IUC Vehicle Tax Liquidation Challenged at CAAD Arbitral Tribunal – Process 165/2015-T

ARBITRATION DECISION

I. - REPORT

A - PARTIES

A..., LDA, tax identification number..., with registered office at Avenue..., no...., ...-... Lisbon, hereinafter referred to as the "Claimant", filed a petition for constitution of an arbitral tribunal, pursuant to the provisions of subparagraph a) of paragraph 1 of article 2 and articles 10 et seq. of Decree-Law no. 10/2011, of 20 January (Legal Framework for Tax Arbitration, hereinafter referred to as "RJAT"), with a view to the review of the following dispute opposing it to the Tax and Customs Authority (which succeeded, among others, the Directorate-General of Taxes) hereinafter referred to as the "Respondent" or "TA".

B – PETITION

1 - The petition for constitution of the arbitral tribunal was accepted by the Honourable President of CAAD on 13 March 2015 and notified to the TA on 13 March 2015.

2 - The Claimant did not proceed to appoint an arbitrator, whereby, pursuant to the provisions of paragraph 1 of article 6 of the RJAT, the undersigned, on 06-05-2015, was appointed by the Ethics Council of the Administrative Arbitration Centre as arbitrator of a Sole Arbitral Tribunal, having accepted in accordance with the legally prescribed terms.

3 - The Parties were, on 06-05-2015, duly notified of such appointment, having manifested no wish to challenge it, in accordance with the combined provisions of subparagraphs a) and b) of paragraph 1 of article 11 and articles 6 and 7 of the Code of Ethics.

4 - In these circumstances, in accordance with the provisions of subparagraph c) of paragraph 1 of article 11 of Decree-Law no. 10/2011, of 20 January, as amended by article 228 of Law no. 66-B/2012, of 31 December, the arbitral tribunal was duly constituted on 26-05-2015.

5 - On 7 December 2015, the Arbitral Tribunal considered dispensable the holding of the meeting provided for in article 18 of the RJAT, taking into account, both the orders issued to this effect in the Case Management System, and the fact that the dispute was concerned, fundamentally, with legal matters, and the will of the parties to dispense with the said meeting.

6 - The Claimant hereby requests that the present Arbitral Tribunal:

a) - Declare the illegality and consequent annulment, both of the acts of assessment relating to the Unique Motor Vehicle Tax (hereinafter referred to as "IUC"), and of the acts of assessment of compensatory interest (CI) that are associated therewith, recorded in the assessment notifications referenced in the proceedings, relating to the years 2013 and 2014, as identified in the case file, concerning the vehicles, equally identified in the case file, which are hereby deemed to be entirely incorporated herein;

b) - Condemn the TA to refund the sum of €4,293.63, corresponding to the total amount paid by way of IUC and CI, relating to the aforesaid years and vehicles.

c) - Condemn the Tax and Customs Authority to payment of indemnity interest for payment of the IUC and CI, wrongfully assessed and paid;

C - GROUNDS OF CLAIM

7 - The Claimant, in the substantiation of its request for arbitral review, affirms, in summary, the following:

8 - That it is a commercial company that engages in the activity of motor vehicle rental and the provision of related services, proceeding, in that framework, to the conclusion of vehicle rental contracts.

9 - That the vehicles identified in the petition for arbitral review were sold by it to its clients, either as used vehicles, or, in other cases, as salvage, during the term of the respective rental contracts, on dates prior to the date of the obligation to assess IUC.

10 - That, during the term of those rental contracts, it occurred, in fact, that some of the vehicles that were the subject of contract, as identified in the case file, were damaged as a result of accidents, having, in those circumstances, been deemed by the insurers as Total Loss.

11 - That, in relation to those vehicles, it received from the Insurers the communications correlated with the vehicles in question and with the corresponding indemnification for their Total Loss, at which time it proceeded to deliver, to the Insurers, all legal documentation with a view to cancellation of the corresponding registrations.

12 - That in 2014 it was notified by the Tax Administration to exercise the right of prior hearing, in relation to the assessments of Unique Motor Vehicle Tax (IUC), relating to the years 2013 and 2014, in relation to the forty-six vehicles identified in the case file.

13 - That, following such procedure, it was notified of the aforementioned assessments, in the total amount of €4,239.63, having, although convinced of their illegality, duly proceeded to payment of the Unique Motor Vehicle Tax and the Compensatory Interest assessed.

14 - That the ground for the said assessments relates to the fact that the vehicles in question were registered in its name, whereby, in light of the provisions of paragraph 1 of article 3 of the CIUC, the TA considered the Claimant as proprietor of the mentioned vehicles and, as such, the passive subject of the corresponding IUC.

15 - That article 3 of the CIUC establishes only a rebuttable legal presumption, allowing the person registered in the register as proprietor of the vehicle to proceed to demonstrate that he alienated the vehicles in question on a date prior to the occurrence of the taxable event of the tax in the years 2013 and 2014, in which circumstance the Claimant ceases to be considered as the passive subject of the tax.

16 - That the legal presumption established in paragraph 1 of article 3 of the CIUC is necessarily rebuttable, given that the presumptions enshrined in tax norms always admit proof to the contrary, in accordance with the provisions of article 73 of the General Tax Code.

17 - That the transfer of ownership of the vehicles is effected by mere effect of the contract, in accordance with articles 408 and 874 of the Civil Code, the registration of their ownership being no more than a presumption that the right exists and belongs to the registered holder, which being rebuttable admits proof to the contrary.

18 - That the ownership of the vehicles in question in the case file was transferred to its clients by mere effect of the respective purchase and sale contracts, the registration thereof not having constitutive character.

19 - That, as proof of the alienation of the vehicles in question, it attached to the case file, not only copies of the invoices for sale of the vehicles, but also invoices for sale of the "salvage" and declarations of "Total Loss", as well as communications from the respective insurers, with dates prior to the dates of the occurrence of the taxable events of the tax, in the years 2013 and 2014.

D - RESPONSE OF THE RESPONDENT

20 - The Respondent, Tax and Customs Authority, (hereinafter referred to as "TA"), submitted its Response, on 07-07-2015, in which it considers that the allegations of the Claimant cannot, in any way, proceed, inasmuch as they make a notoriously erroneous interpretation and application of the legal norms applicable to the case, in that, from the outset,

21 - They reflect an understanding that incurs, not only in a skewed reading of the letter of the law, but also in an interpretation that does not heed the systematic element, violating the unity of the regime established throughout the CIUC and, more broadly, throughout the entire legal-fiscal system, and furthermore proceeding from an interpretation that ignores the ratio of the regime established in paragraph 1 of article 3 of the CIUC. (See article 7 of the Response)

22 - It states that the tax legislator, in establishing, in article 3, paragraph 1 of the CIUC, who are the passive subjects of the IUC established expressly and intentionally that these are the proprietors (or in the situations provided for in paragraph 2 the persons mentioned therein), being considered as such the persons in whose name the same are registered. (See article 16 of the Response)

23 - It emphasizes that the legislator did not use the expression "it is presumed" as it could have done, for example, in the following terms: "the passive subjects of the tax are the proprietors of the vehicles, being presumed as such the natural persons or legal entities, of public or private law, in whose name the same are registered". (See article 17 of the Response)

24 - It considers that the wording of article 3 of the CIUC corresponds to a clear option of legislative policy adopted by the legislator, whereby to understand that a presumption is enshrined therein would be unequivocally to effect an interpretation contra legem. (See articles 26 and 28 of the Response)

25 - It states that the aforementioned understanding has already been adopted by the Jurisprudence of our courts, transcribing, to that end, part of the judgment of the Administrative and Tax Court of Penafiel, rendered in Case no. 210/13.OBEPNF. (See article 30 of the Response)

26 - On the systematic element of interpretation, it considers that the solution advocated by the Claimant is intolerable, the understanding advocated thereby finding no legal support. (See article 32 of the Response)

27 - On the ignorance of the "ratio" of the regime, the TA considers that, in light of a teleological interpretation of the regime established throughout the Code of the IUC, the interpretation advocated by the Claimant, to the effect that the passive subject of the IUC is the effective proprietor independently of not appearing in the motor vehicle register the registration of such quality, is manifestly erroneous, in that it is the very ratio of the regime established in the CIUC that constitutes clear proof that what the fiscal legislator intended was to create a tax based on the taxation of the proprietor of the vehicle, as recorded in the motor vehicle register. (See articles 55 and 56 of the Response)

28 - It adds that the CIUC proceeded to a reform of the regime of taxation of vehicles in Portugal, substantially altering the regime of motor vehicle taxation, the passive subjects of the tax becoming the proprietors recorded in the register of property, independently of the circulation of the vehicles on the public way. (See article 58 of the Response)

29 - The interpretation conveyed by the Claimant evidences that there is a violation of the Constitution, in that the same is translated into the violation of the constitutional principles of confidence and legal security, of the efficiency of the tax system and of proportionality. (See article 95 of the Response)

30 - It adds that, both the invoices and the notifications issued by the insurance entities, presented by the Claimant, as proof of sale of the vehicles, are not capable of proving the conclusion of a synallagmatic contract as is the purchase and sale. (See article 75 of the Response)

31 - It also states that the Claimant did not attach copies of the official model for registration of motor vehicle ownership, which it should have done, and that the invoices presented cannot substitute for that document. (See articles 80 and 84 of the Response)

32 - Finally, it states that it was not the Respondent who occasioned the filing of the petition for arbitral review, but rather the Claimant, and that consequently the Claimant should be condemned in arbitral costs "in accordance with article 527, paragraph 1 of the New Code of Civil Procedure as per article 29, paragraph 1-e) of the RJAT", also stressing that the legal prerequisites are not met that would allow it to be considered that the assessment of indemnity interest is illegal, the request for which was formulated by the Claimant.

33 - It considers, to conclude, that, in light of all the arguments set out, the tax acts in issue are valid and legal, and the petition for arbitral review underlying the present proceedings should be judged to be unmeritorious, the contested tax assessment acts remaining in the legal order, and accordingly the Respondent entity is absolved of the petition.

E - ISSUES FOR DECISION

34 - It is necessary, therefore, to consider and decide.

35 - In light of what has been set out, relative to the positions of the Parties and the arguments presented, the main issues to be decided are those of whether:

a) - The norm of subjective scope of application contained in article 3, paragraph 1 of the CIUC, establishes or does not establish a presumption.

b) - What is the legal value of motor vehicle registration in the economy of the CIUC, particularly for purposes of the subjective scope of application of this tax.

c) If, on the date of occurrence of the taxable event, the vehicle had already been previously alienated, although the right of ownership thereof remains registered in the name of its former proprietor, for purposes of the provision of article 3, paragraph 1 of the CIUC, is the passive subject of the IUC the former proprietor or the new proprietor.

F - PROCEDURAL PREREQUISITES

36 - The Arbitral Tribunal is duly constituted and is materially competent, in accordance with subparagraph a) of paragraph 1 of article 2 of Decree-Law no. 10/2011, of 20 January.

37 - The Parties possess legal personality and capacity, are legitimate and are legally represented (see article 4 and paragraph 2 of article 10 of Decree-Law no. 10/2011 and article 1 of Ordinance no. 112/2011, of 22 March).

38 - The proceedings do not suffer from defects that would invalidate them.

39 - Taking into account the information recorded in the administrative proceedings, and the documentary evidence submitted to the case file, it is necessary now to present the factual matter relevant to the understanding of the decision, as is established in the terms mentioned below.

II - REASONING

G - FACTUAL REASONING

40 - With respect to factual matter relevant, the present tribunal finds the following facts to be established:

41 - The Claimant is a commercial company that engages in the activity of motor vehicle rental and the provision of related services, proceeding, in that framework, to the conclusion of vehicle rental contracts.

42 - The forty-six vehicles identified in the petition for arbitral review were sold by the Claimant to its clients, either as used vehicles, in the number of thirty-four, or, in other cases, in the number of twelve, as salvage, all of them on dates prior to the dates of the tax liability of the IUC.

43 - During the term of the rental contracts, it occurred, in fact, that the twelve vehicles mentioned above, as identified in the case file, were damaged, having, in those circumstances, been deemed by the insurers as Total Loss.

44 - In relation to such vehicles, the Claimant received from the Insurers communications correlated with the vehicles in question and with the corresponding indemnification for their Total Loss, at which time it proceeded to deliver, to the Insurers, all legal documentation with a view to cancellation of the corresponding registrations.

45 - The Claimant was notified by the Tax Administration to exercise the right of prior hearing, in relation to the assessments of Unique Motor Vehicle Tax (IUC), relating to the years 2013 and 2014, in relation to the forty-six vehicles identified in the case file.

46 - Following such procedure, the Claimant was notified of the aforementioned assessments, in the total amount of €4,239.63, having proceeded to payment of the Unique Motor Vehicle Tax and the Compensatory Interest assessed.

47 - The ground for the said assessments is based on the fact that the vehicles in question were registered in the name of the Claimant, considering the TA that the same was the proprietor of the mentioned vehicles and, as such, the passive subject of the corresponding IUC.

48 - At the time of the occurrence of the taxable event and its tax liability, with reference to the years 2013 and 2014 and to the vehicles identified in the case file, the Claimant was no longer proprietor of those vehicles.

49 - As proof of the alienation of the vehicles in question, the Claimant attached to the case file, not only copies of the invoices for sale of the vehicles, but also invoices for sale of the "salvage" and declarations of "Total Loss", as well as communications from the respective insurers, with dates prior to the dates of the tax liability of the taxable events, in the years 2013 and 2014.

REASONING OF THE FACTS PROVED

50 - The facts found to be proved are based on the documents mentioned, relative to each of them, inasmuch as their correspondence to reality was not challenged.

FACTS NOT PROVED

51 - With respect to factual matter, with relevance to the decision, the present tribunal considers as not proved the sale, prior to the tax liability of the tax, of the vehicles with license plates ...-...-... and ...-....-....

H - LEGAL REASONING

52 - The factual matter has been established, it now being necessary to proceed to its legal subsumption and determine the Law applicable to the underlying facts, in accordance with the issues for decision set out in paragraph 35.

53 - The decisive question in the present proceedings, in relation to which there are absolutely opposed understandings between the Claimant and the TA is translated into whether the norm of subjective scope of application contained in paragraph 1 of article 3 of the CIUC establishes or does not establish a rebuttable presumption.

54 - The positions of the parties are known. Indeed, for the Claimant article 3 of the CIUC establishes only a rebuttable legal presumption, allowing the person registered in the register as proprietor of the vehicle to proceed to demonstrate that such ownership is inscribed in the legal sphere of another person, to whom such ownership was transferred, who shall thus become the passive subject of the tax.

55 - The Respondent, on its part, considers that the tax legislator in establishing, in article 3, paragraph 1 of the CIUC, who are the passive subjects of the IUC established expressly and intentionally that these are the proprietors (or in the situations provided for in paragraph 2 the persons mentioned therein), being considered as such the persons in whose name the same are registered.

I - INTERPRETATION OF THE NORM OF SUBJECTIVE SCOPE OF APPLICATION CONTAINED IN PARAGRAPH 1 OF ARTICLE 3 OF THE CIUC

56 - On this question, that is, whether the norm of subjective scope of application contained in paragraph 1 of article 3 of the CIUC, establishes a presumption, it should be noted that the jurisprudence established in the CAAD points in the direction that the said norm establishes a legal presumption. Indeed, from the first Decisions, rendered on this matter, in the year 2013, among which may be mentioned, in particular, those rendered in the context of Cases no. 14/2013-T, 26/2013-T and 27/2013-T, up to the most recent ones of which may be indicated the Decisions rendered in the context of Cases no. 69/2015-T and no. 79/2015-T, passing through numerous Decisions rendered in the year 2014, of which are mentioned, by way of mere example, the Decisions rendered in Cases no. 34/2014-T, 120/2014-T and 456/2014 - T, all point to the understanding that paragraph 1 of article 3 of the CIUC establishes a rebuttable legal presumption.

With respect to this, it should also be considered the understanding inscribed in the Judgment of the Central Administrative Court of the South, rendered on 19-03-2015, Case 08300/14, available at: www.dgsi.pt, which endorses the said jurisprudence, in which it is expressly stated that article 3, paragraph 1 of the CIUC "[...] establishes a legal presumption that the holder of motor vehicle registration is its proprietor, and such presumption is rebuttable by virtue of article 73 of the General Tax Code".

This is an understanding in which, wholly, we rely and which is given, without further ado, as valid and applicable in the present case, it not being considered, therefore, necessary other developments, in light of the abundant reasoning contained in the mentioned Decisions and in the said Judgment.

57 - Being this the understanding that, with respect to article 3, paragraph 1 of the CIUC, is wholly adopted by this tribunal, it is nevertheless still important to point out the lack of merit of the position of the Respondent, when, in articles 95 and 96 of its response, it alleges that the interpretation that goes in the direction of understanding that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC violates the constitutional principles of confidence and legal security, of the efficiency of the tax system and of proportionality.

Let us consider, then, that question.

Let us see:

• On the principle of proportionality, it is, first of all, necessary to point out that the same, in that it is materially inherent to the regime of rights, freedoms and guarantees, being inscribed in their defense, aims, in essence, to govern the action of Public Administration in order that its activity in the relationship with individuals is guided by the choice of the most equilibratedly adequate measures to the pursuit of the public interest.

As taught by Prof. Freitas do Amaral, in Course of Administrative Law, Vol II, Almedina, 2002, pp. 127/128 et seq, the "principle of proportionality constitutes a constitutive manifestation of the principle of the Rule of Law", with "[...] the idea being strongly anchored that, in a democratic Rule of Law State, the measures of public powers should not exceed the strictly necessary for the realization of the public interest".

The principle of proportionality, adds the said Professor, ibidem, p. 129, means that "[...] the limitation of private goods or interests by acts of public powers must be adequate and necessary to the concrete ends which such acts pursue, as well as tolerable when confronted with those ends".

With respect to the principle of proportionality it is also important to note what J. J. Gomes Canotilho and Vital Moreira tell us, in CONSTITUTION OF THE PORTUGUESE REPUBLIC, ANNOTATED, VOLUME I, 4th Edition, 2007, Coimbra Editora, pp. 392/393, when they consider that the said principle is capable of being broken down into three sub-principles, which are: "[...] a) principle of adequacy (also designated by the principle of suitability); b) principle of necessity (also called principle of necessity or indispensability); c) principle of proportionality in the strict sense, which means that the restrictive legal means and the ends obtained must be situated in a "just measure", preventing the adoption of restricted legal measures that are disproportionate, excessive, in relation to the ends obtained [...] ".

The said sub-principles all have a common denominator, which is that of just balance and permanent coherence between the purposes of the law and the means adopted to attain such purposes, which, in the circumstance and attempting the transposition of the said principle to the case of the present proceedings, will imply responding to the question of knowing what is the adequate interpretation of paragraph 1 of article 3, with a view to the pursuit of the legal purposes provided for in article 1 of the CIUC, which are translated into the fiscal burden of the effective proprietors of motor vehicles (and not, necessarily, of those recorded in the register) in the measure of the environmental and road cost that they cause.

As stated by Prof. J. J. Gomes Canotilho in Constitutional Law and Theory of the Constitution, Almedina - Coimbra, 1998, pp. 264 et seq, the most important field of application of the principle of proportionality or of prohibition of excess, which has constitutional foundation in articles 18, paragraph 2 and 266, paragraph 2 of the CRP, "[...] is that of the restriction of rights, freedoms and guarantees by acts of public powers. Nevertheless, the logical domain of application of the principle of proportionality extends itself to conflicts of legal goods of any kind." The administration, adds the said author, idem, "[...] must always observe, in each concrete case, the requirements of the prohibition of excess [...] ".

In this same sense points the jurisprudence, in particular the judgment of the Supreme Administrative Court of 01-07-1997, Case no. 041177, available at: www.dgsi.pt, when it considers that the principle of proportionality in the broad sense comprises the congruence, adequacy or suitability of the means or measure to achieve the end legally proposed and, in the strict sense, encompasses the prohibition of excess.

The principle of proportionality is a corollary of the principle of justice, which means and implies that in its action Public Administration must harmonize the specific public interest that it is incumbent upon it to pursue with the rights and legitimate interests of individuals possibly affected by its acts, interests and rights these which, in the case at hand, are reduced to the non-taxation in IUC of persons who are no longer proprietors of the vehicles and who, consequently, contribute in no way to the effectuation of any road and environmental cost.

What is important is to balance the legal purposes and the means to pursue them, and, within a framework of a judgment of weighing, to identify the most adequate means for that effect, which, in the case, are translated into the interpretation adopted by the arbitral tribunal.

It will be said, furthermore, that the understanding that the said paragraph 1 of article 3 of the CIUC establishes a rebuttable legal presumption corresponds to the only interpretation that coherently comports with the said principle of equivalence, and that is shown to be in line with the principles of justice and proportionality.

The interpretation that understands that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC is, therefore, the only one that permits ensuring the pursuit of the aims envisaged by the law - to burden the proprietors of motor vehicles in the measure of the environmental and road cost that they cause, - as established in article 1 of the CIUC, which means that the passive subjects of the IUC are, presumptively, the persons in whose name the vehicles are registered, that is, the said passive subjects are, in principle, and only in principle, the persons in whose name such vehicles are registered, there being, therefore, no other interpretation capable of achieving the said legal purposes, only thus, it is reaffirmed, are the said principles of proportionality and justice shown to be complied with.

The contrary understanding, that is, the one considered by the TA, which interprets paragraph 1 of article 3 of the CIUC as not establishing a rebuttable legal presumption, understanding that the passive subjects of the IUC are, in conclusion, the persons in whose name the vehicles are registered, in the just measure in which it leads to the imposition of a fiscal burden on those who may no longer be the proprietor of the vehicle in question and who, in this way, does not pollute, removing from fiscal subjection those who, in reality, are the effective causers of environmental and road damage, resulting from the use of the vehicles of which they are the real proprietors, evidences that the legal purposes prescribed would not, in any way, be achieved, the principle of equivalence not being respected, which, in the framework of the CIUC, has an absolutely structuring function. Such understanding, that is the one, does not show itself, in these circumstances, in harmony with the principle of proportionality.

The interpretation made by the tribunal, in the decision which is hereby reformed, took exact account of the principle of proportionality when, contrary to what the Respondent intended, it takes, due account, the fact that definitive registration does not have constitutive effect because it is intended to give publicity to the registered act, functioning only as a mere rebuttable presumption of the existence of the right and when, in homage to that principle, it heeds the principle of equivalence, as a fundamental element of the CIUC.

• As to the efficiency of the tax system, it will be said that the efficiency of Administration in general, or of the TA in particular, in the current sense, corresponds to the capacity/methodology of work oriented toward the optimization of work performed or services provided, which means to produce the maximum, in quantity and quality, with the minimum of costs and means, having nothing to do with the observance of legally established principles and with respect for the rights of citizens, whether in the capacity of taxpayers or not.

In the technical sense, it will be said that the principle of efficiency of the tax system is commonly held, in the domain of tax procedure, as a corollary of the principle of proportionality, which as is well known imposes an adequate proportion between the legal purposes and the means chosen to achieve those ends, or, as refer Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in General Tax Code, Annotated and Commented, 4th Edition 2012, Writing Meeting, Lda, Lisbon, p. 488, in the annotations to article 55 of the General Tax Code, it is a principle that obliges "[...] the tax administration to refrain from imposing upon taxpayers obligations that are unnecessary to the satisfaction of the aims which it pursues".

In this framework, the said principle of efficiency of the tax system will mean the capacity to achieve the objectives legally fixed with the minimum of means, which will have nothing to do either with respect for the rights of citizens, nor with the need for observance of other principles to which the tax administration must subordinate its activity, in particular that of the inquisitorial nature and the discovery of material truth, and obviously, the application of the mentioned principle of efficiency cannot be made, either to the prejudice of the rights of citizens, or through the absence of observance of the legal purposes. [1]

• With respect to the principle of legal security and of confidence it should be noted, first of all, that the latter principle, that of confidence, is a concrete manifestation of the principle of good faith, which, having enshrined in our legal order since 1996, came to have express constitutional inscription, as contained in paragraph 2 of article 266 of the CRP, where it is established that "Administrative bodies and agents are subordinated to the Constitution and to law and must act, in the exercise of their functions, with respect for the principles of equality, proportionality, justice, impartiality and good faith". (emphasis added)

With respect to good faith it is important to note what Prof. Freitas do Amaral states when, in Course of Administrative Law, Vol. II, Almedina, 2002, pp. 135/136, citing Prof. V. Fausto de Quadros, tells us that "[...] Public Administration is obliged to obey good faith in its relations with individuals. More: it should even set, also there, the example to individuals of the observance of good faith, in all its manifestations, as the essential core of its ethical behavior. Without this, it will never be possible to affirm that the State (and with it other public entities) is a person of good character".

On the other hand, the principle of confidence is also held as a consequence of the principle of legal security, indissociable from the Rule of Law, which having to guarantee a minimum of certainty in the rights of persons and in the legal expectations that are created for them, is generative of confidence of citizens in the legal protection of Public Administration.

With respect to the principles of legal security and protection of confidence, Prof. J. J. Gomes Canotilho tells us in Constitutional Law and Theory of the Constitution, Almedina - Coimbra, 1998, p. 250 et seq, that the said principles are closely associated, it being considered that "[...] legal security is connected with objective elements of the legal order - guarantee of legal stability, security of orientation and realization of law - while protection of confidence is concerned more with the subjective components of security, in particular the calculability and predictability of individuals in relation to the legal effects of acts of public powers". In any case, adds the said Professor, idem, that the "[...] general principle of legal security in the broad sense (thereby encompassing the idea of protection of confidence) can be formulated as follows: the individual has the right to be able to trust that to his acts or to public decisions affecting his rights, positions or legal relationships founded on legal norms that are in force and valid are linked the legal effects foreseen and prescribed by those same norms".

It follows from this doctrine that persons in alienating their vehicles must be assured that, in the event they proceed to the sale of vehicles of which they are proprietors, and if the same are not registered in the name of the acquirers, the legal effects resulting therefrom will be those foreseen and resulting from the legal norms in force and from their adequate interpretation, in light of the legal purposes of those same norms, which, in the present case, led the arbitral tribunal to consider the registration as a rebuttable presumption of the existence of the right and that only those persons who cause road and environmental costs should be taxed.

The best way to, in the case of the present proceedings, guarantee legal security, in the broad sense, is, therefore, that concretized by way of the interpretation made by the arbitral tribunal, when it considers that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC, allowing any citizen who proceeds to the sale, to a third person, of a motor vehicle, the possibility of demonstrating that, at the time of the tax liability of the IUC, he was no longer its proprietor nor responsible for payment of that tax.

• Beyond what has been stated above, it will still be important to know whether the interpretation adopted by the arbitral tribunal, beyond not conflicting with any of the referenced principles, is inscribed directly and substantively in the context of the constitutional order.

With respect to the interpretation of law in light of the Constitution, or of interpretation in conformity with the Constitution, Prof. Jorge Miranda tells us, in Manual of Constitutional Law, VOLUME II, Introduction to the Theory of the Constitution, 2nd edition, Coimbra Editora, 1987, p. 232 et seq, that what is at issue, first of all, is "[...] taking into account, within the systematic element of interpretation, that which reports to the Constitution. Indeed, each legal provision must not only be grasped in the set of provisions of the same law and each law in the set of the legal order; it must also be considered in the context of the constitutional order [..]". (emphasis added)

The understanding that considers that a rebuttable legal presumption is established in paragraph 1 of article 3 of the CIUC is supported by various elements of interpretation, among which may be mentioned the systematic element, in that the interpretation in conformity with the Constitution implies that within the systematic element of interpretation, there be taken into account that which reports to the Constitution.

On the mentioned systematic element it is appropriate to note the following:

a) In the understanding of BAPTISTA MACHADO, in Introduction to Law and to Legitimizing Discourse, p. 183, the systematic element "[...] comprises the consideration of the other provisions that form the complex of norms of the institute in which the norm to be interpreted is integrated, that is, which regulate the same matter (context of the law), as well as the consideration of legal provisions that regulate parallel normative problems or related institutes (parallel places). It also comprises the systematic place that corresponds to the norm to be interpreted in the global legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal order".

b) It is known that a legal principle, in this case the principle of equivalence, does not exist in isolation, but rather is linked by an intimate nexus with other principles that integrate, at the more global level, the respective legal order, in this case, with the other principles embodied in the system inscribed in the CIUC, and with other principles constitutionally established. In that sense, each article of a given legal act, in this case the CIUC, will only be comprehensible if we situate it, both before the other articles that follow or precede it, and before the constitutional order.

c) With respect to the systematization of the CIUC, environmental concerns were determinative so that the said principle of equivalence was, from the outset, inscribed in the first article of the said Code, which necessarily leads to the subsequent articles, in that they have their foundation in such principle, being influenced by it. This is what occurred, in particular, with the taxable base, which came to be constituted of various elements, particularly those relating to the levels of pollution, and with the rates of the tax, established in articles 9 to 15, which were influenced by the environmental component, and, naturally, also with the subjective scope of application itself, provided for in article 3 of the CIUC, which could not escape the influence referred to.

d) The said principle of equivalence, as is pointed out by Sérgio Vasques, in Special Taxes on Consumption, Almedina, 2001, p. 122 et seq, implies that "[...] the tax must correspond to the benefit that the taxpayer derives from public activity; or to the cost that the taxpayer imputes to the community by its own activity". Adds the said author, idem, that "Thus, a tax on motor vehicles founded on a rule of equivalence will be equal only if those who cause the same road wear and the same environmental cost pay the same tax; and those who cause different wear and environmental cost, pay different tax also." Therefore, as also states the cited author, idem, the concretization of the principle of equivalence dictates special requirements "[...] with respect to the subjective scope of application of the tax [..] ."

The mentioned principle that informs the current Unique Motor Vehicle Tax is inscribed in the environmental concerns established in paragraph 2, subparagraph a) of article 66 of the CRP and in the need to - with a view to ensuring the right to the environment, in the framework of sustainable development - "Prevent and control pollution and its effects and harmful forms of erosion", concerns these which are, manifestly, considered in the interpretation defended by the arbitral tribunal.

On the other hand, the provision in subparagraph h) of paragraph 2 of article 66 of the Constitution, when it establishes that, within the framework of sustainable development, it is incumbent upon the State to "ensure that fiscal policy makes compatible development with protection of the environment and quality of life", comprises as a corollary the principle of the polluter - payer, which concretizes the idea, inscribed therein, that those who pollute must, for that reason, pay, and thus the interpretation defended by the arbitral tribunal is in perfect accordance with the constitutional order.

e) It is still appropriate to leave a brief note, merely to raise the question of why the rules contained in article 9 of the Civil Code bind the interpreter of ordinary legislation, given that the said Code occupies no prominent place in the legal system.

To this question responds Prof. Jorge Miranda, ibidem, p. 230, when he considers that the "[...] conclusion toward which one inclines is that rules such as these are valid and effective, not because they are contained in the Civil Code - for this does not occupy any prominent place in the legal system - but, directly, as such, because they translate a legislative will, not contradicted by any other provisions, with respect to the problem of interpretation (which are not merely technical-legal) of which they take care."

Adds the said author, idem, that "rules on these matters can be considered substantially constitutional and it would not even be repugnant to see them elevated to the Constitution in the formal sense."

With respect to the problematic of interpretation and its rules, as is drawn from Prof. José de Oliveira Ascensão, in The Law, Introduction and General Theory, 2nd edition, Fundação Calouste Gulbenkian, 1980, pp. 352/353, it must be emphasized the imperative character of those rules, and their binding nature for the interpreter.

The interpretation that the arbitral tribunal makes of paragraph 1 of article 3 of the CIUC and the criteria that, for that purpose, it considered, as is expressly mentioned in the Decision rendered in the context of Case No. 196/2014-T, from the literal element, to the systematic element, passing through the historical and rational (or teleological) element, do not collide, therefore, with any constitutional principles.

Paragraph 1 of article 9 of the Civil Code provides that the search for legislative thought should have "[...] especially in mind [...] the unity of the legal system, the circumstances in which the law was drafted and the specific conditions of the time in which it is applied", circumstances and conditions those which, today more than ever, are of sensitivity to the environment and of respect for questions related to it, and which are shown to be inscribed in the constitutional order.

Therefore, in light of what has been stated, it does not seem, saving due respect, that the TA has any merit, in that the interpretation considered by the arbitral tribunal, as being the only one capable of respecting the legal purposes, does not violate any of the principles in question, that is, the principles of confidence and legal security, of the efficiency of the tax system and of proportionality, and furthermore, such interpretation is express and substantially in conformity with the principles inscribed in the Constitution.

Therefore, it is not perceived that the interpretation made by the tribunal, on paragraph 1 of article 3 of the CIUC, contends with any constitutional norms or principles in force.

J - ACQUISITION OF OWNERSHIP OF THE VEHICLE AND THE VALUE OF REGISTRATION

58 - First of all, it should be added, in light of what will be expressly stated below on the value of registration, that the acquirers of the vehicles become proprietors of those same vehicles by way of the transfer of the respective ownership, with registration or without it.

59 - There are three articles of the Civil Code that are important to take into account, with respect to the acquisition of ownership of a motor vehicle. They are, first of all, article 874, which establishes the notion of contract of purchase and sale, as being "[...] the contract by which the ownership of a thing, or other right, is transferred, for a price"; article 879, in whose subparagraph a) is established, as essential effects of the contract of purchase and sale, "the transfer of ownership of the thing or of the titularity of the right" and article 408, which has as its heading contracts with real effect, and establishes in its paragraph 1, that "the constitution or transfer of real rights over a determined thing is effected by mere effect of the contract, save the exceptions provided for in law". (emphasis added)

We are, in fact, in the domain of contracts with real effect, which means that their conclusion provokes the transfer of real rights, in the case, motor vehicles, determined by mere effect of the contract, as follows expressly from the norm previously mentioned.

60 - With respect to the said contracts with real effect, it is important to note the teachings of Pires de Lima and Antunes Varela, when, in annotations to article 408 of the Civil Code, they tell us that "From these contracts called real (quoad effectum), because they have as their immediate effect the constitution, modification or extinction of a real right (and not merely obligations tending to that result) are distinguished the so-called real contracts (quoad constitutionem), which require the delivery of the thing as an element of their formation (see articles 1129, 1142 and 1185)".

We are thus faced with contracts in which the ownership of the thing sold is transferred, without more, from the seller to the buyer, having, as its cause, the contract itself.

61 - Also from jurisprudence, in particular from the Judgment of the Supreme Court of Justice no. 03B4369 of 19/02/2004, available at: www.dgsi.pt, it is obtained that, in light of the provision of article 408, paragraph 1 of the Civil Code, "the constitution or transfer of real rights over a determined thing is effected by mere effect of the contract, save the exceptions provided for in law". This is the case of the contract of purchase and sale of motor vehicle (articles 874 and 879 subparagraph a) of the Civil Code), which does not depend on any special formality, being valid even when concluded verbally - according to Judgment of the Supreme Court of Justice of 3-3-98, in CJSTJ, 1998, year VI, Volume I, p. 117". (emphasis added)

62 - The contract of purchase and sale having, in light of what has been stated, real nature, with the mentioned consequences, it must also be considered what is the legal value of the motor vehicle registration which is the object of that contract, in that the transaction of the said property is subject to public registration.

63 - It is established, in fact, in paragraph 1 of article 1 of Decree-Law no. 54/75, of 12 February, relating to the registration of motor vehicles, that "The registration of vehicles has as its essential purpose giving publicity to the legal situation of motor vehicles and respective trailers, with a view to the security of legal commerce". (emphasis added)

64 - Being clear, in light of the said norm, what is the purpose of registration, there is not, however, clarity, within the framework of the said Decree-Law, on the legal value of that registration, it being important to consider article 29 of the mentioned act, relating to the registration of motor vehicle ownership, when it is there provided that "The provisions relating to land registration are applicable, with the necessary adaptations, to the registration of motor vehicles, [...]". (emphasis added)

65 - In this framework, so that we may achieve the sought knowledge on the legal value of motor vehicle ownership registration, it is important to take into account what is established in the Code of Land Registration, approved by Decree-Law no. 224/84, of 6 July, when it provides in its article 7 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". (emphasis added)

66 - The combination of the provisions mentioned above, particularly that established in paragraph 1 of article 1 of Decree-Law no. 54/75, of 12 February and in article 7 of the Code of Land Registration, allows us to consider, on the one hand, that the fundamental function of registration is to give publicity to the legal situation of the vehicles, allowing, on the other hand, to presume that the right exists and that such right belongs to the holder in favor of whom it is registered, in the precise terms in which it is defined in the registration.

67 - Thus, definitive registration constitutes no more than the presumption that the right exists and belongs to the registered holder, in the exact terms of the registration, but a rebuttable presumption, admitting, for that reason, evidence to the contrary, as follows from the law and jurisprudence has been pointing out, and may, to this end, be seen, among others, the Judgments of the Supreme Court of Justice nos. 03B4369 and 07B4528, respectively of 19/02/2004 and 29/01/2008, available at: www.dgsi.pt.

68 - The function legally reserved to registration is, therefore, on the one hand, to give publicity to the legal situation of the goods, in the case, of the vehicles and, on the other hand, to allow us to presume that there exists a right over those vehicles and that the same belongs to the holder, as such registered in the registration, which means that registration does not have a constitutive nature with respect to the right of ownership, but only a declarative nature, hence registration does not constitute a condition of validity of the transfer of the vehicle from the seller to the buyer.

69 - Therefore, if the acquirers of the vehicles, as their "new" proprietors, do not, forthwith, promote the adequate registration of their right, it is presumed, for purposes of article 7 of the Code of Land Registration and of paragraph 1 of article 3 of the CIUC, that the vehicles continue to be property of the person who in the registration remains its proprietor, such person being the passive subject of the tax, in the certainty, however, that such presumptions are rebuttable, whether by virtue of what is established in paragraph 2 of article 350 of the Civil Code, or in light of the provision of article 73 of the General Tax Code. Wherefore, from the moment in which the presumptions in question are set aside, by means of proof of the respective transfer, the TA will not be able to persist in considering as the passive subject of the IUC the transferor of the vehicle, which, in the registration, continues to be listed as its proprietor.

L - EVIDENCE PRESENTED

70 - Being not legally required the written form for the transfer of ownership of motor vehicles, proof of such transfer may be made by any means, in particular by way of testimony or documentary, in the latter being included, in particular, the sales invoices-receipts relating to the sales of vehicles.

ON THE SALE OF VEHICLES AS SALVAGE

71 - As a means of proof that the twelve vehicles sold as salvage, (that is, the ten vehicles identified in Table II of the petition for arbitral review, plus the vehicles with license plates ...-...-... and ...-...-..., identified in Table I of the said petition), were not its property on the date of the tax liability of the tax, the Claimant submitted "Communications" from the Insurers correlated with the vehicles in question and with the corresponding indemnification for their Total Loss.

72 - With respect to the said "Communications" it should be pointed out that all of them display identical information, which is embodied, in particular, in the following: identification of the vehicle; amount relating to the value of the Salvage and the value of indemnification for Total Loss; identification of the insurance company and of the Claimant; VAT incurred on the value of the Salvage.

73 - Insurance companies, in accordance with article 8 of Decree-Law no. 94-B/98 of 17.04, «[...] are financial institutions that have as their exclusive purpose the exercise of direct insurance activity and or reinsurance, save for those types or modalities that are legally reserved to certain types of insurers, and may also exercise activities connected with or complementary to insurance or reinsurance, in particular with respect to acts and contracts relating to salvage [...] »; (emphasis added)

74 - The acquisition of salvage by insurance companies and its subsequent alienation, normally to scrappers, is a complementary activity of insurance operations, as results from the norm previously mentioned, in that what is at issue is that within the framework of situations resulting from claims, where the Total Loss of vehicles is verified, such companies are obliged to indemnify those harmed, monetarily, in accordance with the insurance contract which they have concluded with them, when the vehicle is regarded as irreparable, taking, on the other hand, the damaged vehicles and subsequently proceeding to the sale of the same in the condition in which they acquired them.

75 - In fact, within the framework of the Compulsory Motor Vehicle Liability System, contained in Decree-Law no. 291/2007 of 21 August, a vehicle involved in an accident is understood to be in a situation of Total Loss, as is provided in paragraph 1 of article 41 of the said act, when the obligation of indemnification is fulfilled in money and not through repair of the vehicle, whenever it is ascertained that repair is materially impossible or technically inadvisable.

76 - In the case of the present proceedings it is what occurred, in that, on the one hand, the Insurers after the respective appraisals understood to regularize the situation of the damaged vehicles as Total Loss and, on the other, as, in particular, results from the documentation submitted to the case file relating to the exchange of information/memoranda between the Insurers and the Claimant, the Salvages in question, by virtue of the motor vehicle insurance contract, entered into the patrimonial sphere of the insurance companies, the Claimant, as an injured party, having been indemnified.

77 - With respect to the payment of the amounts inscribed in the "Communications" of the Insurers, relating to the vehicles in question, taking into account that the "vehicles" did not remain in the possession of their proprietor, it is important to point out that such amounts are composed of two components, which are: the value of the Salvage and the value of indemnification for Total Loss, which leaves no doubt as to the transfer of ownership of the Salvages, from the Claimant to the insurance companies.

78 - The transfers of ownership of the Salvages to the insurance companies, in relation to the twelve mentioned vehicles, were located between 24-02-2002 and 12-11-2012, and the tax liability of the corresponding IUC relates to the years 2013 and 2014.

79 - With respect to the facts inscribed in the said "Communications", it is also important to note that, in light of the presumption of truthfulness that in paragraph 1 of article 75 of the General Tax Code is conferred upon them, it would be incumbent upon the TA, bearing in mind the provision of article 75, paragraph 2 of the General Tax Code, within the framework of the founded and objective reasons that it might have, to demonstrate that the information inscribed in those "Communications" does not correspond to reality.

80 - In these circumstances, the TA being to require the IUC relating to the years 2013 and 2014, and the Claimant not being, in those years, proprietor of the said vehicles, it is considered that the mentioned "Communications" of the Insurance Companies, combined with the information/memoranda contained in the case file, constitute adequate and capable proof to rebut the presumptions in question in the case file, that is, the presumption established in article 7 of the Code of Land Registration and that established in paragraph 1 of article 3 of the CIUC, which means that, at the time when the tax was due, in all of these cases, the Claimant was not the passive subject of the IUC.

ON THE SALE OF VEHICLES AS USED

81 - As was referred to above, proof of the sale of motor vehicles may be made by any means, in particular by way of sales invoices-receipts.

82 - The Claimant, as a means of proof that it proceeded to the sale of the remaining vehicles, as used, in the number of thirty-four, as identified in the present proceedings, on a date prior to the date of the tax liability, submitted copies of the invoices relating to those alleged sales.

83 - It should, indeed, be pointed out that nothing permits considering that the invoices presented, as support for the sales of vehicles in question in the case file, do not have correspondence with the sales which, allegedly, were completed.

84 - The invoices submitted to the case file, as proof of the alienation of the vehicles, taking into account the corporate purpose of the Claimant and its business activity, translated in particular in the conclusion of financial leasing contracts and operational vehicle rental contracts for motor vehicles, show themselves to be entirely adjusted to the mentioned business reality, being absolutely probable the sale of the vehicles which the invoices presented aim to prove, it not being identified, in any way, elements that embody any simulated contract, rather permitting the conclusion that we are faced with invoices that reproduce the real and true sale of the vehicles to the persons indicated therein.

85 - It will even be said that, in the case of the present proceedings, in light of the economic activity of the Claimant, as was already referred to, it will not be strange, quite the contrary, the transfer of ownership of the vehicles identified in the case file.

86 - Having, nevertheless, in view the need to proceed to the establishment of material truth with respect to the facts, and considering in particular the provision of article 13 of the Code of Tax Procedure and Process and article 99 of the General Tax Code, the arbitral tribunal promoted diligences in order that the documents referred to above and presented as proof of the sales in question, be supplemented with other information, aimed in particular at the verification of the effective receipt of the amounts relating to the sales of the vehicles in question.

87 - With respect to the provision of the last of the mentioned articles, that is, article 99 of the General Tax Code, it is appropriate to note what, in annotations to this article, comes stated by Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in General Tax Code, Annotated and Commented, 4th Edition 2012, Writing Meeting, Lda, Lisbon, p. 859, when, with respect to the principle of the inquisitorial and the said article state that the same affirms "[...] without margin for doubt, the principle of full inquisitorial authority of the tax tribunal in the domain of tax proceedings [...]. The inquisitorial principle applies to all tax tribunals that know of matters of fact, justifying the rejection of application of those norms of civil procedure that establish certain moments for the presentation of documents (see Articles 523, 524 and 706 of the CPC [...] ", articles these which correspond, respectively, to the current articles 423 and 425 of the CPC, article 706 having been repealed.

88 - In this framework, it is appropriate to recall the teachings of Jorge Lopes de Sousa, in Code of Tax Procedure and Process, Annotated and Commented, Volume I, 6th Edition, Áreas Editora, SA, Lisbon, 2011, p. 174, when, in annotations to article 13 of the mentioned Code, states that "The limitation of powers of cognition to the facts alleged, in addition to those of official knowledge, has no clear justification in tax proceedings nor can be understood in absolute terms. Indeed, although it is undeniable that there are some similarities between civil declaratory proceedings and judicial challenge proceedings [...] it is also patent that there are substantial differences [...] ", which "reveals that one is not faced with a proceeding in which the dispositional principle applies integrally".

89 - The Claimant, within the periods granted for that purpose, came to supplement the said invoices, which applies, moreover, to the documents relating to the sale of vehicles as salvage, with other elements of improvement of proof, in particular with the correlative accounting extracts, reinforced with the attachment of maps of gains and losses, capable of proving that the amounts relating to the sales of the said vehicles were, by it, effectively received, which demonstrates the transfers of ownership of those goods, occurred on dates prior to the dates of the tax liability of the IUC.

90 - The said documents, as indeed, the invoices that supplement them, relating to the sale of the vehicles, in that they enjoy the presumption of truthfulness that in paragraph 1 of article 75 of the General Tax Code is conferred upon them, it being incumbent upon the TA, bearing in mind the provision of article 75, paragraph 2 of the General Tax Code, within the framework of the founded and objective reasons that it might have, to demonstrate that the information inscribed in them does not correspond to reality, permit us to consider that such documentation constitutes a sufficient means of proof to rebut the presumptions in question in the case file, that is, the presumption established in article 7 of the Code of Land Registration and that established in paragraph 1 of article 3 of the CIUC, which means that, at the time when the tax was due, the Claimant was not proprietor of the vehicles in question, at the time to which the assessments of that tax refer.

91 - Here arrived, it is important to state that the mentioned understanding is not valid for the vehicles with license plates ...-...-... and ...-...-..., for which neither "Document Accounting Extract" nor "Complementary Document Model 31" were presented, no capable proof being made on the transfer of ownership of those vehicles, at a moment prior to the dates of the tax liability of the corresponding IUC.

92 - The TA, when it understands that there is no legal basis for the said documents to have been requested, and that the same should not be considered, as is contained in the Request, presented by it on 10/12/2015, in particular through violation of what is determined in article 423 of the CPC, where it is provided that the presentation of documents must occur with the respective pleading, does not consider, in any way, the understanding contained in the previous articles 87 and 88, that is, that the inquisitorial principle applies to all tax tribunals that know of matters of fact, justifying the rejection of application of those norms of civil procedure that establish certain moments for the presentation of documents, and that there are substantial differences between civil declaratory proceedings and judicial challenge proceedings.

93 - The total amount resulting from the assessments associated with the two mentioned vehicles, that is, the vehicles with license plates ...-...-... and ...-...-..., amounts to €138.52.

94 - In these circumstances, and in summary, taking into account that the presumption established in article 3, paragraph 1 of the CIUC was rebutted, both as concerns the salvaged vehicles, referenced in the present proceeding, which were alienated on dates prior to the dates of the tax liability of the tax, that is, at the moment when the Tax Administration may require the tax performance, and as concerns the remaining vehicles sold as used, with the exception of the two vehicles mentioned above, it must be considered that the Claimant, in relation to the mentioned vehicles, was not, on the date to which the said assessments refer, the passive subject of the tax in question.

95 - The TA, when it understands that the passive subjects of the IUC are, in conclusion, the persons in whose name the motor vehicles are registered, without considering that article 3, paragraph 1 of the CIUC embodies a presumption, nor taking into account the probative elements that were presented to it, as results, in particular, from the tax administrative proceedings, is proceeding to the illegal assessment of the IUC, in relation to the vehicles identified in the case file, based on the erroneous interpretation and application of the norms of subjective scope of application of the Unique Motor Vehicle Tax, contained in the said article 3 of the CIUC, which configures the practice of tax acts lacking in legality due to error as to the factual and legal prerequisites, determinative of the annulment of the corresponding tax acts, for violation of law.

M - REFUND OF THE AMOUNT PAID AND INDEMNITY INTEREST

96 - In accordance with the provision of subparagraph b) of paragraph 1 of article 24 of the RJAT, and in conformity with what is established therein, the arbitral decision on the merits of the claim which is not subject to appeal or challenge binds the tax administration from the end of the period provided for appeal or challenge, the same having to - in the exact terms of the merits of the arbitral decision in favor of the passive subject and up to the end of the period provided for the voluntary execution of the judgments of the judicial tax tribunals - "Restore the situation that would exist if the tax act that is the subject of the arbitral decision had not been taken, adopting the acts and operations necessary for that purpose." (emphasis added)

97 - These are legal commands that are in complete harmony with the provision of article 100 of the General Tax Code, applicable to the case by virtue of the provision of subparagraph a) of paragraph 1 of article 29 of the RJAT, in which it is established that "The tax administration is obliged, in the event of total or partial allowance of complaints or administrative appeals, or judicial proceedings in favor of the passive subject, to the immediate and full restoration of the situation that would exist if the illegality had not been committed, comprising the payment of indemnity interest, in accordance with the terms and conditions provided for in law." (emphasis added)

98 - The case contained in the present proceedings raises the manifest application of the mentioned norms, in that following the illegality of the assessment acts, referenced in this proceeding, there must, by virtue of those norms, be a place for the refund of the amounts paid, whether by way of tax, or of compensatory interest, as a way of achieving the restoration of the situation that would exist if the illegality had not been committed, amounts these which in the case of the present proceedings total €4,101.11, resulting from the total amount €4,239.63 that was paid, less the sum of €138.52 associated with the assessments relating to the vehicles with license plates ...-...-... and ...-...-....

99 - With respect to indemnity interest, it appears manifest that, in light of what is established in article 61 of the Code of Tax Procedure and Process and the requirements being met for the right to indemnity interest, that is, verified the existence of error imputable to the services which results in payment of the tax debt in an amount greater than that legally due, as provided for in paragraph 1 of article 43 of the General Tax Code, the Claimant has a right to indemnity interest at the legal rate, calculated on the sum of €4,101.11.

CONCLUSION

100 - Within the circumstantial framework that has been referred to, the TA, in taking the assessment acts at issue in the present proceeding, founded on the idea that article 3, paragraph 1 of the CIUC does not establish a rebuttable presumption, makes an erroneous interpretation and application of this norm, committing an error as to the legal prerequisites, which constitutes violation of law.

101 - On the other hand, because the TA, on the date of occurrence of the tax facts, considered the Claimant proprietor of the vehicles referenced in the present proceeding, considering it, as such, passive subject of the tax, when such ownership, with respect to the vehicles in question, was no longer inscribed in its legal sphere, basing itself, therefore, on factual matter divergent from the actual reality, commits an error as to the factual prerequisites, and therefore violation of law.

III - DECISION

102 - Whereupon, bearing in mind all that has been set out, this Arbitral Tribunal decides:

• To adjudge partially meritorious, as proved, on the ground of violation of law, the petition for arbitral review insofar as concerns the annulment of the assessment acts of IUC relating to the years 2013 and 2014, concerning the vehicles identified in the case file;

• To annul, consequently, the assessment acts of IUC, relating to the years 2013 and 2014, relating to the vehicles mentioned above;

• To condemn the TA to refund the sum of €4,101.11, obtained in accordance with the terms indicated above, in article 98, relating to the IUC and compensatory interest which were paid, relating to the years 2013 and 2014, and to payment of indemnity interest at the legal rate, counted from the date of payment of the said sum, until the complete refund of the same;

• To condemn the Claimant and the Respondent in costs, which are fixed, for each, in the proportion of 3% for the Claimant and 97% for the Respondent.

VALUE OF THE PROCEEDINGS

In accordance with the provision of articles 306, paragraph 2 of the CPC (formerly 315, paragraph 2) and 97-A, paragraph 1 of the Code of Tax Procedure and Process and article 3, paragraph 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceedings is fixed at €4,239.63.

COSTS

In accordance with the provision of article 12, paragraph 2, at the end, and article 22, paragraph 4, both of the RJAT, and article 4 of the Regulation of Costs in Tax Arbitration Proceedings and Table I, which is attached thereto, the total amount of costs is fixed at €612.00.

Notify the parties.

Lisbon, 1 January 2016

The Arbitrator

António Correia Valente

(The text of the present decision was elaborated by computer, in accordance with article 131, paragraph 5 of the Code of Civil Procedure (formerly 138, paragraph 5), applicable by reference of article 29, paragraph 1, subparagraph e) of Decree-Law no. 10/2011, of 20 January (RJAT), its drafting being governed by the spelling prior to the Orthographic Agreement of 1990.)

[1] See the study on the matter, elaborated by Prof. Carlos Pestana Barros, in Science and Technical Taxation, 2005, no. 416, pp. 105-126