CIR v. NEXT MOBILE, INC.

FACTS:
Respondent filed with the BIR taxes for 2001. Respondent, through Sarmiento, the
ir director of Finance, executed several waivers of the statute of limitations t
o extend the prescriptive perios of assessment for taxes.
On 2005, respondent received from the BIR a PAN and a formal letter of demand to
pay deficiency income tax. The BIR denied respondent's protest.
With the CTA, it was held that the demand was beyond the three year prescription
period under the NIRC. That the case does not apply the 10 year prescripton per
iod as there was not false return by the respondent. Also, the waivers did not v
alidly extend the prescription because of irregularities.
ISSUE: Whether the period to pay has prescribed.
RULING:
NO.
The SC held that a waiver of the statute of limitations must faithfully comply w
ith RMO No. 20-90 and RDAO 05-01 in order to be valid. Sarmiento failed to show
her authority to the BIR to sign the waivers.
The BIR were also at fault having to neglect their ministerial duties.
Both parties knew the infirmities of the waivers but still continued. Respondent
s were held in bad faith as after having benefitted by the waivers by giving the
m more time to pay, they used the waivers they made themselves when the conseque
nces were not in their favor.
The BIR's negligence amounts to malice and bad faith as they also knew the waive
rs did not conform with RMO 20-90 and RDAO 05-01.
As both parties are in bad faith, the SC granted the petition on the issue of th
e nullification of the formal letter of demand to the CTA.

TOTAL GAS v. CIR

FACTS:
Total Gas filed its Amended Quarterly VAT Returns. Total claims that they incurr
ed unused input VAT credits.
On May 15, 2008, Total filed an administrative claim for the refund. On August 2
8, 2008, Total submitted to the BIR additonal documents. On January 23, 2009, To
tal elevated the case to the CTA.
The CTA dismissed the case citing that the case was prematurely filed as the nec
esary documents were incomplete; that the 120 day period allowed to the CIR to d
ecide on the claim under Section 112 of the NRC has not started to run.
With the CTA en banc, the case was again dismissed reiterating the decison of th
e Division. The en banc also stated that the reckonng point of the 120 day perio
d was on May 2008 thus the petition filed on January 2009 was considered belated
ly filed.

ISSUE: Whether the claim has prescribed.

RULING:
NO.
The SC held that Total timely filed its judicial claim on January 2009.
The NIRC provides that the CIR has 120 days from the date of submission of compl
ete documents to decide on the claim for tax credits. Upon inaction of the BIR a
fter 120 days, the taxpayer may, within 30 days, appeal on the CTA.
The BIR did not give notice to Total with regard to the documents submitted on A
ugust 2008. Thus the counting of the 120 day period should start from August 200
8 or when Total made its submission of complete documents to support its applica
tion. The BIR had until December 2008 to decide. Because of the BIR's inaction,
Total had until January 25, 2009 to file their judicial claim.