Evidence and proof
According to paragraph 2 of article 129 of the CPC, in an administrative process, the burden of proof lies with the administrative body. The plaintiff, in accordance with his capabilities, is obliged to participate in the collection of evidence. Regardless of the claim filed, the plaintiff must determine the time when he became aware of the violation of his rights, freedoms, and legitimate interests.
It is also important that the tax authority cannot use new arguments when proving in court if they have not previously been reflected in the tax audit report, notification or other contested administrative act.
So, one of the tools of tax administration is to conduct a tax survey. As a rule, the event is held to confirm the absence of the taxpayer at the place of his state registration.
In resolution 6001-22-00-6ap/2 dated February 24, 2022, the judicial board on the claim of DEL Plus LLP against the UGD of the West Kazakhstan Region makes an assessment of the following facts.
Due to the impossibility of handing over the tax audit report due to the absence of the LLP at the legal address, a tax survey report was drawn up on December 11, 2019. The plaintiff did not agree with this act, since there is a conclusion of a forensic handwriting examination, according to which the signature of the person understood in this act was not made by Sultanov G.R., but by another person, and therefore this act cannot be legitimate.
By the decision of the SMAS dated September 10, 2021, the claim of DEL Plus LLP was satisfied, and the act of tax inspection of the Department dated December 11, 2019 was declared illegal. The court issued a private ruling against the defendant for violations of tax legislation. By the resolution of the Judicial Board for Administrative Cases of the West Kazakhstan Regional Court dated November 25, 2021, the decision of the SMAS remained unchanged.
As it was explained at the court hearing, the inspectors knew the actual address where the LLP was located. At the same time, the inspectors wanted to deliver the tax inspection report to the address indicated in the registration data. It was not possible for the inspector to hand over the preliminary tax audit report due to the long business trip of the head of the enterprise. Accordingly, the tax inspection act dated December 11, 2019 was drawn up by the inspector at the taxpayer's location.
According to this act, it was drawn up in the presence of two witnesses. Based on the statement of one of the witnesses, a forensic handwriting examination was ordered as part of the pre-trial investigation, according to which the signature of the person understood in this act was not executed by him. The proceedings based on the materials of the pre-trial investigation were terminated on the basis of paragraphs 1 and 2 of Article 35 of the Criminal Procedure Code of the Republic of Kazakhstan (CPC).
In this case, the DGA inspector violated the procedure for conducting a tax survey, and this act was drawn up without the actual involvement of a second person.
The procedure for conducting a tax survey is regulated by paragraphs 1, 2 of Article 70 of the Tax Code, according to which a tax survey is one of the forms of state control carried out by tax authorities in order to confirm the actual presence or absence of a taxpayer.
The procedure for the participation of witnesses is provided for in Article 71 of the Tax Code, which regulates the actions of officials of the tax authority to attract witnesses. The tax authority violated the established procedure. The defendant's representatives do not dispute the fact that the signature of one of the witnesses in the tax inspection report was made by an incomprehensible person. The defendant also does not appeal against the private ruling on the fact of violation by the state body.
According to paragraph 3 of Article 158 of the Tax Code, the end of the tax audit period is considered to be the day when the tax audit report is handed over to the taxpayer. In accordance with paragraph 1 of Article 159 of the Tax Code, upon completion of a tax audit, the tax authority issues a notification on the results of the audit, which is sent (delivered) to the taxpayer in accordance with the procedure and deadlines established in accordance with Articles 114 and 115 of this Code. Consequently, as a result of the tax survey and this act, the tax authority, based on the notification of the audit results No. 60 dated December 11, 2019, accrued an additional amount of taxes in the amount of 207 594 760 tenge. This notice in the specified part was challenged by the plaintiff in court.
According to parts 1, 3 of Article 13 of the CPC, the trust of a participant in an administrative procedure in the activities of an administrative body or official is protected by the laws of the Republic of Kazakhstan.
An illegal administrative act adopted through the fault of an administrative body or official cannot entail burdensome consequences for a participant in the administrative procedure.
The representatives of the tax authority explained that they had a need to complete the tax audit and hand over the tax audit report before December 31, 2020, due to the fact that from January 1, 2020, the statute of limitations was to be reduced from 5 to 3 years according to amendments to tax legislation. At the same time, the representative of the DGD believes that the LLP deliberately avoided handing over the results of the tax audit due to these amendments. The defendant believes that the recognition of the act of tax inspection as illegal entails the risk of recognizing the results of the tax audit as illegal in 2015 and 2016.
However, the board believes that the subject of the dispute is the procedure for drawing up a tax survey report. The principle of protecting the right to trust, provided for in article 13 of the CPC, states that burdensome consequences for a participant in an administrative procedure from illegal actions committed through the fault of an administrative authority are unacceptable. The actions (inaction) of the taxpayer and the risks associated with the late delivery of the tax audit report cannot be considered as justification for falsifying the tax audit report.
The Board does not accept the DGA's argument that an essentially correct administrative act cannot be declared illegal on formal grounds alone. Thus, forgery of a signature is not a formal basis, and a criminal case has been opened on this fact. Compliance with the norms of the Tax Code by tax inspectors themselves is an integral part of protecting taxpayers' right to trust the state revenue authorities. The act of tax inspection is considered illegal.
Another important aspect of evidence is the active role of the judge. By Resolution No. 6001-22-00-6ap/48 of March 31, 2022, the judicial acts of the lower courts were canceled due to the fact that the active role of the court was not fully realized.
Kozhemyakin A.N. appealed to the court with a claim challenging the actions of the Department for calculating Transport taxes, arguing that since October 12, 2012 he has been the owner of a 2003 Dodge Ram 3500 car, category – "C" (truck).
On April 19, 2021, the Department issued a notice on the presence of an outstanding amount of tax arrears for the tax on this vehicle in the amount of 858,576 tenge, penalties in the amount of 225,495 tenge. The transport tax is calculated by the tax authority based on the rate established for vehicles of category "B" (passenger cars) by engine volume.
The plaintiff believes that the defendant's actions to impose additional tax on vehicles as a passenger car are illegal, since his Dodge Ram 3500 car belongs to trucks and is registered as a truck in accordance with the procedure established by law.
The representative of the defendant, Onebai M.B., asks the plaintiff's cassation appeal to be dismissed, explaining that the tax authority calculated the transport tax on the basis of information from automated traffic police data. The plaintiff's car is a pickup truck, respectively, when calculating the transport tax, the tax authority applied subparagraph 1) of paragraph 4 of Article 492 of the Tax Code as for passenger cars by engine volume.
The local courts dismissed the claim, applying subparagraph 1) paragraph 4 of Article 492 of the Tax Code. They concluded that the plaintiff's car, according to the administrative police, belongs to the "pickup" category and is a passenger car for tax purposes.
However, SCUD cannot agree with the above conclusions of the local courts on the following grounds.
Subparagraph 2) paragraph 4 of Article 492 of the Tax Code stipulates that trucks include vehicles of category C (including CE, C1E, C1), unless otherwise specified in subparagraph 1) the present paragraph.
It follows from the vehicle registration certificate that the car of the plaintiff Kozhemyakin A.N. of the Dodge Ram 3500 brand, built in 2003, belongs to the category – "C" (truck).
However, as indicated above by subparagraph 1) Paragraph 4 of Article 492 of the Tax Code establishes otherwise, namely, that for the purposes of this Code, passenger cars include motor vehicles on a passenger car chassis with a cargo platform and a driver's cabin separated from the cargo compartment by a rigid stationary partition (pickup trucks).
Based on the above rule of the law, the key criterion for classifying a motor vehicle as a passenger car is its chassis, that is, a pickup truck must be on the chassis of a passenger car.
Meanwhile, when determining the chassis of the plaintiff Kozhemyakin's car, the court referred only to the information provided in the automated traffic police mode.
According to article 16 of the CPC, administrative proceedings are conducted on the basis of the active role of the court.
In violation of the principle of the active role of the court, the Administrative Police Department of the Karaganda region Police Department was not involved in the case by the court, the information provided to them was not checked in an automated mode, and the request was not sent to the authorized body by the court.
In violation of the principle of the active role of the court, the Administrative Police Department of the Karaganda region Police Department was not involved in the case by the court, the information provided to them was not checked in an automated mode, and the request was not sent to the authorized body by the court.
In accordance with article 110 of the CPC, evidence in administrative cases in court proceedings is subject to direct investigation.
The court did not examine the expert's opinion, did not give it a legal assessment, and in violation of Article 226 of the CPC, the decision did not provide arguments for rejecting this conclusion as evidence in the case.
The court, without special scientific knowledge, without appointing a forensic car technical examination, without reliable and sufficient evidence, came to the conclusion that the car of the plaintiff Kozhemyakin A.N. brand "Dodge Ram 3500" refers to passenger cars, respectively, the tax on transport is calculated by the engine volume of the car.
In this case, the court did not verify the correctness of the administrative procedure provided for by the tax legislation by the tax authority in compliance with all successive stages, also did not find out whether there was an administrative act issued as a result of an administrative action, did not establish the type and form of this act (notification, notice).
Thus, the local courts did not take sufficient measures to comprehensively, fully and objectively clarify the circumstances relevant to the case, incorrectly applied the norms of substantive and procedural law, and did not comply with the principles of administrative proceedings.
The issue of proof is also very acute in disputes over the results of tax audits. Very often, tax authorities rely only on tax reporting data without conducting counter-tax audits, evaluating primary documentation, the tax burden coefficient, and the business model as a whole. In such cases, SCUD considers that the tax authority has not provided its conclusions on deductions and tax offsets with sufficient evidence. This is also evident in the SCUD resolutions in later periods (No. 6001-22-00-6ap/1113 dated October 20, 2022, 6001-22-00-6ap/378(2) dated October 13, 2022, No. 6001-22-00-6ap/855 dated September 20, 2022).
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