2008/01/29 - Pl. ÚS 72/06: Position of Tax Guarantor (228 KB, PDF)
HEADNOTES
Provision
§ 57 par. 5 third sentence of Act no. 337/1992 Coll., on the
Admistration of Taxes and Fees, in the version before it was amended by
Act no. 230/2006 Coll., which amends Act no. 89/1995 Coll., on the State
Statistical Service, as amended by later regulations, and other related
acts, annulled the guarantor´s right to seek protection of his rights
against a summons to pay a tax debt by means of appeal, or eventually by
administrative plaintiff, in all cases except the three expressly
provided, and at the same time denied a constitutionally guranteed
fundamentals rights of the tax guarantor under Art. 36 par. 1 and 2 of
the Charter of Fundamentals Rights and Basic Freedoms.
Through the appeal against „a guarantor summons“, not all situations where the gurantor´s right to peaceful enjoyment of property has been violated cannot be considered effectively remedied under Art. 13 of the Convention for the Protection of Human Rights and Fundamentals Freedoms.
Through the appeal against „a guarantor summons“, not all situations where the gurantor´s right to peaceful enjoyment of property has been violated cannot be considered effectively remedied under Art. 13 of the Convention for the Protection of Human Rights and Fundamentals Freedoms.
If the
guarantor is to have the same obligation as a debtor – i.e. the
obliogation to pay the tax debt, although it has at its disposal
diametrically qualitatively different means for protection from the same
obligation, then i tis caused unjustified inequality in the treatment
in contradiction with Art. 1and Art. 37 of the Charter.
CZECH REPUBLIC
CONSTITUTIONAL COURT
JUDGMENT
IN THE NAME OF THE CZECH REPUBLIC
The plenum of the Constitutional Court, consisting of Stanislav Balík, František Duchoň, Vlasta Formánková, Vojen Güttler, Pavel Holländer, Ivana Janů, Vladimír Kůrka, Dagmar Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Pavel Rychetský, Miloslav Výborný, Eliška Wagnerová and Michaela Židlická, decided on a petition from the Supreme Administrative Court under Art. 95 par. 2 of the Constitution of the CR to pronounce unconstitutional § 57 par. 5 of Act no. 337/1992 Coll., on the Administration of Taxes and Fees, in the version before it was amended by Act no. 230/2006 Coll., as follows:
I.
The provision of § 57 par. 5 third sentence of Act no. 337/1992 Coll.,
on the Administration of Taxes and Fees, in the version before it was
amended by Act no. 230/2006 Coll., was inconsistent with Art. 1, Art. 11
par. 1, Art. 36 par. 1 and 2, and Art. 37 par. 3 of the Charter of
Fundamental Rights and Freedoms and Art. 6 par. 1 and Art. 13 of the
Convention for the Protection of Human Rights and Fundamental Freedoms.
II. The rest of the petition is denied.
REASONING
I.
Definition of the Matter and Recapitulation of the Petition
1.
On 5 October 2006 the Constitutional Court received a petition from the
Supreme Administrative Court asking that it pronounce unconstitutional §
57 par. 5 of Act no. 337/1992 Coll., on the Administration of Taxes and
Fees, in the version before it was amended by Act no. 230/2006 Coll.
(also referred to as the “contested provision”).
2.
The petitioner did so after, in connection with its decision making
activity in accordance with Art. 95 par. 2 of the Constitution and § 48
par. 1 let. a) of Act no. 150/2002 Coll., the Administrative Procedure
Code, as amended by later regulations (the “Administrative Procedure
Code”), it concluded that § 57 par. 5 of Act no. 337/1992 Coll., on the
Administration of Taxes and Fees, in the version before it was amended
by Act no. 230/2006 Coll., which is to be applied in resolving the
matter file no. 2 Afs 108/2005, is inconsistent with Art. 1, Art. 36 and
Art. 37 par. 3 of the Charter of Fundamental Rights and Freedoms (the
“Charter”).
3. In the matter
file no. 2 Afs 108/2005, the Supreme Administrative Court is deciding
on a cassation complaint from the plaintiff, Ing. Jiří Novák, against a
decision by the Regional Court in Hradec Králové of 20 January 2005,
file no. 31 Ca 115/2004. This decision denied his complaint against a
decision of the Financial Directorate in Hradec Králové of 9 March 2004
ref. no. 6828/150/2003-Stř., which denied the plaintiff’s appeal against
a decision by the Financial Office in Pardubice of 20 August 2003, ref.
no. 149179/03/248940/2632. That decision was a summons for the
guarantor to pay a tax debt under § 57 par. 5 of Act no. 337/1992 Coll.,
on the Administration of Taxes and Fees, in the amount of CZK 274,084.
4.
The Supreme Administrative Court suspended proceedings in the matter
and submitted to the Constitutional Court a petition to pronounce the
contested provision unconstitutional. In the introduction to the
petition, it points to the fact that it already submitted a petition to
annul § 57 par. 5 of Act no. 337/1992 Coll., on the Administration of
Taxes and Fees, in the version before it was amended by Act no. 230/2006
Coll., to the Constitutional Court in the matter conducted as file no. 7
Afs 116/2004. However, the Constitutional Court, by plenary resolution
of 11 July 2006 file no. Pl. ÚS 30/05, suspended proceedings on that
petition with reference to § 67 par. 1 of Act no. 182/1993 Coll.,
because, “in reviewing the petition, the Constitutional determined that
on 25 April 2006 the Parliament of the Czech Republic adopted Act no.
230/2006 Coll., which amends Act no. 89/1995 Coll., on the State
Statistical Service, as amended by later regulations, and other related
Acts (“Act no. 230/2006 Coll.”). This Act also amended Act no. 337/1992
Coll., on the Administration of Taxes and Fees, as amended by later
regulations. That Act also annulled the provision contested by the
petition, § 57 par. 5 of the Act (cf. Part Five, Art. V., point 10, of
Act no. 230/2006 Coll.) and regulated the institution of providing a
guarantee in § 57a) in a substantially different manner from the
contested – and annulled – § 57 par. 5 of Act no. 337/1992 Coll.” The
Supreme Administrative Court then points to the fact that this decision
by the Constitutional Court did not create an obstacle of res iudicata,
because that would happen only in the case of a decision issued in the
form of a judgment. In support of its conclusion, it also makes the
argument that in the proceeding on that petition, and in the proceeding
on the present petition, the Constitutional Court was authorized to
evaluate whether the contested provision was constitutional, on the
basis of direct application of Art. 95 par. 2 of the Constitution of the
Czech Republic (the “Constitution”).
5.
The Supreme Administrative Court further states in the petition – with
reference to the arguments made in the petition conducted at the
Constitutional Court as file no. Pl. ÚS 30/05 – as regards the merits of
the matter, i.e. regarding the claim of unconstitutionality, the
following.
6. The
guarantor’s duty to pay a tax debt on behalf of a tax debtor represents
serious interference in his subjective rights. The Constitutional Court
has already addressed the question of protection of these rights many
times in its decisions, and under its settled case law a summons under
the cited provision must always be reviewable by the appropriate general
court within the administrative court system, because denying judicial
review would leave a party to an administrative proceeding without
judicial protection, which would violate his constitutionally guaranteed
fundamental right under Art. 36 par. 1 and 2 of the Charter. Under the
opinion expressed by the Constitutional Court, it is necessary,
especially in terms of constitutional law perspectives and requirements
arising from protection of constitutionality, to devote sufficient, and
marked attention to the scope and manner of judicial review of
compulsory administrative acts, just as it is necessary to sufficiently
and convincingly justify a denial of judicial review of them.
7.
The Act on the Administration of Taxes and Fees, compared to § 14 of
Act no. 71/1967 Coll., on the Administrative Procedure Code, as amended
by later regulations, restricts the circle of parties so that not all
persons whose rights are affected and on whom obligations are imposed or
whose rights are addressed in the proceeding, or whose rights may be
affected by the administrative decision, are parties to the proceeding
and can effectively defend their rights in it. The Act on the
Administration of Taxes and Fees, in § 7, names the persons
participating in a proceeding, who are employees of the tax
administration, tax subjects, and third parties. While the rights and
obligations of the tax administrator and of tax subjects can be
determined from the Act, the procedural status and rights of third
parties in a proceeding into which they enter primarily ex offo, often
not until the final phase of a proceeding, as in the case of a tax
guarantor, are not regulated in greater detail. Some third parties may
be directly affected, e.g. concerning their property rights, with others
the direct interference in their rights is perhaps only at the level of
theory and deliberation (an expert, a witness, etc.), because they are
not burdened by a tax obligation, but only have obligations of a
non-monetary nature.
8.
Under § 57 par. 1 of the Act on the Administration of Taxes and Fees a
guarantor is basically in the position of a tax debtor, and has a tax
liability to which his own property is subject, but the Act does not put
any other third party in that position. The only authorization that is
accorded to the guarantor under par. 5 of that provision is the right to
file, in a limited scope, an appeal against a summons to pay a tax
debt, in the phase where a decision on the tax liability has already
taken legal effect. The tax administrator treats the guarantor like “a
person participating in the proceeding,” which means that it imposes
obligations, and accords rights in a very limited extent (the right to
appeal, stating one of a defined list of grounds) in a proceeding which
it did not open with the guarantor, in which it grants him no procedural
status, in which it did not deal with the guarantor, and where it
brought the guarantor into the tax proceeding ex offo only at the point
where the tax subject did not fulfill his tax liability.
9.
The guarantor is not a party to the assessment proceeding, and only if
the taxpayer does not fulfill his tax liability does he have an
obligation to pay the tax debt, and it cannot be ruled out that cases
might arise where the taxpayer’s tax liability was set inconsistently
with the law. However, the guarantor’s ability to file objections
against that decision in the administrative proceeding and, accordingly,
in the review proceeding before a court is limited by the grounds that
are listed in § 57 par. 5 third sentence of the Act on the
Administration of Taxes and Fees, although the decision establishes his
obligation to pay instead of the taxpayer.
10.
Although the guarantor has basically the same obligation as the
taxpayer to pay the assessed tax, the conditions for exercising his
rights are incomparably more limited. Thus, the law, without material
grounds, accords different rights to the taxpayer and to the guarantor,
although he could not affect the fact that he became a guarantor,
because that is provided by law. The current legal framework completely
ignores procedural regulation of the guarantor’s posititon in the
assessment proceedings, because it does not permit him to participate in
this proceeding, the opening of which he is not aware of, and imposes
an obligation on him with a minimum guarantee of rights, for the first
time in the execution proceeding.
11.
Beyond that, the Supreme Administrative Court states that the new
statutory regulation implemented by Act no. 230/2006 Coll., is not of
better constitutional law quality in fundamental aspects, and it
presents arguments in support of that claim (comparing it with the
contested provision).
II.
Recapitulation of the Essential parts of the Brief from the Party to the Proceeding
12.
Under § 42 par. 4 and § 69 of Act no. 182/1993 Coll., on the
Constitutional Court, as amended by later regulations (the “Act on the
Constitutional Court”), the Constitutional Court sent the petition to
the Chamber of Deputies. In his brief of 4 January 2008, the Chairman of
the Chamber of Deputies of the Parliament of the Czech Republic, Ing.
Miloslav Vlček, recapitulated the process of adoption of Act no.
337/1992 Coll., pointed to its amendment by Act no. 230/2006 Coll. (he
also summarized the process of adopting that Act), and stated the
opinion that in both cases, when discussing these Acts, the legislative
assembly acted in accordance with legal procedure and in the belief that
the adopted Acts were consistent with the constitutional order and the
legal order of the Czech Republic. The Chairman of the Chamber of
Deputies agreed to waive a hearing.
13.
Under § 42 par. 4 and § 69 of the Act on the Constitutional Court, the
Constitutional Court also sent the petition to the Senate of the
Parliament of the Czech Republic. In a brief of 3 January 2008, the
Senate Chairman, MUDr. Přemysl Sobotka, agreed with the petitioner’s
opinion that even the new regulation, which was inserted into the Act on
the Administration of Taxes and Fees based on Act no. 230/2006 Coll.,
did not adequately handle the abovementioned problem, especially as
regards the position of the guarantor as a “third party,” and in the
future will probably bring problems similar to those brought by the
previous regulation. Theoretically the concept of review of
constitutionality is a logical whole, because there is no choice but to
insist that, as regards the annulment of legal regulations, the
Constitutional Court can be formally endowed only with the right to
annul a provision or regulation in its “last,” adopted, i.e. valid,
version. In practice, however, one can conclude that application of § 66
and § 67 of the Act on the Constitutional Court, in connection with the
institution of suspending proceedings under Art. 95 par. 2 of the
Constitution, or under § 109 par. 1 let. c) of the Civil Procedure Code,
from time to time causes difficulties in fulfillment, which, however,
in many cases can more likely be ascribed to hastily adopted changes to
the legal order. Nonetheless, these circumstances, which the affected
persons more or less cannot control, should not function to their
detriment.
III.
Text of the Contested Legal Regulation
14.
The provision of § 57 par. 5 of Act no. 337/1992 Coll., on the
Administration of Taxes and Fees, in the version before it was amended
by Act no. 230/2006 Coll., reads: “Guarantors are also required to pay
tax debts, if the law imposes a guarantee obligation on them, and if
they are summoned to do so by the tax administrator. A guarantor may
appeal against the summons. In the appeal, the guarantor can claim only
the fact that he is not a guarantor, or that the guarantee was applied
in a greater scope than that provided by law, or that the taxes were
already paid.”
IV.
Evaluation of the Constitutional Court’s Jurisdiction to Review to Petition, and Conditions for the Petitioner’s Active Standing
15.
The Constitutional Court first had to answer the question of whether it
had jurisdiction to review the petition on the merits, because the
petitioner did not seek annulment of the contested provision, but only a
declaration that it was unconstitutional. This statement of claim in
the petition was a logical consequence of the fact that on 25 April 2006
the Parliament of the Czech Republic adopted Act no. 230/2006 Coll.,
which amends Act no. 89/1995 Coll., on the State Statistical Service, as
amended by later regulations, and other related Acts (“Act no. 230/2006
Coll.”), which also amended Act no. 337/1992 Coll., on the
Administration of Taxes and Fees, as amended by later regulations. That
Act also annulled the provision contested in the petition, § 57 par. 5
of this Act (cf. Part Five, Art. V., point 10, of Act no. 230/2006
Coll.) and regulated the institution of providing a guarantee in § 57a)
in a substantially different manner from the contested – and annulled – §
57 par. 5 of Act no. 337/1992 Coll. However, the contested provision,
in the version before it was amended by Act no. 230/2006 Coll., was
applied in the present matter, i.e. in the proceeding on the cassation
complaint the application of that provision will have to be reviewed,
and therefore the Supreme Administrative Court, under Art. 95 par. 2 of
the Constitution, turned to the Constitutional Court.
16.
In this regard the Constitutional Court refers to judgment file no. Pl.
ÚS 38/06 (related to judgment file no. Pl. ÚS 33/2000), which responded
to the question posed with the legal opinion that under Art. 95 par. 2
of the Constitution the Constitutional Court has jurisdiction to review
on the merits whether the contested provision is constitutional, even
though it was already annulled (amended), on condition that the
addressee of the claimed grounds for unconstitutionality is the public
authority, and not a subject of private law. In view of the fact that in
this matter the addressee of the claimed grounds for
unconstitutionality is the public authority, conditions in the context
of the cited legal opinion from the matter file no. Pl. ÚS 38/06 for
review of the petition on the merits have been met. As regards the
Constitutional Court’s earlier decision, file no. Pl. ÚS 30/05, the
Constitutional Court, in agreement with the Supreme Administrative
Court, states that in view of § 35 par. 1 f the Act on the
Constitutional Court it does not create the obstacle of rei iudicatae.
17.
As stated above, the petition from the Supreme Administrative Court is
related to its decision making activity, and therefore that court is an
authorized petitioner under Art. 95 par. 2 of the Constitution; the
conditions for the petitioner’s active standing in a proceeding on
review of norms have also been met.
V.
Consistency of the Content of the Contested Statutory Provisions with the Constitutional Order
18.
In the petition, the Supreme Administrative Court contested – from the
point of view of the claimed unconstitutionality – § 57 par. 5 of Act
no. 337/1992 Coll., on the Administration of Taxes and Fees, in the
version before it was amended by Act no. 230/2006 Coll., as a whole. The
contested provision is structure in three sentences, containing three
different legal norms, and therefore the constitutionality of their
content must be reviewed separately.
V. A)
19.
The first sentence of the contested provision provides that “Guarantors
are also required to pay a tax debt, if the law imposes a guarantee
obligation on them, and if they are summoned to do so by the tax
administrator.”
20. We
cannot reliably draw from the Supreme Administrative Court’s arguments
where it finds this part of the contested provision to be
unconstitutional. In a certain sense, we can even doubt whether the
petition even argues that the first sentence (and the second sentence)
of the contested provision is unconstitutional, and whether it does not
find only the third sentence of the contested provision to be
unconstitutional (this seems to be the case, for example, from the
content of point VI. of the petition). However, the petition’s statement
of claim expressly contests the provision as a whole, and the
Constitutional Court is bound in its decision making by the petition’s
statement of claim, not by its reasoning.
21.
The Constitutional Court states that the legal norm established in the
first sentence of the contested provision by itself provides only that
guarantors are also required to pay a tax debt, if the law imposes a
guarantee obligation on them, and if they are summoned to do so by the
tax administrator, that is, it expresses the basis of the institution of
providing a guarantee. Thus, § 57 par. 5, first sentence, of Act no.
337/1992 Coll., on the Administration of Taxes and Fees, in the version
before it was amended by Act no. 230/2006 Coll., is not
unconstitutional. It is only the result of the entire statutory concept
(which is composed of several legal provisions), under which the tax
guarantor is not, from the beginning of tax proceedings with the tax
subject, a party to the proceeding with the same rights and
opportunities for procedural defense as the tax subject has. The
petitioner did not contest this statutory concept before the
Constitutional Court, and therefore the Constitutional Court could not
review it.
22. We can reach
a similar conclusion regarding the claimed unconstitutionality of the
second sentence of the contested provision: “A guarantor may appeal
against the summons,” because this is a legal norm that enshrines
protection of the rights of a tax guarantor in proceedings before
administrative bodies, which is also a prerequisite for protection
before administrative courts.
V. B) 1)
23.
As regards the third sentence of the contested provision, “In the
appeal, the guarantor can claim only the fact that he is not a
guarantor, or that the guarantee was applied in a greater scope than
that provided by law, or that the taxes were already paid,” that
basically involves a different situation. The Constitutional Court
(which is not bound in its decision making by the petition’s reasoning,
which becomes important in view of the content of the petition’s
reasoning in the present matter) primarily reviewed the question of
whether a norm establishing a limited scope of circumstances that the
guarantor can claim in an appeal is inconsistent with the constitutional
order, specifically with Art. 36 par. 1 of the Charter, under which
“Everyone may assert, through the legally prescribed procedure, his
rights before an independent and impartial court or, in specified cases,
before another body.”
24.
Article 36 par. 1 of the Charter enshrines everyone’s right to seek
protection of his rights before a court or another body. The meaning and
purpose of this provision is to establish the state’s obligation to
provide protection of rights to everyone, because in a law-based state
there cannot be a situation in which a rights-holder could not seek
protection of that right (before a court or another body). This is
generally based on the fact that the state exists in order to protect
its citizens, but also persons staying on its territory, and to provide
them guarantees that their rights will be protected.
25.
Paragraph 4 Art. 36 of the Charter (to which par. 1 Art. 36 of the
Charter basically refers with the phrase “prescribed procedure”) refers
to a statute that regulates “conditions and detailed procedure” in
relation to all the previous paragraphs of Art. 36 of the Charter;
nonetheless such a statute, issued on the basis of constitutional
authorization is bound by Art. 36 of the Charter, and thus cannot
deviate from its content (thus the argument is relevant that the key
viewpoint for constitutional conformity of such a statute is, for
example, the degree to which the legislature denies these constitutional
rights, etc. as the Supreme Administrative Court argued in decision
file no. 2 Afs 51/2004: “… of course, constitutional safeguards arising
from Art. 36 par. 1 of the Charter of Fundamental Rights and Freedoms
and from Art. 1 par. 1 of the Constitution do not permit that a tax
guarantor be deprived in such an extent … of the right to effective
protection of his subjective public rights …”). Under Art. 36 par. 4 of
the Charter the meaning and purpose of an “ordinary” statute is simply
to set forth the conditions and details of exercising rights whose
content has (already) been provided by the constitutional framers in
Art. 36 of the Charter, that is, conditions and details of a purely
procedural nature (not “material legal”).
26.
If, under Art. 36 par. 1 of the Charter, everyone has the right to seek
protection of his rights before a court or other body, and the
conditions and rules for the exercise of that right are provided by law,
then such a law, issued on the basis of constitutional authorization,
cannot completely negate everyone’s right to seek protection of his
rights before a court or other body in one or another situation, and
thus deny the constitutionally guaranteed fundamental right, even if
only in certain cases. Article 36 par. 1 of the Charter constitutionally
guarantees everyone the opportunity to seek protection of his rights
before a court or another body in all situations where the right is
violated (there is no constitutional restriction). In other words, no
person can be completely excluded by law from the opportunity to seek
protection of his right, even if only in a certain case, because his
right under Art. 36 par. 1 of the Charter would be annulled. The
opposite interpretation would also mean that the establishment by the
constitutional framers, that is with the highest legal force, of
everyone’s right to turn to judicial and other bodies for protection of
his rights would basically lose meaning, because it could be annulled
for one or another situation of violation of rights by the will of the
“ordinary,” subordinate legislature.
27.
In the present matter, we must state, first of all, that the Act on the
Administration of Taxes and Fees in the version then in effect (i.e. in
the version before it was amended by Act no. 230/2006 Coll.) imposes a
primary obligation to pay taxes on the tax subject to whom the tax
assessment is delivered, and only then imposes a payment obligation on
the guarantor. Thus, the obligation to pay a tax debt rests, in addition
to the taxpayers – debtors – themselves, with the guarantors, if the
law imposes the guarantee obligation on them, and if they are summoned
to pay this obligation by the tax administrator. This is an institution
of a special statutory guarantee governed by public law regulation,
which, assuming that a particular person has the position of a statutory
guarantor, can be implemented by only a summons from the tax
administrator in relation to the person who is the statutory guarantor.
However, the tax guarantor is not a party to the tax proceeding from the
beginning, with the same rights and possibilities for procedural
defense as the tax subject has (in § 7 par. 2 of the Act on the
Administration of Taxes and Fees the guarantor is even included amog
“third parties,” with the same position as, e.g. a witness, an expert,
etc.). The guarantor is not even sent a copy of the payment assessment
or other decision that imposed the tax liability for payment. The tax
proceeding begins for the tax guarantor only with the delivery of the
“guarantor summons” under the contested provision, but at the same time
delivery of that puts the guarantor into the position of a subject on
whom a payment obligation is imposed. Thus, the “guarantor summons” is a
decision by which the obligation to pay a tax debt is transferred to
the guarantor, it is a decision that has substantive law consequences,
because it determines that all legal prerequisites have been met for the
guarantor to step into the place of the original debtor and that it has
the position of the original debtor with all the consequences, which
means that it can also be subject to debt collection. The actual content
of this summons (a decision in the material sense) is not changed in
any way by the imprecise name chosen by the legislature, i.e. “summons”
(and not, e.g. “decision”).
28.
The Constitutional Court argues similarly in its case law on the nature
of customs guarantees, which can also be applied to the position of a
guarantor in tax proceedings. The Constitutional Court stated in
judgment file no. II. ÚS 445/2000 that “a summons made by the customs
body under § 73 par. 1 of Act no. 337/1992 Coll., directed to a debtor
who has not paid the customs debt by the statutory deadline and which
calls on him to pay the debt by an alternate deadline, is the first
procedural step by a body conducting the collection of customs debts,
and is therefore of a procedural nature. Up to this point we can fully
agree with the court’s conclusions. The administrative court then takes
the fact that a guarantor summons aims at the same purpose, and
concludes that a guarantor summons is of the same procedural nature.
However, that conclusion ignores the mandatory § 32 par. 1 of Act no.
337/1992 Coll. Under that provision, in a tax proceeding, and, in view
of § 320 of the Customs Act in a customs proceeding as well, obligations
can be imposed or rights accorded only by a decision. However, in
contrast to a debtor who has been given an obligation to pay a debt by a
decision of a customs body, in relation to a guarantor, that obligation
arising from the decision of the customs body was not imposed before
the summons was made. The guarantor’s declaration in the guarantee
document alone, even if its acceptance by the customs body is confirmed
by a decision, cannot have the character of a decision that imposes an
obligation under § 32 of the abovementioned Act, because the guarantor’s
obligation to pay a debt on behalf of the debtor – testified to by the
very essence of the institution of providing a guarantee – is
implemented only when the debtor himself does not duly pay his debt on
time, and it is not until the summons directed to the guarantor that the
guarantor learns that the debtor, for whom he has provided a guarantee
to pay customs duty, has not paid his debt in a particular amount. Thus,
it is only this summons that imposes on the determined guarantor – as
testified to by the content of the summons in question – the obligation
to pay the debt by a specified deadline, in a specific amount, for the
debtor who did not himself pay it by the specified deadline. It is only
this summons, despite its name, that can be considered a decision issued
under § 32 par. 1 of Act no. 337/1992 Coll., which thus becomes grounds
for execution in relation to the guarantor in the collection of the
debt, and for that reason it must be viewed as a decision of a
substantive nature.”
29.
Thus, it is only upon delivery of the “guarantor summons,” setting the
payment obligation for the tax guarantor, that the tax proceeding begins
for the tax guarantor, and only from that point on can the guarantor
effectively exercise his procedural rights, and thus protect his
substantive rights.
30.
Nonetheless, as regards the actual content of these rights, it is key
that the third sentence of the contested provision limits the material
scope of the circumstances that the guarantor can raise in an appeal, by
providing an exclusive list; in an appeal against a “guarantor
summons,” the guarantor can claim only “the fact that he is not a
guarantor, or that the guarantee was applied in a greater scope than
that provided by law, or that the taxes were already paid.”
31.
Nothing about this limitation is changed by the expansive
interpretation of these facts, often applied in administrative and court
practice, which permits including certain circumstances that cannot be
deduced from the literal wording; even if this expansive interpretation
can be applied, the limitation still remains in the objections that can
be made in an appeal. The opposite interpretation could not be accepted
even by applying the rule of constitutional interpretation (if it were
concluded that the cited limitation of objections for an appeal were
unconstitutional), because – as is indicated by the Constitutional
Court’s case law (and expert commentary) – this rule can be applied only
in a situation where there are two (or more) possible interpretations
of a legal regulation (otherwise it would logically not be
interpretation of the law, but creation of a statute, and the derogatory
authority of the Constitutional Court would be generally redundant if
it were possible to “interpret” every statute in a constitutional
manner). In this case, of course, we cannot conclude from the fact that
the legislature substantively limited the circle of applicable
objections to three expressly stated ones an opposite conclusion, i.e.
that in fact it did not set any limitation. The use of an exhaustive
list by the legislature would then lose any reasonable meaning. In any
case, the settled practice of administrative bodies, administrative
courts (cf. the statement of the Supreme Administrative Court in the
petition), as well as the Constitutional Court, rests on the position
about the limited substantive scope of facts that the guarantor can
claim in an appeal.
32. A
necessary logical consequence is the identical limitation of the
substantive scope of applicable objections in proceedings before an
administrative court. An administrative court could not question a
decision by an administrative body in the refusal to consider objections
that cannot be classified under this statutory provision, because the
opposite approach by the administrative body would be inconsistent with
the statutory imperative, and the decision could not be replaced by
substantive review of these objections by the administrative court
itself. This is supported by the practice of the administrative courts
(including the Supreme Administrative Court) and the Supreme
Administrative Court even argues on that basis in the present petition
(“The guarantor’s ability to file objections against that decision in
the administrative proceeding and, accordingly, in the review proceeding
before a court is limited by the grounds that are listed in § 57 par. 5
last sentence of the Act on the Administration of Taxes and Fees …”).
33.
Thus, we cannot but conclude that in the third sentence of the
contested provision the legislature annulled the guarantor’s right to
seek protection of his rights before a court or other body in all cases
except the three expressly provided, and thus it denied a
constitutionally guaranteed fundamental right in those cases. In the
case of tax guarantors who would want to seek protection of their rights
with the claim that it was violated otherwise than by their being
imposed an obligation to pay a tax debt even though they are not
guarantors, or that the guarantee was applied in a greater scope than
that provided by law, or that the taxes were already paid, the
legislature’s actions thus excluded that category of subjects from the
right to seek protection of their rights before a court or other body.
Under § 57 par. 5 third sentence of the Act on the Administration of
Taxes and Fees, in the version in effect at the time, a guarantor
obviously cannot claim, for example, facts affecting the basis and
amount of his tax obligation, and thus cannot object – as the Supreme
Administrative Court correctly indicated in this petition – that a tax
should not have been imposed (on the tax debtor) at all, should have
been imposed on another person, was assessed in an incorrect amount,
etc. The legislature’s (unconstitutional) intent was obviously, through
this limitation of grounds for an appeal against a “guarantor summons,”
to rule out the possibility that deciding on an appeal under § 57 par. 5
third sentence of the Act on the Administration of Taxes and Fees, in
the version in effect at the time, would, in relation to the tax
guarantor, replace a “tax finding proceeding” that had already taken
place, and that it would essentially informally take place twice.
34.
Therefore, the Constitutional Court can only state that these actions
by the legislature are inconsistent with the constitutional order. The
provision of § 57 par. 5 third sentence of the Act on the Administration
of Taxes and Fees, in the version in effect at that time, is
inconsistent with Art. 36 par. 1 of the Charter.
35.
This statement applies especially in a situation where the guarantor,
appealing against a “guarantor summons,” seeks protection not only of an
“ordinary” right, but of a fundamental right, the right to peaceful
enjoyment of property (which is included under Art. 11 par. 1 of the
Charter – see, e.g. judgment file no. III. ÚS 120/96). The obligation to
pay a tax debt represents interference in the guarantor’s property
sphere, because it deprives him of part of his property, i.e. the part
that he will be required to pay. The tax obligation (or the actual
collection of tax) is considered interference in the right to peaceful
enjoyment of property (cf. Art. 1 paragraph 1, first sentence, of the
Protocol to the Convention: “Every natural or legal person is entitled
to the peaceful enjoyment of his possessions.”) and in the case law of
the European Court of Human Rights (see, e.g. decision of 9 November
1999 in the case Špaček, s.r.o. v. the Czech Republic), and thus also
means violation of the guarantor’s fundamental right to peaceful
enjoyment of property under Art. 11 par. 1 of the Charter.
V. B) 2)
36.
The Constitutional Court also finds § 57 par. 5 third sentence of the
Act on the Administration of Taxes and Fees, in the version in effect at
the time, to be unconstitutional in the context of Article 13 of the
Convention for the Protection of Human Rights and Fundamental Freedoms
(the “Convention”), under which “Everyone whose rights and freedoms as
set forth in this Convention are violated shall have an effective remedy
before a national authority notwithstanding that the violation has been
committed by persons acting in an official capacity.”
37.
The obligation to pay taxes (including a tax debt) could, in particular
cases, be inconsistent with Art. 1 of the Protocol to the Convention,
and therefore, in accordance with Art. 13 of the Convention, everyone
whose rights were violated, including a tax guarantor, must have
effective legal means of remedy before a national body.
38.
However, in view of the third sentence of the contested provision, the
legal order does not have an effective legal means of remedy for
violation of a tax guarantor’s right to peaceful enjoyment of property,
because through the appeal against a “guarantor summons” it is possible
to substantively evaluate only the content of the claim that the
guarantor’s rights were violated because an obligation was imposed on
him to pay a tax debt although he is not a guarantor, or that the
guarantee was applied in a greater scope than that provided by law, or
that the taxes were already paid, and so only violation of that right of
the tax guarantor can be appropriately remedied under Art. 1 of the
Protocol to the Convention. In other words, through the institution of
an appeal under § 57 par. 5 third sentence of the Act on the
Administration of Taxes and Fees, in the version in effect at that time,
not all situations where the guarantor’s right to peaceful enjoyment of
property has been violated can be effectively remedied, and therefore
this instrument cannot be considered “effective” under Art. 13 of the
Convention, so we can only state that the third sentence of the
contested provision is also inconsistent with the cited article of the
Convention.
V. B) 3)
39.
The Constitutional Court also considers that the third sentence of the
contested provision is inconsistent with Art. 36 par. 2 of the Charter,
under which: “Unless a law provides otherwise, a person who claims that
his rights were curtailed by a decision of a public administrative
authority may turn to a court for review of the legality of that
decision. However, judicial review of decisions affecting the
fundamental rights and basic freedoms listed in this Charter may not be
removed from the jurisdiction of courts.”
40.
Art. 36 par. 2 of the Charter adopted the principle that administrative
decisions are generally subject to judicial review, which means that
all administrative decisions are subject to judicial review unless they
are excluded from such review by law; the purpose is a more effective
guarantee that the activities of the public administration will be legal
(than on the basis of an enumerative principle, which therefore
provides more limited judicial review). The constitutional framers
reflected the need for the rule for review of the executive branch –
which, although it is entitled to authoritative interfere in the legal
sphere of natural and legal persons, lacks elements of independence,
etc. – by the independent judicial branch. Thus, this is basically
protection of everyone’s public rights (provided by the independent
judicial branch), that is, protection from (illegal) interference by the
public administration, which also differs from the previous general
paragraph of Art. 36 of the Charter, which guarantees everyone the right
to seek protection of rights other than public subjective rights, and
thus does not deal with only protection from interference by public
administrative bodies, but also by a natural or legal person.
41.
Although in the second sentence of the cited provision the
constitutional framers delegation to the legislature allowing exceptions
from the review of administrative decisions by a court, that
constitutional authorization is limited in the fact that decisions
concerning the fundamental rights and freedoms guaranteed by the Charter
may not be removed from removed from the jurisdiction of courts. Here
the constitutional framers obviously reflected the different relevance
of the fundamental rights and freedoms and “ordinary” rights and
freedoms; the more important rights logically deserve greater protection
by definition.
42. In the
present matter, as concluded above, the decision on the obligation to
pay a tax debt (i.e., in the case of a “guarantor summons” and the
decision on the appeal against it) concern the guarantor’s fundamental
rights (the right to peaceful enjoyment of property); therefore, here
the constitutional framers have not permitted the cited legal exception
from the rule.
43. The
conclusions regarding Art. 36 par. 1 and 4 of the Charter apply equally
to Art. 36 par. 2 of the Charter, i.e., a statute that provides
“conditions and detailed provisions” under Art. 36 par. 4 of the Charter
cannot deviate from the content of Art. 36 par. 2 of the Charter. Thus,
if everyone has, under Art. 36 par. 2 of the Charter, the right to
judicial review of decisions by public administration bodies affecting
the fundamental rights and freedoms, and the conditions and rules for
the exercise of that right are provided by law, then such a statute,
issued on the basis of constitutional authorization, may not completely
negate that right of every person, even if only in certain cases, and
thereby deny the constitutionally guaranteed fundamental right in those
situations. Article 36 par. 2 of the Charter does not permit a statute
to make any restrictions in content of the right to judicial review of
decisions concerning the fundamental rights and freedoms.
44.
The logical consequence – as was concluded above – of the limited
material scope of facts that a guarantor can claim in administrative
proceedings under the third sentence of the contested provision is
identical to the limitation of applicable objections before an
administrative court.
45.
Thus, we can only conclude that the contested provision, also implying
limitation of the material scope of objections before an administrative
court, is – taken comprehensively – also inconsistent with Art. 36 par. 2
of the Charter. In § 57 par. 5 third sentence of the Act on the
Administration of Taxes and Fees, in the version then in effect, the
legislature annulled a guarantor’s right to judicial review of decisions
concerning his fundamental rights in all situations, with the exception
of the three expressly provided, and thus denied a constitutionally
guaranteed fundamental right in those situations. In the case of tax
guarantors who would seek protection of their rights in the event that
their fundamental rights were violated otherwise than by their being
imposed an obligation to pay a tax debt even though they are not
guarantors, or that the guarantee was applied in a greater scope than
that provided by law, or that the taxes were already paid, the
legislature’s actions thus excluded that category of subjects from the
right under Art. 36 par. 2 of the Charter.
46.
Similarly, § 57 par. 5 third sentence of the Act on the Administration
of Taxes and Fees, in the version in effect at the time, is inconsistent
with Art. 6 par. 1 of the Convention, because it does not meet the
requirement that everyone whose civil rights or obligations are involved
must be guaranteed the right to access to the courts.
V. B) 4)
47.
The Constitutional Court also evaluated whether the contested provision
is inconsistent with the constitutional principle of equality. The
Constitutional Court interprets the constitutional principle of
equality, enshrined in Art. 1 of the Charter, under which all people are
free, have equal dignity, and enjoy equality of rights, complementarily
expressed in Article 3 of the Charter, as well as the principle of
prohibition of discrimination in recognized fundamental rights, in its
case law from two viewpoints (e.g., judgments file no. Pl. ÚS 16/93,
file no. Pl. ÚS 36/93, file no. Pl. ÚS 5/95, file no. Pl. ÚS 9/95, file
no. Pl. ÚS 33/96, Pl. 9/99, and others). The first is the requirement of
preventing arbitrariness in the actions of the legislature in
differentiating groups of subjects and their rights; the second is the
requirement of constitutionally acceptable grounds for differentiation,
i.e. the impermissibility of affecting a fundamental right or freedom by
differentiation of subjects and rights on the part of the legislature.
48.
Delivery of a summons for the guarantor to pay the tax debt places the
guarantor in the same position as the tax debtor whose tax debt he
guarantees. He acquires an obligation to pay the tax debtor’s tax debt,
to the extent of the guarantee, i.e. the same obligation as the tax
debtor, with the possibility that his property will be seized in
execution. Thus, as the Supreme Administrative Court states in the
petition, one can say that the guarantor is, under § 57 par. 1 of the
Act on the Administration of Taxes and Fees, basically in the position
of the tax debtor. On the other hand – unlike the tax debtor, who was,
e.g., a party in an assessment proceeding in which he could fully
protect his rights and raise any objections – the contested provision
permits the guarantor protection of his rights only in a very limited
material scope provided by the exhaustive list of objections that can be
applied in an appeal against the “guarantor summons.”
49.
However, the principle of equality requires that if the guarantor is to
have the same obligation as a debtor – i.e. the obligation to pay the
tax debt, which reduces his property by payment of taxes in the same way
as for a tax debtor – we can find no grounds that would be able to
justify the inequality in the treatment of the tax debtor and guarantor
in the manner described above (they have at their disposal diametrically
qualitatively different means for protection from the same obligation –
the scope of objections applicable by a tax guarantor against a
decision on tax obligation concerning him is considerably substantively
restricted). Thus, the Constitutional Court concluded that the contested
provision has the consequence of an unjustified inequality between
subjects on whom a tax obligation is imposed. The postulate of equality
does not require general equality of everyone with everyone else, but it
gives rise to a requirement that the law not give an unjustified
advantage or disadvantage to one person vis-à-vis another. In this case
it is indisputable that the contested provision does not respect the
requirement of providing the same rights under the same conditions
without unjustified differences, because the legislature considerable
disadvantaged subjects in the position of a tax guarantor without
constitutionally acceptable reasons.
50.
Providing a guarantee is not an institution that appears only in tax
proceedings, but, on the contrary, is a general institution in the
entire legal order, which is addressed in detail primarily in the theory
and case law of private law, whose roots go deep into years long past,
and are permeated by the Roman law tradition, adopted and adapated by
various trends and schools in the process of reception of Roman law.
Thus, providing guarantees does not originate in financial law, and
certainly not in the Czech tax laws (cf. e.g., Supreme Administration
Court decision file no. 1 Afs 86/2004). One of the fundamental
principles of the private institution of a guarantee is that a guarantor
can raise all the objections against a creditor that the debtor would
have against the creditor (§ 548 par. 2 of Act no. 40/1964 Coll., the
Civil Code). The Constitutional Court also reasoned to this effect in
its abovementioned judgment, file no. II. ÚS 445/2000, where it spoke of
the “essence of the institution of providing a guarantee” (in the
framework of public law guarantees), as well as in judgment file no. I.
ÚS 429/2001: “The public law regime of obligations on the grounds of
guaranteeing customs duty cannot completely eliminate the principles of
relationships under the law of obligations … In any case, we must point
out that in the modern legal understanding the boundary between public
and private law is no longer seen to be as sharp as in the past, so that
private law elements can often be seen in a legal relationship that is
essentially under public law, and vice versa.” The Constitutional Court
further stated in judgment file no. I. ÚS 643/03, “the imperative for
internal harmony and consistency of the legal order gives rise to a
requirement that the same legal institution (here, a guarantee) mean the
same thing, regardless of which branch of law it is being applied in.
The Supreme Administrative Court relied on similar principles, e.g. in
its decision file no. 2 Afs 81/2004, where it said that “a legal order
based on principles of unity, rationality, and internal consistency of
content, necessarily brings an imperative of taking the same view of
comparable legal institutions, even if they are provided in different
legal regulations, or even different branches.” In its decision file no.
5 Afs 138/2004, the Supreme Administrative Court stated that “We cannot
accept an interpretation under which there is a substantial difference
between public law and private law guarantees; this follows from the
decision of the expanded panel of the Supreme Administrative Court (1
Afs 86/2004, available at www.nssoud.cz).” If in civil law, where
contractual guarantees are made, there is no limitation on the
objections that a guarantor can apply, we can conclude by the logical
argument a maiori ad minus, that it is all the more so true that such a
marked restriction of applicable objections has no place with regard to
statutory guarantees.
51.
Thus, the Constitutional Court states that insofar as the third sentence
of the contested provision establishes unconstitutional inequality, it
is also inconsistent with Art. 1 and Art. 37 par. 3 of the Charter.
VI.
Instruction: Judgments of the Constitutional Court cannot be appealed.
Brno, 29 January 2008