Lawyer in Almaty for tax disputes, calculation and timely payment of taxes and other mandatory payments to the budget

Part 1 of Article 292 of the CPC stipulates that, in case of rejection of a protest against a legal act of individual application that does not comply with the law by an authority or official who issued an illegal act or committed illegal acts, or by a higher authority or official, the Prosecutor of the Zyryanovsky district of the East Kazakhstan region applies to the court with an application for recognition of the act or actions as illegal (hereinafter – The Prosecutor), taking into account the clarification of the requirements, appealed to the court for the recognition of illegal actions to reject the protest of October 21, 2016, and the cancellation of the decision of June 17, 2016 to the State Revenue Agency "Department of State Revenue for the East Kazakhstan Region of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan" (hereinafter referred to as the Department). He motivated his demands by the illegality of the Department's decision of June 17, 2016 to satisfy the complaint of the peasant farm "K." (hereinafter – KH "K.") to the notification of the results of the tax audit of the State Revenue Department for the Zyryanovsky district – the city of Zyryanovsk dated February 10, 2016 No. 130. The decision of the specialized interdistrict Economic Court of the East Kazakhstan region dated December 13, 2016 denied the application. By the resolution of the Judicial Board for Civil Cases of the East Kazakhstan Regional Court dated March 14, 2017, the court's decision was changed. Regarding the refusal to satisfy the requirement to cancel the Department's decision of June 17, 2016, it was canceled, and a new decision was made to cancel the Department's decision of June 17, 2016 regarding the cancellation of additional charges of KH "K." individual income tax (hereinafter – IPN) in the amount of KZT 9,021,129 and penalties of KZT 3,387,363, social tax 130,872 tenge and penalties 54,741 tenge. The rest of the court's decision remains unchanged.

Lawyer in Almaty for tax disputes, calculation and timely payment of taxes and other mandatory payments to the budget

The Judicial Board for Civil Cases of the Supreme Court changed the decision of the appellate instance and reversed the decision of the court of first instance dated December 13, 2016 on the refusal to satisfy the claim of the prosecutor of the Zyryanovsky district of the East Kazakhstan region on the cancellation of the decision of the State Institution "Department of State Revenue for the East Kazakhstan region of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan" dated December 17 June 2016 and issued a new decision to satisfy this requirement., I upheld the decision of the court of first instance of December 13, 2016 in this part. In the remaining part, the decision of the Court of appeal was upheld on the following grounds. It follows from the case file that the State Revenue Administration for the Zyryanovsky district – the city of Zyryanovsk (hereinafter referred to as the Department) conducted a comprehensive tax audit of KH "K." on the correctness of the calculation and timely payment of taxes and other mandatory payments to the budget for the period from January 1, 2015, based on the order dated October 30, 2015. 2010 to December 31, 2014. Based on the results of the audit, a tax audit report was drawn up and notification No. 130 on the accrual was issued on the same day.: Personal income tax in the amount of 9,021,129 tenge and penalties of 3,387,363 tenge; unified land tax in the amount of 27,739 tenge and penalties of 10,550 tenge; social contributions 4,931 tenge and penalties of 2,893 tenge; social tax 130,872 tenge and penalties of 54,741 tenge. KH "K." appealed the said notification to the Department. By the decision of the Department dated June 17, 2016, taking into account the results of the thematic audit, the notification regarding the accruals of the IPN, the unified land tax, the social tax and the corresponding amounts of penalties was canceled. On October 21, 2016, the Prosecutor protested the Department's decision. On November 1, 2016, the Department replied that it was deprived of legal grounds to review its decision based on the results of consideration of the complaint by KH "K." The response referred to specific norms of tax legislation regulating the review of decisions based on the results of consideration of a taxpayer's complaint about notification of audit results, and indicated the authorized body – the State Revenue Committee of the Ministry Finance of the Republic of Kazakhstan. The prosecutor appealed to the court with a statement in which, without citing any circumstances to substantiate his claim, he asked to recognize the illegal actions of the Department in rejecting the protest, and he also demanded that the Department's decision regarding the cancellation of additional charges to KH "K." on personal income tax and social tax be canceled. The Court of First Instance motivated the refusal to satisfy the application by the legality and legality of the Department's decisions and actions. The Court of Appeal recognized the conclusions of the court of first instance as correct at the Prosecutor's first request, and in terms of challenging the Department's decision, it concluded that the Prosecutor's claim was justified and that it was necessary to satisfy it. The Judicial Board finds that the court of first instance correctly refused to satisfy the Prosecutor's demand to overturn the Department's decision. However, he does not agree with the conclusions of the court, which are the basis of the adopted act. The local courts, contrary to the legislation in force at the time of the case review and the factual circumstances, considered the Prosecutor's claim on the merits.

Meanwhile, this claim was to be dismissed due to the Prosecutor's lack of legal grounds for making this claim due to the following circumstances. Article 676 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (Tax Code) (hereinafter referred to as the Tax Code, as amended in 2016) establishes that, in accordance with the provisions provided for in this Code, a decision based on the results of consideration of a taxpayer's (tax agent's) complaint against notification of audit results is reviewed. by the authorized body. The Department, whose decision was challenged by the Prosecutor, responded with reference to the specified norm and named the authorized body endowed by the legislator with the appropriate competence to review his decision. Consequently, the Department did not consider the protest on its merits due to its lack of competence. Part 1 of Article 292 of the CPC stipulates that the prosecutor, in case of rejection of a protest against a legal act of individual application that does not comply with the law, as well as against the actions of a state body or official by an authority or official who issued an illegal act or committed illegal acts, or by a higher authority or official, applies to the court with an application for recognition of the act, action illegal. According to paragraph 2 of Article 23 of the Law of the Republic of Kazakhstan dated December 21, 1995 "On the Prosecutor's Office" (hereinafter referred to as the Law on the Prosecutor's Office), in cases of rejection of acts of prosecutorial supervision or failure to review them within the time limit established by law, the prosecutor has the right to apply to the court with an application for invalidation of actions and acts of bodies and officials, as well as for the elimination of violations laws.

The prosecutor has the right, by his decision, to suspend the operation of the contested act until the court considers the application. An analysis of these norms allows us to conclude that the prosecutor has the right to file a complaint with the court in two cases: rejection of the protest, that is, consideration of its merits and not satisfaction, or failure to review it within the time limit established by law. As mentioned above, the Department, which is obliged to carry out activities only within its competence, did not consider the protest on its merits, therefore, the Prosecutor's statement and the conclusions of the local courts on the rejection of the protest are unlawful. The Department also responded to the protest in compliance with the ten-day deadline set by paragraph 3 of Article 19 of the Law on the Prosecutor's Office. The Judicial Board considers that in such circumstances, the Prosecutor had no right to file a claim with the court to overturn the Department's decision. The act of prosecutorial supervision was subject to referral to the authorized body, which, by virtue of the provisions of Chapter 94 of the Tax Code, had the appropriate authority to review the Department's decision, including the appointment and conduct of a thematic audit. In accordance with paragraph 3 of Article 12 of the Law of the Republic of Kazakhstan "On Administrative Procedures", if the issue goes beyond the established competence, the authorized official decides to send an application to the competent state body or official with mandatory notification of the applicant within no more than three working days. At the same time, this norm is not applicable to the relations in question, since it regulates relations arising in the procedures for reviewing citizens' appeals for the exercise of their rights, as well as procedures for the administrative protection of citizens' rights and legitimate interests.  The relations related to the appeal of notifications based on the results of tax audits and the revision of decisions of a higher tax authority are regulated by the norms of the Tax Code, which do not provide for the authority of the tax authority to redirect any received documents. Thus, due to a significant violation of the norms of substantive and procedural law, the decision of the court of appeal regarding the cancellation of the court's decision and the issuance of a new decision to satisfy the Prosecutor's claim to challenge the Department's decision is subject to cancellation. According to part 5 of Article 451 of the CPC, if the court has made the right decision, but violations provided for in parts one and two of Article 427 of this Code have been committed, the decision indicates the motives, norms of substantive and procedural law, according to which judicial acts are left unchanged. In this regard, the decision of the court of first instance to refuse to satisfy the Prosecutor's claim is subject to be upheld for the reasons and grounds set out above. 

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