Commissioner of Internal Revenue vs Victorias Milling Co

FACTS: On December 23, 1957 Victorias Milling Co., Inc., filed a claim for the refund of the sum of P12,464.53 representing 50% of the specific tax paid on the manufactured oils and fuels used in its agricultural operation for the period from June 18, 1952 to June 18, 1957. The Commissioner of Internal Revenue granted refund in the sum of P3,415.18 representing the tax paid for the period from January 1, 1956 to June 18, 1957 but denied the claim in the amount of P2,817.08 which corresponds to the tax paid during the period from June 18, 1952 to December 31, 1955 for the reason that the same was filed after the two-year period provided for in Section 306 of the Tax Code had elapsed. Subsequently, Victorias Milling Co., Inc. appealed to the Court of Tax Appeals contending that the aforesaid Section 306 does not apply to its claim

ISSUE: Whether or not Victorias Milling’s right to claim a refund has already prescribed

RULING: YES. The taxpayer's claim for refund with the Bureau of Internal Revenue of December 23, 1957 is within two years from December 1955 — the last month of the period during which the fuels and oils were used. The appeal to the Court of Tax Appeals however, was instituted six years and two months from December 31, 1955. We have repeatedly held that the claim for refund with the Bureau of Internal Revenue and the subsequent appeal to the Court of Tax Appeals must be filed within the two-year period. "If, however, the Collector 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 Court of Tax Appeals before the end of the two-year period without awaiting the decision of the Collector." In the light of the above quoted ruling, We find that the right of Victorias Milling Co., Inc. to claim refund of P2,817.08 has prescribed.