Court supported position of tax officials regarding application of fines for legislative violations in production and turnover of alcoholic beverages and tobacco products

Cassation court supported the controlling body's position on the application of fines (financial sanctions) for legislative violations in production and turnover of alcoholic beverages and tobacco products.

Court of the first instance found that the plaintiff, during the absence of license for production of alcoholic beverages, produced products (wine material), which according to the technological production process (technological instructions of the plaintiff) is the final stage of production process, during which finished product is obtained, which, according to the law, requires presence of the license.

Cassation court rejected the plaintiff's argumentations that he applied to relevant state authorities in advance to obtain new license for production of alcoholic beverages. Panel of judges notes that court of the first instance established (which is not disputed or refuted by the plaintiff with any proper, sufficient and admissible evidence) that the plaintiff applied for the specified license only 11 days after expiration of previous license, which cannot be characterized namely as the "advance" of the plaintiff's actions to obtain such license.  

In addition, as court of the first instance reasonably noted, that before the license expires, taking into account the plaintiff's intentions to continue his economic activity in production of alcoholic beverages and the impossibility of stopping already started production process of alcoholic products, he should have applied for the corresponding license to the licensing authority (territorial body of the State Tax Service), considering the license or refusal decision to its issuance is issued to the applicant by the executive authority authorized by the Cabinet of Ministers of Ukraine not later than 30 calendar days from the date of receipt of documents. At the same time, the plaintiff did not provide any evidence and explanations regarding the impossibility of applying for license earlier.

Therefore, Cassation administrative court as a part of panel of judges of the Supreme Court on 09.11.2023 in case №400/4162/21 upheld cassation appeal of the controlling body; decision of the Fifth administrative court of appeal as of 27.07.2023 was annulled and decision of the Mykolaiv District administrative court as of 10.04.2023 was upheld.