Summary
Full Decision
Arbitral Decision [1]
Claimant – A…
Respondent - Tax and Customs Authority
The Arbitrator Dr. Sílvia Oliveira, designated by the Deontological Council of the Administrative Arbitration Center (CAAD) to form the Arbitral Tribunal, constituted on 13 August 2014, with respect to the case above identified, decided as follows:
1. REPORT
1.1
A… (hereinafter designated as "Claimant"), taxpayer no. …, resident at Rua …, no. …, R/C..., …-… Lisbon, filed a request for arbitral pronouncement and constitution of a single arbitral tribunal, on 9 June 2014, pursuant to article 4º and section 2 of article 10º of Decree-law no. 10/2011, of 20 January [Legal Regime for Arbitration in Tax Matters (RJAT)], in which the Tax and Customs Authority is the Respondent (hereinafter designated as "Respondent").
1.2
The Claimant intends, in the aforementioned request for arbitral pronouncement, that the Arbitral Tribunal declare:
1.2.1
"Annulled the Personal Income Tax (IRS) assessments relating to the year 2007, or, if not so understood and subsidiarily, the values of the said assessments shall be corrected, taking into account both the reinvestment value, and the value of the capital gain itself, as well as the value of disposal expenses".
1.3
The request for constitution of the Arbitral Tribunal was accepted by His Excellency the President of CAAD and was notified to the Respondent on 16 June 2014.
1.4
The Claimant did not appoint an arbitrator, wherefore, pursuant to article 6º, section 2, paragraph a) of RJAT, the undersigned was designated as arbitrator by the President of the Deontological Council of CAAD, the appointment having been accepted within the deadline and in the terms legally foreseen.
1.5
On 29 June 2014, the parties were duly notified of this designation, having manifested no intention to refuse the appointment of the arbitrator, pursuant to the combined provisions of article 11º section 1 paragraphs a) and b) of RJAT and articles 6º and 7º of the Code of Ethics.
1.6
Thus, in conformity with the provision of paragraph c) of section 1 of article 11º of RJAT, the Arbitral Tribunal was constituted on 13 August 2014.
1.7
On 1 October 2014, the Tax and Customs Authority filed its Response, raising the following exceptions:
1.7.1
Of impropriety of the means, and
1.7.2
Of untimeliness of the request for arbitral pronouncement.
1.8
Additionally, and still in the Response filed, the Respondent defended itself by contestation, arguing:
1.8.1
The timeliness of the filing of the hierarchical appeal;
1.8.2
The illegality of the assessments.
1.9
In these terms, the Respondent concludes requesting that "the exceptions of material incompetence of the Arbitral Tribunal and untimeliness of the request should be judged sustained, as proven, or, if not so understood, the Respondent Entity should be absolved of the request, judging the present arbitral proceeding to be groundless, maintaining in the legal order the contested tax acts".
1.10
On 14 October 2014, pursuant to the terms and for the purposes provided for in article 18º of RJAT, the first arbitral meeting was held at CAAD, of which the corresponding minutes were drawn up.
1.11
In the course of this meeting, with the Claimant's representative having declared his preference to make a written statement regarding the exceptions invoked by the Respondent, the Tribunal granted a period of 10 days for that purpose and fixed 17 November 2014 for the delivery of the interlocutory decision on the matter of exception.
1.12
In the event of continuation of the proceedings, the representatives of the Claimant and the Respondent expressed themselves in favor of legal arguments in writing, for which the Tribunal granted a period of 15 days from the interlocutory decision, with the Respondent's period beginning to count from the notification of the attachment of the Claimant's arguments.
1.13
In the course of the aforementioned meeting, and in the event of continuation of the proceedings, after the delivery of the interlocutory decision, 13 January 2015 was also designated for purposes of delivery of the arbitral decision.
1.14
On 27 October 2014, the Claimant filed, in writing, a response to the exceptions raised by the Respondent.
2. GROUNDS OF THE CLAIM
The Claimant supports its request, in summary, as follows:
2.1
Erroneous decision on the timeliness of the hierarchical appeal
2.2
He was notified on 11 March 2014 of the dismissal of hierarchical appeal no. …2012…, filed following the dismissal of the gracious petition no. …2012…, which had as its object the assessment of Personal Income Tax (IRS) for the year 2007, "(…) based on its untimeliness (…)", inasmuch as "(…) the Tax Administration alleges that the hierarchical appeal was filed on the last day of the deadline (12 December 2012), by fax, after the closure of the competent administrative service responsible for its receipt, which leads to its timeliness defect".
2.3
The Claimant does not agree with the arguments for dismissal of the said hierarchical appeal, based on untimeliness, given that "the fact that the facsimile (fax) was sent outside normal office hours of the secretariat has no relevance whatsoever for purposes of timeliness, since, in accordance with article 20º of the Code of Tax Procedure and Process (CPPT), the deadlines of tax procedure and judicial challenge are counted in accordance with article 279º of the Civil Code", that is, "(…) at midnight on the last day of the deadline".
2.4
In this sense, the Claimant supports its arguments, both in the European Convention for the Counting of Deadlines (signed by Portugal on 20 November 1979), and in Court of Appeals (AC) decisions of the Court of Appeal of Coimbra (TRC) of 15/05/2013[2] and of 31/03/2004[3].
2.5
In this matter, the Claimant cites the AC TRC of 31/03/2004, according to which "only the procedural act that is dependent, implies and requires the intervention of the secretariat will have to be performed within the normal hours of operation of the secretariats (…)".
2.6
The erroneous decision on the gracious petition - the illegality of the assessments
2.5.1
Of the lapse of the right to assess
2.7
The Claimant filed, on 4 May 2012, a gracious petition against official assessments nos. 2011…, 2011… and 2009…, in the amount of EUR 30.624,89, concerning IRS for 2007.
2.8
In that gracious petition, the Claimant "sought the lapse of the right to assess and petitioned for the correction of the said assessments due to errors occurring in the completion of the tax return for IRS 2007 and due to the late submission of the tax return for the year 2009, the year in which the reinvestment was made".
2.9
However, the gracious petition was dismissed by dispatch of 16 August 2012, given that "the decision-maker of the gracious petition understood that the petitioner was notified of the decisions of the tax acts carried out by the services of the tax administration (…) reason for which it appears that the petitioner's argument does not have merit".
2.10
Notwithstanding, the Claimant does not agree with the said assessments because, in his view, "the right to assess lapsed" inasmuch as, the Claimant alleges, "he did not receive any notification of the IRS assessments for 2007 (…) until 31 December 2011, inclusive, (…) being unaware of the contents of the documents attached (…) since of the same he never (…) had knowledge".
2.11
Thus, the Claimant concludes, "it cannot and should not be presumed the notification of the passive subject on the dates referred to in the dispatch that dismissed the claim of the passive subject".
2.12
Of the non-consideration of reinvestment and expenses
2.12.1
Errors in the completion of the tax return for IRS/2007;
2.12.2
Late submission of the tax return for 2009, the year in which the Reinvestment was made.
2.13
In this context, the Claimant argues that "he alleged in the gracious petition that in the IRS declaration for 2007, sent on 1 October 2009, in its respective annex G, by oversight, the values declared as expenses and charges in table 4, field 401, are incorrect, and the value to be considered should be EUR 6.490,00 (…)".
2.14
Additionally, the Claimant continues, "there was also a complaint of an error in the completion of annex G, table 5, field 503, which should have contained the value of EUR 76.693,91 and not EUR 0 (…) as inadvertently occurred", having also been requested the respective correction "due to the fact that the tax return for the year 2009 was not submitted, the year in which the reinvestment of part of the capital gain obtained in 2007 was made, without recourse to credit, in the amount of EUR 100.000, for the acquisition of own and permanent housing (…)".
2.15
Thus, the Claimant concludes that "the gracious petition should have been granted in this matter", wherefore, "in terms of the above (…) the present request for arbitral pronouncement should be considered well-founded as proven (…) and, in consequence, the IRS assessments under analysis should be annulled or, if not so understood and subsidiarily, the values of the said assessments shall be corrected (…)".
3. RESPONDENT'S RESPONSE
3.1
The Respondent responded by sustaining, as a final matter, the groundlessness of the request for arbitral pronouncement, but also invoking (and in the same order as listed below) the following requests:
3.1.1
"The exceptions of material incompetence of the Arbitral Tribunal and untimeliness of the request should be judged sustained, as proven, or, if not so understood,
3.1.2
The Respondent should be absolved of the request, judging the present arbitral proceeding to be groundless, maintaining in the legal order the contested tax acts".
3.2
Indeed, the Respondent in its response presented the following arguments:
BY EXCEPTION
Of impropriety of the means
3.3
In this context, the Respondent defends the "impropriety of the means" used, inasmuch as, having "the hierarchical appeal examined in the present proceedings been the subject of summary dismissal, based on its untimeliness, such decision does not entail the assessment of the legality of the act of tax assessment, reason for which the contentious means to examine it is, pursuant to paragraph p) of section 1 and section 2 of article 97º of CPPT, the previously called contentious appeal (current special administrative action), provided for and regulated by the rules of the Code of Procedure of Administrative Courts (CPTA)".
3.4
On the other hand, the Respondent understands that "the competences materially conferred to the arbitral tribunal are restricted only to those expressly listed in paragraphs a) and b) of section 1 of article 2º of RJAT and in that context, not included are the administrative acts in tax matters that do not entail the assessment of the legality of a tax assessment act".
3.5
Thus, "(…) only when the second-degree act incorporates the illegality of the first-degree act, by confirmation of the assessment act, will the arbitral tribunal be materially competent to know of it".
3.6
In these terms, according to what is alleged by the Respondent, "the arbitral jurisdiction will not be competent to assess the claim" of the Claimant, "(…) reason for which the material incompetence of the arbitral tribunal should be recognized, and in consequence, the Respondent should be absolved (…)".
Of untimeliness of the request for arbitral pronouncement
3.7
The Respondent understands that "the request omits (…) any reference, either to the request for annulment of the act of dismissal of the hierarchical appeal, or to the dismissal of the gracious petition (…)".
3.8
Thus, the Respondent understands that "it follows from this that the act examined is solely the act of IRS assessment for the year 2007, whose term of the voluntary payment deadline occurred on 09.01.2012".
3.9
"Given that the deadline for filing the request for arbitral pronouncement is defined pursuant to article 10º of RJAT, its formulation on 09.06.2014 denotes its manifest untimeliness".
3.10
Notwithstanding, the Respondent continues, "if such is not understood and it is concluded that from the request formulated in the petition, it results a request for assessment of the dispatch relating to the gracious petition, having this been validly notified on 29.08.2012, equally it will be concluded that the presentation of the request for arbitral pronouncement on 09.06.2014 is afflicted by untimeliness".
3.11
In these terms, the Respondent concludes, by the untimeliness of the request for arbitral pronouncement, "which will determine its absolution".
BY CONTESTATION
3.12
Timeliness of the filing of the hierarchical appeal
3.13
In this matter, the Respondent alleges that the Claimant resorted to, in its argumentation, "jurisprudence emanating from common courts, seeking thereby to rebut the decision of summary dismissal of the hierarchical appeal petition, by untimeliness".
3.14
However, the Respondent defends that "it cannot (…) either the Claimant nor the Arbitral Tribunal overlook that in administrative law a special regime exists for the practice of administrative acts" pursuant to which "the rule of counting time until midnight of the day on which the deadline expires (…), applicable to judicial deadlines by express provision of article 296º of the Civil Code, cannot be transposed to the gracious contentious proceedings, because there exists a specific normative body of administrative law on the counting of deadlines"[4].
3.15
Thus, the Respondent understands that "the act does not suffer from the vice that is imputed to it, and should thus be maintained in the legal order" inasmuch as "the justification of the dispatch of summary dismissal now examined accompanies this jurisprudence (…)".
3.16
Illegality of the assessments
3.17
In this matter, the Respondent alleges that "this matter cannot be assessed by the Arbitral Tribunal given the arguments presented in the final decision of the gracious petition procedure", namely:
3.17.1
"From the documentary elements nothing permits us to conclude for the existence of a reinvestment of the realization value for the year in question (…) nor to judge concerning the amounts to be considered for purposes of a hypothetical correction under annex G of the tax returns (belatedly) presented by the taxpayer, relating to the years 2007 and 2009 (…)".
3.17.2
"Thus, regarding the allegations presented as to disagreement with the corrections presented, the petitioner presents no document that proves the alleged".
3.17.3
"In summary, regarding the arguments that serve as allegations on the part of the aforementioned petitioner, it is concluded (…) that by virtue of article 74º of the General Tax Law (LGT) the burden of proof of the facts constituting rights (…) falls on whoever invokes them wherefore, in this context, it was incumbent on the petitioner to present evidence elements that would allow proving the alleged" which "however he did not do".
4. CLAIMANT'S RESPONSE TO EXCEPTIONS RAISED BY RESPONDENT
Of impropriety of the means
4.1
The Claimant in response to this exception came to allege that "the Tax Authority has no reason" when it invokes the material incompetence of the arbitral tribunal, inasmuch as, "the hierarchical appeal was filed from the decision of the gracious petition that assessed the legality of the tax assessment act and, thus being, as it is from the act of dismissal of the hierarchical appeal filed from the dismissal of gracious petition that assesses the illegality of the assessment act that judicial challenge may be pursued and not contentious appeal (…), pursuant to article 97º section 1, paragraphs d) and p) of CPPT".
4.2
Thus, the Claimant continues, "the request for constitution of arbitral tribunal may be presented within the period of 90 days counting from the notification of the decision of the hierarchical appeal, pursuant to article 10º section 1, paragraph a) of RJAT".
4.3
On the other hand, the Claimant alleges that it is the Respondent itself that "in the Letter sent to the Claimant regarding the decision of dismissal of the hierarchical appeal states that (…) the passive subject may, within the period of three months, counting from the date of receipt, file judicial challenge against that decision, pursuant to the provisions of articles 99º and following of CPPT".
4.4
In these terms, the Claimant concludes regarding this exception that "(…) from the act of dismissal of the hierarchical appeal filed from the dismissal of gracious petition that assesses the legality of the assessment act, being concerned with the declaration of illegality of assessment acts, as well as of the administrative decisions that entailed the assessment of those assessment acts, judicial challenge may be pursued, whereby the competence of the arbitral tribunal is verified in conformity with paragraph a) of section 1 of article 2º of RJAT (…)".
Of untimeliness of the request for arbitral pronouncement
4.5
In this context, the Claimant understands that "once again, the Respondent has no reason" inasmuch as, "in the case at hand, the provision of paragraph a) of section 1 of article 10º of RJAT applies, the taxpayer having the option to request the constitution of the arbitral tribunal within the period of 90 days, counted from the notification of the decision of the hierarchical appeal".
4.6
Thus, "given that the notification of the decision of the hierarchical appeal occurred on 11.03.2014, the 90 days provided for in this article ended on 9.06.2014, the date on which the Claimant submitted the request for constitution of the arbitral tribunal".
4.7
The Claimant also came, in the response presented, to comment on the arguments invoked "by contestation" (regarding the timeliness of the filing of the hierarchical appeal and regarding the illegality of the assessments), by the Respondent in its response to the request for arbitral pronouncement, which will not be considered here by the tribunal as the Claimant had no right of "counter-response" in that matter at this stage of the proceedings, but only of response to the exceptions raised by the Respondent, as was defined in the meeting held on 14 October 2014[5].
5. EVALUATION OF PRELIMINARY ISSUES
5.1
In accordance with the provision of article 608º of the CPC in force, applicable by virtue of the provision of article 22º of RJAT, "(…) the judgment deals, firstly, with the procedural issues that may determine the dismissal of the instance, according to the order imposed by their logical precedence" and the judge should "resolve all issues that the parties have submitted to his assessment, except those whose decision is prejudiced by the solution given to others (…)" (emphasis ours).
5.2
In these terms, taking into consideration the preliminary issues raised by the Respondent, it becomes necessary to assess and previously decide, in the present arbitral proceeding, the following issues:
5.2.1
Of the impropriety of the means used by the Claimant, inasmuch as, according to the Respondent, "the hierarchical appeal examined in this proceeding was the subject of summary dismissal, based on its untimeliness" wherefore, the Respondent defends, "such decision does not entail the assessment of the legality of the act of tax assessment" and, therefore, "the jurisdictional examination of that act (…) is removed from the competence of arbitral tribunals" (emphasis ours).
5.2.2
Of the untimeliness of the request for arbitral pronouncement, inasmuch as, according to the Respondent, "the present request for arbitral pronouncement (…) omits (…) any reference, either to the request for annulment of the act of dismissal of the hierarchical appeal, or to the dismissal of the gracious petition, (…) it follows from this that the act examined is solely the act of IRS assessment for the year 2007, whose term of the voluntary payment deadline occurred on 09 January 2012" (emphasis ours).
5.2.3
Thus, the Respondent defends that the presentation on 09 June 2014 of a request for arbitral pronouncement, defined pursuant to article 10º of RJAT, denotes its manifest untimeliness.
5.2.4
If such is not understood, the Respondent continues, "and it is concluded that from the request formulated in the petition, it results a request for assessment of the dispatch relating to the gracious petition, having this been validly notified on 29 August 2012, equally it will be concluded that the presentation of the request for arbitral pronouncement on 09 June 2014 is afflicted by untimeliness" (emphasis ours).
5.3
In any of the hypotheses (5.2.2. to 5.2.4.), the Respondent understands that the request for arbitral pronouncement will be untimely, which will determine its absolution.
Of the impropriety of the means used
5.4
The question arises as to whether the preliminary issue alleged by the Respondent, of the "impropriety of the means" procedural used by the Claimant regarding recourse to the Arbitral Tribunal to know of the illegality of the act of summary dismissal of the hierarchical appeal filed by the Claimant, in consequence of the act of express dismissal of the gracious petition, is well-founded.
5.5
Article 2º of RJAT fixes the matters on which the arbitral tribunal may pronounce, being among the competences defined there "the declaration of illegality of acts of tax assessment" (covered by the paragraph of that article).
5.6
The scope of applicability of the statement "declaration of illegality of acts of tax assessment", used in paragraph a) of section 1 of article 2º of RJAT, does not restrict arbitral jurisdiction to cases in which a direct challenge is made to an act of that nature.
5.7
In fact, the illegality of assessment acts may be declared jurisdictionally as a corollary of the illegality of a second-degree act, which confirms an assessment act, incorporating its illegality.
5.8
Thus, "the inclusion in the competences of the arbitral tribunals operating in CAAD, of cases in which the declaration of illegality of the acts, listed in article 2º of RJAT, is made through the declaration of illegality of second-degree acts (…) results with certainty from the reference made in that rule", namely, to the acts of tax assessment, "which are expressly referred to as included among the competences of the arbitral tribunals"[6] (emphasis ours).
5.9
In these terms, we can thus conclude that the provision of paragraph a) of section 1 of article 2º of RJAT does not exclude cases in which the declaration of illegality results from the illegality of a second-degree act.
5.10
The question now is whether it is included in the competences of the arbitral tribunals operating in CAAD, to declare the illegality of assessment acts when that illegality was not assessed by the act aimed at being examined (i.e., in the case under analysis, the act that summarily dismissed the hierarchical appeal filed by the Claimant).
5.11
Notwithstanding the fact that article 2º of RJAT ("the competence of arbitral tribunals") does not expressly include the assessment of claims for declaration of illegality of acts of summary dismissal of hierarchical appeal, the fact that paragraph a) of section 1 of article 10º of RJAT makes reference to sections 1 and 2 of article 102º of CPPT, in which the various types of acts that give rise to the deadline for judicial challenge are indicated (including the hierarchical appeal), makes it apparent that all types of acts capable of being challenged through the judicial challenge process, covered by those sections 1 and 2, will be covered within the scope of jurisdiction of the arbitral tribunals operating in CAAD, provided they have as their object an act of one of the types indicated in the aforementioned article 2º of RJAT (emphasis ours).
5.12
With respect to the act of summary dismissal of hierarchical appeal, that constitutes an administrative act, in view of the definition given by article 120º of the Code of Administrative Procedure (CPA) [subsidiarily applicable in tax matters, by virtue of the provision of article 2º, paragraph d), of the LGT, article 2º, paragraph d), of CPPT and article 29º, section 1, paragraph d), of RJAT], as it constitutes a decision of a body of the Administration which, pursuant to rules of public law, aimed to produce legal effects in an individual and concrete situation.
5.13
On the other hand, it is also unquestionable that it is an act in tax matters as the application of rules of tax law is made in it.
5.14
In these terms, an act of summary dismissal of hierarchical appeal constitutes an "administrative act in tax matters".
5.15
From the analysis of the provision in paragraphs d) and p) of section 1 and section 2 of article 97º of CPPT, it is inferred the rule that the challenge of administrative acts in tax matters may be made, in the tax judicial process, through judicial challenge or special administrative action (which succeeded the contentious appeal, pursuant to article 191º of CPTA), as those acts entail or do not entail the assessment of the legality of administrative assessment acts (emphasis ours).
5.16
Thus, in view of the criterion above stated, the acts rendered in procedures of summary dismissal of hierarchical appeal of assessment acts may only be challenged through the judicial challenge process when they entail the assessment of the legality of the assessment act (emphasis ours).
5.17
If the act of summary dismissal of hierarchical appeal of assessment act does not entail the assessment of the legality of the latter, the special administrative action shall apply (emphasis ours).
5.18
The legislative concern in removing, from the competences of the arbitral tribunals operating in CAAD, the assessment of the legality of administrative acts that do not entail the assessment of the legality of assessment acts, in addition to resulting from the outset from the generic directive of creating an alternative means to the judicial challenge process and to the action for recognition of a right or legitimate interest, results also, and clearly, from the provision in the Law that approved the State Budget for 2010 (Law no. 3-B/2010, of 28 April), pursuant to which, in accordance with paragraph a) of section 4 of article 124º, among the possible objects of the tax arbitral proceeding are found "(…) the administrative acts that entail the assessment of the legality of assessment acts (…)" (emphasis ours).
5.19
This specification can only be justified by the fact that there was a legislative intention to the effect of excluding, from the possible objects of the proceeding, the assessment of the legality of acts that do not entail the assessment of the legality of assessment acts (emphasis ours).
5.20
Therefore, the solution of the question of the competence of this Arbitral Tribunal connected with the content of the act of summary dismissal of the hierarchical appeal filed depends on the analysis of that act of dismissal.
5.21
In fact, in accordance with the various information contained in the Administrative Process attached to the Record by the Respondent, namely, the content of the dispatch of 14 February 2014, from the Director of Services of the Directorate of Services for Personal Income Tax (DSIRS) (made in the information no. …/14), duly notified to the Claimant, in the assessment made which culminated in the summary dismissal of the hierarchical appeal only the question of its untimeliness was taken into account and not any question relating to the assessment of the legality of the underlying assessment acts (emphasis ours).
5.22
In fact, already in the draft decision of dismissal of the hierarchical appeal under analysis (Letter no. …, of 7 August 2013, from DSIRS) the now Respondent came to allege the untimeliness of that appeal on the basis that "(…) the appeal petition was submitted by fax sent on the last day of the deadline, at 23:51 (…)".
5.23
Subsequently, and already in the final decision seat of assessment of the said hierarchical appeal, the now Respondent came to allege that "the draft decision of dismissal of the hierarchical appeal was based on the understanding sanctioned by the Services of the Tax Administration (see Information no. …/12, Process …/11, of the Directorate of Services for Tax Justice, sanctioned by dispatch of the Sub-Director General of 27.07.2012) regarding the moment for the practice of acts"
5.24
In this way, the now Respondent justified that "the rules of petitions in administrative procedure are provided for in articles 77º, 78º and 79º of the CPA, which are subsidiarily applied to CPPT, by virtue of the provision of article 2º, paragraph d) of the same statute" wherefore, "although to the counting of the deadlines provided for in the tax procedure (…) the form of counting provided for in article 279º of the Civil Code applies (…) in the case of sending correspondence by facsimile (…), article 77º and following of the CPA is to be applied" reason for which the petitions thus delivered "are only considered received within normal hours of operation of the services (…)"
5.25
Thus, given that the tax services were already closed when the hierarchical appeal was sent by facsimile, the same was considered presented "on the next business day (…)", reason for which that appeal was considered untimely.
5.26
In view of the assessment made by the now Respondent (above cited in summary form), the Tribunal understands that, in the act of dismissal of the hierarchical appeal, we are dealing with an administrative act that does not entail (because it does not include) the assessment of the legality of a tax assessment act.
5.27
Thus, the appropriate process, in view of the above, is that of special administrative action[7].
5.28
In this context, jurisprudence has corroborated the above presented, in the sense that:
5.28.1
The appropriate procedural means for knowing the legality of an act of decision of the procedure of official revision of an assessment act is the special administrative action if in that decision the legality of the assessment act was not assessed (emphasis ours)[8];
5.28.2
The appropriate procedural means for knowing the legality of an act of decision of the procedure of official revision of an assessment act is the judicial challenge process if in that decision the legality of the assessment act was assessed (emphasis ours)[9].
5.29
Given that, in the present case, "underlying the hierarchical appeal the defects imputed to the procedure and the assessment act were not discussed, but only the timeliness of the hierarchical appeal, the proper procedural means, in view of the provision of article 97º, section 1, paragraph p) and section 2 of CPPT, to react judicially against the decision rendered therein, is the current special administrative action" (emphasis ours)[10].
5.30
Further on this matter, as Jorge Lopes de Sousa emphasizes[11], in the comments to the provision of article 97º of CPPT, "it clearly follows that, in cases where the act to be challenged is an assessment act or an act that entails the assessment of an assessment act [act of dismissal (…) of hierarchical appeal filed from the decision that assesses the gracious petition] the appropriate means is the challenge process (…) if the act to be challenged effectively contains the assessment of the legality of an assessment act. If in the act practiced (…) the legality of the assessment act was never assessed, due to some obstacle to such knowledge [such as untimeliness (…)], the appropriate challenge means will be the special administrative action, as follows from the provision of section 2 of this article 97°, as it will be a matter of an act that does not assess the legality of an assessment act. Although it is not usual the determination of the appropriate judicial means through the content of the act and not its nature or the administrative or tax procedure in which it was rendered, it is clear that paragraph d) of section 1 and section 2 of this article 97° make the choice between challenge and special administrative action (contentious appeal) depend on the content of the act and not on any other factor" (emphasis ours)[12].
5.31
In these terms, in view of the analysis carried out, regarding the exception under analysis, that "it is improper the means used by the Claimant to request the revision of the act that summarily dismissed the hierarchical appeal, based on its untimeliness", it is understood that this exception is well-founded, inasmuch as with the need for adoption of special administrative action (and impossibility of converting the judicial challenge process adopted), there is a matter excluded from the competences of the arbitral tribunals operating in CAAD, this tribunal being incompetent to know that request for revision of the act that summarily dismissed the hierarchical appeal.
Of the untimeliness of the request for arbitral pronouncement
5.32
As a preliminary matter, it should be stated that, despite the exception of incompetence of CAAD to know of the request for revision of the act that summarily dismissed the hierarchical appeal filed by the Claimant having been raised, taking into account that this exception only concerns this act, the exception raised by the Respondent regarding the alleged untimeliness of the request for arbitral pronouncement will also be assessed here, as taking into account that in it is also implicit the request for examination of the act of dismissal of the gracious petition, as a way of being able to declare, as a final matter, the illegality of the IRS assessments object of the request for pronouncement, the continuity of the arbitral procedure will depend on the assessment of the merit of this exception.
5.33
Pursuant to the provision of section 1 of article 102º of CPPT, the (general) deadline for filing the judicial challenge is 90 days counted from the facts enumerated in that article, such period being 15 days (special deadline), in case of dismissal of gracious petition, counting from the notification of the decision.
5.34
In general terms, the deadlines for filing actions are:
a) Substantive deadlines, of lapse, and are integral to the very material legal relationship disputed, aiming to determine the period for the exercise of a right; and
b) Peremptory deadlines, as their passage extinguishes the very right itself.
5.35
Thus, before an action is filed, regardless of the nature of the courts to resort to for the filing of the same, there is not yet a proceeding, there being no judicial or procedural deadlines before there is a proceeding.
5.36
In either of the cases provided for in item 5.34., above, it is a substantive deadline, counted in accordance with the provision of article 279º of the Civil Code (by referral of article 20º of CPPT), that is, on a continuous basis, not being suspended in the period of judicial recess[13].
5.37
As Jorge Lopes de Sousa states, in the annotations to article 102º of CPPT, "as no special deadline is provided for in this article for the judicial challenge of decision rendered in hierarchical appeal, the appropriate deadline will be the 90 days provided for in paragraph e) of section 1 of that article"[14].
5.38
Thus, given that the special deadline for judicial challenge is provided only for the decision of dismissal of gracious petition, and not also for the challenge of the subsequent decision of dismissal of hierarchical appeal, that shorter deadline will only apply to that decision and not to this[15].
5.39
Consequently, the decision of the hierarchical appeal that entails the assessment of the legality of assessment act (…) falls within the provision of paragraph e) of section 1 of article 102º, wherefore the deadline of 90 days from the respective notification applies to it"[16][17].
5.40
In the scope of the regime of tax arbitration, article 10º, section 1, of RJAT establishes that the request for constitution of arbitral tribunal must be presented:
5.40.1
"Within the period of 90 days, counted from the facts provided for in sections 1 and 2 of article 102º of CPPT, regarding acts susceptible to autonomous challenge and, as well, from the notification of the decision or from the end of the legal deadline for decision of the hierarchical appeal" and,
5.40.2
"Within the period of 30 days, counted from the notification of the acts provided for in paragraph b) of article 2º, in other cases".
5.41
In this matter, it should be noted that the arbitral nature of this tribunal and the application of the regime of tax arbitration do not entail any modification relating to the nature, modalities and form of counting of deadlines, as is extracted from the reading of RJAT, and even less regarding substantive deadlines, which are an integral part of the material statute of the very right of tax credit.
5.42
And, if there were any doubt, article 29º of RJAT provides for the subsidiary application of the rules of a procedural or processual tax nature, of the rules on organization and process in administrative and tax courts, of the CPA and of the Code of Civil Procedure (CPC).
5.43
Taking into consideration the already analyzed regarding the exception invoked by the Respondent regarding the "impropriety of the means used" by the Claimant to examine the act of summary dismissal of the hierarchical appeal (see above, item 5.4. to item 5.31.), we understand that, in the situation under analysis, the counting of the mentioned deadline of 90 days (see item 5.40., above) should begin from, not from the notification of that dispatch of summary dismissal (since this did not entail any analysis of the legality of the IRS assessments relating to the year 2007 and, therefore, would not give rise to the counting of deadline for purposes of presentation of arbitral request, as already demonstrated), but should begin the counting of that deadline from the notification of the decision of dismissal of the gracious petition (inasmuch as that dispatch expressed itself on the legality of the assessments above mentioned).
5.44
In these terms, the request for constitution of the arbitral tribunal had to be submitted, within the maximum period of 90 days counting from the date of notification of the decision of the gracious petition filed by the Claimant, that is, by 27 November 2012 (taking into account the notification of the dispatch of dismissal of the gracious petition on 29 August 2012) which did not occur, the request for constitution of the arbitral tribunal having been filed with CAAD on 9 June 2014, that is, after the expiration of the legal deadline for doing so.
5.45
Given that the deadline for filing the request is a deadline of peremptory lapse (articles 298º, section 2, 330º, section 1, and 333º, section 1, all of the Civil Code), it is embodied in a peremptory exception[18][19][20], of a type imperative of the exercise of the respective right.
5.46
Being imperative of the exercise of the respective right [articles 576º, section 3 and 579º of CPC, here applicable ex vi paragraph e) of article 2º of CPPT], the untimeliness resulting from that peremptory exception has as a consequence the extinction of the right to perform the act (articles 298º, section 2 and 333º section 1 of CC and section 3 of article 139º of CPC), expressed in the lapse of the right to request arbitral pronouncement, which implies the absolution of the Respondent regarding the request for examination (implicit in the request for pronouncement) of the act of dismissal of the gracious petition concerning the IRS assessments (article 576º, section 3 of CPC)[21].
6. DECISION
6.1
In these terms, in view of the above in the preceding chapter, regarding the assessment of the exceptions raised by the Respondent, and taking into consideration the well-foundedness of both exceptions, the interlocutory decision rendered here will have the nature of final decision of this proceeding, becoming without effect the subsequent conditional terms pre-defined at the meeting held at CAAD on 14 October 2014[22], in which the representatives of both Parties were present.
6.2
On the other hand, in accordance with the provision of article 22º, section 4, of RJAT, "the arbitral decision rendered by the arbitral tribunal includes the fixing of the amount and the allocation among the parties of the costs directly resulting from the arbitral proceeding".
6.3
In this context, the basic rule relating to responsibility for procedural costs is that the party that caused them must be condemned, being understood that the losing party incurs procedural costs, in the proportion in which they are (article 527º, section 1 and 2 of the CPC in force).
6.4
In the case under analysis, taking into consideration the above, the principle of proportionality imposes that all responsibility for costs be attributed to the Claimant.
6.5
In these terms, this Arbitral Tribunal decided:
6.5.1
To judge the exception of impropriety of the means used as well-founded, inasmuch as the material incompetence of this Arbitral Tribunal to assess the dispatch of dismissal of the hierarchical appeal is recognized and, in consequence, absolved the Respondent from the instance in this matter.
6.5.2
To judge the exception of untimeliness of the request for revision of the dispatch of dismissal of the gracious petition as well-founded and, in consequence, absolving the Respondent of the request for annulment of the IRS assessments object of the request for arbitral pronouncement.
6.5.3
Condemn the Claimant to payment of the costs of the present proceeding.
Process Value: In conformity with the provision of articles 306º, section 2 of CPC in force and 97º-A, section 1 of CPPT, as well as article 3º, section 2 of the Regulation of Costs in Tax Arbitration Proceedings, the process is assigned the value of EUR 30.624,89.
The Arbitration Fee is fixed at EUR 1.836,00, pursuant to Table I of the Regulation of Costs in Tax Arbitration Proceedings, charged to the Claimant, in accordance with the provision of article 22º, section 4 of RJAT.
Notify.
Lisbon, 17 November 2014
The Arbitrator
Sílvia Oliveira
[1] The writing of the present decision is governed by the spelling prior to the 1990 Orthographic Agreement.
[2] AC TRC Process 1660/11.2TBNC.C1 of 15.05.2013
[3] AC TRC Process 508/0404 of 31.03.2004
[4] See AC TCAS Process 09623/2013 of 21 March 2013.
[5] And of which the corresponding minutes were drawn up, filed in this proceeding.
[6] In this sense, see CAAD Arbitral Decision P65/2012-T (adapted)
[7] In this context, see in particular AC TCAS Process 06254/12 of 5 March 2013 and AC STA of 25 June 2009 (Process no. 0194), cited therein.
[8] In this context, cite in particular the AC STA of 20 May 2003 (Process no. 638/03), the AC STA of 8 October 2003 (Process no. 870/03), the AC STA of 6 November 2008 (Process no. 357/08).
[9] In this context, cite in particular the AC STA of 19 February 2003 (Process no. 1461/02), the AC STA of 29 February 2012 (Process no. 441/11) and the AC STA Process 0747/12 of 24 October 2012.
[10] See AC TCAN Process 00334/05.8BEVIS of 28 June 2012.
[11] See CPPT, Annotated and Commented, II Vol., 6th ed., 2011, annotation 18 a) to article 97º, pages 53 and 54.
[12] In this sense, also cited by Jorge Lopes de Sousa, in particular, the AC STA Process 0441/11 of 29 February 2012 and the AC STA Process 01461/02 of 19 February 2003, regarding this position.
[13] In this context, see in particular AC STA Process 01038/12 of 28 November 2012, AC STA Process 0677/10 of 7 September 2011 and AC STA Process 01922/13 of 5 February 2014.
[14] See CPPT, Annotated and Commented, II Vol., 6th ed., 2011, annotation 7 c) to article 102º, page 152.
[15] See CPPT, Annotated and Commented, II Vol., 6th ed., 2011, annotation 7 c) to article 102º, page 153.
[16] See CPPT, Annotated and Commented, II Vol., 6th ed., 2011, annotation 7 c) to article 102º, page 153.
[17] Regarding deadlines, see AC TCAS Process 02435/08 of 29 September 2009.
[18] In this sense, see AC STA 340/13 of 20 May 2013, according to which it is written that "the lapse of the right of action, once it prevents the production of legal effect of the facts articulated by the plaintiff, constitutes a peremptory exception. In fact, the lapse of the right of action configures a cause to which the substantive law attributes the cessation of the right that the plaintiff invokes as already validly constituted and, from this perspective, integrates the field of peremptory exceptions that «are those that translate into the invocation of facts or cause imperative, modifying or extinguishing of the right of the Plaintiff, thereby leading to total or partial dismissal of the action (…)»".
[19] In this sense, MANUEL DE ANDRADE, Elementary Notions of Civil Procedure, Coimbra Editora, 1979, pages 130/131, cited in the AC STA Process 340/13 of 20 May 2013.
[20] In the AC STA Process 340/13, mentioned in the previous notes, it is stated that "(…) in the CPTA, more specifically in article 89º, section 1, paragraph h), within the scope of the special administrative action, the lapse of the right of action was qualified as a dilatory exception. There it seems to have chosen a somewhat different framing of the question (…) viewing the lapse as a preclusory fact, although based on substantive law grounds, «whose effect is to preclude all inquiry about the disputed legal situation, dispensing with ascertaining its prior existence [since] once the lapse is invoked the right subject to it can no longer be exercised, which makes discussion about its prior existence useless» (LEBRE DE FREITAS, Code of Civil Procedure Annotated, volume II, 2nd ed., Coimbra Editora, page 333 et seq.). Now, the characteristic effect of dilatory exceptions is, precisely, to prevent the court from knowing the merits of the case, obligatorily limiting judicial activity to the knowledge of the exception, which is what occurs in the case of the lapse of the right of action, in which the court limits itself to certify, in light of the relevant facts (invoked by the defendant or known ex officio), that knowledge of the right invoked by the plaintiff is precluded, wherefore the decision can be considered merely on form, because it does not go beyond the procedural level of untimeliness of the action, having as effect the dismissal of the instance.
From the point of view of practical results, this diversity of doctrinal options will have no repercussions as in both the court does not proceed with the assessment of the merits of the case (…). In the case sub judice, because the law subsidiarily applicable is the CPC, we understand that the legal effect will be the dismissal of the request (…)".
[21] See AC STA 01038/12 of 28 November 2012.
[22] And of which the corresponding minutes were drawn up, filed in this proceeding.
Frequently Asked Questions
Automatically Created