ACC SC Clarified Peculiarities of Proceedings in Cases on the Confirmation of Substantiation of Taxpayers’ Property Administrative Arrest

Tax authority is authorized to apply with administrative claim in the procedure of general proceedings regardless of a judgment adopted by court pursuant to Article 270 (as for the peculiarities of calculation of procedural terms in separate categories of administrative cases), Article 283 (as for the peculiarities of proceedings in cases upon the address of revenue and duties bodies) of the Code of Administrative Procedure of Ukraine.

The Chief Department of the State Fiscal Service appealed in cassation procedure the rulings of lower instance courts, which had returned the claim to it (CD SFS). The claim return was motivated by the fact that the plaintiff had applied to court with a claim on the confirmation of substantiation of taxpayer’s property administrative arrest with the violation of 24-hour term since the moment of the establishment of facts, which had stipulated the application to court (Part 2 of Article 283 of the CAP of Ukraine).

Courts have not taken into account the explanation of supervisory agency as for the fact that the claim previously applied by the agency in the procedure of Article 283 of the CAP of Ukraine (for urgent consideration of administrative case) had been dismissed; therefore, it applies to court in general order, but not pursuant to Article 283 of the CAP of Ukraine. Courts of first and appeal instances motivated their judgments by the fact that the plaintiff might submit a claim on confirmation of substantiation of taxpayer’s property administrative arrest to court in general order, only if previously a judicial ruling on the refusal to open proceedings in a case, but not its dismissal, had been issued.

While submitting a cassation appeal to the Supreme Court, the supervisory agency requested to cancel the judgments of courts of first and appeal instances and to refer the case to the first instance court for the continuation of its consideration. The Supreme Court concluded that there were reasons for the satisfaction of these demands.

To resolve differences in the interpretation of Article 283 of the CAP of Ukraine, the Supreme Court, while considering the case, was represented by the Judicial Chamber on Cases on Taxes, Fees and Other Obligatory Payments of the Administrative Cassation Court. Also, to carry out the assignment of the Court, members of the SC Scientific Advisory Board provided their scientific opinions as for the problem issues of conducting the procedure of confirmation of taxpayer’s property administrative arrest substantiation (as for the peculiarities of proceedings in cases upon the address of revenue and duties bodies).

The judicial chamber of the ACC SC concluded that the tax body is authorized/obliged to apply to court in the order of general proceedings observing general terms for application to court with claim on confirmation of taxpayer’s property administrative arrest substantiation. While considering this request, the fact of proof includes, particularly, the existence of grounds and observing the procedure of inspection appointment by supervisory body and the adoption of decision on the imposition of administrative arrest of property.

Thus, tax authority while applying to administrative court, shall determine by itself the procedure of such an application: in general order or pursuant to Article 283 of the CAP of Ukraine for urgent consideration; this circumstance shall be noted in the claim. The legislator has noted that under Article 283 of the CAP of Ukraine, a tax authority may apply to court only in case of incontestability of such demands, since in other circumstances the court shall refuse to open proceedings pursuant to Part 4 of Article 283 of the CAP of Ukraine because of the issue on law existence.

The refusal to open proceedings pursuant to Part 5 of this article authorizes the tax body to apply to court in the order of general proceedings but such application is also possible without a preliminary application to court in the order determined by Article 283 of the CAP of Ukraine, since the issue on law may also arise on the stage of applying the administrative arrest by tax authority, thus the application to court with a claim pursuant to Article 283 of the CAP of Ukraine may be inappropriate. In any case, issue on law shall not be supposed, but real; and court shall be provided with evidence of the application to solve dispute in administrative or judicial procedure.

The legislator has established that court should examine the justification of applying administrative arrest of property, and in case of issue on law such consideration shall be performed in a universal litigation.

Resolution of the Supreme Court of 26 June 2020 in the case No. 280/2993/19 (administrative proceedings No. К/9901/26872/19) – http://www.reyestr.court.gov.ua/Review/90366882.