Stamp Tax on Vertical Property Under Verba 28 TGIS: CAAD Arbitration 100/2015-T

ARBITRAL DECISION

I. Report

1. A…, S.A. (hereinafter "Claimant"), with tax identification number ("NIF") …, with registered office at Avenue …, no. …, 2nd floor, parish of …, municipality of Lisbon, filed on 16 February 2015, pursuant to the combined provisions of articles 2 and 10 of Decree-Law no. 10/2011, of 20 January, i.e., Legal Framework for Arbitration in Tax Matters ("RJAT"), a request for constitution of an arbitral tribunal, in order for the 1st and 2nd instalments of the Stamp Tax ("IS") assessment, by reference to the year 2012, in the manner discriminated below (in the total amount of €10,126.30), to be declared illegal, and further for recognition of the right to compensation corresponding to costs incurred by the Claimant with the issuance and maintenance of a bank guarantee corresponding to the tax act in question, with the Tax and Customs Authority (hereinafter "Respondent" or "AT") being the defendant.

A) Constitution of the Arbitral Tribunal

1. Pursuant to the provisions of subsection a) of article 6(2) and subsection b) of article 11(1) of the RJAT, the Ethics Board of this Administrative Arbitration Center ("CAAD") appointed the undersigned as sole arbitrator, who communicated acceptance of the assignment within the applicable period, and notified the parties of such appointment on 13 April 2015.

2. Accordingly, in conformity with the provision of subsection c) of article 11(1) of the RJAT, and through communication from the President of the Ethics Board of CAAD, the Sole Arbitral Tribunal was constituted on 28 April 2015.

B) Procedural History

1. In the request for arbitral pronouncement, the Claimant petitioned, following the express dismissal of the Gracious Complaint previously submitted (with the same purpose), for a declaration of illegality of the IS assessments mentioned above (1st and 2nd instalments), relating to the year 2012, with reference to an urban property, constituted as divided ownership, located at Ave. …, no. …, parish of …, municipality of Lisbon, registered in the urban property register of the said parish, under the article ….

2. The AT submitted a response, petitioning for dismissal of the request for arbitral pronouncement, on the grounds that the arbitral tribunal would be incompetent (ratione materiae) on the basis that: i) the object of the present arbitral pronouncement was not challengeable (in arbitral proceedings); and that ii) with respect to the tax act under analysis there already existed a prior decision that had acquired the force of res judicata (exception of res judicata).

3. The Claimant, having been notified of the AT's response, further submitted an additional motion, where it sought to additionally contest the position put forward by the Respondent regarding the points (2) listed in the previous paragraph.

4. By order of 11 September 2015, the Sole Arbitral Tribunal, pursuant to the provision of subsection c) of article 16 of the RJAT, and following what was requested by the AT, decided, without opposition from the parties, that it was not necessary to convene the meeting referred to in article 18 of the RJAT, as a result of the simplicity of the matters at issue, as well as considering that it had at its disposal all the necessary elements to make a clear and impartial decision.

5. It also decided, in conformity with article 18(2) of the RJAT, that it was not necessary for oral arguments to be presented, as the positions of the parties were clearly defined in their respective pleadings, and set 2 October 2015 as the deadline for the arbitral decision.

6. The Claimant, having been informed by CAAD only on 22 September 2015 of the deadline previously mentioned, requested an extension of the deadline for the arbitral decision, as provided by law, and further presented its final arguments on 8 October 2015.

7. Accordingly, the deadline for the arbitral decision was, in the first instance, set for 15 October, being subsequently postponed to 27 October 2015, in order to give the Respondent the right to be heard.

8. The Tribunal was regularly constituted and is competent to assess the questions indicated (article 2(1)(a) of the RJAT); the parties have legal personality and capacity and have full standing (articles 4 and 10(2) of the RJAT and article 1 of Order no. 112-A/2011, of 22 March). No irregularities have occurred, such that nothing prevents judgment on the merits.

9. Accordingly, the present case is in a position for a final decision to be rendered.

II. Question to be Decided

1. The central question to be assessed and decided with respect to the merits of the case, as appears from the parties' procedural documents (after the AT had tacitly acknowledged, within its response, that the IS assessments, in the manner illustrated above, were illegal), concerns the following: will the exceptions of unchallengeable status of the act being challenged and of res judicata apply, as the AT suggests, with respect to the assessments that the Claimant seeks to challenge?

2. In this sense, should that be the understanding of the present tribunal, it would necessarily have to refrain from assessing the respective request for arbitral pronouncement due to its incompetence ratione materiae, pursuant to article 2 of the RJAT.

III. Decision on Matters of Fact and its Reasoning

1. Having examined the documentary evidence produced, the tribunal finds proven, with relevance to the decision of the case, the following facts:

I. The Claimant is the owner of an urban property, constituted as divided ownership, located at Ave. …, no. …, parish of …, municipality of Lisbon, registered in the urban property register of the said parish, under the article ….

II. The Claimant received, with respect to the years of 2012, and as a result of what is set out in Item no. 28 of the General Table of Stamp Tax ("TGIS"), assessment notices from the AT, mentioned above, in the total amount of €10,126.30.

III. Accordingly, the Claimant submitted a Gracious Complaint contesting the said assessment notices, which was dismissed by the AT on 18 November 2014 (giving rise to the present request for arbitral pronouncement).

IV. In parallel, on 13 January 2014, the Claimant after having been notified of the 3rd instalment, relating to the same fiscal year, filed a Gracious Complaint, having subsequently, on 8 August 2014, challenged the tacit dismissal of the same, through the submission of a separate request for arbitral pronouncement, which gave rise to case no. 618/2014-T.

V. To date, the decision relating to case no. 618/2014-T, of 7 February 2015, has already acquired the force of res judicata, such decision having gone in the direction of the Claimant's claim, that is, it annulled the act of assessment of independent tax (i.e., relating to the 3rd instalment) relating to IS to be paid, in the manner previously set out.

1. The Tribunal's conviction regarding the facts found to be proven resulted from the documents annexed to the case file and contained in the parties' pleadings and allegations, which were not contested, as specified in the points of the matter of fact set out above.

2. There is no factual matter relevant to the decision of the case found to be unproven.

IV. On the Law

A) Legal Framework

1. Given the subject matter under discussion in the present case, it is important, first of all, to set out the norms that comprise the relevant legal framework, as of the date of occurrence of the facts.

2. First and foremost, it should be noted that, notwithstanding the Claimant's claim, the Respondent will have demonstrated, in the understanding of the present tribunal, that it accepts the illegality of the contested assessments, such that it remains only to determine whether the exceptions invoked by the Respondent will be possibly applicable, being necessary for that purpose to specify the connected legal framework.

3. Accordingly, article 2 of the RJAT establishes the scope of the competence of arbitral tribunals, in the following terms:

"1 - The competence of arbitral tribunals comprises the assessment of the following claims:

a) declaration of illegality of acts of assessment of taxes, of self-assessment, of withholding at source and of payments on account;

b) declaration of illegality of acts of determination of taxable matter when it does not give rise to assessment of any tax, of acts of determination of taxable income and of acts of determination of property values.

2 - Arbitral tribunals decide in accordance with established law, and are prohibited from applying principles of equity."

1. In parallel, the article which governs the item under discussion, in the IS Code, is article 23(7), relating to the assessment of IS, which provides as follows: "where the tax is owed for the situations provided in item no. 28 of the General Table, the tax shall be assessed annually, in relation to each urban property, by the central services of the Tax and Customs Authority, applying, with the necessary adaptations, the rules contained in the IMI Code."

2. Lastly, attention should also be paid to article 89(1) of the Code of Administrative Court Procedure ("CPTA"), applicable by force of article 29(1)(c) of the RJAT, which prevents knowledge of the merits of cases, in the following situations:

"1 - For the purposes of the provisions of the preceding articles, the following in particular prevent the continuation of the case:

a) Defective nature of the petition;

b) Lack of legal personality or legal capacity of the plaintiff;

c) Unchallengeable status of the act being challenged;

d) Lack of standing of the plaintiff or defendant;

e) Illegality of joinder;

f) Failure to identify interested third parties;

g) Illegality of cumulation of claims;

h) Expiration of the right of action;

i) Lis pendens and res judicata."

B) Arguments of the Parties

1. In summary, and as set out in the initial petition, the Claimant based its request on the following arguments (errors attributable to the AT), to request the annulment of the instalments mentioned above:

i) Erroneous interpretation of the concept of "property" for purposes of taxation under IS;

ii) Untimely assessment of IS effected against the Claimant due to non-compliance with the transitional provisions provided in article 6(1) of Law no. 55-A/2012, of 29 October and violation of the principle of good faith;

iii) Erroneous application of the IS rate and the property valuation used in the tax act being challenged;

iv) Violation of the principle of equality and of tax capacity constitutionally enshrined.

1. It should be noted that in the previous point only a summary enumeration is made of the arguments put forward by the Claimant since, in the understanding of the present tribunal, notwithstanding the merit of the said initial petition, its content ultimately proves to be irrelevant to the fundamental question to be decided (as set out in points 14 and 15).

2. Particularly since the Claimant itself, upon becoming aware of the AT's response to its initial petition, sought additionally to combat those points in which the parties were in fact at odds (detailed below), arguing that not only were the tax assessment acts divisible (making reference to supporting case law), thus seeking to contest the procedural exception of unchallengeable status of the act being challenged raised by the AT, but also that the procedural exception of res judicata did not apply, a question also raised by the Respondent, since the cause of action and the claim differed from those mentioned in case no. 618/2014-T.

3. Furthermore, the Claimant also drew attention to the fact that, in the procedural exception regarding the unchallengeable status of the act being challenged, the AT, by treating separately the tax enforcement proceedings resulting from non-payment of the tax assessment acts in question, would be confirming that the same are, after all, capable of being divisible.

4. Indeed, in the words of the Claimant, "for if, with respect to tax enforcement proceedings and their respective oppositions, divisibility and autonomous challengeability of each of the Tax Acts of IS Assessment (1st and 2nd Instalments), relating to 2012, is recognized, then, and a fortiori, such divisibility and autonomous challengeability of the Tax Acts of Assessment subject to the present Request for Arbitral Pronouncement should be recognized in the present case."

5. In this sense, the Claimant made reference to several decisions of the Supreme Administrative Court ("STA"), namely the STA Judgments no. 024101, of 22 September 1999, and no. 0994/11, of 29 May 2013.

6. Finally, it should be noted that the Claimant sought further to strengthen its point of view with the final arguments presented on 8 October 2015, bringing in particular the opinion of relevant tax doctrine on this matter.

7. In conclusion, the Claimant therefore petitioned that the assessments previously mentioned be annulled, notwithstanding the position set out by the AT, and further that it be granted the right to compensation corresponding to the costs it incurred with the issuance and maintenance of the bank guarantee (in the part corresponding to those assessments) which it was obliged to constitute.

8. For its part, the Respondent, after being duly notified for that purpose, presented its response in which it began by considering that "for each tax event, there will, in principle, be a single assessment, by which the tax to be paid will be determined."

9. In parallel, it also considered that, "by force of law, the assessment is only one and only it constitutes an injurious act, capable of being challenged and which can only, evidently, be subject to a single challenge, regardless of whether the tax is paid in several instalments."

10. In this way, the Respondent is of the opinion that "the payment of one of the instalments of the assessment effected (…) is not a partial payment of that assessment, but only a technique for collection of the assessed tax (…)."

11. That is, for the Respondent "the law does not contemplate the autonomous challenge of one instalment of Item no. 28 of the TGIS contained in the collection notices, as is the case in the present instance. Naturally, when the law provides for payment of the assessment amount in several instalments, annulment of the tax act will have consequences with respect to all of them."

12. Enumerating the various arbitral decisions on which it relied, namely relating to cases no. 120/2012-T, 408/2014-T, 138/2015-T, among others, the Respondent concluded that "the act of assessment of Item no. 28 of IS is unique, and the fact that it can be paid in several instalments does not imply that there have occurred several assessments. The nature of the instalments of an assessment of this tax is that of a division of the overall assessment, effected annually, and each instalment per se cannot be autonomously challenged, since the object of judicial challenge or of a tax arbitration proceeding is the tax act of assessment."

13. Requesting accordingly that, by virtue of the manifest unchallengeable status of the autonomous character of the instalments previously mentioned, the AT be absolved from the action (this being because, in its understanding, we are dealing with a procedural exception which prevents knowledge of the merits by the present arbitral tribunal, pursuant to articles 89(1)(c) of the CPTA and 29(1)(c) of the RJAT).

14. On the other hand, the Respondent also alerts to the procedural exception of res judicata.

15. Indeed, in the case under analysis, and as previously mentioned, the Claimant also submitted a separate request for arbitral pronouncement, relating to the 3rd instalment of the assessments in question, case no. 618/2014-T, whose decision, published on 7 February 2015, has already acquired the force of res judicata, deciding in favour of the Claimant and thus annulling the respective assessment notices.

16. Now in the understanding of the Respondent, "the cause of action in the present case and in case no. 618/2014-T stems from the same concrete legal facts – the acts of assessment of IS, Item no. 28, issued on 22/03/2013, relating to the year 2012, with the same rate and the same property valuation, relating to the same floors of the same urban property – and legally supports the Claimant's claim, consisting of the annulment of the acts of assessment expressed in the first, second and third instalments."

17. For which reason, in its opinion, and pursuant to article 89(1)(i) of the CPTA, such situation prevents knowledge of the merits of the case and leads to absolution of the Respondent from the action.

18. For all this reason, the Respondent requests that the present tribunal declare itself incompetent to assess the merits of the case, absolve the Respondent from the action and charge the Claimant with bearing the costs relating to the respective case.

C) Assessment by the Tribunal

1. First, it is incumbent on the present tribunal to make a preliminary note.

2. This is because it is important to stress that the question which is relevant to the outcome of this case does not concern the scope of application of Item no. 28 of the TGIS, that is, which properties that item applies to.

3. Indeed, on that matter the present tribunal is entirely in agreement with the arguments put forward by the Claimant.

4. Furthermore, that has been the general understanding of arbitral tribunals.

5. However, the present tribunal cannot fail to address the true question that is at issue here.

6. That is, can the instalments relating to an IS assessment, contained in the collection notices, be considered autonomously as tax assessment acts? Or alternatively, are we, as the AT argues, dealing with an exception of unchallengeable status of the act being challenged? In parallel, could we further be, by force of the arbitral decision no. 618/2014-T, dealing with the formation of the exception of res judicata, in the manner referred to by the AT?

7. To support its decision, the present tribunal will make use of some arbitral decisions that have already acquired the force of res judicata, namely arbitral decision no. 726/2014-T, of 10 March, which, given its relevance, is now transcribed.

8. "Another of the exceptions invoked by the AT is that of incompetence of the arbitral tribunal to decide the dispute, on the grounds that 'the Claimant is not challenging a tax act, but rather is challenging the payment of one instalment of a tax act contained in a collection notice', that is, that 'the object of the proceeding is the annulment not of a tax act, but of a collection notice for the payment of the 2nd instalment of a tax, a matter which in no way forms part of the set of norms which defines the competence of tax arbitral tribunals, contained in art. 2 of the RJAT'. The competence of tax arbitral tribunals operating at the CAAD is fixed by articles 2(1) and 10(1) of the RJAT.

Specifically, article 2(1)(a) of the RJAT provides that such competence comprises the assessment of claims relating to declaration of illegality of acts of assessment of taxes, self-assessment, withholding at source and payments on account, while subsection a) of article 10(1) thereof establishes the 90-day period for presentation of the request for constitution of the tribunal, 'calculated from the date of the facts provided in articles 1 and 2 of article 102 of the Code of Tax Procedure and Process, with respect to acts capable of autonomous challenge and, likewise, from notification of the decision or expiration of the legal deadline for decision of the hierarchical appeal'.

To determine the competence of the arbitral tribunal to decide the claim object of the present case will necessarily involve ascertaining whether the request for declaration of illegality and consequent annulment of one of the instalments of a Stamp Tax assessment, effected under item 28 of the TGIS, amounts to a request for total or partial annulment of that assessment or, if not amounting to that, whether one of those instalments can constitute an act capable of autonomous challenge.

As to the first question, it can be affirmed that an instalment does not amount to a tax assessment, because, pursuant to article 23(7) of the Stamp Tax Code, as worded by article 3 of Law no. 55-A/2012, of 29 October, '7 - Where the tax is owed for the situations provided in item no. 28 of the General Table, the tax shall be assessed annually, in relation to each urban property, by the central services of the Tax and Customs Authority, applying, with the necessary adaptations, the rules contained in the IMI Code'.

Now, the expression 'the tax is assessed annually' suggests that a single annual assessment is effected, even though the same may be divided, for purposes of payment, into instalments, and not as many assessments as there are instalments in which the debt must be satisfied – the division of an assessment into instalments will thus be nothing more than a mere technique for collection of revenues.

On the other hand, the question of whether an instalment can be regarded as an autonomously challengeable part of the assessment refers us to that of the divisibility of the tax assessment act and the consequent possibility of its partial annulment.

In this respect, case law has held that an assessment is a divisible act, both by nature, because it relates to an obligation of a pecuniary nature, and by legal definition, since article 100 of the General Tax Law (LGT) admits 'total or partial success of complaints or administrative appeals, or of judicial proceedings in favour of the taxpayer', a situation in which the tax administration is obliged 'to immediately and fully restore the situation that would have existed had the illegality not been committed, including payment of default interest, in accordance with the terms and conditions provided by law'.

However, in order for there to be partial annulment of the tax act, it is necessary that the illegality affect it only in part (see, in this sense, the Judgment of the Plenary of the Tax Litigation Section of the STA, rendered on 10 April 2013, in (…) whose summary reads: 'Summary: I - The tax act, as a divisible act both by nature and by legal definition, is capable of partial annulment. II - The criterion for determining whether the act should be totally or partially annulled is to determine whether the illegality affects the tax act in its entirety, in which case the act should be entirely annulled or only in part, in which case partial annulment is justified.'

Accordingly, in cases where the tax act is divisible, 'if partial annulment of a tax act is requested, the tribunal cannot, in principle, annul it entirely'[1]; if total annulment is requested and the act is only partially annullable, the request will be partially rejected.

On the question of the indivisibility of a Stamp Tax assessment referred to in item 28 of the TGIS, the CAAD has already pronounced itself, in case no. 205/2013-T, as shown in the extract that follows: '11. The Respondent further challenges the value of the claim, considering that it is €8,940.94 and not €28,822.80, as indicated by the claimant.

The claimant maintains that 'the act being challenged in the present case is the act of assessment no. ... of 22/02/2013, relating to the first instalment of stamp tax, of the year 2012, in the amount of €8,940.94, attached by the claimant to the request for arbitral pronouncement as Doc. 1'.

However, the value of assessment no. ... of 22/02/2013, as appears from that document, is in fact €26,822.00 and not €8,940.94. It should be noted that there is no assessment of €8,940.94. This amount is only the first instalment of an assessment which was effected from the outset in the amount indicated by the Claimant.

From the fact that the value of the assessment can be paid in several instalments, it does not follow that there are three assessments. Rather, it is an assessment that can be paid in several instalments (emphasized), the taxpayer not being prevented from challenging it due to the fact that the deadline for payment of only one of them has elapsed.

The taxpayer challenged the act of assessment no. ... of 22/02/2013, in the amount of €26,822.00, which had been notified to him and that is the correct value of the claim.' Also the arbitration proceeding no. 120/2012-T (…) from which the following fragments are extracted, had already pronounced on the indivisibility of an IMI assessment, a matter of subsidiary application to IS assessments of item 28 of the TGIS, by referral of article 67(2) of the Stamp Tax Code: 'In accordance with the provision of article 113(2) of the IMI Code, the assessment of this tax is effected in the months of February and March of the year following that to which the tax relates.

Pursuant to article 120(1) of the same statute, the tax must be paid in two instalments, in the months of April and September, provided that its amount exceeds €250, with payment, in the event that that amount is equal to or less than that limit, to be made only once, during the month of April.' (…) 'As thus appears from the provisions of the aforementioned articles, although the act autonomously subject to review is the act of assessment of IMI (emphasized), the deadline for contesting its legality shall only be calculated from the end of the payment deadline for the tax determined in it.

Since this must be paid, in accordance with law, in more than one instalment, only with the end of the last of those (assuming, naturally, the non-occurrence of situations of early maturity) will the deadline referred to in article 102(1)(a) of the CPPT thus begin to run, applicable, in the context of arbitration proceedings, ex vi the provision in article 10(1)(a) of Decree-Law no. 10/2011, of 20 January ('RJAT')'.

'(…)Such conclusion is moreover clear from the indivisible nature of the assessment act, as well as from the need – moreover emphasized by the Respondent itself – that, with respect to the same IMI assessment - which, in accordance with law must be paid in two instalments - contradictory administrative or judicial decisions are not rendered.' (…) 'For – let us reiterate –, since neither of the instalments of payment of IMI is autonomously subject to review – but only the assessment act to which they refer'.

The instalments of payment of an IMI assessment or, in the situation under analysis, of a Stamp Tax assessment, in accordance with Item 28 of the TGIS, are not autonomously subject to review, because they originate from a single annual obligation, in accordance with the teaching of Braz Teixeira: 'it is necessary not to confuse periodic instalments, which, although being effected through successive acts, at different moments, originate from the same obligation and constitute the various portions of the same instalment that was divided, with instalments that must be effected periodically, not due to a division of the overall instalment, but rather to the periodic birth of new obligations, due to the persistence of the factual assumptions of taxation'.

Concluding that the instalments of a tax assessment are not autonomously challengeable, because they constitute portions of an overall instalment, originating from the same obligation, it is necessary to ascertain whether one of those instalments can be considered as an 'act of autonomous challenge', referred to in article 10(1)(a) of the RJAT, with referral to articles 1 and 2 of article 102 of the CPPT.

In an annotation to article 102 of the CPPT, and with respect to subsection e) of its article 1, which provides for the start of the deadline for judicial challenge on the date of 'notification of the remaining acts which may be subject to autonomous challenge in accordance with this Code', Jorge Lopes de Sousa writes: '(…) this rule applies not only to cases of autonomous challenge provided in this Code [decisions of hierarchical appeal which involve assessment of the legality of assessment acts (art. 76(2)), self-assessment acts (art. 131), withholding at source acts (art. 132) and acts determining property values (art. 134)], but also to other cases of challenge of direct assessment acts (article 86(1) of the LGT)'.

The fact that the declaration of illegality of acts determining taxable matter when it does not give rise to assessment of any tax, acts determining taxable income and acts determining property values form part of the competence of arbitral tribunals, pursuant to article 2(1)(b) of the RJAT, the request for constitution of the arbitral tribunal with respect to them being to be presented within 30 days from the date of notification thereof, pursuant to article 10(1)(b) of the RJAT, leads to the necessary conclusion that the acts of autonomous challenge referred to in article 10(1)(a) of the RJAT are the acts of assessment, self-assessment and payments on account, even though, with respect to these, a gracious complaint or hierarchical appeal, express or tacitly dismissed, has been submitted.

Having excluded the possibility of an instalment constituting a tax assessment act, much less can the nature of self-assessment or payment on account be attributed to it. Since each of the instalments of the IS assessments identified in the case is not autonomously challengeable, for the reasons previously set out, we are dealing with a case of incompetence of the arbitral tribunal to assess and declare their illegality and consequent annulment."

1. Indeed, notwithstanding the fact that, on several occasions, case law has expressed itself in the sense of the divisibility of tax assessment acts, as previously mentioned, it should be noted that such (divisibility) will only be considered, for purposes of a possible challenge of acts of tax assessment, in cases in which partial annullability is possible.

2. However, despite the framework set out above, the present tribunal considers that the situation at hand has, naturally, various specificities which should also be considered, within the framework of this arbitral decision, with the purpose of ensuring the legitimacy thereof.

3. First, it should be noted that, despite forcefully asserting that acts of tax assessment are indivisible, the AT, when issuing the notices for payment of IS, gives the taxpayer the opportunity to, should it wish, object separately to the payment of the same (i.e., by instalment), recognizing the divisibility and autonomous challengeability of each of the acts of tax assessment, in this case of IS.

4. In fact, in each of the said notices, it is possible to read "you may complain or challenge the assessment in accordance with the terms and deadlines established in articles 70 and 102 of the CPPT."

5. And, in this sense, notwithstanding the position it defends, the truth is that the Respondent itself has, within its conduct in the Portuguese tax legal system, acted as if acts of tax assessment were capable of being divisible, in particular when they relate to IS.

6. Accordingly, what can be said of the legitimately formed expectations of the taxpayer (and of its confidence in the AT), when the AT expressly refers that the taxpayer is enabled to react against each of the notifications individually?

7. This is because, and it is especially important to emphasize, the taxpayer, in this case the Claimant, naturally assumes the autonomous character of each instalment, as an individual act of tax assessment.

8. Let us look at the words of Professor Rui Duarte Morais, as the Claimant drew to the attention of the present tribunal.

9. "The notifications must contain an indication of the means of reaction available against the notified act. And if such indication is wrong? We begin by noting that such situations are fairly common."

10. The Professor then questions whether in these cases it is justified "that the Tribunal refrain from assessing the question and the taxpayer be obliged to submit such a complaint?"

11. Indeed in his understanding, such conduct is not necessary.

12. For the reason that, "the complaint in question is, in essence, a form of judicial appeal. That is, if the dispute involves a judicial decision and the 'proceeding' has already gone to Court (even though through an improper route, due to an error by the Administration), there is no apparent reason to recommend restarting the entire procedure from 'scratch'. Rather, it would be necessary to proceed with the correction of the procedural form used"[2].

13. Lastly, it should also be noted that this perspective finds support in various arbitral decisions, namely in arbitral decision no. 618/2014-T, of 7 February, so often mentioned in this decision, which, in recognizing autonomously the illegality of the 3rd instalment of IS, considering its challenge as well-founded, naturally validated the possibility of IS assessments being divisible and, in that way, the instalments in which they are, as a rule, composed, being individually challenged.

14. See also, by way of example, the arbitral decision rendered in Case no. 757/2014-T, in which the taxpayer had requested the challenge of the 2nd and 3rd instalments relating to the act of assessment of IS.

15. In that particular case, the respective tribunal recognized and declared in the same proceeding that, as to the act of assessment of IS, it would only annul the 3rd instalment, since, for purposes of that initial petition, the request corresponding to the 2nd instalment was already untimely (confirming once more that autonomous challengeability of each of the instalments, individually considered, is legitimate).

16. From another perspective, the AT further makes reference to the procedural exception of res judicata, since it considers that the present matter will have already been ruled upon in the arbitral decision relating to case no. 618/2014-T, of 7 February, requesting that the present arbitral tribunal refrain from pronouncing itself on the question under analysis.

17. Now using the words of the Claimant, it is necessary to recall that "decisions only constitute res judicata within the precise limits and terms in which they decided, being therefore necessary to determine what the true meaning and scope of the judgment" (in this case, of the arbitral decision mentioned in the previous point).

18. Now according to Abílio Neto, "the limits of res judicata are traced by the identifying elements of the legal relationship or of the substantial legal situation defined by the judgment: the subjects, the object and the source or constitutive title. On the other hand, it is necessary to attend to the terms of that definition (…) it has authority – makes law – for any future proceeding, but only in exact correspondence with its content. It cannot therefore prevent a new proceeding from discussing and resolving that which it itself did not define."

19. In this sense, pursuant to article 581 of the Civil Procedure Code, "the cause is repeated when an action is brought identical to another as to the subjects, the claim and the cause of action."

20. Now in the situation at hand, and despite the taxpayer being the same, the present tribunal considers that the other two requirements are not met (i.e., the claim and the cause of action are manifestly distinct).

21. It is further stated that, at the date of submission of the request for arbitral pronouncement which gave rise to the present tribunal, 16 February 2015, the arbitral decision relating to case no. 618/2014-T, despite having been published (on 7 February 2015), had not yet acquired the force of res judicata.

22. Since the Claimant had been notified of the express dismissal of the Gracious Complaint, submitted to challenge the instalments mentioned above, on 18 November 2014, the deadline for submission of a request for arbitral pronouncement, aimed at challenging such dismissal, ended on 16 February 2015 (i.e., 90 days after receipt of notification).

23. Accordingly, it is considered as legitimate that, in order to safeguard its position, the Claimant should also have sought to obtain an arbitral pronouncement with respect to the instalments mentioned above (especially because the deadline was ending on that day and the arbitral decision relating to case no. 618/2014-T had not yet acquired the force of res judicata and could, in those terms, be subject to some modification).

24. Res judicata thus not being formed, in the opinion of the present tribunal.

25. In this context, and having regard to what was the question which the present tribunal proposed to decide, we are to grant the Claimant's request and consequently consider the present request for arbitral pronouncement as well-founded.

V. Decision

1. On these grounds, this Arbitral Tribunal decides:

A) To grant the present request for arbitral pronouncement;

B) To condemn the Respondent to pay the compensation requested by the Claimant, in accordance with the terms previously indicated;

C) To condemn the Respondent to pay the costs of the proceeding.

VI. Value of the Case

1. The value of the case is fixed at €10,126.30, in accordance with article 97-A(1)(a) of the CPPT, applicable by force of subsections a) and b) of article 29(1) of the RJAT and article 3(2) of the Regulation of Costs in Tax Arbitration Proceedings ("RCPAT").

VII. Costs

1. In accordance with the provision of article 22(4) of the RJAT, the value of the arbitration fee is fixed at €918, in accordance with Table I of the mentioned Regulation, to be borne by the Respondent, given the complete success of the request.

Notify.

Lisbon, CAAD, 27 October 2015

The Arbitrator

(Sérgio Santos Pereira)

[1] SOUSA, Jorge Lopes de, "Code of Tax Procedure and Process – annotated and commented" Volume I, Áreas Editora, 2006, p. 875.

[2] See Manual of Tax Procedure and Process, Almedina Editions, 1st Edition, Coimbra, September 2012, p. 24.