IUC Vehicle Tax: Constitutional Review of Article 3(1) CIUC Rebuttable Presumption – CAAD 109/2017-T

TAX ARBITRATION JURISPRUDENCE

Case No. 109/2017-T

Decision Date: 2020-08-04
IUC

Value of Claim: € 9,317.28

Subject: Constitutionality of Article 3, No. 1 of the IUC Code, in the version prior to Decree-Law No. 41/2016, of 1.08, interpreted in the sense that it establishes a rebuttable presumption – Reform of Arbitral Decision (annexed to this decision).
Replaces the Arbitral Decision of 10 July 2017.

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SUMMARY:

I— The principles of legal certainty, confidence and proportionality are norms for controlling and limiting the actions of public authorities in relation to individuals, and given such nature, were not susceptible to being violated by Article 3, No. 1, of the IUC Code, in the version prior to Decree-Law No. 41/2016, of 1.08, when interpreted in the sense that it established a rebuttable presumption.

II— The principle of efficiency, like any other principle, must not operate in isolation but in conjunction and joint weighing with other principles, namely with the principle of equivalence that governs the tax, in concretization of the general principle of tax equality, with which the norm in question, in the interpretation mentioned, was in harmony.

III— In light of this weighing, the principle of efficiency was not violated by the norm in question, in the interpretation mentioned, all the more so since the rebuttable presumption itself was already a measure established with a view to administrative efficiency and practicality in tax management.

IV— The norm, in the interpretation mentioned, did not therefore suffer from unconstitutionality, by violation of the constitutional principles in question.

ARBITRAL DECISION

1. A..., S.A., legal entity No. ..., with registered office at Rua ..., ..., Lisbon, came, invoking the provisions of Articles 10, Nos. 1 and 2 of Decree-Law No. 10/2011, of 20 January (hereinafter RJAT), Article 99 of the Tax Procedure and Process Code (CPPT) and Article 95, No. 1 of the General Tax Law (LGT), to request the establishment of a Single Arbitral Court with a view to the annulment of 83 assessment acts of the Single Circulation Tax and respective compensatory interest (hereinafter designated as IUC), carried out by the Tax and Customs Authority (hereinafter AT), relating to 76 vehicles, for the years: 2010, 2011 and 2012, identified in Annex A, together with the request for arbitral ruling, which is hereby fully reproduced.

The Claimant further requested reimbursement of the total amount of € 9,317.28, which includes corresponding compensatory interest, which it alleges to have paid, and indemnitary interest on such amounts.

1. Pursuant to the provisions of Article 6, No. 2, paragraph a) and Article 11, No. 1, paragraph b) of Decree-Law No. 10/2011, of 20 January, in the wording introduced by Article 228 of Law No. 66-B/2012, of 31 December, the Deontological Council appointed Ms. Dr. Maria de Fátima Alves as sole arbitrator, who communicated acceptance of the position within the applicable time limit.

2. The Arbitral Court was constituted on 2017-05-02, as provided in Article 11, No. 1, paragraph c) of Decree-Law No. 10/2011, of 20 January, in the wording introduced by Article 228 of Law 66-B/2012, of 31 December.

3. On 10.07.2017 an arbitral decision was rendered, which is hereby fully reproduced and in which it was decided:

"— To uphold the claim for declaration of illegality of the IUC assessment, relating to the years: 2010, 2011 and 2012, concerning the motor vehicles identified in this process, consequently annulling the corresponding tax acts;

— To uphold the claim for condemnation of the Tax Administration to reimburse the amount unduly paid, in the sum of €9,317.28 (nine thousand, three hundred and seventeen euros and twenty-eight cents), condemning the Tax and Customs Authority to effect these payments;

— The AT must also effect payment corresponding to the amount due as indemnitary interest, on the tax paid relating to the annulled assessments, pursuant to Article 43, No. 1 of the LGT, by virtue of Article 61, No. 2 of the CPPT (Wording of Law No. 55-A/2010, of 31-12, entering into force on 2011-01-01."

1. Not conforming with the decision, the Respondent filed an appeal against the arbitral decision before the Central Administrative Court-South, which proceeded under No. 126/17.1BCLSB.

2. In its initial pleading, the Appellant set forth the following conclusions:

"1st This appeal is intended to react against the Arbitral decision rendered on 2017-07-10 by the Single Arbitral Court constituted in the context of case No. 109/2017-T which proceeded in the CAAD;

2nd The decision rendered by the said Single Arbitral Court suffers from nullity by the fact that it failed to rule on two essential issues upon which it should have ruled [Article 28°/1-c) of the RJAT];

3rd By means of the request for arbitral ruling, the Appellant sought to place in dispute 100 acts of IUC assessment;

4th The Appellant timely submitted its Response, by means of a pleading in which, in summary: (i) it argued that Article 3 of the IUC Code contains no rebuttable presumption; (ii) challenged the evidential value of the documents submitted by the appellant, having emphasized that on the date of the tax event giving rise to the IUC the respective financial lease contracts had already ended with regard to several vehicles and that the Appellant had not complied with the obligation to declare set out in Article 19 of the IUC Code; (iii) raised the unconstitutionality of the interpretation made by the Appellant regarding Article 3 of the IUC Code; (iv) argued for its non-condemnation to payment of indemnitary interest and arbitral costs in light of the appellant's inertia;

5th Each of these issues was duly developed by the Appellant throughout its pleading and was perfectly identifiable to any reader;

6th The Single Arbitral Court understood that the issues to be decided were limited to the following: '— The allegation made by the Claimant relating to the material illegality of the assessment acts and the illegality of the acts of accessory interest, for the years 2010, 2011 and 2012, concerning the IUC on the vehicles aforesaid in the PI; — The incorrect interpretation and application of the norms of subjective incidence of the single circulation tax levied and collected, which constitutes the central issue to be decided in this process, — The legal value of the registration of motor vehicles';

7th The Single Arbitral Court appreciated the issues enumerated by itself, which correspond, in essence, to the issues raised by the Appellant herself;

8th However, not only did the said list of issues set by the Single Arbitral Court completely omit (i) the issue of whether on the date of the tax event giving rise to the IUC the respective financial lease contracts had already ended with regard to three vehicles and (ii) the issue of the unconstitutionality of the interpretation made by the Appellant regarding Article 3 of the IUC Code, both raised by the Respondent, as worse, the reasoning of the Arbitral decision did not reserve a single word for them;

9th The issues to be decided were not exclusively the issues raised by the Appellant, but also the issues raised by the Respondent, for otherwise the adversarial process embodied in the Response timely submitted serves no purpose;

10th However, everything proceeded as if, purely and simply, the Respondent had never raised (i) the issue of whether on the date of the tax event giving rise to the IUC the respective financial lease contracts had already ended with regard to three vehicles and (ii) the issue of the unconstitutionality of the interpretation made by the Appellant regarding Article 3 of the IUC Code, that is, whether such interpretation conforms to the principles of legality and tax justice, of contributive capacity, of equality and of legal certainty and security;

11th By ignoring these two fundamental issues the Single Arbitral Court did not incur any error in appreciation of the evidence, but rather an unequivocal omission of ruling;

12th No relationship of legal dependence exists between the interpretation of law regarding Article 3 of the IUC Code made by the Single Arbitral Court and the unconstitutionalities raised by the Respondent that would justify the omission in which that court incurred, as indeed was learnedly decided in the judgment rendered on 2015-04-23 by the 2nd Section of the 2nd Court of the Central Administrative Court South in the context of case No. 08224/14;

13th The Arbitral decision does not suffer from "mere" laconic or deficient reasoning, rather it constitutes a "surprise decision";

14th Furthermore, by failing to comply with one of the essential requirements inherent to a decision (i.e., that of convincing its recipients) the Single Arbitral Court irretrievably and incomprehensibly curtailed one of the few control mechanisms available to the Respondent: recourse to the Constitutional Court;

15th For which reasons the Arbitral Decision now in issue should not be maintained in the legal order, but rather should be declared null.

In such terms, and with the learned supplementation of Your Excellencies, this appeal should be judged to be well-founded and, consequently, the Arbitral Decision should be declared null, thus doing the customary JUSTICE."

1. In the learned judgment of the Central Administrative Court-South, rendered on 30-09-2019, which decided the appeal filed, the following appears, among other things:

"(...) in the sentence under appeal, the Arbitral Court began by enumerating the three issues that in essence the process raised and which we now recover:

(...)

2 ISSUES TO BE DECIDED

2.1 Given the foregoing in the previous numbers, relating to the exposition of the parties and the arguments presented, the main issues to be decided are the following:

— The allegation made by the Claimant relating to the material illegality of the assessment acts and the illegality of the acts of compensatory interest, for the years 2010, 2011 and 2012, concerning the IUC on the vehicles aforesaid in the PI;

— The incorrect interpretation and application of the norms of subjective incidence of the single circulation tax levied and collected, which constitutes the central issue to be decided in this process.

— The legal value of the registration of motor vehicles." (emphasis ours)

From this enumeration, as well as from the confrontation and critical appreciation of the two main pleadings of the arbitral process, a first conclusion emerges immediately: it does not correspond to reality that in the delimitation of the scope of ruling imposed on it the Arbitral Court confined itself exclusively to the allegations of the then Claimant and/or to the issues and arguments adduced by it (moreover, from the point "1. REPORT", in which the Arbitral Court made an exposition of the points of fact and law presented in the pleadings, it was equally indicated that the Arbitral Court had present the position of the now Appellant).

Furthermore, both from the same enumeration and from the appreciation carried out in the part of the judgment on law it also emerges unquestionably that the Arbitral Court appreciated the first "issue" which the Appellant alleges was not appreciated and which relates to the alleged termination of the financial lease contracts on the date of the tax event giving rise to the IUC.

Effectively, as appears from the tenor of the pleadings of both parties and of the arbitral sentence, the central issue, and which ab initio arose, was that of knowing whether Article 3 of the IUC Code consecrated or not a rebuttable presumption.

For the now Respondent the answer to this issue had to be affirmative, having filed in the arbitral process, with a view to the said rebuttal, a set of documents.

For the Appellant the answer by the Arbitral Court to the same issue could only be negative, having, in order to sustain its thesis, advanced from the outset a legal-interpretative position of principle: the interpretation of Article 3 of the IUC Code defended by the Respondent in its request for arbitral ruling in the sense that it establishes a rebuttable presumption lacks legal foundation because it does not respect the subjective incidence of the tax legally imposed and disregards, namely, the systematic and teleological elements that must preside over the interpretation of legal norms. This position of principle is sustained throughout all the response presented in the arbitral process, in particular in the points "II. 1. B On the subjective incidence of the IUC", " II. 1.C On the interpretation that does not heed the systematic element violating the unity of the regime" and in the point "II.1.D On the interpretation that ignores the teleological element of interpretation of the law".

However, as concluded from careful reading of the same pleading, the Appellant did not stop at that position of principle, advancing, also in what concerns this same issue, the "remote" hypothesis that the Court would accept the same interpretation of Article 3 of the IUC Code defended by the now Respondent, which, in any event, the claim should be judged unfounded since the Respondent had failed to rebut the "alleged presumption" since the documents filed in the case should not be recognized as having sufficient evidentiary force for that purpose.

It is, clearly, what results from point II of the response presented, where, under the heading of "II.2 As to the documents filed with a view to rebutting the presumption", and in particular from Articles 73 to 79, the following is gathered: "However, even if this were not the case (...) and accepting that it is admissible to rebut the presumption in light of the jurisprudence that has been forming in this arbitration center, it is nevertheless important to appreciate the documents filed by the Claimant and their evidential value with a view to such rebuttal" (74), "This appreciation which embodies the analysis of an issue, an issue of fact" (75) "With a view to such rebuttal, the Claimant came to substantiate its request for arbitral ruling with the filing of copies of financial lease contracts (See documentary amalgams designated as "Documents 77 to 108", "Documents 109 to 140" and "Documents 141 to 152" filed in the PI." (Article 76) "In other words: will such contracts demonstrate that, on the date of the tax event giving rise to the IUC, the vehicles in question were (still) the subject of financial leases entered into by the Claimant?" (Article 78), "The answer cannot but be negative for the reasons that will be set out, which is why Documents 77 to 152 are hereby impugned for all legal purposes." (Article 79).

However, contrary to what the Appellant alleges, from what has been transcribed one cannot conclude that an issue not appreciated by the Arbitral Court was raised. Effectively, translating that allegation an overt challenge of the means of proof presented by the Respondent to make its annulment claim effective, it was naturally required that the Arbitral Court resolve the issue arising therefrom, that is, that it appreciate and decide whether the documents in question, regardless of the challenge of which they had been the subject, allowed the Court to conclude that the facts necessary for the Court to conclude by the rebuttal of the presumption established in Article 3 of the IUC Code had been proven.

Now, as the reading of the arbitral sentence allows us to conclude, the Arbitral Court appreciated and decided that issue, which, moreover, it expressed itself on in the "judgment of fact" and already in the judgment on law.

In the former by taking as proven "3.1 On the matter of fact, relevant for the decision to be rendered, this Court takes as established, in light of the elements existing in the file, the following facts:

— The Claimant presented evidentiary elements consisting of documents Nos.; 1 to 76, 77 to 152, consisting of tables D and M, of Annex A, filed in the case, which are hereby fully reproduced for all legal purposes; (...)

3.1.1 SUBSTANTIATION OF THE PROVEN FACTS

— The facts taken as proven are based on the documents attached to the request for arbitral ruling of the aforesaid PI and, in the Response of the Respondent, all, filed in the case which are hereby fully reproduced for all legal purposes.(...)"

In the latter, by stating that:

"7.2 REBUTTAL OF THE PRESUMPTION

— The Claimant, as referred to in 3.1., with respect to the proven facts, alleged, with the purpose of dispelling the presumption, not being the liable person for the tax, at the time of the occurrence of the tax events, offering for that purpose the following documents;

— Sales invoices to the respective lessees and to third parties and, lease contracts (see documents filed in the case with Nos., 77 to 152, identified in D and M, comprising ANNEX A, filed in the case);

— Now, those documents enjoy the presumption of truthfulness provided for in Article 75, No. 1 of the LGT. It follows from this that on the date when the IUC was payable, those who held ownership of the motor vehicles were the legitimate owners and users and not the Claimant, due to the typology of the financial lease contract (leasing) and respective sales."

The Appellant may understand that the extensive and profound allegations made by it concerning the evidential value of the documents should have warranted more thorough analysis by the Arbitral Court or, even, that the manner in which "the facts" are enumerated or the issue of the evidential value of the documents and the conclusions drawn from them for purposes of rebutting the presumption are treated reveal diminished technical-legal rigor or are not correct. What it cannot claim is that this Court, on the basis of such considerations, recognize the existence of an omission of ruling that would legitimate the finding of nullity of the arbitral sentence on that ground.

In summary, regardless of the technical rigor or the quality or legal value of the decision adopted, at most, what will exist is a "mere" error of judgment, insusceptible, as the Appellant well knows, of being appreciated or censured by this Central Administrative Court South.

Indeed, if we see correctly, this must have also been the conclusion reached, or, at the very least, considered, by the Appellant, since in the initial petition, in particular in Articles 24 to 32, it does not fail, by anticipation, to consider that error of judgment (in the analysis of the evidence), although to argue that it does not occur and that it is actual omission of ruling, with which, for the reasons already advanced, we disagree.

On this ground, therefore, this Impugnation is not to be judged well-founded.

Diametrically opposite, however, is our decision as to the second omission of ruling pointed out in the arbitral judgment and connected with the allegations made by it relating to the unconstitutionality of Article 3 of the IUC Code in the interpretation advocated by the Appellant.

But let us see.

In response to the request for annulment of the assessments – after having argued for the legal conformity of those with what is provided for in Article 3 of the IUC Code and the rejection of the legal interpretation conveyed by the now Appellant - the Appellant further adduced, in its response, under the heading " III OF THE INTERPRETATION NONCONFORMING TO THE CONSTITUTION", that "(…) if the interpretation conveyed by the Claimant is accepted then the same proves to be contrary to the Constitution, to the extent that such interpretation is expressed in the violation of the principle of confidence, the principle of legal certainty, the principle of efficiency, the principle of efficiency of the tax system and the principle of proportionality" (Article 104), "That is, if this court were to conclude that there exists a rebuttable presumption in Article 3 of the IUC Code, it hereby raises, for all legal purposes, the issue — because it is an issue and not merely an argument — of assessing whether such interpretation is in keeping with the said four constitutional principles" (Article 105), violations of which it subsequently specifies, in fact and in law, in Articles 106 to 112 of the same pleading.

In view of what has been set forth, it is unquestionable that the now Appellant raised before the Arbitral Court the issue of unconstitutionality of Article 3 of the IUC Code if interpreted in a certain sense, that is, in the case, in the sense advocated by the now Appellant, and that it did so by adducing the constitutional principles which, in its view, with the application of that norm in that interpretative dimension would be violated, explicitly setting out the reasons of fact and law for the understanding it defended and from whose decision, without doubt, it intended that effects be drawn for the decision of the case.

We are, then, in the presence of a true issue — and not in the presence of a mere argument or reason adduced in order to sustain the claim inherent in the issue — which, because expressly raised, imposed upon the Arbitral Court the duty to appreciate it, pursuant to what is provided for in Article 608 of the Code of Civil Procedure (applicable by virtue of Article 29 of the Legal Framework for Arbitration in Tax Matters).

As appears from the reading of the arbitral sentence, the said issue — unconstitutionality of the norm above identified when interpreted in the sense and with the scope defended by the Appellant for the reasons of fact and law advanced — was not the subject of any appreciation either in point "1. REPORT", or in point "2. ISSUES TO BE DECIDED", or, what is of the utmost importance to note, in point "3. GROUNDS OF LAW". That is, the issue of unconstitutionality raised was not considered relevant and was not the subject of substantive appreciation.

And it was also not expressly declared prejudicial by the Arbitral Court, namely because the decision rendered was not based on the norm whose unconstitutionality was being raised or was not applied with the sense invoked as nonconforming with the constitutional principles invoked.

This is, moreover, an aspect that assumes extreme relevance in the present case for two reasons.

The first concerns the distinction between nullity of sentence and error of judgment, and as we have been arguing "If the Court considered the issue raised by the Appellant, enumerated it as an issue to be decided and, subsequently, decides expressly not to proceed with its appreciation, by judging it prejudicial by virtue of decision previously taken in relation to another issue, there is no nullity by omission of ruling but, possibly, error of judgment, regardless of whether the issue judged to be prejudicial is or is not of ex officio knowledge."(2)

That is, if the Arbitral Court had expressly judged the unconstitutionality issue raised to be prejudicial, we would not be in the presence of a question of nullity of sentence by omission of ruling but of (possible) error of judgment, insusceptible of being reviewed by this Central Administrative Court South given the powers and competences attributed to it by the RJAT in the terms that we defined in point II of this judgment.

In the concrete case, it is important to say clearly — and this is already the second reason for the relevance of the distinction we have been emphasizing — the Arbitral Court expressed in the sentence a judgment of prejudiciality, including in the sentence, in its point "8 OTHER ISSUES RELATING TO THE LEGALITY OF THE ASSESSMENT ACTS", that "With regard to the existence of other issues relating to the legality of the assessment acts, taking into account that inherent in the establishment of an order of knowledge of defects, as provided for in Article 124 of the CPPT, if the request for arbitral ruling is based on defects that prevent the renewal of the impugned assessments, it becomes prejudicial, because useless, the knowledge of other defects, which is why it does not seem necessary to rule on the other issues raised."

It is, however, for us clear, from the critical reading we have carried out of the sentence in this part, that this judgment of prejudiciality was exhausted in the "issues of illegality of the tax act" in the strict sense, that is, in the issue of the nonconformity of the tax act with the law that directly shapes it, in the defects proper to the act in its relationship with infra-constitutional law, as appears from the use by the arbitral judge of the term legality ("issues relating to legality"), the use of the term "defects" and, finally, by express reference to Article 124 of the CPPT.

In sum, the critical reading of the judgment of prejudiciality externalized in the arbitral sentence requires the conclusion that that judgment does not, in any way, include the issue of unconstitutionality, which does not surprise if we note, as already mentioned, that neither in the report nor in the enumeration of the issues (points 1 and 2 of the arbitral sentence) was any reference made by the Arbitral Court to the issue of unconstitutionality raised.

Note that the attention we devoted to this part of the reasoning of the impugnation had underlying it, as could not be otherwise, the high importance that this matter of issues relating to possible unconstitutionalities assumes, since, as is known, the invocation of possible unconstitutionalities and the decision rendered on them is dependent on the use of one of the limited mechanisms for reviewing the arbitral decision, that is, recourse to the Constitutional Court (Article 25, No. 1, in fine, of the RJAT).

Hence, having been raised by the Appellant before the Arbitral Court the issue of unconstitutionality of a norm if interpreted in the sense advocated by the Appellant (Article 3 of the IUC Code), having the Arbitral Court founded its decision on the application of that specific norm with that interpretation, that issue not having been the subject of substantive appreciation or having been decided upon judging it to be prejudicial, it must be concluded that the Judge violated the duty to rule and, consequently, the nullity of the arbitral sentence, pursuant to Article 125 of the Tax Procedure and Process Code, applicable by virtue of Article 30 of the RJAT.

And, accordingly, that it be judged, with this ground, the Impugnation of the arbitral decision to be well-founded, which in the operative part shall be provided for.

V- Decision

Given the foregoing, the Judges of the 2nd Contentious Tax Subsection of the Central Administrative Court-South agree, in conference, judging this judicial impugnation to be well-founded, annulling, by omission of ruling, the arbitral sentence rendered in case No. 109/2017-T, determining, accordingly, and for appreciation of the omitted unconstitutionality issue, the remission of the file to the CAAD."

1. By order of the President of the Deontological Council, dated 16 April 2020, following the resignation of Ms. Dr. Maria de Fátima Alves from the arbitral functions, the undersigned was appointed as arbitrator in her place.

2. In accordance with the learned judgment of the Central Administrative Court-South, the arbitral court proceeds to appreciate the unconstitutionality issue in question.

On this issue, the Respondent alleged the following:

i. "(…) if the interpretation conveyed by the Claimant is accepted, then the same proves to be contrary to the Constitution, to the extent that such interpretation is expressed in the violation of the principle of confidence, the principle of legal certainty, the principle of efficiency of the tax system and the principle of proportionality.

ii. "That is, if this court were to conclude that there exists a rebuttable presumption in Article 3 of the IUC Code, it hereby raises, for all legal purposes, the issue – because it is an issue and not merely an argument – of assessing whether such interpretation is in keeping with the said four constitutional principles."

iii. "Since, in the view of the Respondent, the interpretation defended by the Claimant entails a violation of the no less important principles of confidence, legal certainty, efficiency of the tax system and proportionality."

iv. "Effectively, the interpretation proposed by the Claimant, an interpretation that in essence devalues the registral reality to the detriment of an informal reality and insusceptible of minimum control by the Respondent, is offensive of the basic principle of confidence and legal certainty that should inform any legal relationship, here including the tax relationship."

v. "In parallel, the interpretation given by the Claimant is offensive of the principle of efficiency of the tax system, to the extent that it translates into an impediment and increase in cost of the competencies attributed to the Respondent, with obvious prejudice to the interests of the Portuguese State, of which both the Claimant and the Respondent are part."

vi. "Now, the position defended by the Claimant is an understanding that is at the antipodes of that principle and of the very reform of motor vehicle taxation to the extent that, by seeking to disregard the registral reality, a reality that constitutes the cornerstone upon which the entire edifice of the IUC rests, it generates for the Respondent, and ultimately for the Portuguese State, additional administrative costs, impediment of the performance of its services, absence of control of the tax and uselessness of the registral information systems."

vii. "Finally, the argument conveyed by the Claimant represents a violation of the principle of proportionality, to the extent that it completely disregards it when confronted with the principle of contributive capacity, when in reality the Claimant has at its disposal the necessary and appropriate legal mechanisms to safeguard its capacity (e.g., motor vehicle registration, request for seizure of documents and request for cancellation of registrations), without, however, having exercised them in due time."

In summary, the Respondent argues that the interpretation proposed by the Claimant of Article 3, No. 1 of the IUC Code is contrary to the Constitution of the Portuguese Republic to the extent that it devalues the registral reality in the face of an "informal reality", violating the principle of confidence and legal certainty, the principle of efficiency of the tax system and the principle of proportionality.

It is not apparent, however, with all due respect, how the position that argues that Article 3, No. 1 of the IUC Code, establishes a rebuttable presumption, could call into question the principles of confidence and legal certainty, since the same impose duties and restrictions on the exercise of legal-public authority.

Effectively, as noted by Jorge Bacelar Gouveia, the principle of legal certainty requires "the publicity of acts of public authority, as well as the clarity and determinability of sources of law" and the principle of protection of confidence requires "that the normative framework in force does not change in a way that frustrates the expectations generated in citizens regarding its continuity, with the prohibition of an intolerable retroactivity of laws, as well as the necessity of its alteration in keeping with expectations that are constitutionally protected" (Handbook of Constitutional Law, Almedina, 4th Ed., Vol. II, p. 821).

For his part, Jorge Reis Novais writes, with respect to these principles, that "Without the possibility, legally guaranteed, of being able to calculate and foresee the possible developments of the action of the powers of the action of public authorities susceptible of having repercussions on his legal sphere, the individual would convert himself, ultimately in violation of the fundamental principle of human dignity, into mere object of state happenings." (The Structural Constitutional Principles of the Portuguese Republic, Coimbra Publisher, 2004, p. 261-262)

Also, the principle of proportionality imposes duties and restrictions on the exercise of legal-public authority. According to Jorge Bacelar Gouveia, the configuration of this principle "rests on an internal material limitation to the exercise of legal-public authority of a discretionary character, containing the excessive effects that may present themselves in the issuance of public authority measures of an ablative character for their respective recipients" (op. cit., pp. 839-840). Also Jorge Reis Novais writes that "(…) this principle is, today, the fundamental reference for the control of the exercise of public powers in a state of law, assuming, particularly in the context of limits on fundamental rights, the role of principal instrument of control of restrictive exercise of individual freedom" (Op. cit. p. 161).

These legal principles thus aim to control and limit the exercise of public authority in relation to individuals. By their very nature, they can be invoked by these against public authority, because it is the interests of individuals, in the face of the exercise of those, that the principles in question aim to protect and not the public authorities in the face of their own exercise, globally considered.

It is, therefore, manifest that the interpretation of the norm sustained by the Claimant and adopted by the first arbitral decision does not violate the principles in question.

On the contrary, additionally it should always be said that such interpretation, beyond not conflicting minimally with the said principles, is in perfect harmony with the principle of equivalence that governs the tax in concretization of the general principle of tax equality.

1. The Respondent further invoked that the rule in question, in the interpretation sustained by the Claimant, would violate the principle of efficiency of the tax system.

It appears to us that the Respondent has in mind the idea of efficiency in tax law, related to administrative efficiency. It must be observed, however, that the relevance of a principle in the solution of a concrete case should not operate in isolation, but in conjunction and joint weighing with other principles, and, in the sequel of what was said above, regarding the principles of equality and equivalence, the idea of efficiency is not sufficient to postpone the possibility of the law allowing the dispelling of the presumption resulting from motor vehicle registration. Note, moreover, as results from Article 73 of the General Tax Law, "The presumptions established in norms of tax incidence always admit proof to the contrary."

Furthermore, the rebuttable presumption itself had already been established with a view to administrative efficiency and practicality in tax management.

Thus, it is concluded that the interpretation proposed by the Claimant of Article 3, No. 1 of the IUC Code, in the wording at the time of the facts, is not contrary to the Constitution of the Portuguese Republic, which is why the allegation of unconstitutionality raised by the Respondent is unfounded.

1. Having the arbitral decision rendered on 10.07.2017 been annulled by the Central Administrative Court-South, by omission of ruling on this issue, and having also been determined "accordingly, and for appreciation of the omitted unconstitutionality issue, the remission of the file to the CAAD", having such issue been appreciated and decided in the present arbitral decision in the sense of the constitutionality of the norm applied by the previous arbitral decision, this must, with the nullity decreed by the TCA-South cured, be restored to the legal order.

2. DECISION

Thus, with the grounds of the present decision and of the first arbitral decision, which are hereby adopted and to which reference is made, this Arbitral Court decides:

— To uphold the claim for declaration of illegality of the IUC assessment, relating to the years: 2010, 2011 and 2012, concerning the motor vehicles identified in this process, consequently annulling the corresponding tax acts;

— To uphold the claim for condemnation of the Tax Administration to reimburse the amount unduly paid, in the sum of €9,317.28 (nine thousand, three hundred and seventeen euros and twenty-eight cents), condemning the Tax and Customs Authority to effect these payments;

— The AT must also effect payment corresponding to the amount due as indemnitary interest, on the tax paid relating to the annulled assessments, pursuant to Article 43, No. 1 of the LGT, by virtue of Article 61, No. 2 of the CPPT (Wording of Law No. 55-A/2010, of 31-12, entering into force on 2011-01-01.

CASE VALUE: In accordance with the provisions of Articles 306, No. 2 of the CPC and 97-A, No. 1 of the CPPT and Article 3, No. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the case value is set at € 9,317.28.

COSTS: In accordance with Article 22, No. 4 of the RJAT, the amount of costs is set at € 918.00, pursuant to Table I, annexed to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority.

Notification to be given.

Lisbon, 4.08.2020

The Arbitrator

Marcolino Pisão Pedreiro

ARBITRAL DECISION

1 REPORT

1.1 — A..., S.A., NIPC:…, Claimant in the tax procedure, above and marginally referenced, hereinafter, called "Claimant", came, invoking the provisions of Articles 10, Nos. 1 and 2 of Decree-Law No. 10/2011, of 20 January (hereinafter RJAT), Article 99 of the Tax Procedure and Process Code (CPPT) and Article 95, No. 1 of the General Tax Law (LGT), to request the establishment of a Single Arbitral Court, which constitutes a request for impugnation of tax acts of assessment of the Single Circulation Tax, described in the table comprised in Annex A, which forms an integral part of this Request, as follows:

— The annulment of 83 assessment acts of the Single Circulation Tax (hereinafter designated as IUC), carried out by the Tax and Customs Authority (hereinafter AT), relating to 76 vehicles, for the years: 2010, 2011 and 2012, identified in Annex A, which forms an integral part of the Request for Tax Arbitral Ruling;

— The request for reimbursement of the total amount of € 9,317.28, which includes the corresponding compensatory interest, unduly paid by the Claimant (also itemized in the aforesaid Annex A);

— The Claimant considers that it also has the right to indemnitary interest provided for in Articles 43 of the LGT and Article 61 of the CPPT, both by virtue of Article 29 of the RJAT.

1.2 Pursuant to the provisions of Article 6, No. 2, paragraph a) and Article 11, No. 1, paragraph b) of Decree-Law No. 10/2011, of 20 January, in the wording introduced by Article 228 of Law No. 66-B/2012, of 31 December, the Deontological Council appointed Maria de Fátima Alves as sole arbitrator, who communicated acceptance of the position within the applicable time limit:

— The Arbitral Court was constituted on 2017-05-02, as provided in Article 11, No. 1, paragraph c) of Decree-Law No. 10/2011, of 20 January, in the wording introduced by Article 228 of Law 66-B/2012, of 31 December.

— The Response of the AT was presented on 2017-05-25.

1.3 The Claimant, in the substantiation of its request for arbitral ruling, states, in summary, the following:

— The self-assessments impugned in the case were carried out by the Claimant and fully paid, despite disagreeing with them (see docs. Nos. 1 to 76, better identified in Annex A, filed in the case);

— For which reason the Claimant filed a request for ex officio review, which was denied;

— As a consequence of that denial, the Claimant filed an Administrative Appeal, also denied, as per Annex B, filed in the case;

— Being based, as foundation, on the same legal-tax understanding: the fact of not being responsible for payment of the respective IUC, in light of Article 3, No. 2 of the IUC Code;

— Since the Claimant is a Financial Institution, which also dedicates itself, within the scope of its activity, to financing the motor vehicle sector;

— Celebrating, among others, financial lease or leasing contracts;

— Such contracts, which, in this case, were entered into with the respective clients, having these, however, chosen the type of motor vehicle they wished to acquire, including type, brand and price;

— Which consequently, subsequently, proceeded to deliver the said vehicles to the respective clients who assume, at that moment, the status of lessees with the conclusion of the lease contract by means of monthly pecuniary payments (see documents Nos. 77 to 152, comprised in column D, of Annex A, filed in the case);

— Such lease, which was already in effect in each month of the year in which the obligation to pay the respective IUC came due, since each lessee had already assumed through the transfer of the leased asset, as results from the sales invoices, following the termination of the financial lease contracts, filed as documents Nos.: 77 to 152 and, identified, in Annex A, filed in the case;

— Which is why on the dates to which the tax events of the disputed assessments relate, the Claimant was no longer the owner of the said vehicles;

— Unable, therefore, for the Claimant to assume the status of liable person for the IUC assessed;

— It reinforces the fact of not being liable person on the date of the exigibility of the tax, as can be seen from the documents of the contracts and sales invoices that title the sale of the respective vehicles, comprised in the aforesaid documents referred to in Annex A, relating to each of the disputed vehicles and, which form an integral part of the case.

— Such invoices, which are sent, automatically, upon their issuance, to the respective clients, thus conveying the ownership of the vehicles to their rightful owners.

— Situation which also occurs within the context of lease contracts, as per registration with the Commercial Registry Conservatory (CRC), by which the responsibility of the Claimant for payment of the respective IUC is thus dispelled, pursuant to Article 3, No. 2 of the IUC Code, since the lessees are the owners of the vehicles by virtue of the lease contract;

— The Claimant places in relevance the fact of being a financial lessor of the respective motor vehicles and, given the typology of the said contracts never conducted by itself or in its own interest, any of the leased vehicles comprised in the said columns D and M, identified in Annex A, filed in the case;

— Considers, therefore, the Claimant, that in light of the facts, contextually described, the imputation of the IUC should only be applied to those who cause damage to the road network and environment, as provided for in the principle of equivalence, Article 1 of the IUC Code, which establishes the principle of the polluter/payer;

— /polluter, see Sérgio Vasques, in "The Principle of Equivalence as a Criterion of Tax Equality", Almedina, 2008, p. 312 et seq.

— From which it follows that: the prejudice that accrues to the environment, arising from the use of motor vehicles, should be borne by the actual polluters, since they are the agents using them, who operate them in their own interest (see Sérgio Vasques, "Reform of Motor Vehicle Taxation: problems and perspectives, Taxation, No. 10, 2002, p. 60, 79 et seq".

— Which reinforces the position of the Claimant, in light of the assessments in question, since it was never the actual polluter and causer of environmental damage, which is why it merely limited itself to leasing the disputed automobiles and selling them to the respective lessees or to third parties, when the said contracts had already terminated, see docs. Nos. 77 to 152, as per columns D and M, which form part of Annex A, filed in the case;

— Given the contextually described, on the date of the tax events, the Claimant could not be considered liable person for the tax, a fact that bars any subjective responsibility for its payment.

1.4 The Respondent, Tax and Customs Authority (hereinafter designated as AT), presented a Response, from which it is taken that the disputed tax acts do not suffer from any defect of violation of Law, arguing for the unfoundedness of the request and for the maintenance of the assessment acts challenged, arguing, summarily, the following:

— It considers that the Claimant makes an incorrect interpretation and application of the legal norms, subsumable to the case at issue;

— Because the Claimant does not heed the systematic element, thus violating the unity of the regime established throughout the IUC Code and, "more broadly, throughout the entire tax law system, ignoring the ratio of the regime of Article 3 of the IUC Code";

— It thus bases its position on the fact of not considering any legal presumption in Article 3 of the IUC Code;

— Since it considers it "a clear choice of legislative policy adopted by the legislator", understanding that the "legislator considers as owners those who, as such, appear in motor vehicle registration";

— Because, albeit the fact that the Claimant "alleges having entered into financial lease contracts, it is responsible for the IUC", not therefore considering Article 3, No. 2 of the IUC Code, thus rejecting what is set forth in Article 73 of the LGT,

— which describes that "the presumptions established in norms of tax incidence always admit proof to the contrary";

— From all of its allegations, substantiated in the pleading of the Response, it is taken that in the case under analysis, the IUC is only due by persons who appear in motor vehicle registration;

— However, it must be considered that in the case at issue, one is in the presence of a specific typology of the circulation of vehicles in public space, which embodies the road and environmental damage caused by the respective users/polluters, who should be responsible, according to the principle of equivalence provided for in Article 1 of the IUC Code (which will be developed in the appropriate chapter);

— Facts which call into question the exigibility of the single circulation tax on vehicles;

— The Respondent also challenges the truthfulness of the evidential means, lease contracts and sales invoices, corresponding to the respective vehicles;

— Since it does not consider them "apt to prove the conclusion of a bilateral contract";

— Now, perhaps by oversight, the Respondent does not consider that in this specific case, the purchase and sale of vehicle has freedom of form, pursuant to Article 219 of the CC, allowing that the purchase and sale contract may be verbal, although, in the concrete case this does not occur;

— Since as is known, the alteration of the title of the right of property, acquired in verbal form, of purchase and sale of vehicles "is relevant for purposes of the IUC, from the date of transmission of the respective vehicles, as provided for in Article 17-A of the IUC Code;

— The Respondent argues that "the tax legislator, in Articles 3 and 6 of the IUC Code, clearly established the premises as to the tax event giving rise to the tax, as well as its exigibility, stating unequivocally that such event is constituted by the ownership of the vehicle, as attested by registration or registration in national territory";

— It is therefore irrelevant that the Claimant transmitted, with the "Leasing" contract and the sale, the ownership of the motor vehicles to "third parties";

— The Respondent, in light of the facts, summarily set out:

— Does not take into account the principle of "equivalence", provided for in Article 1 of the IUC Code, corollary of the principle of the polluter/payer, grounded in Article 66, No. 2 of the CRP and in Doctrine, aforesaid in point 1.3 and which will be better clarified (further ahead) in the present Arbitral Decision;

— The evidential means, established in the contracts and in the purchase and sale invoices do not bear relevance, when it has them at its disposal ex officio, particularly within the context of corporate income tax, since the Claimant necessarily has organized books, which allow assessment of the revenues and losses of its financial activity;

— Beyond which, there exists the registration of the respective financial lease contracts with the Commercial Registry Conservatory (CRC);

1.5 The meeting provided for in Article 18 of the RJAT was dispensed with, as it concerns issues already sufficiently debated, both in the case and in Jurisprudence, this Arbitral Tax Court understanding it unnecessary to hold final allegations, dispensing with the questioning of witnesses.

1.6 This Court having set the date 2017-07-10 for the Final Decision.

2 ISSUES TO BE DECIDED

2.1 Given the foregoing in the previous numbers, relating to the exposition of the parties and the arguments presented, the main issues to be decided are the following:

— The allegation made by the Claimant relating to the material illegality of the assessment acts and the illegality of the acts of compensatory interest, for the years 2010, 2011 and 2012, concerning the IUC on the vehicles aforesaid in the PI;

— The incorrect interpretation and application of the norms of subjective incidence of the single circulation tax levied and collected, which constitutes the central issue to be decided in this process.

— The legal value of the registration of motor vehicles.

3 GROUNDS OF FACT

3.1 On the matter of fact, relevant for the decision to be rendered, this Court takes as established, in light of the elements existing in the file, the following facts:

— The Claimant presented evidentiary elements consisting of documents Nos.; 1 to 76, 77 to 152, consisting of tables D and M, of Annex A, filed in the case, which are hereby fully reproduced for all legal purposes;

— Considering also the doctrine and Jurisprudence presented by it, excluding the Request of the Claimant, presented to this Court, on 2017-07-04, as not considered necessary for the appreciation of the merit of the present cause.

— The Respondent in its Response, based its defense on: legal descriptions, doctrines and jurisprudence, which were duly analyzed.

Excepting, however, the Requests presented to this Court, respectively, on 22-06-2017 and 07-07-2017, as documentary evidence, which was not filed in the case by this Court, pursuant to Article 6, No. 1 of the CPC, by virtue of Article 29 of the RJAT, having understood, upon analysis, that the same did not bring new facts for the proper decision of the present cause.

3.1.1 SUBSTANTIATION OF THE PROVEN FACTS

— The facts taken as proven are based on the documents attached to the request for arbitral ruling of the aforesaid PI and, in the Response of the Respondent, all, filed in the case which are hereby fully reproduced for all legal purposes.

3.1.2 FACTS NOT PROVEN

— There are no facts taken as not proven, given that all facts considered relevant for the appreciation of the merit of the cause were proven.

4 GROUNDS OF LAW

4.1 The Court is materially competent and is regularly constituted, pursuant to Articles 2, No. 1, paragraph a), 5, No. 2, paragraph a), 6, No. 1, 10, No. 1, paragraph a) and No. 2 of the RJAT:

— The parties enjoy personality and legal capacity and are legitimate, by virtue of Articles 4 and 10, No. 2, of the RJAT and Article No. 1 of Ordinance No. 112-A/2011, of 22 March;

— The process does not suffer from nullities.

4.2 The claim, object of the present process, consists of the declaration of annulment of the assessment acts of the IUC, corresponding to the motor vehicles better identified in the case;

4.2.1 Condemnation of the AT to reimburse the amount of the tax relating to such assessments in the total amount of € 9,317.28;

4.2.2 Condemnation of the AT to payment of indemnitary interest on the same amount.

4.3 According to the understanding of the AT, it is sufficient that in the registration the vehicle appears as property of a certain person, for that person to be the liable person for the tax obligation.

4.4 The matter of fact is fixed, as appears in No. 3.1 above, the task now being to determine the Law applicable to the underlying facts, in accordance with the issues to be decided, identified in No. 2.1 above, it being certain that the central issue in question in the present case, with respect to which there are absolutely opposing understandings between the Claimant and the AT, consists in knowing whether Article 3, Nos. 1 and 2 of the IUC Code relating to the subjective incidence of the single circulation tax establishes or not a rebuttable presumption.

4.5 All considered and, taking into account, on one hand, the positions of the parties in confrontation, mentioned in points 1.3 and 1.4 above, and considering, on the other hand, that the central issue to be decided is that of knowing whether Article 3, Nos. 1 and 2 of the IUC Code establishes or not a legal presumption of tax incidence, it is incumbent upon this Court, in this context, to appreciate and render decision.

5 ISSUE OF THE INCORRECT INTERPRETATION AND APPLICATION OF THE NORM OF SUBJECTIVE INCIDENCE OF THE IUC

5.1 Considering it to be universally agreed that in the interpretation of tax laws the general principles of interpretation fully apply, which will be, only and naturally, limited by the exceptions and particularities dictated by the very law subject to interpretation. This is an understanding that has come to merit adoption in the General Tax Laws of other countries and which came to have bearing in Article 11 of our General Tax Law, which moreover, has been frequently underlined by jurisprudence.

It is consensually accepted that with a view to the apprehension of the meaning of the law, interpretation is aided, a priori, in reconstructing the legislative thought through the words of the law, which means seeking its literal sense, valuing it and assessing it in light of other criteria, with the intervention of the designated elements of a logical, rational or teleological nature and of a systematic order:

— With regard to the interpretation of tax law, the jurisprudence must be considered, namely, the Judgments of the STA of 05-09-2012, case No. 0314/12, of 06-02-2013, case 01000/12, available at www.dgsi.pt, the importance of the provision of Article 9 of the Civil Code (CC), as a fundamental element of legal hermeneutics;

— Article 3, No. 1 of the IUC Code provides that "The liable persons for the tax are the owners of the vehicles, considering as such the natural or legal persons, of public or private law, in whose name the same are registered";

— The formulation used in the aforesaid article resorts to the expression "considering" which raises the question of whether to such expression can be attributed a presumptive sense, equating itself to the expression "presuming", these expressions being frequently used with equivalent senses;

— As taught by Jorge Lopes de Sousa, in Tax Procedure and Process Code, Annotated and Commented, volume I, 6th Edition, Área Publisher, SA, Lisbon 2011, p. 589, that in the matter of tax incidence, presumptions can be revealed by the expression "it is presumed" or by similar expression, mentioning therein diverse examples of such presumptions, referring to that contained in Article 40, No. 1 of the CIRS, in which the expression " it is presumed" is used and that contained in Article 46, No. 2, of the same Code, in which use is made of the expression "considers", as an expression with an effect similar to that and, embodying, equally, a presumption;

— In the legal formulation set out in Article 3, No. 1 of the IUC Code, in which a presumption was established, revealed by the expression "considering", of similar meaning and equivalent value to the expression "presuming", in use since the creation of the tax in question;

— The use of the expression "considering" was aimed at nothing more than the establishment of a more marked and clear approximation between the liable person for the IUC and the actual owner of the vehicle, which is in harmony with the reinforcement given to the ownership of the vehicle, which came to constitute the tax event of the tax, pursuant to Article 6 of the IUC Code;

— The relevance and interest of the presumption in question, which historically was revealed by means of the expression "presuming" and which now resorts to the expression "considering", resides in the truth and justice which, by that means, is conferred to tax relations and, which embody fundamental tax values, allowing the taxation of the real and actual owner and not that which, by circumstances of diverse nature, sometimes is nothing more than an apparent and false owner. If the case were not thus considered, not admitting and valuing the presentation of evidentiary elements intended to demonstrate that the actual owner is, after all, a person different from the one appearing in the registration and, which initially, and in principle, was supposed to be the true owner, those values would be objectively sidelined.

5.2 There is also to be considered the principle of equivalence, inscribed in Article 1 of the IUC Code, which has underlying it the principle of the polluter-payer and, concretizes the idea inscribed therein that whoever pollutes must, for that reason, pay (see Fernanda Alves and Nuno Vitorino, "The Balance of the Reform of Motor Vehicle Taxation" p. 42 et seq; Sérgio Vasques, in " The Principle of Equivalence as a Criterion of Tax Equality", Almedina, 2008, p. 312 et seq, and, also, the same author "Reform of Motor Vehicle Taxation: problems and perspectives", Taxation, No. 10, 2002, p. 79 et seq). The said principle has constitutional grounding, to the extent that it represents a corollary of what is provided for in Article 66, No. 2, paragraph h) of the Constitution, having, also, grounding in community law, whether at the level of primary law, Article 130-R of the Maastricht Treaty (Treaty of the European Union, of 07-02-1992), where the aforesaid principle came to feature as support of Community Policy in the environmental domain and which aims to make responsible those who contribute to the prejudice that accrues to the community, arising from the use of motor vehicles, should be borne by their owners-users, as costs which only they should bear.

5.3 Heeding the facts above described, it is important to note that the already mentioned elements of interpretation, whether those related to literal interpretation, supported by the words legally used, whether those respecting logical elements of interpretation, of a historical nature or of a rational order, point, all of them, in the sense that the expression "considering" has a sense equivalent to the expression "presuming", and should thus be understood that what is provided for in Article 3, No. 1 of the IUC Code establishes a legal presumption which, given Article 73 of the LGT, where it is established that "The presumptions established in norms of tax incidence always admit proof to the contrary", will necessarily be rebuttable, which means that the liable persons are, in principle, the persons in whose name such vehicles are registered. They will, thus, be those persons, identified in such conditions to whom the AT must necessarily direct itself;

— But it will, in principle, be the case that in the context of the mandatory prior hearing, as provided for in Article 60, No. 1, paragraph a) of the LGT, the tax relationship may be reconfigured, validating the initially identified liable person or redirecting the procedure toward that which is, after all, the true and actual liable person for the tax in question.

— The taxpayer has the right to be heard, by means of prior hearing (José Manuel Santos Botelho, Américo Pires Esteves and José Cândido de Pinho, in Tax Procedure Code, Annotated and Commented, 4th edition, Almedina, 2000, annotation 8 of Article 100).

— The prior hearing which, naturally, must be concretized at a moment immediately preceding the assessment procedure, corresponds to the seat and proper moment for, with certainty and security to identify the liable person for the IUC.

6 ON THE LEGAL VALUE OF REGISTRATION

6.1 With respect to the legal value of registration, it is important to note what is established in Article 1, No. 1 of Decree-Law No. 54/75, of 12 February (amended various times, the last by Law No. 39/2008, of 11 August), when it states that "the registration of motor vehicles has essentially the purpose of giving publicity to the legal situation of motor vehicles and their trailers, with a view to the security of legal commerce":

— Article 7 of the Predial Registration Code (CRP), applicable, suppletively, to motor vehicle registration, by virtue of Article 29 of the CRA, provides that

— "Definitive registration constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which the registration defines it";

— Definitive registration is nothing more than a rebuttable presumption, admitting, therefore, counterproof, as follows from law and jurisprudence has been noting, being able to see, among others, the Judgments of the STJ No. 03B4369 of 19-02-2004 and No. 07B4528, of 2008-01-29, available at: www.dgsi.pt;

— Therefore, the function legally reserved to registration is on one hand that of publicizing the legal situation of assets, in the case in question, of vehicles and, on the other hand, allows us to presume that the right exists over those vehicles and that the same belongs to the holder, as such registered in the registration, does not have a constitutive nature of the right of ownership, but only declaratory, hence the registration does not constitute a condition of validity of the transmission of the vehicle from the seller to the buyer;

— The acquirers of vehicles become owners of those same vehicles by way of the conclusion of the corresponding purchase and sale contracts, with registration or without it;

— In this context it is worth recalling that, in light of what is provided for in Article 408, No. 1 of the CC, the transfer of real rights over things, in the case at issue, motor vehicles, is determined by mere effect of the contract, it being the case pursuant to what is provided for in paragraph a) of Article 879 of the CC, among the essential effects of the contract of purchase and sale, stands out the transmission of the thing;

— Given the foregoing, it becomes clear that the legislative thought points in the sense that what is provided for in Article 3, No. 1 of the IUC Code, establishes a presumption "juris tantum, consequently rebuttable, allowing, thus, that the person, who in the registration is registered as owner of the vehicle, may present evidentiary elements intended to demonstrate that such ownership is inserted in the legal sphere of another person, to whom the ownership was transferred;

— Which with respect to the disputed facts, exist, in the case documents, which were proven by the Claimant, both in the context of prior hearing, and in the request for arbitral ruling, configuring, therefore, the certainty that it belongs to the respective owners/users of the vehicles, the subjective responsibility for the IUCs, pursuant to Article 3, Nos. 1 and 2 of the IUC Code.

7 THE PRESUMPTION OF ARTICLE 3 OF THE IUC CODE AND THE DATE ON WHICH THE IUC IS PAYABLE

7.1 DATE ON WHICH THE IUC IS PAYABLE

— The IUC is a tax of periodic taxation, whose periodicity corresponds to the year that begins at the time of registration or in each of its anniversaries, as provided for in Article 4, Nos. 1 and 2 of the IUC Code;

— It is payable pursuant to Article 6, No. 3 of the said Code;

— It should be noted that, as to the assessment of the IUC levied on the Claimant over the vehicles above-referenced, for the years 2010, 2011 and 2013, it must be considered that at the moment of the tax events, the vehicles in question were in the legal sphere of the owners/users of the said automobiles, because they hold the use and enjoyment of the said vehicles, which is why pursuant to Article 3, Nos. 1 and 2 of the IUC Code, they must be made responsible for payment of the obligation of the said tax, see docs. Nos. 77 to 156, comprised in columns D and M, in Annex A, filed in the case.

7.1.1 As to the burden of proof, Article 342, No. 1 of the CC provides "it is incumbent upon him who invokes a right to prove the facts constitutive of the right alleged";

7.1.2 Also Article 346 of the CC (counterproof) determines that "to the proof that is produced by the party upon whom the burden of proof falls, the opposing party may put up counterproof with respect to the same facts, intended to render them doubtful; if it succeeds, the issue is decided against the part burdened with proof." (As stated by Anselmo de Castro, A., 1982, ED. Almedina Coimbra, "Law of Civil Procedural Declaration", III, p. 163, "when one of the parts bears the burden of proof, it suffices to the opposing party to put up counterproof, which is proof intended to render doubtful the facts alleged by the first".

Thus, in the case before us, what the Claimant must prove, in order to rebut the presumption that results either from Article 3 of the IUC Code or from the very Motor Vehicle Registration, is that it was not the owner of the vehicles in question during the period to which the disputed assessments relate. What it proposes to prove, as results from the case, is that the ownership of the vehicles did not belong to it in the periods to which the assessments relate. Presenting, thus, the sales invoices and the lease contracts of the vehicles comprised in the documents 77 to 152, identified in columns D and M, comprised in Annex A, filed in the case, which are hereby fully reproduced for all legal purposes.

7.2 REBUTTAL OF THE PRESUMPTION

— The Claimant, as referred to in 3.1., with respect to the proven facts, alleged, with the purpose of dispelling the presumption, not being the liable person for the tax, at the time of the occurrence of the tax events, offering for that purpose the following documents;

— Sales invoices to the respective lessees and to third parties and, lease contracts (see documents filed in the case with Nos., 77 to 152, identified in D and M, comprising ANNEX A, filed in the case);

— Now, those documents enjoy the presumption of truthfulness provided for in Article 75, No. 1 of the LGT. It follows from this that on the date when the IUC was payable, those who held ownership of the motor vehicles were the legitimate owners and users and not the Claimant, due to the typology of the financial lease contract (leasing) and respective sales.

8 OTHER ISSUES RELATING TO THE LEGALITY OF THE ASSESSMENT ACTS

— With regard to the existence of other issues relating to the legality of the assessment acts, taking into account that inherent in the establishment of an order of knowledge of defects, as provided for in Article 124 of the CPPT, if the request for arbitral ruling is based on defects that prevent the renewal of the impugned assessments, it becomes prejudicial, because useless, the knowledge of other defects, which is why it does not seem necessary to rule on the other issues raised.

9 REIMBURSEMENT OF THE TOTAL AMOUNT PAID

— Pursuant to Article 24, No. 1, paragraph b) of the RJAT and, in accordance with what is established therein, the arbitral decision on the merit of the claim of which there is no recourse or impugnation, binds the tax administration from the end of the time period provided for recourse or impugnation, with the latter having to, in the exact terms of the success of the arbitral decision in favor of the liable person and until the end of the time period provided for the execution of the sentences of tax judicial courts "Restore the situation that would exist if the tax act object of the arbitral decision had not been practiced, adopting the acts and operations necessary for that purpose"

— These are legal commands that are in total harmony with what is provided for in Article 100 of the LGT, applicable to the case, by virtue of what is provided for in Article 29, No. 1, paragraph a) of the RJAT, in which it is established that " The tax administration is obliged, in case of total or partial success of claims or administrative appeals or of judicial proceedings in favor of the liable person, to the immediate and full reconstitution of the situation that would exist if the illegality had not been committed, corresponding to the payment of indemnitary interest, pursuant to the terms and conditions provided for in law";

— The case comprised in the present file raises the manifest application of the mentioned norms, since as a consequence of the illegality of the assessment acts, referenced in this process, there will, by force of those norms, have to be reimbursement of the amounts paid, whether by title of the tax paid (see docs. Nos. 1 to 76, comprised in Annex A), whether of the corresponding compensatory interest, as a form of achieving the reconstitution of the situation that would exist if the illegality had not been committed.

10 OF THE RIGHT TO INDEMNITARY INTEREST

— The declaration of illegality and consequent annulment of an administrative act gives to the recipient of the act the right to reintegration of the situation in which it would have found itself before the execution of the annulled act.

— In the context of tax assessment, its annulment gives to the liable person the right to restitution of the tax paid, increased by the corresponding compensatory interest and, as a rule, the right to indemnitary interest, pursuant to Article 43, No. 1 of the LGT and Article 61 of the CPPT.

— Thus the Claimant has the right to indemnitary interest on the amount of tax paid relating to the annulled assessments.

11 DECISION

Given the foregoing, this Arbitral Court decides:

— To uphold the claim for declaration of illegality of the IUC assessment, relating to the years: 2010, 2011 and 2012, concerning the motor vehicles identified in this process, consequently annulling the corresponding tax acts;

— To uphold the claim for condemnation of the Tax Administration to reimburse the amount unduly paid, in the sum of €9,317.28 (nine thousand, three hundred and seventeen euros and twenty-eight cents), condemning the Tax and Customs Authority to effect these payments;

— The AT must also effect payment corresponding to the amount due as indemnitary interest, on the tax paid relating to the annulled assessments, pursuant to Article 43, No. 1 of the LGT, by virtue of Article 61, No. 2 of the CPPT (Wording of Law No. 55-A/2010, of 31-12, entering into force on 2011-01-01.

CASE VALUE: In accordance with the provisions of Articles 306, No. 2 of the CPC and 97-A, No. 1 of the CPPT and Article 3, No. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the case value is set at € 9,317.28.

COSTS: In accordance with Article 22, No. 4 of the RJAT, the amount of costs is set at € 918.00, pursuant to Table I, annexed to the Regulation of Costs in Tax Arbitration Proceedings, to be borne by the Tax and Customs Authority.

Notification to be given to the parties.

Lisbon, 2017-07-10

The Arbitrator

Maria de Fátima Alves

(the text of the present decision was produced by computer, pursuant to Article 131, No. 5 of the Code of Civil Procedure, applicable by reference of Article 29, No. 1, paragraph e) of Decree-Law 10/2011, of 20 January (RJAT), its wording governed by current orthography)