Court upheld position of tax authorities regarding additional accrual of 4.48 million UAH to the company for non-confirmation of petroleum products sale

Cassation Administrative Court as a part of the Supreme Court upheld position of Main Directorate of the State Tax Service of Poltava region in case № 440/728/20 regarding non-confirmation of economic operations of petroleum products sale due to non-compliance of primary documents with requirements of current legislation and sale of fuel without obtaining a retail sales license.

Panel of judges noted that the unified procedure for organization and performance of work related to acceptance, transportation, storage, sale and accounting of commodity oil and petroleum products at enterprises and organizations is regulated by Instruction on the procedure for acceptance, transportation, storage, sale and accounting of oil and petroleum products at enterprises and organizations of Ukraine, approved by Order of the Ministry of Fuel and Energy of Ukraine, Ministry of Economy of Ukraine, Ministry of Transport and Communications of Ukraine, State Committee of Ukraine on Technical Regulation and Consumer Policy № 281/171/1578/155 as of 20.05.2008.

Requirements of this Instruction are mandatory for all business entities (enterprises, institutions, organizations and individuals - entrepreneurs) involved in at least one of such types of economic activity as a purchase, transportation, storage and sale of oil and petroleum products on the territory of Ukraine.

There are additional requirements for documentation of economic operations with oil and petroleum products. In particular, consignment and transport invoice is compiled for the wholesale sale of oil and petroleum products from a wholesale warehouse.

Claimant did not provide consignment and transport invoice for disputed business operations, instead, expense invoices, vouchers and copies of information on the petroleum products sale (form 16-NP), which are used exclusively at gas stations for the retail sale, were provided.

In addition, copies of documents submitted for verification contained a number of shortcomings and inaccuracies that do not allow to identify place of shipment of petroleum products; set data on the balance at the beginning and at the end of reporting period by fuel type; do not make it possible to reliably identify title of enterprises to which petroleum products were released; do not allow identification of the motor vehicle in which petroleum products were shipped; do not allow identification of travel document number; do not allow identification of a person responsible for sale on the plaintiff’s part and others.

Cassation Administrative Court summarizes that the above specified facts testify to the non-compliance of primary documents with requirements of Instruction № 281; controlling body, adopting the contested tax notification-decision, acted according to requirements of current legislation.

Therefore, by the decision of the Cassation Administrative Court as a part of the Supreme Court as of September 16, 2022 in case № 440/728/20 the cassation appeal of Main Directorate of the State Tax Service of Poltava region was satisfied, decision of courts of previous instance was cancelled and new decision was adopted, which refused to completely satisfy claims for recognition of tax notification-decision for the total amount of 4.48 million UAH as illegal and its cancellation.