FIRST DIVISION
[CA-G.R. SP No. 83206. July 5, 2006.]
TOKIO MARINE MALAYAN INSURANCE COMPANY, INC. (formerly Pan Malayan Insurance Corporation), petitioner, vs. COMMISSIONER OF INTERNAL REVENUE, respondent.
D E C I S I O N
ROXAS, V.Q., J p:
Tax refunds are in the nature of tax exemptions and, as such, are construed strictissimi juris against the tax payerandliberally in favor of the taxing authority. Accordingly, the claimants of those refunds bear the burden of proving the factual basis of their claims; and of showing, by words too plain to be mistaken, that the legislature intended to exempt them.
The Case
An insurance company purchased several long term, fixed rate treasury notes, believing that the interest on the notes would not be subjected to the 20% final withholding tax imposed on deposit substitutes. When the Bureau of Treasury paid the interest due on the notes, the insurance company discovered that the 20% tax had been deducted. The insurance company filed a claim for refund or tax credit before the respondent Commissioner of Internal Revenue (CIR). When the two year period was about...
