A taxpayer's application to challenge a notification based on the results of a desk inspection performed by him using one of the above methods is not subject to consideration and resolution in civil proceedings.
G.B. Tazhibayeva appealed to the court with a statement to the RSU "UGD in the Nauryzbay district of the DGD in the city of Almaty" to declare illegal the notification of the elimination of violations based on the results of desk control issued in connection with the sale of her real estate – a shopping complex.
The decision of the Medeu District Court of Almaty dated May 27, 2020 denied the application.
By the decision of the Court of Appeal of the Almaty City Court dated October 14, 2020, the court's decision was overturned, and a new decision was made to satisfy the application.
By the decision of the court of cassation of March 31, 2021, the judicial acts that took place in the case were canceled, the proceedings were terminated on the following grounds.
According to paragraph 2 of Article 96 of the Tax Code, the taxpayer's (tax agent's) execution of a notification on the elimination of violations identified by the tax authorities based on the results of desk control is recognized in case of disagreement with the violations indicated in the notification - the taxpayer's submission of an explanation on the violations identified on paper or electronically to the tax authority that sent the notification on the elimination of violations identified by the tax authorities based on based on the results of desk control, with the exception of the cases provided for in paragraph 3 of this article.
In this case, G.B. Tazhibayeva, disagreeing with the notification, submitted an objection to the tax authority on May 6, 2019.
In response to G.B. Tazhibayeva's objection, the tax authority indicated that the notification had been deemed unfulfilled, and a letter had been sent to her address.
In accordance with paragraph 2 of Article 65 of the Law "On Legal Acts", a legal act of individual application is terminated from the moment its requirements or instructions contained therein are fulfilled by the persons to whom this legal act is addressed.
According to paragraph 19 of the NP "On Judicial Practice of applying Tax Legislation", in connection with the first part of Article 293 of the CPC, a taxpayer's application to challenge a notification based on the results of desk control performed by him using one of the above methods is not subject to consideration and resolution in civil proceedings. The judge refuses to accept such an application (subparagraph 1) of the first part of Article 151 of the CPC), and in the event of a civil case, the court terminates proceedings on it (subparagraph 1) of Article 277 of the CPC).
In these circumstances, the local courts incorrectly applied and interpreted the norms of substantive law.
Since G.B. Tazhibayeva, having submitted an objection to the notification based on the results of desk control, complied with it, her application to challenge the notification based on the results of desk control was not subject to consideration and resolution in civil proceedings, and the court should have discontinued the proceedings.
Taxpayers indicate in their statements that they are classified as medium-risk taxpayers, therefore, on the basis of the above-mentioned norm of the Tax Code, the state revenue authority should issue a notice in relation to them, not a notification.
Regulatory and legal framework
In accordance with Article 2 of the Code of the Republic of Kazakhstan dated December 25, 2017 "On Taxes and other mandatory payments to the Budget (Tax Code)", the tax legislation of the Republic of Kazakhstan is based on the Constitution of the Republic of Kazakhstan, consists of this Code, as well as regulatory legal acts, the adoption of which is provided for by this Code.
If an international treaty ratified by the Republic of Kazakhstan establishes rules other than those contained in the Tax Code, the rules of the said treaty shall apply.
The main regulatory legal acts that courts should follow when considering cases related to the application of tax legislation are:
1. The Constitution of the Republic of Kazakhstan dated August 30, 1995;
2. The Code of the Republic of Kazakhstan "On Taxes and other Mandatory Payments to the Budget (Tax Code)" (hereinafter – NC);
3. The Civil Code of the Republic of Kazakhstan (hereinafter referred to as the Civil Code) (General Part) dated December 27, 1994, (Special Part) dated July 1, 1999;
4. The Civil Procedure Code of the Republic of Kazakhstan (hereinafter – CPC) dated October 31, 2015;
5. The Business Code of the Republic of Kazakhstan (hereinafter referred to as the Business Code) dated October 29, 2015;
6. The Law of the Republic of Kazakhstan "On Permits and Notifications" dated May 16, 2014;
7. The Law of the Republic of Kazakhstan "On Accounting and Financial Reporting" dated February 28, 2007;
8. The Law of the Republic of Kazakhstan "On State Registration of Legal Entities and Registration of branches and representative Offices" dated April 17, 1995;
9. Regulatory rulings of the Supreme Court of the Republic of Kazakhstan (hereinafter – NP):
- "On judicial practice of tax legislation application" dated June 29, 2017 No. 4;
- "On the application by courts of certain norms of civil procedural legislation" dated March 20, 2003 No. 2;
- "On some issues of the invalidity of transactions and the application by courts of the consequences of their invalidity" dated July 7, 2016 No. 6;
- "On some issues of application by courts of the norms of Chapter 29 of the CPC" dated December 24, 2010 No. 20;
Resolutions of the Government of the Republic of Kazakhstan, regulatory legal orders of the authorized body in the system of state revenue bodies.
Summary from the Supreme Court of the Republic of Kazakhstan on the judicial practice of applying tax legislation for 2020 and 3 months of 2021 dated July 9, 2021
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