange proceeds have been duly accounted for in accordance with BSP rules and regulations;

(8)        Where there are both zero-rated or effectively zero-rated sales and taxable or exempt sales, and the input taxes cannot be directly and entirely attributable to any of these sales, the input taxes shall be proportionately allocated on the basis of sales volume; and

(9)        The claim is filed within two years after the close of the taxable quarter when such sales were made.

           While acknowledging that SPP’s sale of electricity to NPC is a zero-rated transaction, the CTA En Banc ruled that SPP failed to establish that it made zero-rated sales.  True, SPP submitted official receipts and sales invoices stamped with the words “BIR VAT Zero-Rate Application Number 419.2000” but the CTA En Banc held that these were not sufficient to prove the fact of sale. 

But NIRC Section 110 (A.1) provides that the input tax subject of tax refund is to be evidenced by a VAT invoice   “or”   official receipt issued in accordance with Section 113.     Section 113 has been amended by Republic Act (R.A.) 9337 but it is the unamended version that covers the period when the transactions in this case took place.  It reads:

 Section 113. Invoicing and Accounting Requirements for VAT-Registered

Persons. – A.        Invoicing Requirements. – A VAT-registered person shall, for

every sale, issue an invoice or receipt.  In addition to the information required under Section 237, the following information shall be indicated in the invoice or receipt:

 (1)        A statement that the seller is a VAT-registered person, followed by his taxpayer’s identification number (TIN); and

(2)        The total amount which the purchaser pays or is obligated to pay to the seller with the indication that such amount includes the value-added tax.

The above does not distinguish between an invoice and a receipt when used as evidence of a zero-rated transaction.  Consequently, the CTA should have accepted either or both of these documents as evidence of SPP’s zero-rated transactions. 

Section 237 of the NIRC also makes no distinction between receipts and invoices as evidence of a commercial transaction: 

SEC. 237.  Issuance of Receipts or Sales or Commercial Invoices.–  All persons subject to an internal revenue tax shall, for each sale or transfer of merchandise or for services rendered valued at Twenty-five pesos (P25.00) or more, issue duly registered receipts or sales or commercial invoices, prepared at least in duplicate, showing the date of transaction, quantity, unit cost and description of merchandise or nature of service: Provided, however, That in the case of sales, receipts or transfers in the amount of One hundred pesos (P100.00) or more, or regardless of the amount, where the sale or transfer is made by a person liable to value-added tax to another person also liable to value-added tax; or where the receipt is issued to cover payment made as rentals, commissions, compensations or fees, receipts or invoices shall be issued which shall show the name, business style, if any, and address of the purchaser, customer or client: Provided, further, That where the purchaser is a VAT-registered person, in addition to the information herein required, the invoice or receipt shall further show the Taxpayer Identification Number (TIN) of the purchaser. 

The original of each receipt or invoice shall be issued to the purchaser, customer or client at the time the transaction is effected, who, if engaged in business or in the exercise of profession, shall keep and preserve the same in his place of business for a period of three (3) years from the close of the taxable year in which such invoice or receipt was issued, while the duplicate shall be kept and preserved by the issuer, also in his place of business, for a like period.  

          Business forms like sales invoices are recognized in the commercial world as valid between the parties and serve as memorials of their business transactions.  And such documents have probative value. 

Three.  The CTA also did not accept SPP’s official receipts due to the absence of the words “zero-rated” on it.  The omission, said that court, made the receipts non-compliant with RR 7-95, specifically Section 4.108.1.  But Section 4.108.1 requires the printing of the words “zero-rated” only on invoices, not on official receipts:

 Section 4.108-1.  Invoicing Requirements. — All VAT-registered persons shall, for every sale or lease of goods or properties or services, issue duly registered receipts or sales or commercial invoices which must show:

1.         The name, TIN and address of seller;2.         Date of transaction;3.         Quantity, unit cost and description of merchandise or nature of

service;4.         The name, TIN, business style, if any, and address of the VAT-

registered purchaser, customer or client;5.         The word "zero-rated" imprinted on the invoice covering zero-

rated sales; and6.         The invoice value or consideration.  

          Actually, it is R.A. 9337 that in 2005 required the printing of the words “zero-rated” on receipts.  But, since the receipts and invoices in this case cover sales made from 1999 to 2000, what applies is Section 4.108.1 above which refers only to invoices.           A claim for tax credit or refund, arising out of zero-rated transactions, is essentially based on excess payment. In zero-rating a transaction, the purpose is not to benefit the person legally liable to pay the tax, like SPP, but to relieve exempt entities like NPC which supplies electricity to factories, offices, and homes, from having to shoulder the tax burden that ultimately would be passed to the public.           Four.  The Court finds that SPP failed to indicate its zero-rated sales in its VAT returns.  But this is not sufficient reason to deny it its claim for tax credit or refund when there are other documents from which the CTA can determine the veracity of SPP’s claim.           Of course, such failure if partaking of a criminal act under Section 255 of the NIRC could warrant the criminal prosecution of the responsible person or persons.  But the omission does not furnish ground for the outright denial of the claim for tax credit or refund if such claim is in fact justified.