The Constitutional Court found no 342 / 2008 Coll.
The Constitutional Court found of 2 July 2008 on the application for annulment of Article 64 (2) of Act No. 337 / 1992 Coll., on the Administration of Taxes and Fees, as amended, and on the application to declare the inconstitutionality of § 37a (1) of the First Law No. 588 / 1992 Coll., on value added tax, as amended, and § 105 (1) of the Third Act No. 235 / 2004 Coll., on value added tax, as amended
Valid
The Constitutional Tribunal found
Text versions:
12.09.2008
342
FIND
The Constitutional Court
On behalf of the Republic
The Constitutional Court ruled on 2 July 2008 in plenary composed of Stanislav Balík, František Duchoň, Vlasta Formánková, Vojen Güttler, Pavel Holländer, Ivan Janů, Vladimir Krórek, Dagmar Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Pavel Rychetský, Miloslav Excellent, Eliška Wagner and Michaela Židlická on the proposal of the Supreme Administrative Court on the abolition of § 64 paragraph 2 of Act No. 337 / 1992 Coll., on the administration of taxes and charges, as amended by Act No. 235 / 2004 Coll., and on the application to declare the first Law No 588 / 1992 Coll., on Value Added Tax Tax, and § 105 (1).
as follows:
I. The application for annulment of the provisions of § 64 (2) of Act No. 337 / 1992 Coll., on the Administration of Taxes and Fees, as amended, is rejected.
II. The proposal to declare the unconstitutionality of the provisions of § 37a (1) of the First Law No. 588 / 1992 Coll., on value added tax, as amended, is worded as follows: "If an excessive deduction results in a refundable excess, the payer shall be returned without application within 30 days of the measurement of the excess deduction, even in the event of bankruptcy. In this case, the special Regulation shall be followed. ';
From Article 11 The Charter cannot be interpreted as giving rise to increased protection of the State's rights as owner (in tax matters represented by the tax administrator), which would, in a particular case under consideration, in the cases of bankruptcy, give it an advantage and de facto grant it a privileged position vis-à-vis other creditors.
III. The proposal to declare unconstitutional the provision of § 105 paragraph 1 of the third sentence of Act No. 235 / 2004 Coll., on Value Added Tax, as amended, is rejected.
Reasons
Definition and recap of the proposal
1. The Constitutional Court was served on the proposal of the Fifth Chamber of the Supreme Administrative Court, which, pursuant to Article 95 (2) of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution ') and Article 64 (3) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, (hereinafter referred to as" the Law on the Constitutional Court'), sought the annulment of Article 37a of Act No. 588 / 1992 Coll., on Value Added Tax, as amended, Section 105 of Act No. 235 / 2004 Coll., on Value Added Tax Tax, as amended, and Section 64 (2) of Act No. 337 / 1992 Coll., on Tax Administration and Taxes, as amended. In addition to the proposal of 12 February 2008, the original proposal (in relation to the provisions of Section 37a of Act No. 588 / 1992 Coll. and of Section 105 of Act No. 235 / 2004 Coll.) was amended in the sense that the appellant sought to declare the unconstitutional text:
(1) If a repayable excess is incurred as a result of the measurement of the excess deduction, the payer shall be reimbursed without application within 30 days of the measurement of the excess deduction, even in the case of a bankruptcy declaration. In this case, the special rule shall be followed. 40a) [Paragraph 37a (1) of the First Law No. 588 / 1992 Coll. (sic - ref.)], and
2) The declaration of bankruptcy shall not interrupt the tax procedure and, after the declaration of bankruptcy, the excess deduction to be applied shall be returned to the payer if he does not have any tax arrears arising before and after the declaration of bankruptcy. (Paragraph 105 (1) of Act No. 235 / 2004 Coll.).
2. The appellant stated that, in the present legal case, the claimant (liquidator of bankruptcy) lodged a appeal against the defendant's tax office against the judgment of the Regional Court in Ostrava. By the contested decision, the Regional Court of illegality annulled the decision of the administrative authority and referred the case back to it for further proceedings. The illegality was seen in the procedure of the tax administrator, which calculated the excess deduction of value added tax (calculated after the effective decision on the declaration of bankruptcy) within the meaning of § 64 (2) of Act No. 337 / 1992 Coll., on the administration of taxes and charges (hereinafter referred to as "the SDP ') to cover the arrears of the income tax on individuals from dependent activities and functional benefits.
3. According to the Regional Court of § 14 (1) (i) of Act No. 328 / 1991 Coll., on bankruptcy and settlement, (hereinafter referred to as "ZKV"), it follows that after the bankruptcy of the assets belonging to the bankruptcy is not permitted. It is indifferent, however, that, by offsetting, the claims would have been met (and would have died) before the bankruptcy. Therefore, where the insolvency practitioners of the value added tax overpayment are created, they may not be used for the duration of the bankruptcy to pay other tax arrears, even if otherwise (except for bankruptcy), in accordance with the procedure laid down in Sections 64 of the SDP and 37a of Act No. 588 / 1992 Coll., on value added tax, since the claim for repayment of the overpayment is a claim by the insolvency practitioner for his debtor (State), represented by the tax administrator, and the debts of the insurer (in accordance with § 6 of the SKV) are part of the assets of his bankruptcy. This conclusion does not alter the fact that the insolvency debtor himself has a claim to the insolvency which he has entered into or was obliged to enter into bankruptcy (§ 20 ZKV). The procedure under Paragraph 64 of the CSDP would, in the duration of the bankruptcy, have the character of an inadmissible set-off (cf. Resolution of the Supreme Court of 19.9.2001 sp. zn. 29 Odo 532 / 2001, published in the Collection of Judgments and Opinions under No 23 / 2002).
4. In the appeal, the tax authority argued in particular that the bankruptcy and settlement law was not in relation to the tax and tax administration law lex specials, since those laws did not regulate the same area of legal relations and were not identical in nature even from the point of view of the so-called dualism of law. The Institut's netting falls under private law (Sections 488 and 580 of the Civil Code, Sections 358 to 364 of the Commercial Code), as well as the bankruptcy and settlement law. Inadmissibility and impossibility of netting is generally provided for in § 581 (1) and (2) of the Civil Code, as well as in § 14 (1) (i) of the ZKV as one of the effects of the bankruptcy declaration. In the tax procedure, the tax administrator operates in accordance with the Tax Administration and Charges Act even if the tax entity has been declared bankrupt because the tax procedure is not interrupted by the declaration of bankruptcy within the meaning of § 40 (11), second sentence, of the TSDP. If the tax administrator, pursuant to § 62 of the SSDP, records a excess tax on one of the tax entity's personal accounts, it must use it in the manner set out in § 64 (2) to (6) of the SSDP. The question of whether or not the claimant has a right to repayment of the overpayment can only be assessed under public law rules. The excessive deduction calculated cannot fall within the assets constituting the bankruptcy nature and be included by the liquidator of the bankruptcy nature in the substance inventory under Paragraph 18 of the ZKV because it would be an unjustified interference with public tax proceedings.
In detail, the argument is identical to the conclusions of the Supreme Administrative Court in its Opinion of 29.4.2004 (see below).
Legal opinion of the Supreme Administrative Court
5. The Supreme Administrative Court took the view that the provisions of § 37a of Act No. 588 / 1992 Coll., on Value Added Tax, as amended, (hereinafter referred to as "Act No. 588 / 1992 Coll.," or "the Law on Value Added Tax"), the provisions of § 105 of Act No. 235 / 2004 Coll., on Value Added Tax, as amended, and the provisions of § 64 (2) of Act No. 337 / 1992 Coll., on Tax Administration and Fees, as amended, as amended by the Act No. 235 / 2004 Coll., on Value Added Tax Tax Tax, as amended, are contrary to the constitutional order of the Czech Republic. It therefore makes an application for annulment of those provisions as the court is bound by the provisions cited and cannot disregard them. The Court is aware of the interpretative rule, as expressed by the Constitutional Court in its finding in its sp. zn. III. ÚS 41 / 05 of 18.1.2006 (N 19 / 40 CollNU 147) *, but in the present case the legislation does not allow such an option, since Section 37a of the Value Added Tax Act expressly states that if an excess deduction is calculated by means of a repayable overcharge, the payer shall be returned without application within 30 days of the measurement of the excess deduction, even in the event of bankruptcy; Therefore, the excess deduction does not return. Similarly, the provisions of Paragraph 64 (4) of the SSDP, which determine what is meant by overpayment or refundable overpayment, are similar. The Supreme Administrative Court proposes the retention of part of the first sentence: "If the tax debtor asks for a refund of the overpayment, the overpayment will be refunded if it is more than 50 CZK 'and only in the rest it proposes to cancel it.
6. The appellant further cited the opinion of the plenary of the Supreme Administrative Court, adopted on 29 April 2004 within the meaning of the provisions of § 12 (2), § 19 (2) and § 20 of Act No. 150 / 2002 Coll., the Administrative Rules of the Court, which, according to the appellant, gives rise to arguments in favour of the tax office.
In that opinion (adopted in the light of the discrepancy of the practice of administrative courts), plenary of the Supreme Administrative Court submitted an analysis of the purposes and objectives of tax management, bankruptcy proceedings and their comparison. The purpose of the tax procedure provided for in the tax rules is to exercise the rights and obligations of the tax entity towards the State represented by the tax administrator whose legal relationship is based on inequality. The purpose of the tax procedure is to determine and collect the tax, in accordance with Paragraph 2 (2) of the SAA, so that tax revenues are not reduced. Although the principle of equality applies in tax proceedings (Paragraph 2 (8) of the SAA), it applies to tax entities which have the same procedural rights and obligations before the tax administrator. On the other hand, the purpose of the bankruptcy proceedings is to organise the property ratios of the debtor who is bankrupt and to achieve a proportional satisfaction of the creditors of the assets constituting the bankruptcy. The participants in the bankruptcy proceedings shall be in an equal position. In the context of the bankruptcy and tax proceedings, the tax administrator has a dual position, both as the tax administrator carrying out the tax administration's exercise of tax proceedings, which does not interrupt the bankruptcy declaration and as a participant in the bankruptcy proceedings. The tax administrator, even after the bankruptcy declaration, does not lose its position as a public authority on the public finances section, but may, in the event of tax arrears, be a participant in a bankruptcy procedure in which it has an equal position with other parties to the proceedings.
7. Furthermore, Plenum submitted an analysis of the Institute's accounting with reference to the relevant provisions of the tax laws, namely § 37a of Act No. 588 / 1992 Coll., § 64 and § 59 (3) (e) of the TSDP, and § 40 (11) of the same Act. The emphasis was placed on the latter provision, which implies that the declaration of bankruptcy does not interrupt the tax procedure, and on the definition of a tax overpayment, of which a special kind is the excess deduction of value added tax, and the method of payment of taxes. If the tax administrator, pursuant to § 59 (3) of the SCF, transfers to a tax entity for whose assets bankruptcy has been declared, the payment of the tax due is made, i.e. the payment of the tax debt is made and not the netting on the assets of the bankruptcy entity within the meaning of private law, and there is therefore no conflict with the provisions of § 14 (1) (i) of the ZKV. In that procedural tax provision, and in any other law, there is no provision that the tax administrator may, or should, otherwise apply where bankruptcy is declared against the assets of the tax entity. The excess tax, or the excess deduction on value added tax, may be included in the assets constituting the bankruptcy nature within the meaning of Paragraph 6 of the ZKV (according to paragraph 2 of the provision referred to above, the bankruptcy relates to assets belonging to the debtor on the date of the bankruptcy declaration and acquired for bankruptcy) only if it is refundable. If the tax administrator, even in relation to the tax entity, has been declared bankrupt in accordance with the provisions of § 64 of the ZKV, this is not contrary to the provisions of § 14 (1) (i) of the ZKV, since it is not an inadmissible compensation. The tax liability of the tax entity towards the State can only be a tax overpayment that is refundable, i.e. exceeds any tax underpayment.
8. According to the Supreme Administrative Court, the argument that the claim for repayment of the overpayment is a claim by the debtor for his debtor, which is the State, and that the excess tax is an asset which, at the date of the bankruptcy, was in bankruptcy, is justified by the reference to the purpose of the bankruptcy, which must be achieved in the manner set out in § 27 and 27a of the ZKV's assets constituting the bankruptcy, which presupposes that such property may be the subject of civil relations, but which does not correspond to the right of the tax body of public law.
9. The Board of the Supreme Administrative Court therefore takes the legal view that the Institute of Excess Deduction is an institution of public law and that the tax overpayment is subject to the treatment of the tax administrator in the manner set out in § 64 of the SSDP, i.e. to transfer it first to the payment of tax arrears, even if the tax entity is a bankrupt person whose assets have been declared bankrupt. The tax excess may be refunded to the tax entity only if it is a refundable excess, i.e. if it is not registered in any of its personal accounts by any tax administrator, and it is not decisive whether the excess payment arose before or after the bankruptcy.
10. The referring Chamber of the Supreme Administrative Court stated that, in the present case, the essential view expressed by the Constitutional Court in its decision in sp. v. III. ÚS 648 / 04 of 28.7.2005 (N 145 / 38 SbNU 135) was taken into account: "It is based on the principle of constitutional conformity with the interpretation of simple law, the Constitutional Court concluded that Clause 14 (1) (i) of the ZKV is a special law establishing the inadmissibility of compensation not only by private law but also by private law and public law. As such, it therefore takes precedence as a special arrangement over that contained in the provisions of § 59 (3) (e), § 40 (2) and § 64 (2) of the CSDP. Decisions of general courts which do not accept the correlation of the standards of simple law shall, for this reason, be contrary to the provisions of Articles 4 (4) and 11 (1) of the Charter. ';
11. The Supreme Administrative Court stated that although Law No 588 / 1992 Coll. has already been repealed, the provision of § 111 of Law No 235 / 2004 Coll. is applied in the case under appeal. In that context, several questions arise which, in the opinion of the Senate of the Supreme Administrative Court, are opposed to the presumption of the constitutionality of the provisions laid down in both laws and are therefore presented to the Constitutional Court.
12. According to the Supreme Administrative Court, it is necessary to recall the conceptual and content definitions of the various tax-law institutes cognisable in the tax laws - the tax excess pursuant to § 64 (1) of the ZSDP. The so-called tax overpayment is irrevocable - the accounting, tax overpayment according to 64 (4) of the cited Act, the refundable tax overcharge, the excess deduction on value added tax pursuant to § 2 (2) (j) of Act No 588 / 1992 Coll., on value added tax, as amended for the present case. It is also appropriate to address the moment when the statutory public law claim of a tax entity to repay a refundable overpayment pursuant to § 64 (4) of the Act cited, in the event of the measurement of the excess deduction for value added tax under § 37a of the Value Added Tax Act in conjunction with § 64 (4) of the SAA, in relation to the possible reciprocity of the public claims accounted for, where the distinction between the above-mentioned legal institutes of tax law and their content results explicitly directly from the legislation. The importance of the above mentioned legal provisions in terms of the definition of these legal institutes is very clear and does not allow for any other scope of its interpretation (understanding). The non-distinction between these legal institutes of public tax proceedings, their identification in one substance indeterminate, in tax laws, but not even in the bankruptcy and settlement law unregulated, the insolvency institution of the tax entity's claim to the tax administrator of the current public tax proceedings cannot be a matter of legal opinion or legal interpretation, but must be expressly regulated in the law. A new tax law is created by a constitutional interpretation of a new tax law on the creation of a public right of a tax body to refund a tax credit on value added tax in the context of bankruptcy and tax proceedings, whereby the mere assessment of an excessive deduction for value added tax for the relevant tax period after the declaration of bankruptcy on the property of the insurer arises to that taxable person according to the interpretation of the public law on the refund of the tax credit on that tax, regardless of the possible existence of a refundable, but also of a non-refundable overpayment. The value added tax, which is the basis of not only indirect taxation in the Czech Republic, but also the basis of the entire tax system, and is closely linked to taxes of the same type in the European Union States, is understood, in the context of this interpretation, without taking into account the construction of this tax under the legislation (Act No. 588 / 1992 Coll., Act No. 235 / 2004 Coll., the relevant Directive of the European Union on that tax) only as a right to deduct tax, regardless of its own tax liability, where the value added tax is legally-technically constructed as a difference in input tax (right to deduct) and output (own tax liability) of the taxpayer in the specific tax period [see Section 2 (2) of Law No. 588 / 1992 Coll.
13. The constitutional conformal interpretation, with emphasis on the protection of the property rights of other (in this case bankruptcy) creditors, does not lead to the abolition of the above-mentioned provisions of Act No. 337 / 1992 Coll., in particular § 64 of the cited Act and § 37a of Act No. 588 / 1992 Coll., on value added tax, effective until 30 April 2004, and § 105 of Act No. 235 / 2004 Coll., on value added tax, effective from 1 May 2004. Legislation of the tax administrator's tax overpayment procedure in the context of the bankruptcy procedure, which would consist of a de facto infringement of tax rules, which would contravene Article 11 (5) of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as the "Charter '), according to which taxes and charges may be imposed only on the basis of the law, the priority of the constitutional conformity interpretation of the anti-constitutional tax provisions in question before the procedure laid down in § 64 et seq., of the Constitutional Court of Justice, was not specified in the finding of the Constitutional Court of First Instance in paragraph III.
14. In the context of the current tax procedure, there would therefore be a legal non-regulated advantage for one group of tax entities, namely those of which bankruptcy has been declared, against other tax entities, i.e. those which are bankruptcy creditors in the ongoing bankruptcy proceedings, for which the above mentioned legal provisions were fully applied when handling their tax overpayment, but in the case of the insolvency proceedings, such provisions on the treatment of tax overpayments would not be applied because of their constitutional inconsistency because they restrict the ownership of the bankruptcy creditors in question, who are outside the tax jurisdiction and are not parties to the tax proceedings. Such a procedure would infringe the principle of the procedural equality of all tax entities in the framework of the tax procedure implemented, as set out in Paragraph 2 (8) of the SAA.
15. In addition to the proposal of 12 February 2008, the appellant stated that, in view of the change in the legislation resulting from the effectiveness of Act No. 296 / 2007 Coll., amending Act No. 182 / 2006 Coll., on the bankruptcy and methods of its resolution (insolvency law), as amended, and certain laws in the context of its adoption, the original proposal is amended in the sense that it seeks to pronounce the unconstitutional text:
(1) If a repayable excess is incurred as a result of the measurement of the excess deduction, the payer shall be reimbursed without application within 30 days of the measurement of the excess deduction, even in the case of a bankruptcy declaration. In this case, the special rule shall be followed. 40a) [Paragraph 37a (1) of the First Law No. 588 / 1992 Coll. (sic - ref.)], and
2) The declaration of bankruptcy shall not interrupt the tax procedure and, after the declaration of bankruptcy, the excess deduction to be applied shall be returned to the payer if he does not have any tax arrears arising before and after the declaration of bankruptcy.
(Paragraph 105 (1) of Act No. 235 / 2004 Coll.)
16. The appellant notes that by Act No. 296 / 2007 Coll., Insolvency Act, (sic - note.), the third sentence in the provision of § 105 of Law No. 235 / 2004 Coll. was deleted (see Section 89th, CIII, paragraph 5). The legislation, based on identical principles, was also contained in the provision of § 37a of Act No. 588 / 1992 Coll., which, despite the repeal of Act No. 588 / 1992 Coll. is still applied under § 111 of Law No. 235 / 2004 Coll. in cases pending. The Supreme Administrative Court is therefore obliged to continue to carry out its test of constitutionality, even though it is aware of the fact that, in the case of the Constitutional Court under Act No. 235 / 2004 Coll., which repealed Act No. 588 / 1992 Coll., it was not applied and § 105 was not applied.
17. The two provisions cited, i.e. both Section 37a and Section 105, express the legislator's intention to repay the tax entity, including the bankrupt, not the entire excess deduction, but only the part of it remaining as a repayable overpayment (only this part is part of the property of the insurer), the refundable overpayment being established in accordance with the procedure laid down in Section 64 (2) of Act No 337 / 1992 Coll. In addition, an amendment to Act No. 337 / 1992 Coll., on the Administration of Taxes and Fees (see Section Twenty-first, Article XXVII (6)) was implemented by the Insolvency Act (sic). Paragraph 40a - Repayments in insolvency proceedings was newly incorporated into the law. That provision in paragraph 4 remained on the original intention of the legislator and essentially took over the adjustment contained in the repealed sentence of the third Section 105 of Act No. 235 / 2004 Coll., or in the provision of § 37a of Act No. 588 / 1992 Coll. Nor can that provision import the inadmissible set-off of claims in the event that the tax administrator does not repay the full excess deduction claimed but only the part that remains as a refundable overpayment, i.e. after payment of other arrears.
18. The legislation in force therefore considers that the tax entity - including the bankrupt - is not the full amount of the excess VAT deduction claimed but only that part of the excess deduction which is a refundable overpayment. for its findings the 64 paragraph 2 of Act No. 337 / 1992 Coll. The referring Chamber of the Supreme Administrative Court found that Article 40a of Act No. 337 / 1992 Coll., as amended, is based on the same legislative intentions as was the case in the provisions on which the Supreme Administrative Court made a proposal to abolish or declare unconstitutional. However, it is not for the Supreme Administrative Court to propose the annulment of that provision in the present case.
Substantial part of the observations made by the parties
19. The Constitutional Court sent a motion to initiate proceedings in accordance with the provisions of § 69 of Act No. 182 / 1993 Coll., on the Constitutional Court, the parties - Chamber of Deputies and the Senate of the Parliament of the Czech Republic.
20. The Chamber of Deputies of the Parliament of the Czech Republic stated in its observations that the proposal to abolish Clause 37a of the Value Added Tax Act lacked justification, since this Act was repealed with effect from 1 May 2005 by Act No. 235 / 2004 Coll., on Value Added Tax.
In approving the draft contested provisions, the legislature assumed that the tax procedure was the exercise of the rights and obligations of the taxable entity vis-à-vis the State represented by the tax administrator. Their relationship, governed by the tax rules, with a view to collecting the tax so as not to shorten the revenue of the State, is based on inequality. Excessive deduction of value added tax where it exceeds the deduction of output tax is designed as a payment of a tax which is used by the tax administrator to pay tax obligations under Paragraph 59 (3) of the Tax Administration Act or to pay any arrears on another tax or, under specified conditions, with another tax administrator. If a tax body has a refundable overpayment pursuant to Article 64 (4) of the Act cited, that is, if it does not have a refundable overpayment with the same tax administrator, or if another tax administrator does not make a claim for reimbursement, a refundable overpayment shall be entitled. The condition of reversibility was enshrined in the amendment of the Value Added Tax Act by Act No. 17 / 2000 Coll. in relation to bankruptcy proceedings. The new Act No. 235 / 2004 Coll., on Value Added Tax, in § 105, the previous regulation on the refund of excess deduction was taken over by Act No. 588 / 1992 Coll. The explanatory memorandum to the draft law states: "As in the current version of the law, the refund of the excess deduction is linked to the creation of a refundable overpayment which is incurred by the payer in the absence of any tax arrears. The provision taken from the Law on the Administration of Taxes and Fees is added to the provision that the declaration of bankruptcy does not interrupt the procedure. Where a refundable excess is created by a change in the tax liability on the basis of an additional measurement, the payer shall apply for the refund of the excess and the tax administrator shall comply with the provisions of the legislation governing tax administration. ';
The legislature acted in the belief that the laws adopted were in line with the Constitution and our rule of law, leaving it to the Constitutional Court to assess its constitutionality and to give its decision.
21. The Senate of the Parliament of the Czech Republic, in its comments on the proposal, stated that the provision 37a of Act No. 586 / 1992 Coll. (sic - note) Coll.: correctly Act No. 588 / 1992 Coll.) was incorporated into the Act on Value Added Tax Act No. 285 / 1994 Coll. (sic - note: correctly Act No. 258 / 1994 Coll.), amending and supplementing the Act of the Czech National Council No. 588 / 1992 Coll., on Value Added Tax, as amended; the provision was valid until 30 April 2004, when it was repealed together with the entire law. In the course of the Act (sic - notes red.) No. 588 / 1992 Coll. was Article 37a amended by Act No. 133 / 1995 Coll. and Act No. 17 / 2000 Coll. The Senate was therefore only involved in the approval of the last amendment cited and, as a result, the comments cannot be supported by the arguments raised by the debate on this law in the Senate bodies. The draft Act No. 17 / 2000 Coll., contained in Senate Press No. 141, was discussed by the Senate plenary at its 15th meeting on 12.1.2002 (sic - note.), and none of the Senators spoke on the subject of the amendment of § 37a of the Act on Value Added Tax, and it can therefore be concluded that the Senate did not consider the provision to be problematic from a constitutional point of view.
22. Also when discussing Act No. 235 / 2004 Coll., on Value Added Tax, none of the debating senators came forward in accordance with § 105 and by resolution No. 381 approved the draft law as referred to by the Chamber of Deputies. It can be concluded from the discussion that the Senate and this provision were not considered constitutionally unconformal.
23. Paragraph 64 (2) of the SAA was amended only once by Act No. 255 / 1994 Coll., amending and supplementing the Act of the Czech National Council No. 337 / 1992 Coll., on the Administration of Taxes and Fees, as amended, is therefore a provision which was approved before the Constitution of the Senate and therefore cannot be supported by the arguments raised by the debate on this Act in the Senate bodies.
24. Paragraph 37a of Law No 588 / 1992 Coll. was repealed by Law No 235 / 2004 Coll. with effect from 1 May 2004, and for these reasons it can be assumed that the Constitutional Court will deal with the proposal in accordance with Paragraph 67 (1) of the Law on the Constitutional Court. In addition, it can be held that, in a situation where the Constitutional Court has already expressed several times in the past (even in the validity of Act No. 17 / 2000 Coll.), it is irrelevant whether it is a refundable or irrevocable overcharge on value added tax, or whether it is an overpayment made before or after the declaration of bankruptcy, since it imposes Article 14 (1) (i) of the Act on bankruptcy and compensation for the special arrangements for the contested provision, it would not be appropriate to abolish that provision, even if the contested provision were to apply because it could be brought to a constitutional interpretation. Paragraph 105 of Act No. 235 / 2004 Coll. The Supreme Administrative Court does not apply in the present case (appeal complaints) and therefore the question arises as to whether the application for annulment of this provision fulfils the conditions of Paragraph 64 (3) of the Law on the Constitutional Court, but in particular whether it also fulfils the conditions of Article 95 (2) of the Constitution.
25. When assessing the proposal for the annulment of this provision in the future, it should be taken into account that Article 105 of Law No 235 / 2004 Coll. already explicitly, contrary to the legal situation in force until 30 April 2004, contains in essence an exception to the bankruptcy and settlement arrangements and that it could be qualified as a so-called indirect amendment to the Act on bankruptcy and settlement, or its provisions of § 14 (1) (i). It would then be reasonable for the Constitutional Court to consider whether this derogation, which provides the State with "higher claims' to satisfy its claims than other creditors involved in bankruptcy, is still justified and does not fulfil the characteristics of the unacceptable inequality. The amendment to the Act on bankruptcy and settlement, implemented by Act No 27 / 2000 Coll. and effective from 1 May 2000, made it clear that the State would no longer be privileged in respect of its claims to the bankruptcy, with the State's privileged position of almost a decade, and concerned not only tax claims (the fees, duties and social security contributions, if they arose no more than three years before the declaration of bankruptcy and in the course of the bankruptcy), but by adopting a new law on value added tax as if it had revised that position and agreed with the new law that, in the event of an excessive deduction of value added tax, the State would not" divide itself with other creditors'. However, the assessment of this issue appears premature, even if new actions and complaints as a result of the application of § 105 provisions are likely to be expected. In the case of the provisions of Paragraph 64 (2) of the Act, it can be pointed out, in relation to the appellant's objection, that, when using a constitutional interpretation within the meaning of the findings of the Constitutional Court, there will be a breach of tax rules and, consequently, an infringement of Article 11 (5) of the Charter, it can be pointed out once again that the present case-law of the Constitutional Court, which implies a clear conclusion that the provisions of Paragraph 14 (1) (i) of the ZKV constitute a special law against the provisions of Article 37a of Law No 588 / 1992 and, in turn, the provisions of § 64 (2) of the CSDP, which cannot be contrary to those provisions.
26. The appellant further argues that the rejection of the appeal will create an unequal position for tax entities in tax proceedings and a breach of the principle set out in Paragraph 2 (8) of the SAA. Unconstitutionality sees the fact that the tax office will not apply the provisions of Paragraph 64 (2) of the SSDP to the value added tax payer when rejecting the appeal, while it will apply that provision to the other payers. It is clear that not only the rule explicitly set out in Paragraph 2 (8) of the SSDP, but also the various procedural institutes themselves, in tax proceedings, should ensure the equal status of tax entities, in particular in the light of Article 37 (3) of the Charter, even if the appellant does not invoke its infringement. Article 37 (3) The documents shall be equal to each other. In this context, it is necessary to consider the nature of the provision of Paragraph 64 (2) of the SSDP, which orders the tax administrator to use the excess tax to pay another tax, and, as a result of this payment, the duty to pay the tax ceases. The Constitutional Court has made it clear in its earlier findings that it considers the provision of Paragraph 64 (2) of the SSDP, contrary to the opinion expressed by the Supreme Administrative Court, to be a provision containing the obligation of the tax administrator to set off the overpayment, although the provision formally refers only to the payment of the "arrears', because the obligation to pay has been terminated, as well as to the netting provided for in Section 580 of the Civil Code. However, netting itself is an institution of substantive law, which at least partially retains those elements even if it is contained in a procedural regulation, since it is essentially an" act 'whereby the tax administrator satisfies his claim as well as when netting under the Civil Code. It is up to the Constitutional Court to assess whether the alleged inequality is justified by the appellant from the point of view of these arguments by the specificity of the status of insolvency practitioners and whether the intensity of that inequality vis-à-vis tax entities does not exceed the necessary limit and the situation is adequate.
Derogation of the contested provisions
Paragraph 64 (2) of the TSDP
The excess shall be used for the payment of any arrears on another tax or, if there is no such arrears, as an advance on the tax tax which has not yet been paid. The excess tax shall also apply to the payment of the tax arrears of the same tax debtor with another tax administrator for which the excess payment is registered, if that tax administrator so requests, that this requirement be met by the tax administrator for which the tax overpayment is registered before it is refunded but at the latest by the date of the period of entitlement to its refund. The request shall be accompanied by an enforceable statement of arrears to be paid by the overpayment; where the requirement is applied through linked automated tax information systems, it is sufficient to submit an enforceable statement of arrears within 10 days of the requirement for payment of arrears. The requirement cannot be met if there is no refundable overcharge at the time it is applied. The payment of tax arrears registered with the tax administrator, for which a tax overpayment is registered, shall take precedence. The tax debtor shall be notified of the transfer of the excess payment to cover the arrears of another tax. The date following the date on which the overpayment is made shall be considered as the date on which the arrears are paid.
Paragraph 37a of Act No. 588 / 1992 Coll.
paragraph 1, first sentence
If a repayable overcharge is incurred as a result of the measurement of the excess deduction, the payer shall be returned without application within 30 days of the measurement of the excess deduction, even in the case of a bankruptcy declaration.
Paragraph 105 of Act No. 235 / 2004 Coll.
paragraph 1, third sentence
The bankruptcy declaration shall not interrupt the tax procedure and, after the bankruptcy declaration, the payer shall return the excessive deduction calculated if he does not have tax arrears incurred before and after the bankruptcy declaration.
Provisions relating to the subject matter
Article 111 (1) of Act No. 235 / 2004 Coll.
The existing legislation shall apply to the application of value added tax for the period prior to the date of entry into force of this Act and to the application of the rights related thereto.
Article 14 (1) (i) of the ZKV
The bankruptcy declaration shall have the following effects: netting on assets belonging to the substance is not permitted; This does not apply to final settlement under the special legislation governing the capital market business
§ 33 (3) of the ZKV
In order to cover the debts of bankruptcy creditors, the funds which can only be dealt with in a specified manner under the special law may not be used.
Assessment of laws with regard to their adoption and extradition in a constitutional manner
27. The Constitutional Court, in accordance with Paragraph 68 (2) of the Law on the Constitutional Court, first assessed whether the laws which are objected to the unconstitutionality of the contested provisions had been adopted and issued within the limits of the Constitution laid down by competence and by the constitutional procedure.
28. Clause 37a of Act No. 588 / 1992 Coll., on Value Added Tax, as amended by Act No. 17 / 2000 Coll., was adopted at the 19th session of the Chamber of Deputies of the Parliament of the Czech Republic on 7 December 1999, when 118 of the 188 Members present voted against it and 65 voted against it. Act No. 235 / 2004 Coll., on Value Added Tax, which repealed Act No. 588 / 1992 Coll., was approved by the Chamber of Deputies at third reading at the 27th meeting of 26.2.2004, when out of the 187 Members present, 94 and 93 voted against. The President of the Republic did not sign the law and returned it to the Chamber of Deputies, which voted on it at its 30th meeting on 22 April 2004. Of the 184 Members present, 101 voted in favour, 83. Paragraph 64 (2) of the CSDP was adopted by Act No. 255 / 1994 Coll., which the Chamber of Deputies approved at its 25th meeting of 8 December 1994, when 108 Members voted in favour of the Act, 38 were opposed and 16 abstained.
29. The Constitutional Court notes that the laws incorporating the contested provisions have been adopted and issued within the limits of the constitutional competence and constitutional requirements.
Assessment of the jurisdiction of the Constitutional Court to discuss the application and the applicant's active legitimacy
30. The Constitutional Court also examined whether the appellant is entitled, pursuant to Article 95 (2) of the Constitution and Article 64 (3) of the Law on the Constitutional Court, to apply for the annulment of the above provisions.
31. The Constitutional Court notes that, as is clear from the above explicit communication of the appellant, the provisions of § 105 of Act No. 235 / 2004 Coll. in the present case, it was not applied since the provision of § 111 of that law shows that the provisions of § 37a of Law No 588 / 1992 Coll. apply to the application of value added tax for the period before the date of application of that law and to the exercise of the rights related thereto.
32. In the present procedural situation, therefore, the Supreme Administrative Court, as the appellant, is not entitled to file an application for annulment or inconstitutionality of § 105 of Act No. 235 / 2004 Coll., since this provision is not the law to be used in the resolution of the case, and the Constitutional Court is not entitled to give an authoritative opinion on its constitutional conformity in the context of the present proposal.
33. The Constitutional Court also addressed the finding that the proposal for the annulment of the provision of § 37a of Act No. 588 / 1992 Coll., which (as a whole of the Act) was repealed with effect from 1 May 2004 by Act No. 235 / 2004 Coll.
34. The Constitutional Court refers to the finding of sp. zn. Pl. ÚS 38 / 06 of 6.2.2007, published under No. 84 / 2007 Coll. [Further to the finding of sp. zn. Pl. ÚS 33 / 2000 of 10.1.2001 (N 5 / 21 SbNU 29; 78 / 2001 Coll.) and similarly to the finding of sp. zl. ÚS 72 / 06 of 29.1.2008, published under No. 291 / 2008 Coll.), in which the Constitutional Court has given its legal opinion on the question raised, pursuant to Article 95 (2) of the Constitutional Court of First Instance, in its Rules of Procedure. The Constitution shall examine the constitutionality of the contested provision as a matter of principle, even if it has already been repealed (amended), on condition that the public authority and not the private law body are the addressee of the alleged reason for the unconstitutionality. Since the public authority is the addressee of the alleged reason for unconstitutionality in the present case, in the context of the opinion expressed in sp. zn.
35. In the rest of the proposal, the Supreme Administrative Court can therefore be considered as a legitimate appellant within the meaning of Article 95 (2) of the Constitution.
The present case law of the Constitutional Court relating to the issue under examination
36. The subject was already addressed by the Constitutional Court in its previous findings, e.g. the finding of sp. zn. I. ÚS 544 / 02 of 7.4.2005 (N 76 / 37 SbNU 75), the finding of sp. zn. I. ÚS 713 / 05 of 18.1.2006 (N 17 / 40 SbNU 135), the finding of sp. zn. III.
A detailed interpretation was given, in particular (even in the appellant mentioned) of the finding in point III. ÚS 648 / 04 of 28.7.2005), and the conclusions set out here are also fully applicable to the case pending by the Supreme Administrative Court, in respect of which an application was made to declare the inconstitutionality of the provisions in question and to repeal the provisions of Paragraph 64 (2) of the SAA.
37. In that decision, the Constitutional Court assessed the contested decisions of the General Courts (including the Supreme Administrative Court Opinion of 29.4.2004), which was based on the legal opinion that the Institute of Excess Deduction was an institution of public law, and with the tax overpayment, the tax administrator is obliged to dispose of it in the manner set out in Paragraph 64 (2) of the SSDP, i.e. to transfer it first to the payment of tax arrears, even if the tax body is a bankrupt person whose assets were declared bankrupt. The Constitutional Court was also aware of the different position of the six judges of the Supreme Administrative Court, according to which, in short, it follows from the legislation: "I. The tax arrears arising before the bankruptcy declaration can only be satisfied in accordance with the final timetable resolution. II. The tax arrears incurred after the bankruptcy declaration shall be the nature of the claim and may be satisfied at any time during the bankruptcy; III. The excess tax may not be used after the bankruptcy declaration to cover other tax arrears of the bankruptcy which the tax administrator has registered or was to apply for bankruptcy. The procedure provided for in Paragraph 64 of the SSDP would be inadmissible for the duration of the bankruptcy. '
The Constitutional Court stated, inter alia:
38. Paragraph 59 (3) (e) and Paragraph 64 (2) of the Law on the Administration of Taxes and Fees in relation to the provisions of § 37a (1) and (3) of Act No. 588 / 1992 Coll., constitutes a special arrangement which takes precedence over the modification. In other words, before the tax administrator's general obligation to repay the taxable person a refundable excess if it was due to the measurement of the excess value added tax deduction, the right of the tax administrator to apply such excess to cover any arrears of the same taxpayer for another tax. If, then, Article 40 (11) of the Taxes and Charges Act provides that it does not interrupt the declaration of bankruptcy of the tax proceedings, its two possible interpretations shall be linked to this:
39. According to the first intervention of the declaration of bankruptcy, the alleged relationship between the provisions of § 59 (3) (e) and § 64 (2) of the Act on the Administration of Taxes and Fees does not affect the provisions of § 37a (1) and (3) of Act No. 588 / 1992 Coll., on value added tax, as amended, i.e. the declaration of bankruptcy does not prevent the deduction of a refundable excess to another tax due. This interpretation is followed by one of the interpretative alternatives to the provision of Section 33 (3) of the ZKV, according to which the funds which can only be used in accordance with the special law cannot be used to cover the claims of bankruptcy creditors, which is considered to be the procedure under Sections 59 (3) (e) and 64 (2) of the Tax and Fees Management Act. It is further followed by the interpretation of the concept of netting according to the provisions of Paragraph 14 (1) (i) of the ZKV, which limits its scope to only private claims.
40. According to the interpretation of the second continuation of the tax procedure after the bankruptcy declaration, it is limited to aspects other than the possibility of charging a tax excess to another tax debt. This interpretation is based on Paragraph 14 (1) (i) of the ZKV and its interpretation, according to which the concept of inadmissibility of netting on property belonging to the substance includes both private and public claims. It also relies on the interpretation of Paragraph 33 (3) of the ZKV, which does not include the right of the tax administrator to pay other tax arrears in the context of a specific legal method of disposal, excluding the possibility of using them to cover the claims of bankruptcy creditors.
41. The Constitutional Court therefore addressed the question of the legal concept of netting, which is the concept of private and public law, stating that even from the previous decisions of the Constitutional Court, it is not possible to derive generalisation concerning the exclusion of the possibility of netting between private and public claims. The assessment of the admissibility of such netting depends on specific positive rules.
42. When assessing whether Paragraph 14 (1) (i) of the ZKV is a special law which provides for the inadmissibility of compensation not only of private law, but also of private law and public law, the Constitutional Court based its view on the principle of a special priority before the general legal regulation, to which it expressed itself in a number of its findings [see e.g. the sp. zn. Pl. ÚS 41 / 02 of 28.1.2004 (N 10 / 32 of SbNU 61; 98 / 2004 of Sb.), the find sp. zn. III. ÚS 132 / 04 of 29.6.2004 (N 88 / 33 of SbNU 347), the find sp. II. ÚS 133 / 04 of 23.9.2004 (N 136 / 34 of SbNU 381)], and in this context, it also referred to the relevant opinion: "When the conflict between the general and special law may be suspected that the legislature by the legislature to derogate by a general law." Paris 1976, cit. according to German translation: Juristische Logik als Argumentationslehre. Commission Implementing Regulation (EU) No 680 / 2014 of 11 July 2014 amending Implementing Regulation (EU) No 540 / 2011 laying down detailed rules for the application of Regulation (EU) No 540 / 2011 of the European Parliament and of the Council as regards the list of approved active substances (OJ L 179, 19.6.2014, p. 1). In the event of a conflict of two amendments to the simple law of the same degree of legal force, which is not in relation to inclusion but to overlap, the determination of which is a general regulation and which is a special one is the subject of a procedure (as defined in the procedural proposal). The general rule is therefore that, from the point of view of the law of a simple prima facie, the proposed subject matter of the proceedings is regulated. In the present case, the procedure for the transfer of the value added tax overpayment to the payment of tax arrears is the subject of this procedure, i.e. the general scheme is defined by the provisions of Sections 59 (3) (e), 40 (11) and 64 (2) of the Tax Administration Act. Paragraph 14 (1) (i) of the ZKV is a special adjustment which takes precedence over the general rule.
43. Thus, in the quoted finding, a very detailed analysis of the various interpretative alternatives to the relevant simple law in terms of the constitutionality of their interpretation and application was carried out. The Constitutional Court, which was based on the principle of the principle of the principle of constitutionally conformal interpretation of simple law, concluded that the provision of Paragraph 14 (1) (i) of the ZKV is a special law, which underpins the inadmissibility of compensation not only by private law but also by private law and public law. As such, it therefore takes precedence as a special arrangement over that contained in the provisions of § 59 (3) (e), § 40 (11) and § 64 (2) of the CSDP. Decisions of general courts which do not accept the correlation of the standards of simple law are therefore found contrary to the provisions of Articles 4 (4) and 11 (1) of the Charter.
44. The Constitutional Court stressed that the right of ownership as a fundamental right to be taken into account in the assessment of the problem is protected by Article 11 of the Charter. According to paragraph 1, first and second sentences, each person has the right to own the property and the right of ownership of all owners has the same legal content and protection. No interpretation of that constitutional standard can be inferred from the increased protection of the rights of the State as the owner represented in tax matters by the tax administrator. However, the interpretation put forward by the administrative courts in the case under examination confers an advantage on the State or the tax administrator in relation to other owners - in cases of bankruptcy which are considered as bankruptcy creditors - and in fact confers a privileged position on it.
Assessment of the constitutionality of the contested provisions
45. The motion by the Supreme Administrative Court is essentially based on the assertion that the constitutionally conformal interpretation of the contested provisions, with the emphasis on the protection of the property rights of bankruptcy creditors, does not lead to the abolition of their unconstitutionality. In the appellant's view, the finding of the Constitutional Court was not, sp. zn. III. ÚS 648 / 04 of 28.7.2005 specifies the priority of the constitutional conformal interpretation of the anti-constitutional tax provisions in question over the procedure laid down in § 64 et seq of the Law on the Constitutional Court. The Supreme Administrative Court contends that the procedure of the tax administrator would infringe the principle of the procedural equality of all tax entities in the framework of the tax procedure under Article 2 (8) of the SCA, since there would be a legally unregulated advantage for one group of tax entities, namely those who, because of the constitutional inconsistency of the contested provisions, would not have been applied, compared with other tax entities for which the legal provisions cited would have been fully applied when dealing with their tax overpayment.
46. In view of the objections put forward by the appellant, the Constitutional Court therefore focused on the assessment of the related issues, namely the priority of the constitutionally consistent interpretation and application of the provisions before their annulment, the assessment of the own constitutionality of the contested provisions and the assessment of the equality of tax entities, provided that the interpretation and application of the contested provisions are consistent with the interpretation held by the Constitutional Court.
47. On the objection concerning the lack of clarification of the preference of the constitutionally conformal interpretation of the provisions in question to the procedure laid down in § 64 et seq. of the Constitutional Court Act, the Constitutional Court first points out that the finding of sp. zn. III. The Court of Justice of the European Union ("the Court of Justice ') decided on a constitutional complaint against specific decisions which were not linked to a proposal to repeal the law, the Third Chamber did not find, in view of the principle of the principle of the constitutional conformal interpretation of the simple law, a reason to proceed under Paragraph 64 (1) (c) of the Law on the Constitutional Court.
48. In addition, the Constitutional Court points out that, in its previous publicly available and commonly known case law, it has emphasised many times that the principle of a constitutionally consistent interpretation of the law or of its individual provision or other legislation takes precedence over its abolition and that it is the duty of all public authorities to interpret and apply the law, taking into account the requirement to protect fundamental rights and freedoms. In a situation where a provision of legislation allows two different interpretations, one of which is in accordance with the constitutional laws and international treaties by which the Czech Republic is bound and the other is not, there is no reason to repeal that provision. In its application, it is the task of all state authorities to interpret the provision in a constitutional manner (e.g., the sp. zn. Pl. ÚS 5 / 96, the Collection of Finals and the Order of the Constitutional Court, Volume 6, Found No. 98, Dec. No. 286 / 1996 Coll., or Found sp. zn. In the latter decision, the Constitutional Court also stated that, in a democratic rule of law, which is primarily understood as a material rule of law, the application of the legal provision in force cannot be permitted in a way which contradicts some of the fundamental constitutional principles. The duty of the courts to find the right is not only to seek direct, specific and explicit guidance in the legal text, but also to identify and formulate what is a specific law, even where it concerns the interpretation of abstract standards, constitutional principles, provisions of the Charter of Fundamental Rights and Freedoms and obligations arising from international treaties. Therefore, from many conceivable interpretations of the law, only an interpretation that respects constitutional principles (if such an interpretation is possible) must be used and the repeal of the provisions of the law on non-constitutionality should not be allowed to apply the provision in question unless it is infringed (the principle of minimising interference with the powers of other public authorities).
49. The objection to the lack of clarification of the preference of the constitutionally conformal interpretation applied in the present proposal is therefore, moreover, in a situation where Article 37a of Law No 588 / 1992 Coll. has already been abolished, when the inconstitutionality of the individual provisions (without any link to the bankruptcy and settlement law) is not even claimed, and according to the amendment of the proposal, the appellant no longer seeks the annulment of the contested provisions.
50. As is clear from the proposal, the Fifth Chamber of the Supreme Administrative Court is convinced that it cannot rule against the insolvency administrator in the case at hand, as it would have to apply the contested provisions which it finds to be unconstitutional in this situation, and subsequently seeks to make their text unconstitutional by the Constitutional Court.
51. The Constitutional Court must also recall that in sp. zn. 2 Afs 180 / 2004-44 The Supreme Administrative Court stated that, notwithstanding the Supreme Administrative Court's internal belief in the correctness of a view, it would respect the Constitutional Court's legal opinion in further decision-making. On the binding effects of the Constitutional Court's findings within the meaning of Article 89 (2) The Constitutional Court has already stated in detail its findings in the case sp. zn.
52. The Constitutional Court points out that the provisions of Article 37a (1) of Law No 588 / 1992 Coll. and Article 64 (2) of the CSDP need to be addressed in the light of the alleged inconstitutionality in their relationship with each other when their current application is necessary, as well as the application of the relevant provisions of the bankruptcy and settlement law. Moreover, even the appellant does not object to the various contested provisions dealing with different material, as laid down in the laws with a different purpose and purpose, but is essentially convinced that their inconstitutionality results from their application to specific cases of bankruptcy and settlement proceedings, when, using the interpretation found by the Constitutional Court by interpretation of constitutional conformity, there is to be an inequality between tax entities.
53. In the light of the foregoing, the Constitutional Court therefore limits itself to finding that, even in the light of the arguments of the proposal, it does not find any reason to deal separately with the inconstitutionality of § 37a of Act No. 588 / 1992 Coll., which imposed an obligation to repay the taxable person a refundable excess if it was due to the measurement of the excess deduction, even in the case of a declaration of bankruptcy (the date of the overpayment was considered as the result of the excess deduction). After all, the statutory obligation of the tax administrator to repay the value added tax overpayment logically results from the construction of the Institute of Value Added Tax and its purpose. Similarly, the Constitutional Court finds no reason to consider separately the provisions of Paragraph 64 (2) of the SSDP, according to which the tax may be paid by way of an overpayment for another tax and the overpayment shall be applied to the payment of any underpayment for another tax. That provision, which is part of the comprehensive tax treatment (part of the Sixth Tax and Fee Management Act), generally provides for the tax administrator's procedure relating to any overpayments and arrears relating to different types of taxes registered in the accounts of tax debtors, and the justification for that provision is precisely due to the legal concept of the Tax and Fee Administration Act, against which no objections have been raised.
54. The issue in which the alleged inconstitutionality is therefore not due to its own content of the contested provisions must therefore be addressed solely in the light of the possibilities of a constitutional interpretation of the provisions in question in their context and in relation to the provisions of the bankruptcy and settlement law. Specifically, and in a simplified way, the question whether the application of the provisions of Paragraph 64 (2) of the SSDP after the bankruptcy declaration is unconstitutional.
55. In this regard, the Constitutional Court found no reason to deviate from the conclusions adopted in the judgment in paragraph III. ÚS 648 / 04 (see above), where the issue of inadmissibility has already been resolved.
It can therefore be stated briefly that, when assessing the relationship between the relevant provisions of the Tax and Charges Administration and bankruptcy and compensation law, it is necessary to take account, in particular, of the constitutional arrangements for fundamental rights, in accordance with the requirement of respect for the rights and freedoms of man and citizen as the basis of the rule of law (Article 1 (1) of the Constitution), of the primacy of fundamental rights and freedoms, of the primacy of individuals before the State. This must then also be respected in the conflict of fundamental rights with the general interest of the State. Article 11 of the Charter does not provide any interpretation of the increased protection of the State's rights as owner (in tax matters represented by the tax administrator), which would, in the particular case under consideration, i.e. in bankruptcy cases, give it an advantage and de facto grant it a privileged position vis-à-vis other creditors. The State, as a creditor of a debtor who is bankrupt, is not in any way at a disadvantage since, provided that its claims are properly applied under Paragraph 20 of the ZKV, there is no significant damage, or no greater harm, than for other creditors in proportion to their claims.
56. It follows from the constitutionally conformal interpretation of the simple law that the regulation contained in the provisions of Paragraph 14 (1) (i) of the ZKV, which imposes the inadmissibility of compensation not only by private law but by private law and by public law, is a special regulation which takes precedence over the general regulation contained in Sections 59 (3) (e), 40 (11) and 64 (2) of the ZSDP. Paragraph 14 (1) (i) of the ZKV thus creates an obstacle in the tax administrator's procedure under the provisions of § 40 (11) and § 64 (2) of the ZSDP.
As a result of the constitutionally consistent interpretation of those provisions, the purpose and objectives of the bankruptcy and settlement law are fulfilled, and it is not absolutely impossible to achieve the objectives envisaged by the tax rules, but the satisfaction of the State's claims is allowed to the same extent as the satisfaction of other creditors' claims, without limiting their ownership rights.
57. The Constitutional Court further addressed the assessment of the issue of the equality of tax entities. According to the appellant, there should be a legal non-regulated advantage for one group of tax entities, namely those whose assets have been declared bankrupt, against other tax entities, including those who are bankruptcy creditors in an ongoing bankruptcy procedure, for which the above mentioned legal provisions are fully applied in the course of the treatment of their tax overpayment, but, in the case of bankruptcy in the context of the tax proceedings carried out, those provisions on the treatment of tax overpayments would not be applied because of their constitutional inconsistency, as they restrict the ownership of those bankruptcy creditors who are outside the tax jurisdiction and are not in the context of tax proceedings or persons involved in the tax proceedings.
58. Paragraph 2 (8) of the SAA provides that all tax entities have the same procedural rights and obligations in the tax proceedings before the tax administrator. The purpose of the provision is to guarantee objective decision-making in a tax procedure excluding any libel from the administration. The procedural right of equality of a party to administrative proceedings shall mean an equal opportunity to defend the rights of the entity under consideration in which comparable proceedings. In the view of the Constitutional Court, it is clear from the above that the declaration of bankruptcy is a legal fact which is reflected in all the relations of the bankrupt, including those of the State represented by the tax administrator. The moment of the bankruptcy declaration applies to the tax procedure the restriction, in the case in point, of the impossibility of applying the excess tax to the tax underpayment (de facto netting). It is with regard to the specificity of the tax procedure in place, at the same time as the bankruptcy procedure, that the position of tax entities in bankruptcy and tax entities of non-contributors should be assessed separately, even in the light of possible procedural rights.
59. In this sense, as a result of the constitutionally consistent interpretation of the relevant provisions of the Constitutional Court, there is no breach of the equality of tax entities, since the contested provisions are applied to tax entities (i.e. netting is permissible) who are not in a comparable position with tax entities.
60. The constitutional principle of equality enshrined in Article 1 of the Charter, according to which people are free and equal in dignity and rights, and the complementary principle expressed in Article 3 of the Charter as a principle of non-discrimination in granted fundamental rights, is interpreted by the Constitutional Court in its caselaw from a dual point of view [for example, the finding of sp. zn. The first is due to the requirement to exclude the libel in the legislature's procedure in differentiating groups of entities and their rights, and the second to the requirement of the constitutional acceptability of the aspects of differentiation, i.e. the inadmissibility of any of the fundamental rights and freedoms by differentiating bodies and rights by the legislature (Ref.
61. From the point of view of the material view of the law, it must also be taken into account that, although the appellant argues that, as a result of the constitutionally consistent interpretation on the part of tax actors, the advantage will occur, but does not state what such advantage actually consists of. In fact, it is a "disadvantage 'of a State which, as a result of a constitutional interpretation, has the same rights as other insolvency creditors.
62. The obligation to pay the tax due (tax arrears) is for both entities, whether the taxable entity or non-taxable entity, to pay the tax for the use of the overcharge (offsetting) or the taxable entity under the schedule procedure. The excess is not available directly, but is always used to pay the claim (possibly its proportional part) of the tax administrator (or the State). In general, it should be recalled that the deceased always has a different status than the non-deceased. If the overpayment is given in favour of bankruptcy, the purpose of the legislation (its constitutionally acceptable interpretation) is not and cannot be the alleged advantage of the insurer against the insurer, but the arrangement of the debtor's assets in order to satisfy all its creditors of the assets constituting the bankruptcy, the emphasis being placed on the equal position of all creditors.
63. It may be possible to consider inequalities on the part of other creditors of the tax debtor, where the debtor's creditor would have less opportunity to satisfy his claims in the event of execution, as a result of the deduction of the excess payment to the debtor's tax arrears, etc. However, in this respect, his position is not fundamentally different from that of the insolvency creditor, which, although satisfied with any overpayment, will be included in the bankruptcy proceedings, but only to a limited extent within the framework of the schedule procedure.
64. The question of the status of the State (represented by the tax administrator) as a creditor and as a participant in the bankruptcy proceedings has already been addressed by the Constitutional Court and has come to the conclusion that the tax administrator has an equal position with other parties, is subject to the same rules on the inadmissibility of claims and cannot benefit from any of its specific powers to exercise its powers, which would favour it against other parties.
65. The Constitutional Court concluded, for the reasons set out above, that the provisions of § 37a (1) of Act No. 588 / 1992 Coll., on value added tax, as amended, and of § 64 (2) of Act No. 337 / 1992 Coll., on the administration of taxes and charges, as amended, are not contrary to Article 11 (5) of the Charter or the constitutional order of the Czech Republic, and therefore the proposal of the Supreme Administrative Court to declare inconstitutionality of the provisions of § 37a (1) of Law No. 588 / 1992 Coll. In the rest, the application was rejected under the provisions of Section 43 (1) (c) of the Constitutional Court Act as a proposal made by someone manifestly unauthorized.
66. In view of the arguments put forward in addition to the draft, the Constitutional Court adds that, when discussing the proposal under Article 95 (2) of the Constitution and Article 64 (3) of the Law on the Constitutional Court, it is bound by the petition and, therefore, by examining the provisions of Section 40a of the Law on the Administration of Taxes and Fees, in the current version, it was unable to deal with it. However, the Constitutional Court recalls that it is necessary to continue to apply the provisions of § 14 (1) (i) of the bankruptcy and settlement law (cf. § 432 of the insolvency law, according to which the existing legislation applies to bankruptcy and compensatory proceedings initiated before the law is effective).
President of the Constitutional Court:
JUDr. Rychetský v. r.
*) NB: Collection of finds and resolutions of the Constitutional Court, Volume 40, Found No 19, p. 147
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Regulation Information
| Citation | The Constitutional Court found no 342 / 2008 Coll., on the application for annulment of Article 64 (2) of Act No. 337 / 1992 Coll., on the Administration of Taxes and Fees, as amended, and on the application for annulment of the Inconstitutionality § 37a (1) of First Law No. 588 / 1992 Coll., on Value Added Tax, as amended, and § 105 (1) of the Third Act No. 235 / 2004 Coll., on Value Added Tax, as amended |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 12.09.2008 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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