On Recognizing as Unlawful and Cancelling a Notice Issued by the State Revenue Authority
Case No. 6001-22-00-6ап/1629
According to Paragraphs 1 and 2 of Article 19-4 of the Law of the Republic of Kazakhstan "On Road Transport" (hereinafter – the Law), transport control over the movement of motor vehicles across the territory of the Republic of Kazakhstan is carried out at vehicle checkpoints across the State Border of the Republic of Kazakhstan coinciding with the customs border of the Eurasian Economic Union (EAEU), at other locations where goods cross the customs border of the EAEU, at transport control posts within the territory of Kazakhstan, as well as through special automated measuring systems.
Transport control over the movement of motor vehicles at checkpoints across the State Border of the Republic of Kazakhstan coinciding with the customs border of the EAEU, as well as at other locations where goods cross the customs border of the EAEU, is conducted by the state revenue authorities of the Republic of Kazakhstan.
Pursuant to Paragraph 3 of Article 19-5 of the Law, transport control of oversized and heavy vehicles through verification of their actual weight and dimensional parameters and determination of the extent to which they exceed the permissible limits established in Kazakhstan is carried out using:
- Measuring instruments and dimensional frames;
- Stationary weighing equipment or portable mobile scales;
- Special automated measuring systems.
A Joint Stock Company (JSC) filed a lawsuit against the State Institution “Department of State Revenues for Turkestan Region of the State Revenue Committee of the Ministry of Finance of the Republic of Kazakhstan” and chief specialist M.M., seeking recognition as unlawful and cancellation of:
- the notice dated August 19, 2021, requiring payment of a fee for the passage of a motor vehicle through the territory of Kazakhstan in the amount of KZT 60,425; and
- the vehicle detention report dated August 19, 2021.
By decision of the Specialized Interdistrict Administrative Court (SIAC) of Turkestan Region dated February 4, 2022, the claim was satisfied. The notice dated August 19, 2021, and the detention report concerning the vehicle and trailer were declared unlawful and cancelled. Court costs were awarded in favor of the claimant.
By ruling of the Judicial Panel for Administrative Cases of the Turkestan Regional Court dated May 13, 2022, the judgment of the court of first instance was upheld.
In resolving the dispute and granting the claims, the lower courts supported the claimant’s position and concluded that the measurement tolerances established by Rules No. 689 apply to vehicle scales installed at the customs border. Consequently, taking such tolerances into account, the permissible load on a driving axle is 11 tons. This circumstance was also considered confirmed by Part 6 of Article 571 of the Code of Administrative Offenses (CAO), according to which administrative liability arises when weight parameters are exceeded by more than one ton. The courts interpreted the measurement error of the Mettler-Toledo (Changzhou) Measurement Technology Co., Ltd. (China) equipment in favor of the carrier.
The detention report was declared unlawful and cancelled by the courts because the defendant failed to prove the legality of its issuance. Paragraph 10 of the Transport Control Rules does not provide for vehicle detention as a measure in cases where excess weight and/or dimensional parameters are identified when leaving the Republic of Kazakhstan.
The Judicial Panel for Administrative Cases of the Supreme Court (JPAC SC), upon review of the judicial acts, disagreed with the conclusions of the lower courts for the following reasons.
Concerning the Exceeding of Vehicle Weight Parameters and the Legality of the Notice Requiring Payment of KZT 60,452
Under Paragraph 6 of the Transport Control Rules, officials verify the actual weight parameters of vehicles using a certified automated system for determining vehicle weight and dimensional parameters and video surveillance (hereinafter – measuring equipment). The results are stored in the database of the measuring equipment. Weight parameters are determined while passing through the measuring equipment.
It was established that customs posts in Kazakhstan use the certified automated system Mettler-Toledo (Changzhou) Measurement Technology Co., Ltd. (China) (hereinafter – Toledo Automated System) to measure vehicle weight parameters. According to its technical passport, the permissible measurement error is 0.5% (up to 50 kg).
Pursuant to Paragraph 5 of Rules No. 689, special automated measuring devices are installed on public roads and monitor excess weight and dimensional parameters while vehicles are moving, which presupposes a higher measurement error (up to one ton).
Based on the foregoing, the panel concluded that Rules No. 689 do not regulate the procedure for controlling vehicle weight parameters at customs posts using the Toledo Automated System. Accordingly, the measurement tolerances established by Rules No. 689 do not apply to it.
When measuring weight parameters using the Toledo Automated System, the permissible measurement error established by its technical passport is taken into account.
The panel found erroneous the conclusions of the lower courts that the applicability of measurement tolerances to the Toledo Automated System was confirmed by Paragraph 6 of Article 571 of the CAO. The disposition of this article establishes grounds for administrative liability. The obligation to pay taxes and fees arises when the axle load exceeds 10,000 kg, and is not connected with the existence of an administrative offense.
Taking into account the proven fact that the claimant exceeded the permissible vehicle weight parameters when leaving the Republic of Kazakhstan during transport control at a customs post using the Toledo Automated System, the disputed notice was lawfully issued by the defendant. The panel found no grounds for its cancellation. Therefore, the judicial acts in this part were reversed and a new decision was rendered dismissing the claim.
Concerning the Unlawfulness of the Vehicle Detention Report Dated August 19, 2021
According to Parts 2 and 3 of Article 797 of the CAO, detention, delivery, and prohibition of operation of a vehicle may be carried out by transport control officers within their authority, as well as by officials of state revenue authorities within their competence. A detention report in the prescribed form must be drawn up and attached to the administrative offense report.
According to Parts 1 and 2 of Article 827 of the CAO, a person whose rights and freedoms are directly affected by actions (inaction) and/or decisions of an authority (official) conducting proceedings in an administrative offense case has the right to file a complaint with a higher authority (official) and/or a court regarding violations of law in the preparation of an administrative offense report, other actions (inaction), and decisions, except for decisions made upon consideration of the administrative offense case and complaints (protests) against decisions in such cases.
It was established that the disputed detention report was prepared by the defendant in violation of the procedure established by the CAO.
However, this circumstance does not deprive the claimant of the right to challenge the actions (inaction) and/or decision of the official who prepared the report in accordance with Chapter 44 of the CAO.
Given that vehicle detention is one of the measures ensuring proceedings under the CAO, a claim challenging such a report is not subject to consideration under the Administrative Procedure and Process Code (APPC).
Therefore, this part of the claim was returned to the claimant pursuant to Subparagraph 11 of Article 138 of the APPC.
Regulatory Framework
- Constitution of the Republic of Kazakhstan dated August 30, 1995;
- Administrative Procedure and Process Code of the Republic of Kazakhstan (APPC);
- Code of the Republic of Kazakhstan “On Customs Regulation in the Republic of Kazakhstan”;
- Customs Code of the Eurasian Economic Union, ratified by the Law of the Republic of Kazakhstan No. 115-VI dated December 13, 2017;
- Regulatory Resolution of the Supreme Court of the Republic of Kazakhstan No. 7 dated November 29, 2019, “On Certain Issues of Application of Customs Legislation by Courts”;
- Code of the Republic of Kazakhstan “On Taxes and Other Mandatory Payments to the Budget (Tax Code)”;
- Entrepreneurial Code of the Republic of Kazakhstan;
- Code of Administrative Offenses of the Republic of Kazakhstan (CAO);
- Civil Procedure Code of the Republic of Kazakhstan;
- Treaty on the Eurasian Economic Union dated May 29, 2014;
- Acts Constituting the Law of the EAEU (international treaties and acts in the field of customs regulation);
- Decision No. 42 of the Board of the Eurasian Economic Commission dated March 27, 2018, “On the Specifics of Customs Control of the Customs Value of Goods Imported into the Customs Territory of the Eurasian Economic Union.”
Abbreviations Used
- JPAC SC – Judicial Panel for Administrative Cases of the Supreme Court of the Republic of Kazakhstan;
- JPAC – Judicial Panels for Administrative Cases of regional and equivalent courts;
- SIAC – Specialized Interdistrict Administrative Courts;
- SI – State Institution;
- RSI – Republican State Institution;
- SRC – State Revenue Committee;
- DSR – Department of State Revenues;
- USR – Department/Office of State Revenues;
- LLP – Limited Liability Partnership;
- IE – Individual Entrepreneur.
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