Court supported position of tax officials regarding legality of the application of fines

Cassation court supported the controlling body’s position regarding legality of decision, which imposed fines on the plaintiff for storing alcoholic beverages and tobacco products in places not included in the Unified State register of storage locations.

Parties do not deny and case materials confirm storage of alcoholic beverages and tobacco products by the plaintiff in a warehouse that was under customs control and used by the plaintiff as additional premises of a duty-free shop, and therefore the plaintiff, as the owner of a duty-free shop, is obliged to enter information about location of this premises to the Unified State register of storage locations.

Therefore, taking into account difference in legal regulation of powers of tax and customs authorities, which are defined by the Law of Ukraine "On state regulation of production and turnover of ethyl, cognac and fruit alcohol, alcoholic beverages and tobacco products" № 481/95-VR as of 19.12.2005 (hereinafter – Law № 481/95-ВР) and the Customs Code of Ukraine, the scope of these legislative acts and their purpose, the courts of previous instances incorrectly applied only norms of customs legislation to disputed legal relations and, taking into account circumstances established in the case, came to erroneous conclusion that there are grounds for recognizing illegal and cancellation of tax notification-decision, legality of which has been disputed.

Judicial panel does not accept the plaintiff's argumentations that provisions of Article 421 of the Customs Code of Ukraine, rather than Article 15 of the Law № 481/95-VR, should be applied to disputed legal relations, since there is no competition between the specified norms, given different legal regulations.

Article 421 of the Customs Code of Ukraine provides requirements for arrangement and location of a duty-free shop, and requirements of Article 15 of the Law № 481/95-VR – the business entity’s obligation to store alcoholic beverages and tobacco products in places where alcoholic beverages and tobacco products are stored, entered into the unified State register of storage locations, regardless of who owns such storage location.

Summarizing above specified, the Supreme Court concluded that tax authority acted within the scope of authority and in manner prescribed by the law and reasonably imposed fines on the plaintiff.

Cassation administrative court as a part of the Supreme Court on 18.04.2024 in case № 320/3752/22 satisfied the defendant's cassation appeal; decision of the Kyiv district administrative court as of 06.10.2022 and decision of the Sixth appeal administrative court as of 16.02.2023 have been annulled. New decision was adopted, which completely refused to satisfy the plaintiff's claims.