Found at the Constitutional Court of the Czech Republic No. 130 / 1996 Coll.

Motion denied.

On 19 October 1995, the Constitutional Court received a constitutional complaint from J. M. Complainant requesting the annulment of the judgment of the Regional Court in Brno of 7 August 1995, No 29 Ca 393 / 94-24, rejecting his action for annulment of the decision of the Financial Directorate in Brno, No FRO 3171 / 230 / 94 of 18 October 1994. By this decision, in conjunction with the decision of the Tax Office in Znojmo, the tax was levied on the aid within the meaning of Article 31 (5) of the Czech National Council Act No. 337 / 1992 Coll., on the administration of taxes and charges, as amended. In addition to this complaint, an application for annulment of the provisions of Paragraph 31 (9) of the Act cited was made in part, expressed in words "or for which the tax administrator was called upon in the course of tax proceedings'.

The IV Chamber of the Constitutional Court concluded that the contested provision was applied in both administrative decisions and in the decision of the court which is the subject of the constitutional complaint itself and that therefore the conditions of Article 74 of Law No 182 / 1993 Coll., on the Constitutional Court, were met. Therefore, the procedure laid down in Paragraph 78 (1) of the Act was interrupted by the decision of 4 December 1995 of the ÚS 252 / 95 and referred the proposal to the plenary.

In the complainant's view, the tax administrator is entitled to impose a tax liability on the use of aids only if the tax entity does not fulfil any of its legal obligations when proving the facts it claims. The wording of Paragraph 31 (9) of the Act of the Czech National Council No. 337 / 1992 Coll., as amended, shows that the tax entity demonstrates all the facts which it is obliged to state in the declaration, statement and bill, or the evidence of which the tax administrator was called upon during the tax proceedings. In the appellant's view, Clause 31 (9) of the Act cited in part "or to which the tax administrator has been called in the course of tax proceedings' provides a basis for the liking of civil servants who may invite a tax entity to do anything, such as to prove that someone else is legally responsible for the correctness of the facts (for example, the fact that the exhibition of the document is a VAT payer). If the tax entity fails to meet the call, the tax administrator shall apply the procedure laid down in Paragraph 31 (5) of the Act cited and, whatever the actual and duly substantiated situation of the case, shall decide on the basis of" aids' which it does not need to specify in any way. The national authority or official is thus given the possibility to impose on citizens any obligations which otherwise do not result from law or other legislation. In the appellant's view, this infringes the fundamental human right protected by Article 11 (5) of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as "the Charter '), as the tax obligation goes beyond the law. Furthermore, that provision is contrary to Article 4 (1) of the Charter, according to which obligations may be imposed only on the basis of the law and within its limits and only with respect to fundamental rights and freedoms. If the Charter uses a" law-based "code, it does not exclude the possibility of a separate tax administrator procedure, but it must respect that obligations can only be imposed within the limits of the law. At the hearing on 24 April 1996, the lawyer added to the appellant that the contested text of the law is also contrary to Article 2 (4) of the Constitution of the Czech Republic (hereinafter referred to as the Constitution), according to which no one must be forced to do what the law does not impose.

On 2 February 1996 the Chamber of Deputies of the Parliament of the Czech Republic commented on the proposal. The statement states that the burden of proof concerning the facts mentioned in the tax return is borne by the tax entity according to § 31 of the Act of the Czech National Council No. 337 / 1992 Coll., as amended. This means that if the tax administrator expresses doubts as to the alleged facts which the tax entity does not refute, the tax administrator has the right to determine the basis of the tax and the tax according to the means available to it or which it provides itself, even without any interaction with the tax entity. This method of calculation was common both in the pre-war legislation (e.g. § 327 of Act No. 76 / 1927 Coll. and n., on direct taxes) and also exists in the legislation of other countries, e.g. Germany. If the appellant considers that the part of the provision of Paragraph 31 (9) in question constitutes an approval of the tax administrator, then it should be noted that such an incentive is hindered, in addition to the provisions of § 31 (9) and § 2 of the Czech National Council Act No. 337 / 1992 Coll., which states in paragraph 2 that "The tax authorities proceed in close cooperation with the tax authorities in order to require that their obligations in the tax proceedings are fulfilled only those which are least burdensome to which the tax authorities are able to achieve the objective of the procedure, i.e. the correct determination and recovery of the tax. 'It follows that a licence notice may be issued only in tax proceedings and only in respect of such facts as are necessary to fulfil the objective of the tax procedure.

Finally, it is noted that the Law was passed on 5 May 1992 by the necessary majority of the legislators, signed by the relevant constitutional authorities and duly declared. The legislature acted in the belief that the adopted provision was in line with the Constitution and it is up to the Constitutional Court to assess the constitutionality of the provision § 31 paragraph 9 of the Czech National Council Act No. 337 / 1992 Coll., as amended, in the scope of the complainant's proposal. At the same time, copies of House Prints Nos 691 and 755 were added.

Pursuant to Article 68 (2) of Law No 182 / 1993 Coll., the Constitutional Court has the task of assessing the content of the law in terms of its compliance with constitutional laws, international treaties under Article 10 of the Constitution and with the laws, and of determining whether it has been adopted and issued within the limits of the constitutional competence and in a constitutional manner. Since the court had no reason to doubt that the law in question had been adopted within the limits of the Constitution laid down by competence and in a constitutionally prescribed manner, it focused, in particular, on the assessment of the content of the contested provision and its consistency with the constitutional rights and freedoms guaranteed, in particular by those whose infringement was alleged by the appellant.

The proposal goes against the provisions of the Tax and Fees Administration Act. The tax administration means the right to exercise the measures necessary for the correct and complete determination of the tax liability as well as for its fulfilment. The Law on the Administration of Taxes and Taxes is a separate procedural law governing the procedure of tax authorities for collecting taxes and charges, as well as the rights and obligations of tax entities. The tax procedure is a specific type of administrative procedure carried out by specialised public authorities. It is essentially bilateral, written and non-public management. It is based on two basic principles, namely the principle of legality and the principle of synergy. In particular, the second principle in question concerns the present case. This principle is expressed in particular in § 2 (2) of the Act of the Czech National Council No. 337 / 1992 Coll., which provides that tax administrators are to proceed in close cooperation with tax entities in proceedings and are to choose only those means which are the least burdensome and enable tax entities to achieve the objective of management, i.e. the correct determination and collection of tax.

In general, the tax procedure is based on the principle for us, like in other countries, that each tax entity has, on the one hand, an obligation to recognise the tax itself (that is, a burden of claim), but also an obligation to prove its claim - the burden of proof. As regards the present law, this principle is expressed in particular in § 31 (9). However, virtually any means of proof can serve as proof of the facts relevant to the determination of tax liability, but those obtained in breach of generally binding legislation cannot be used. Thus, at the first stage of the procedure, the legislator transfers the burden of proof to the tax entity. However, the provision cited cannot be considered in isolation. In particular, what the tax administrator can call for is the provision of Paragraph 43 of this Law, which regulates the so-called "complaint procedure ', in the part of the law which deals with the taxation. Paragraph 31 (9) therefore does not regulate what the tax administrator can demand but who bears the burden of proof. This provision is also included in the general provisions of the Act (Part One). Therefore, if, pursuant to Article 43 of the Act cited, the tax administrator expresses doubts as to the claim of the tax entity, the tax entity is required to prove the alleged facts within the time limit set by the tax administrator. If they do not prove them, that is to say, if they do not bear the burden of proof, that is to say, if they do not refute the doubts of the tax administrator, the tax administrator is entitled to determine the taxable amount and the tax on the basis of the means which he has or will obtain, even without any interaction with the tax entity (i.e. in a substitute manner pursuant to Articles 31 (5) and 44 of the Law). This procedure is a breakthrough in the basic principle of tax procedure, which is expressed in Section 2 (9) of the Act, namely the law of the tax entity to cooperate with the tax administrator in the correct determination of its amount. Only if the tax could not be determined according to the means can the tax administrator negotiate both the tax base and the tax in an agreement with the tax entity.

In the view of the Constitutional Court, the complainant's application is based, in particular, on the failure to understand the above-mentioned principles of tax proceedings. The contested provision of the law would appear in a completely different light if the assessment of the tax and the taking of evidence as to why it was assessed at one or the other level would be the duty of the tax authority from the outset. However, this is not the case, and therefore the provision which is the subject of the procedure cannot be understood as providing for a procedure where the evidence submitted for a tax return (which the tax entity may consider to be sufficient) is of such a nature as to raise doubts to the tax administrator. The contested provision of Paragraph 31 (9), or part of it, may therefore appear to the appellant as a provision which makes it possible, in particular because it removes it from other contexts and ties and, in particular, from the whole concept of the case-law in tax matters. Thus, a civil servant cannot call upon a tax entity to do anything, as the appellant claims, but only to prove what he himself claims. Only when the tax entity does not prove its own claims does the tax administrator proceed separately.

The applicant's constitutional argument is based on Article 11 (5) of the Charter, in conjunction with Article 4 (1) of the Charter. An infringement of Article 2 (4) of the Constitution shall also be objected. However, Article 11 (5) of the Charter does not, in the view of the Constitutional Court, affect the case as there is no doubt that the value added tax in question is regulated by law. It can therefore only be disputed whether the method of its measurement or selection is adjusted in a constitutional manner. The fact that the basic law of a procedural nature has the power of the law (Act No. 337 / 1992 Coll., as amended) indicates that the cited article of the Charter, or paragraph 5 thereof, has not been violated. Similarly, Article 2 (4) of the Constitution could not be infringed, since what the tax entity is obliged to prove and how the law also provides for. It could therefore only be considered that the contested provision does not comply with Article 4 (1) of the Charter, since it allows tax authorities to impose obligations on tax entities outside the limits of the law or in the way in which they interfere with fundamental rights and freedoms. In this respect, however, the Constitutional Court did not consider that this provision of the Charter, or of another Constitution protected law, or of the law resulting from an international treaty within the meaning of Article 10 of the Constitution, would be infringed by the contested Act of the Czech National Council No. 337 / 1992 Coll., as amended. For these reasons, the Constitutional Court rejected the application.