CIR v. Team Sual Corporation


CIR v. Team Sual Corporation

CTA EB NO. 2353

February 10, 2022


“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”


This resolves the Petition for Review1 filed by petitioner Commissioner of Internal Revenue (CIR) filed on October 19, 2020, pursuant to Section 3 (b), Rule 8 of the Revised Rules of the Court of Tax Appeals (RRCTA), as amended2 , which prays for the reversal and setting aside of the Decision dated March 2, 20203 (Assailed Decision) and the Resolution dated September 29, 2020 4 (Assailed Resolution) promulgated by the Special Second Division of the Court of Tax Appeals (CTA) in CTA Case No. 7260 entitled "Team Sual Corporation {formerly Mirant Sual Corporation and Southern Energy Pangasinan, Inc.) vs. Commissioner of Internal Revenue", and the rendition instead of a new judgment denying respondent's claim for refund.


Whether or not the VAT was subjected to proportional allocation.


  Yes. It should be noted that the Court in Division, as stated in the Assailed Decision, found that respondent TSC was able to comply with the requisites for such claim for refund although entitled only to the amount of '97,846,457.61. Hence, those are factual findings which, in the absence of any clear showing of abuse, arbitrariness, or capriciousness committed by the Court in Division, are binding and conclusive upon this Court as held in Heirs of Teresita Villanueva, et al., v. Heirs of Petronila Syquia Mendoza, et al., to wit: "Findings of fact made by a trial court are accorded the highest degree of respect by an appellate tribunal and, absent a clear disregard of the evidence before it that can otherwise affect the results of the case, those findings should not simply be ignored. Absent any clear showing of abuse, arbitrariness, or capriciousness committed on the part of the lower court, its findings of facts are binding and conclusive upon the Court. The reason for this is because the trial court was in a much better position to determine which party was able to present evidence with greater weight."

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