On invalidation of the act of documentary tax audit
No. 6001-22-00-6ap/2707 dated 07/13/2023
Plaintiff: LLP "A"
Respondent: Russian State Institution "Department of State Revenue"
The subject of the dispute is the invalidation of the act of the documentary tax audit (hereinafter referred to as the audit report) and the notification of the audit results No. 368 dated December 28, 2021 due to violations of tax legislation and taxpayer rights (hereinafter referred to as the notification).
Review of the plaintiff's cassation appeal.
PLOT: based on the Committee's order, on October 29, 2021, the defendant issued an order to conduct a thematic audit. Based on the results of the audit, the respondent has drawn up an inspection report and issued a notification.
It follows from the inspection and notification act that the plaintiff received additional charges for the period from January 1, 2018 to December 31, 2019: VAT in the amount of 10.0 million tenge, a fine of 2.0 million tenge and VAT in the amount of 3.0 million tenge, a fine of 9.0 thousand tenge, for a total of 17.3 million tenge.
According to the audit report, the plaintiff's settlements were established for the period from January 1, 2018 to December 31, 2019 with suppliers of LLP "N", deduction costs in the amount of 20.0 million tenge were excluded for 2018; LLP "C" excluded expenses from deductions for 2018 in the amount of 8.5 million tenge and VAT from offset for the 4th quarter. 2018 in the amount of 1 million tenge; LLP "B" excluded from deductions for 2019 expenses in the amount of 15.5 million tenge and VAT from offset for 1-2 quarters of 2019 in the amount of 1.8 million tenge; LLP "E" (reorganized by joining LLP "K") excluded expenses from deductions for 2019 in the amount of 6.2 million. and VAT offset for the 1st quarter of 2019 in the amount of 7.0 thousand tenge.
It follows from the inspection report that the plaintiff:
1) unreasonably offset the amount of VAT and deductions of the amount of CPN for mutual settlements with these suppliers for the specified amount of turnover;
2) during the tax audit, he submitted documents on mutual settlements with the specified suppliers: contracts, invoices, invoices for the release of goods to the side, checks, receipts for the incoming cash order, a reconciliation report with counterparties.
Judicial acts:
1st instance: the claim was denied.
Appeal: the decision remains unchanged.
Cassation: the decision of the appeal is overturned with the referral of the case for a new hearing to the court of appeal in a different composition of the court.
Conclusions: By rejecting the claim, the local courts came to the conclusions about the validity of the verification act and notification due to the fact that they correspond to the examined documents, and additional charges to the plaintiff were made in accordance with the requirements of tax legislation.
The courts, in support of their conclusions, pointed out that an analysis of the documents available in the case file allows us to conclude that the plaintiff has not proven the fact of purchasing goods from suppliers to the extent that they are settled with them.
The Judicial Board disagreed with these conclusions on the following grounds:
1) the courts have not given a proper assessment of the defendant's actions to identify and establish the actual performance of work by suppliers;
2) the courts, agreeing with the inspection report, did not verify the documentary evidence of the conclusions indicated therein, namely: the actual sale of goods and the provision of services, as well as the availability of labor and material resources, including those necessary to fulfill obligations, suppliers for the purchase of goods, invoices, and the facts of the transfer of goods, work;
3) the defendant has not verified and the court has not established the actual volume of purchases of goods from suppliers, which is subject to mutual settlements with them, necessary for tax purposes.
The courts have not investigated or given a proper legal assessment with a comparison of the transactions indicated in the inspection report with the established circumstances in the cited verdict.
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