SC rules in favor of ICTSI’s tax refund claim

International Container Terminal Services Inc. (ICTSI) has won a petition before the Supreme Court to reverse a Court of Tax Appeals (CTA) decision on the supposed double taxation collected against the Enrique Razon-led company in 1999.

In a press statement on Friday, the SC directed the CTA to proceed with the resolution of ICTSI’s case based on the merits “with due and deliberate dispatch.” It also ordered the tax court to determine the amount of the refund.

The petition stemmed from the taxes collected by the City of Manila from 1999 to 2003, during which ICTSI paid its local business taxes and business taxes separately.

ICTSI first filed a protest assailing its tax refund in the first three quarters of 1999, but the city treasurer failed to act within the 60-day prescriptive period and prompted the company to seek redress from the Regional Trial Court of Manila.

It elevated the case to the Court of Tax Appeals after the Manila RTC junked its refund claim. The RTC noted that ICTSI failed to file written claims in protest of the double taxation for each quarter, starting in October to December of 1999.

The CTA ruled that ICTSI was indeed paid its tax dues twice for the first three quarters of 1999 and ordered a partial refund of P6.22 million.

But the tax court junked ICTSI’s claim for the succeeding quarters as there was no protest against the double taxation, “thus the court could not verify the total amount of taxes paid and the taxing period in this protest.”

The SC ruled that it was reasonable for ICTSI not to protest anymore and seek a refund in the following quarters, knowing the city treasurer of Manila would not act upon it.

“If a party can prove that the resort to an administrative remedy would be an idle ceremony such that it will be absurd and unjust for it to continue seeking relief that will evidently be granted to it, then the doctrine of exhaustion of administrative remedies will not apply,” the SC said in its 28-page decision.

“As correctly pointed out by petitioner, the filing of written claims with respondent City Treasurer for every collection of tax would have yielded the same result every time,” the high court added.

Associate Justice Marvic Leonen penned the decision, and Associate Justices Diosdado Peralta, Jose Reyes Jr., and Ramon Paul Hernando concurred. —VDS, GMA News