27.03.09

According to the reports of the Press Service of the Constitutional Court of the Russian Federation, the Constitutional Court will make an announcement on March 17 regarding the complaint of LLC Varm. The case involves the constitutionality of paragraphs 4 and 5 of section 10 of Article 89 of the Tax Code.

The history of the issue

In 2006 the Interdistrict Inspectorate № 2 of the Federal Tax Service (FTS) of the Omsk region conducted a tax inspection of LLC Varm for the 2004 and 2005 years. As a result of the examination, the construction firm was obliged to pay an additional 4.8 million rubles in taxes (1.7 million for VAT; 2.3 million for the Profit Tax; .8 million in fines and interest).

The company argued the case in every Arbitration Court in the Omsk Region and Federal Arbitration Court of the North Siberian District—and won in every instance. The courts, discovering gross violations of current legislation in the tax audit, declared the demands for the additional sums unlawful.

However, upon completion of the arbitration proceedings the Tax Division of Omsk announced they would conduct a repeat audit in the construction firm Varm – to check the work of the Interdistrict Inspectorate № 2. The lawyers of LLC Varm, realizing that with the repeat check the FTS could again demand millions of rubles in additional taxes, again turned to the arbitration court. However, nothing came of the complaint as the repeat check was in line with the procedures of the higher tax authority over its subordinates (part 10 of article 89 of Tax Code of the Russian Federation).

Meanwhile, in the process of "correcting the mistakes" of their colleagues, the Tax Inspection of the Omsk Region practically came to the exact same conclusion as their colleagues previously had. The construction company was again charged millions of rubles in additional taxes. LLC Varm began a new case in the arbitration court about the unlawful results of the tax inspectors. And they submitted their complaint to the Constitutional Court of the Russian Federation.

The claimants’ position

Varm pointed out in their complaint to the Constitutional Court that several points of Article 89 of the Tax Code contradicted the Constitution of the Russian Federation. In particular, Article 8 of the Constitution guarantees the equal protection of all forms of ownership, and Article 10 forbids re-evaluating judicial acts whose legality has already been verified.

LLC Varm asks that the norms of the Tax Code to allow tax organs to repeat a tax examination in the face of a court decision that was already made regarding the first tax examination be recognized as unconstitutional.

At stake is whether the Tax Authorities, after losing a dispute with a company in the arbitration court, can attempt to punish the company by declaring a second tax examination.

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Source: LEGIS.RU