The High Court of Arbitration has officially published its decision from 18.04.06 concerning the case by Ulyanovsk Outlet Store (UZTC) against the Ulyanovsk Regional Tax Inspection. The tax inspection had refused to refund the company a total of 8,355 million RUR in VAT on export goods on the grounds that the documents presented by company confirming the right to the refund had not been properly validated by customs officials.

When challenging the decision in arbitration court, the company presented the court with documents validated by customs officials after the inspection had taken place.

The regional arbitration court had ruled in favor of the company, saying that documents did indeed entitle them to the refund. However, the company decided that the case should be heard by the High Court. After hearing all arguments, the High Court reversed the lower court’s decision and ruled that the court can only consider those documents with which the tax inspection was presented. In February, the Moscow District Arbitration Court had also come to that decision on similar logic: if the court considers new documents, the court is “substituting” the tax inspection and itself engaging in a tax audit – which is outside its sphere of competence.

The Chairman of the High Court of Arbitration A.Ivanov explains: "It’s one thing when the tax inspection makes a mistake, and quite another when the tax payer knowingly submits incomplete documentation and awaits trial."

Source: Vedomosti 05.06.06