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The full-scale war unleashed by the russian federation against Ukraine has led to changes in all areas of civil society. The military conditions of life of the Ukrainian people and the activities of citizens and public authorities have necessitated adjustments in the organisation of relations between man and the state; have placed new demands on the rational and effective functioning of the state apparatus in ensuring the exercise of the rights, freedoms and interests of man and citizen, the rights and interests of participants in economic relations; have pointed to the need for a decisive substantive revision of the existing legislation in order to adapt it to the challenges of today. In such a challenging period, the administrative judiciary, while maintaining its resilience and readiness for judicial protection of constitutional rights, freedoms and interests of people and citizens, continues to resolve pre-war disputes and actively develops new case law on administrative cases in the most socially sensitive areas of society and priority areas of state activity.
Everyday challenges and threats pose new tasks for the state, including the prompt and effective legal regulation of various issues in most areas of the state and society's life. At the same time, the most vulnerable segments of the population with their rights and interests sensitive to economic and social changes (in particular, internally displaced persons, persons with disabilities caused by the war, children affected by the war, and others), as well as the economic activities of small and medium-sized businesses, on which the state of the national economy and employment of the population during martial law largely depend, are brought to the fore.
Since the introduction of martial law in Ukraine, the Verkhovna Rada of Ukraine and the Cabinet of Ministers of Ukraine have adopted a number of socially necessary legal acts, which, however, due to the ambiguity of understanding and perception of their provisions, have been subject to review and application by the courts.
During the full-scale war, the Supreme Court resolved many public law disputes, and the most important court decisions with legal opinions on the resolution of modern disputes have already become the legal basis for the consideration of such disputes by local and appellate courts, as well as for the activities of public authorities in the exercise of their functions, including rule-making, in the context of the war, which should help strengthen the spirit of the Ukrainian people and ensure a speedy Victory.
In case no. 560/8064/22, the plaintiff, disagreeing with the amount of one-time financial assistance paid by 5 May 2022 in the amount of UAH 3906.00, appealed against the refusal of the pension authority to accrue and pay him, as a person with a war disability of group II, an annual one-time financial assistance by 5 May 2022 in the amount of eight minimum old-age pensions.
Considering the dispute, the Supreme Court stated that in 2022, when the person was paid the annual one-time financial assistance, until 5 May there were simultaneously in force the provisions of Art. 13 of the Law of Ukraine of 22 October 1993 no. 3551-XII "On the Status of War Veterans, Guarantees of Their Social Protection" (Law no. 3551-XII) and the Procedure for the Use of State Budget Funds Provided for the Payment of Annual One-Time Financial Assistance to War Veterans and Victims of Nazi Persecution in 2022, Approved by Resolution of the Cabinet of Ministers of Ukraine of 7 May 2022 no. 540 "On Some Issues of Payment of One-Time Financial Assistance Provided for by the Laws of Ukraine "On the Status of War Veterans, Guarantees of Their Social Protection" and "On Victims of Nazi Persecution" in 2022" (Procedure no. 540), which differently determine the amount of annual one-time financial assistance to be paid by 5 May.
After considering the case, the Supreme Court ruled that, in view of the provisions of part 3 of Article 7 of the Code of Administrative Procedure of Ukraine, which establishes the general principles of the supremacy of laws over by-laws, in order to determine the amount of the one-off financial assistance for persons with war disability in 2022, Law no. 3551-XII, which has higher legal force and is a special law in this area of relations, should be applied, rather than Procedure no. 540.
The Resolution of the Administrative Cassation Court of the Supreme Court of 13 June 2023 in case no. 560/8064/22: https://reyestr.court.gov.ua/Review/111536574.
²². Legal Positions on Dispute Resolution in the Field of Social Protection of Families with Children
In case no. 360/3668/18, the applicant requested the District State Administration to grant the status of a child affected by hostilities and armed conflicts to her child, residing in the town of Svatove, Luhansk region, on the grounds that the child had suffered psychological violence as a result of hostilities and armed conflicts.
The defendant refused to grant the applicant's child the relevant status on the grounds that there had been no military operations, armed conflict or temporary occupation in Svatove, Luhansk region.
In its decision, the Supreme Court stated that a child, as well as a person who was under the age of 18 (majority) at the time of the anti-terrorist operation and who has suffered, in particular, psychological violence as a result of hostilities and armed conflicts, is entitled to this status. In determining whether to grant the status of a child affected by hostilities and armed conflict, the child's status as an internally displaced person should be taken into account.
There must also be a causal link between hostilities, armed conflict on the territory of a settlement included in the List of settlements where the anti-terrorist operation was carried out, approved by the Cabinet of Ministers of Ukraine on 2 December 2015, no. 1275-p, and the fact of circumstances (violence, injury, etc.) that had a negative impact on the child's health and development, since, given the concept of a child affected by hostilities and armed conflicts, it is as a result of hostilities or armed conflict that such a child should have been subjected to psychological violence, in particular.
The attribution of a settlement to the territories where an anti-terrorist operation was carried out, without military operations or armed conflicts, is not a sufficient legal basis or condition for granting a child the status of a child affected by hostilities and armed conflicts.
The Resolution of the Administrative Cassation Court of the Supreme Court of 24 January 2023 in case no. 360/3668/18: https://reyestr.court.gov.ua/Review/108594040.
²²². Legal Positions on Dispute Resolution in the Field of Social Protection of Internally Displaced Persons
In case no. 160/12308/22, the plaintiff, as an internally displaced person, filed a court appeal against the decision of the Social Protection Department refusing to grant the subsistence allowance in accordance with the Procedure for Granting Subsistence Allowance to Internally Displaced Persons, approved by Resolution of the Cabinet of Ministers of Ukraine no. 332 of 20 March 2022 "Some Issues of Payment of Subsistence Allowance to Internally Displaced Persons" (Procedure no. 332).
The defendant motivated his refusal by the fact that the person had not been displaced in connection with the hostilities and had not received monthly targeted assistance as an internally displaced person to cover living expenses, including housing and utility costs, as of 1 March 2022, in accordance with the Procedure for Providing Monthly Targeted Assistance to Internally Displaced Persons to Cover Living Expenses, including Housing and Utility Costs, approved by Resolution of the Cabinet of Ministers of Ukraine of 1 October 2014 No. 505.
The Supreme Court concluded that an internally displaced person is entitled to the subsistence allowance provided for in Procedure no. 332, regardless of the date of registration as an internally displaced person, if he or she has moved from an area which fulfils two conditions: hostilities are taking place in that area and this area is included in the list of administrative-territorial units in the territory of which payers of the single obligatory state social insurance contribution registered in the respective area may receive assistance under the ePidtrymka programme, approved by Order of the Cabinet of Ministers of Ukraine of 6 March 2022, no. 204-p (Order no. 204-p).
Since, as follows from the circumstances of the case established by the courts, the plaintiff has moved from an area which fulfils the two conditions set out in paragraph 2 of Procedure no. 332 (hostilities are taking place in this area and this area is included in the list approved by Order no. 204-p), she is one of the persons entitled to subsistence allowance under Procedure no. 332.
The Resolution of the Administrative Cassation Court of the Supreme Court of 14 June 2023 in case No. 160/12308/22 - https://reyestr.court.gov.ua/Review/111536754.
²V. Legal Positions on Dispute Resolution in the Field of Public Service
In case no. 560/8238/22, an individual brought an action against the Territorial Centre for Recruitment and Social Assistance, requesting that its actions in issuing an order regarding the mobilisation and appointment, registration in the personnel lists of the Territorial Centre for Recruitment and Social Assistance and all types of assistance to a reserve soldier - a rifleman - be declared unlawful and that this order be annulled.
The plaintiff argued that the contested order was issued in gross violation of the law in that the plaintiff's daughter, who is a person with a group II disability, is dependent on the plaintiff and therefore, pursuant to Article 23 of the Law of Ukraine "On Mobilisation Training and Mobilisation" (the Law), the plaintiff was not subject to call-up for military service during mobilisation.
The defendant pointed out that Article 23 of the Law provides for cases in which persons liable for military service may exercise the right to deferment of military service. To exercise the right to deferment, a person liable for military service must submit an application and attach supporting documents. By failing to submit such an application and the relevant supporting documents concerning the maintenance of a child who is a person with a disability in group II, which would have entitled the plaintiff to a deferment of military service, the defendant was deprived of the possibility of knowing that the applicant was not subject to conscription. According to the defendant, the imperative of subpara. 8, part 1, Article 23 of the Law could only be applied if the defendant had information and data on the plaintiff's immunity from military service.
The Supreme Court concluded that the fact that the plaintiff's adult child, who is a person with a group II disability, is dependent on the plaintiff does not constitute an exemption from military service, but only a right to deferment of conscription.
In resolving the case, the Supreme Court took into account the provisions of the Procedure for Organising and Maintaining Military Registration of Conscripts and Persons Liable for Military Service, approved by Resolution of the Cabinet of Ministers of Ukraine no. 921 of 7 December 2016, and stated that it is the responsibility of the person liable for military service to independently notify the competent authority where such person is registered for military service of the existence of grounds for deferment of conscription and to provide documents confirming this right.
Since the courts of previous instances, when making decisions in this case, referred only to the fact that the plaintiff had a child who was a person with a disability since childhood of group II, the Supreme Court decided to overturn the decisions of the courts of previous instances and send the case for a new trial to clarify the necessary circumstances in this case for its full resolution.
The Resolution of the Administrative Cassation Court of the Supreme Court of 9 November 2023 in case no. 560/8238/22: https://reyestr.court.gov.ua/Review/114805026.
In case no. 1140/3182/18, an individual filed an administrative claim with the court against the Conscription Commission, requesting that the decision declaring the plaintiff fit for military service and calling him to regular military service be declared unlawful and annulled. The plaintiff also requested that the defendant be obliged to issue a decision on granting a deferment from the obligation to perform regular military service on the grounds provided for in subpara. 4, part 13, Article 17 of the Law of Ukraine "On Military Duty and Military Service" (Law no. 2232-XII).
The plaintiff argued that he was entitled to a deferment from conscription for regular military service, as he had been appointed to the position of a clergyman (deacon) of the religious organisation Kirovohrad Local Religious Community of Jehovah's Witnesses since 1 October 2017. However, he was unlawfully denied this because he did not have proof of graduation from a religious higher or secondary school.
In resolving this case, the Supreme Court recognised the presence of discriminatory features in the provisions of the Law of Ukraine "On Military Duty and Military Service" in relation to clergy of other denominations.
Clergymen are granted a deferment from conscription for regular military service. Within the meaning of Law no. 2232-XII, a clergyman is a person who has graduated from a higher or secondary religious education institution and who holds a position in a religious organisation operating on the basis of a statute (regulation) registered in accordance with the established procedure. However, this law does not take into account the peculiarities of other denominations, in particular the clergy of the religious organisation "Religious Centre of Jehovah's Witnesses in Ukraine" (according to the canonical guidelines and rules of the world denomination of Jehovah's Witnesses, a person acquires the spiritual rank of a clergyman - a minister (deacon) of a congregation - not as a result of studying at any educational institution and obtaining a relevant diploma, but in view of the person's fulfilment of the requirements established in the Bible for the clergy).
In granting a certain right to a certain category of persons, the state cannot ignore the particularities of certain groups of persons in that category. For example, if the state grants clergy the right to defer conscription for regular military service, it should establish norms that take into account their specificity. This is the essence of the principle of equality before the law, which requires public authorities to apply the law equally to all persons without discrimination.
The Resolution of the Administrative Cassation Court of the Supreme Court of 11 May 2023 in case no. 1140/3182/18: https://reyestr.court.gov.ua/Review/110826956.
In case no. 420/15045/21, an individual brought an action against the Central Directorate of the Security Service of Ukraine for the declaration of unlawfulness and cancellation of an order in part of a warning for incomplete service performance - for violation of military discipline, which consisted in improper compliance with the requirements of Article 4 of the Disciplinary Statute of the Armed Forces of Ukraine and Article 59 of the Statute of the Internal Service of the Armed Forces of Ukraine.
In the present case, the key issue in assessing the legality of the plaintiff's imposition of disciplinary liability was to determine whether the plaintiff had failed or improperly performed his official duties so as to comply with military discipline, i.e. whether there were grounds to impose disciplinary liability on the plaintiff.
The plaintiff did not really deny that his subordinates had committed unlawful acts (attacking a border patrol). The plaintiff's main arguments for disagreeing with the disciplinary measure imposed on him are that the defendant has not proved his guilt as a commander in violating the norms of the current legislation by his subordinates, i.e., the elements of a disciplinary offence have not been proved.
After analysing the provisions of the Law of Ukraine "On the Disciplinary Statute of the Armed Forces of Ukraine" and the Law of Ukraine "On the Statute of the Internal Service of the Armed Forces of Ukraine", the Supreme Court concluded that the commander is responsible to the state for the training of the servicemen under his command and for their observance of military discipline.
Such responsibility may manifest itself, inter alia, in the disciplinary liability of the commander for the actions of his subordinates.
Thus, the fact that the servicemen subordinated to the plaintiff committed acts with signs of a criminal offence was the result of their low moral and psychological qualities, for which the plaintiff, as their commander (superior), is also responsible, as established by Article 58 of the Statute of the Internal Service of the Armed Forces of Ukraine and Article 5 of the Disciplinary Statute of the Armed Forces of Ukraine.
The Resolution of the Administrative Cassation Court of the Supreme Court of 13 July 2023 in case no. 420/15045/21: https://reyestr.court.gov.ua/Review/112184734.
In case no. 420/6607/22, an individual filed a lawsuit against the Odesa State Internal Affairs University, seeking a declaration of unlawfulness of the defendant's failure to calculate and pay him additional remuneration in accordance with Resolution of the Cabinet of Ministers of Ukraine no. 168 of 28 February 2022 "On Issues of Certain Payments to Servicemen, Ranks and Commanders, Police Officers and Their Families During Martial Law" (Resolution no. 168).
In the present case, the provisions of para. 1 of Resolution no. 168 must be examined in the context of their application to a police officer who, without valid reasons, did not take up her duties and did not perform the tasks of the police service, and whether the plaintiff is entitled to additional remuneration for the period from 24 February 2022 to 23 March 2022.
Systematic and targeted interpretation of para. 1 of Resolution no. 168 in its interrelation with the provisions of Article 94 of the Law of Ukraine no. 580-VII "On the National Police" of 2 July 2015 and the provisions of the Decrees of the President of Ukraine no. 64 "On the Introduction of Martial Law in Ukraine" and no. 69 "On General Mobilisation" of 24 February 2022 gives grounds to conclude that additional remuneration is a type of financial support for a police officer paid for the period of service during martial law. This remuneration is of a temporary nature and its payment is conditional on the performance of official duties in the circumstances of the military aggression of the russian federation against Ukraine. Therefore, the status of a police officer does not automatically entitle a person to additional remuneration.
Circumstances that make it impossible to accrue and pay the above remuneration to a police officer may vary, but they must be related to actual failure to perform official duties without valid reasons.
The Supreme Court stated that since the plaintiff was a police officer who had not taken up her duties and was absent from service, she was not entitled to receive additional remuneration under paragraph 1 of Resolution no. 168 between 24 February 2022 and 23 March 2022.
The Resolution of the Administrative Cassation Court of the Supreme Court of 18 September 2023 in case no. 420/6607/22: https://reyestr.court.gov.ua/Review/113535723.
In case no. 160/11478/22, the Supreme Court resolved a contentious issue regarding the exemption of a taxpayer from the obligation to pay customs duties for the period of martial law and the application of the provisions of Law of Ukraine of 24 March 2022 no. 2142-IX "On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine on Improving Legislation for the Period of Martial Law" (Law no. 2142-IX).
In the opinion of the supervisory authority, the provisions of Law no. 2142-IX on exemption from VAT and import duties apply only to goods for which customs declarations for customs clearance under the import customs regime (release for free circulation in accordance with Article 74 of the Customs Code of Ukraine) have been submitted to the customs authority during the period of validity of this Law, regardless of the date of actual (physical) movement of the goods across the customs border of Ukraine. The key to determining the taxation rules is the date on which the goods are first declared, rather than when they cross the Ukrainian customs border.
Considering the dispute, the Supreme Court stated that the import of goods into the customs territory of Ukraine, as a transaction to which the legislator links the exemption from the obligation to pay customs duties, is not limited to the actual (physical) crossing of the goods across the customs border of Ukraine, but is an algorithm of actions aimed at fulfilling a number of necessary customs formalities.
The provisions of subpara. 69.23, para. 69, subsection 10 of Section XX of the Tax Code of Ukraine, as amended by Law no. 2142-IX, as well as para. 9-11 of Section XXI of the Customs Code of Ukraine, shall apply from 1 April 2022, as expressly stated in the Law. Clauses 1-4, subpara. 1, para. 9-11, Section XXI of the Customs Code of Ukraine and subpara. 69.23, para. 69, subsection 10, Section XX of the Tax Code of Ukraine were deleted by the Law of Ukraine no. 2325-IX of 21 June 2022 "On Amendments to the Tax Code of Ukraine and Other Legislative Acts of Ukraine on Revision of Certain Tax Benefits", which entered into force on 1 July 2022.
Thus, if the declaration submitted for the purpose of customs clearance of imported goods is dated between 1 April and 1 July 2022, the goods declared under this customs declaration fall within the scope of Law no. 2142-IX, as the statutory conditions for exemption from import duty and VAT are met.
The Resolution of the Administrative Cassation Court of the Supreme Court of 28 June 2023 in case No. 160/11478/22: https://reyestr.court.gov.ua/Review/111884041.
V². Legal Positions on Tax Dispute Resolution
In case no. 200/11022/19-a, the taxpayer challenged the tax assessment notices of the controlling authority on the accrual of VAT liabilities due to the fact that out of the total number of locomotives, railway cars, gondola cars, tanks (272 units) located in the temporarily occupied territory and remaining blocked in the territory not controlled by Ukraine, 151 units of railway rolling stock are non-current assets intended for use (or started to be used) in operations that are not the taxpayer's business activities, given that 147 railway cars, gondola cars, tanks were purchased before 14 April 2014 and as of 1 January 2017 were located in Ukraine, and four locomotives were purchased after 15 April 2014.
The taxpayer argued that there were no grounds for such qualification of his assets (railway cars, gondola cars, tanks, diesel locomotives), as the movement of goods across the contact line within Donetsk and Luhansk regions was suspended pursuant to the Decree of the President of Ukraine no. 62/2017 of 15 March 2017 "On the Decision of the National Security and Defence Council of Ukraine of 15 March 2017 'On Urgent Additional Measures to Counter Hybrid Threats to the National Security of Ukraine'". The inability to move goods within the meaning of para. 198.5 of Article 198 of the Tax Code of Ukraine is neither the use of assets in transactions unrelated to business activities nor a supply transaction or transfer to non-productive non-current assets. The accrual of a reserve for impaired assets does not fall within the definition of a transaction for the supply of goods/services and this transaction is therefore not subject to VAT.
In resolving the dispute, the Supreme Court noted that the subject of proof in resolving a dispute over VAT tax liabilities based, in particular, on subpara. "ã" of para. 198.5 of Art. 198 and subpara. 38.10 of para. 38 of subsection 10 of Section XX of the Tax Code of Ukraine is the circumstances regarding the date of acquisition by the payer of railway rolling stock (fixed assets) and their location as of a certain date. The acquisition/construction of fixed assets prior to such date and their further stay on the temporarily occupied territory and/or the territory of settlements located on the contact line are legal facts that, in accordance with the provision of subpara. 38.10, para. 38, subsection 10, section XX of the Tax Code, exclude the assessment of the use of fixed assets in transactions that are not economic activities of the VAT payer.
In view of the grounds for determining the taxpayer's VAT liabilities, the circumstances of the disposal of railway cars, gondola cars, and tanks from its possession, which occurred in the temporarily occupied territory, are not legally relevant to this case and do not affect the outcome of the dispute on the merits on the facts established in the case.
The Resolution of the Administrative Cassation Court of the Supreme Court of 13 February 2023 in case no. 200/11022/19-a: https://reyestr.court.gov.ua/Review/109138615.
In case no. 160/19575/22, the Supreme Court upheld the conclusions of the courts of previous instances that the plaintiff, when applying to the supervisory authority with a statement on the inability to fulfil tax obligations, had to confirm the inability to timely fulfil its tax obligations with documents that would not cause any doubts or comments and are specified in the List of documents confirming the inability of a taxpayer - legal entity, in particular with respect to its branch, representative office, separate or other structural subdivision, to timely fulfil its tax obligations, including the obligation of a tax agent, approved by Order of the Ministry of Finance of Ukraine no. 225 of 29 July 2022.
Having analysed the provisions of the Procedure for confirming the possibility or impossibility of fulfilling the obligations set out in subparagraph 69.1, paragraph 69, subsection 10, Section XX "Transitional Provisions" of the Tax Code of Ukraine, approved by Order of the Ministry of Finance of Ukraine no. 225 of 29 July 2022, the Supreme Court stated that its adoption was due to the need for taxpayers to confirm the possibility or impossibility of timely fulfilment of their tax obligations with respect to meeting the deadlines for payment of taxes and fees, submission of reports, etc. The purpose of this procedure is to protect taxpayers affected by the armed aggression of the russian federation from negative consequences due to the objective inability to fulfil their tax obligations to submit reports, pay taxes, etc. in a timely manner.
A taxpayer who, due to hostilities, has lost the ability to conduct economic activities, receive income from entrepreneurial activities and/or lost fixed assets for conducting such economic activities, cannot be held liable for failure to fulfil tax obligations. In order for a taxpayer to be exempted from tax obligations, the circumstances in which it is impossible to fulfil the tax obligation in a timely manner must be real and objective, not formal. The taxpayer must provide an exhaustive list of documents confirming the occurrence of circumstances that make it impossible to conduct economic activity and fulfil tax obligations.
The documents submitted by the plaintiff in case no. 160/19575/22 did not prove the loss (destruction or damage) of primary documents, computer and other equipment as a result of hostilities, terrorist acts, sabotage caused by the military aggression of the russian federation, as a result of which the company could not fulfil its obligations to submit tax returns, pay taxes, and perform other tax obligations in a timely manner; it did not provide documents confirming the absence of funds in bank accounts. Therefore, the Supreme Court found that the tax authority had acted on the basis and in the manner prescribed by the applicable Ukrainian legislation when issuing the disputed decision.
The Resolution of the Administrative Cassation Court of the Supreme Court of 4 October 2023 in case No. 160/19575/22: https://reyestr.court.gov.ua/Review/113935238.
Author's column: https://so.supreme.court.gov.ua/authors/302/kliuchovi-rishennia-kasatsiinoho-administratyvnoho-sudu-u-skladi-verkhovnoho-sudu-za-2023-rik.
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