Recognition of illegal notifications on the elimination of violations identified by the state revenue authorities based on the results of desk control

No. 6001-23-00-6ap/474 dated 07/18/2023

Plaintiff: K LLP

Respondent: RSU "State Revenue Administration" The subject of the dispute: on recognition as illegal:

1) notifications on the elimination of violations identified by the state revenue authorities based on the results of desk control No. 6008QL400003 dated March 17, 2022, No. 6008QO300004 dated April 29, 2022 and No. 6008O1000147 dated May 24, 2022;

2) on recognition as illegal and cancellation of decisions on refusal to accept execution in the form of explanations on notifications.

Review of the plaintiff's cassation appeal.

PLOT: UGD conducted desk control in relation to LLP "K", as a result of which three notifications were issued.

In response to the plaintiff's explanations on two UGD notifications, a written explanation was given about the impossibility of its acceptance. On the third notification, the UGD ruled that the explanation provided by the plaintiff had not been accepted, indicating that violations had not been eliminated. The notifications imputed violations of mutual settlements for 2019-2020.

The basis for the notification is the decision of the specialized interdistrict economic court that entered into force, which invalidated the state re-registration of the counterparty dated March 27, 2019 and April 11, 2019 due to the non-involvement of managers in the creation and implementation of financial and economic activities.

Judicial acts:

1st instance: the claim was denied.

By an additional decision, the operative part of the decision was supplemented with the following: "To satisfy the requirements of K LLP for recognition as illegal and cancellation of the decision to refuse to accept execution in the form of an explanation to notification No. 6008O1000147 dated May 24, 2022.

Appeal: the decision remains unchanged. Cassation: judicial acts are annulled with the referral of the case for a new hearing to the court of appeal in a different composition of the court.

Conclusions: In rejecting the claim, the local courts, guided by paragraph 4 of Article 403, subparagraph 2) of Article 264 of the Tax Code, concluded that the tax authority had legitimate grounds for the plaintiff to issue the disputed primary notices. The courts did not provide evidence of the actual receipt of services from the counterparty to the documents in the Assessment, with reference to paragraph 19 of the Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan No. 4 dated June 29, 2017 "On Judicial practice in the application of tax legislation".

The Board considered these conclusions to be contrary to the norms of substantive law. Thus, the Tax Code applicable to disputed legal relations was adopted on December 25, 2017 and entered into force on January 1, 2018, while the above-mentioned Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan clarifies the application by courts of the norms of the expired Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" dated December 10, 2008.

According to paragraph 5 of Article 96 of the Tax Code, the plaintiff has the right to prove in court the actual receipt of services from a legal entity whose registration (re-registration) has been declared invalid. By virtue of the provisions of Article 413 of the CPC, when considering a case on appeal, the court verifies the legality and validity of the decision of the court of first instance in full.

The court of appeal shall evaluate the evidence available in the case, as well as the evidence presented in accordance with the second part of Article 404 of this Code, within the limits of the claimed claim. It follows from the case file that the plaintiff submitted contracts, primary documents, acts of completed work and acts of acceptance of the facility into operation to the court of first instance as such evidence.

However, there are no payment documents in the file. However, the courts have not ensured the completeness and objectivity of the consideration of the case, the documents available in the case have not been given a legal assessment, the payment documents from the plaintiff have not been requested or examined, their admissibility and reliability have not been verified as evidence of the actual performance of work by the counterparty.

In addition, it follows from the operative part of the decision of the court of first instance that the plaintiff was denied satisfaction of the claim, including recognition as illegal and cancellation of decisions on refusal to accept execution in the form of explanations, whereas such decisions on notifications dated March 17 and April 29, 2022 were not made by the tax authority.

Letters have been sent explaining the impossibility of accepting explanations with reference to subparagraph 3) of paragraph 3 of Article 96 of the Tax Code. In this regard, the conclusions of the courts on the legality of the contested administrative acts are premature.

 

 

 

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