CAAD Process 275/2016-T addresses the constitutionality of Article 236 of Law 83-C/2013, which retroactively revoked IMT (Municipal Property Transfer Tax) and Stamp Duty exemptions previously granted to Real Estate Investment Funds for Residential Leasing (FIIAH). The taxpayer challenged the IMT assessment arguing that Article 236 violated the constitutional principle prohibiting fiscal retroactivity by eliminating exemptions that applied to transactions already completed under prior legislation. The tribunal analyzed whether the retroactive revocation of tax benefits constituted abstract illegality under Article 286(1)(a) of the Civil Procedure Code and Article 204(1) of the Tax Procedure Code. The decision examined the nature of abstract illegality arising when norms violate constitutional principles, which can be invoked in objection to tax enforcement even beyond normal impugnation deadlines. Following established jurisprudence, the tribunal recognized that assessment acts based on unconstitutional provisions suffer from illegality that affects the legal norm itself, not merely its application. The ruling emphasized that violations of higher hierarchy norms, particularly constitutional guarantees against retroactive taxation, constitute grounds for challenging tax assessments regardless of whether the underlying provision was merely annulable or unconstitutional. The tribunal applied the principle that taxpayers retain the right to invoke abstract illegality throughout the enforcement period when the collecting norm conflicts with constitutional protections. This decision reinforces constitutional safeguards against retroactive elimination of tax benefits and provides taxpayers with extended procedural opportunities to challenge assessments grounded in unconstitutional retroactive provisions, affirming that fiscal legislation cannot unilaterally revoke previously granted exemptions with retrospective effect.
[7] And not declaration of nullity, given that, in the case "sub judice", there is no appearance of violation "of the essential content of a fundamental right".
As can be read in the summary of the judgment of 23.10.2013, issued in proc. 0579/13 (Reporter Isabel Marques da Silva) "The assessment act executed in application of an annulable, non-existent or unconstitutional municipal resolution suffers from abstract illegality - articles 286, paragraph 1, letter a) of the Code of Civil Procedure and 204, paragraph 1 of the Code of Tax Procedure and Process -, which, in cases of compulsory collection, may be invoked up to the end of the period for objection to tax enforcement, even if subsequently to the period for impugnation of annulable acts but never, consequently, at any time." (emphasis ours).
On this issue Jorge Lopes de Sousa also tells us that "There are, however, grounds that are invocable both as a basis for objection to tax enforcement and for judicial impugnation.
(...)
These include cases of norms that violate norms of higher hierarchy such as constitutional norms (...).
The illegality is abstract because. Affecting the law itself, it does not depend on the act that applies it in the concrete case.
Being provided for as a basis for objection to tax enforcement, this abstract illegality also constitutes a vice of violation of law, since the assessment would have applied a norm that is not valid in the face of a rule of higher hierarchy." (CODE OF TAX PROCEDURE AND PROCESS Annotated, 4th Ed., Vislis, 2003, pp. 443-444, emphasis ours).
[8] On this issue see Jorge Lopes de Sousa, Commentary on the Legal Regime for Arbitration in Tax Matters, in GUIDE TO TAX ARBITRATION, Coord. Nuno Villa-Lobos and Mónica Brito Vieira, 2013, Almedina, pp. 110-116).
