IUC Subjective Incidence and Legal Presumptions: CAAD Arbitration Annulment of Tax Assessments 2009-2013

ARBITRAL DECISION

I. - REPORT

A - PARTIES

A..., taxpayer number ..., hereinafter referred to as the "Claimant", filed a request for establishment of an arbitral tribunal, pursuant to the provisions of subparagraph a) of no. 1 of article 2 and articles 10 and following of Decree-Law no. 10/2011, of 20 January (Legal Framework for Arbitration in Tax Matters, hereinafter referred to as "LFATM"), with a view to examining the following dispute which opposes it to the Tax and Customs Authority (which succeeded, among others, the Directorate-General of Taxes) hereinafter referred to as the "Respondent" or "TCA".

B - REQUEST

1 - The request for establishment of the arbitral tribunal was accepted by the Honourable President of CAAD on 20 June 2014 and notified to the TCA on 10 July 2014.

2 - The Claimant did not proceed to appoint an arbitrator, wherefore, pursuant to the provisions of no. 1 of article 6 of the LFATM, the undersigned, on 26-08-2014, was designated by the Ethics Council of the Administrative Arbitration Centre as arbitrator of a Sole Arbitral Tribunal, having accepted in the terms legally foreseen.

3 - The Parties were, on 26-08-2014, duly notified of such designation and did not manifest their intention to refuse it, in accordance with the combined provisions of subparagraphs a) and b) of no. 1 of article 11 and articles 6 and 7 of the Ethics Code.

4 - In such circumstances, in accordance with the provisions of subparagraph c) of no. 1 of art. 11 of Decree-Law no. 10/2011, of 20 January, in the wording introduced by art. 228 of Law no. 66-B/2012, of 31 December, the arbitral tribunal was regularly constituted on 11-09-2014.

5 - On 24 February 2015, the Arbitral Tribunal, pursuant to art. 16, subparagraph c) of the LFATM, issued an order dispensing with the hearing provided for in article 18 of the same statute, having regard to both the fact that the subject matter of the dispute essentially concerns a matter of law, and the absence of exceptions to be examined and decided, and the understanding reached between the parties on this point, not having the same requested any autonomous proof diligences, with the relevant documents contained in the file and the administrative process attached to the record.

6 - The herein Claimant seeks that this Arbitral Tribunal:

a) - Declare the annulment of the IUC assessments referenced in the file relating to the years 2009 to 2013.

b) - Declare the annulment of the penalties that were applied to it.

c) - Order the extinction of the tax enforcement proceedings that were instituted for collection of the IUC debt and of the other charges associated with it.

d) - Condemn the Tax and Customs Authority to reimbursement of the amounts that, as security, it paid, in the framework of the aforementioned tax enforcement proceedings.

e) - Condemn the Tax and Customs Authority to the payment of the interest provided for in article 43 of the General Tax Law.

C - CAUSE OF ACTION

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

8 - That it was notified of ex officio assessments of IUC and of the corresponding compensatory interest, as identified in the file, relating to the years 2009, 2010, 2011, 2012 and 2013, concerning the vehicle with registration number ...-...-..., referenced in the file.

9 - That, in the context of the administrative complaints it lodged against the aforementioned assessments and of the corresponding prior hearings, it presented irrefutable evidence that at the time of the tax exigibility, it had long ago proceeded to transfer ownership of the vehicle in question.

10 - That it demonstrated repeatedly, before the Finance Office of Oeiras -…, that the vehicle in question was sold, on 08-06-2005, to Stand B..., SA, located at Avenue …, in Lisbon.

11 - That the sale of the vehicle in question to Stand B..., SA is proven by receipt no. 126, of 08-06-2005, attached to the file.

12 - That the aforementioned vehicle was subsequently sold by the said Stand to a used vehicle dealer, as mentioned in invoice no. 880466, of 30-06-2005, which is included in the file.

13 - That the acquirer of the vehicle in question issued a declaration to Stand B..., SA, which is attached to the file, in which the same assumes all and any responsibility arising from the acquisition of ownership of the vehicle.

14 - That the contract of purchase and sale of the vehicle in question is not subject to written form, nor is its registration constitutive of ownership rights of the vehicle.

15 - That the purchase and sale of a motor vehicle, as a purchase and sale contract that it is, operates quod effectum, thus transferring ownership by mere effect of the contract.

16 - That vehicle registration, not having constitutive nature, is reflected in a mere presumption of ownership, capable of being rebutted by contrary proof, such as that which was made.

17 - That it has suffered too much because of the vehicle in question, with legal proceedings, notifications and unjustified collection of IUC, with clear evidence that the vehicle was sold in 2005 and that it does not belong to it, having rebutted the presumption resulting from the registration.

18 - That no. 1 of article 3 of the IUC Code enshrines a legal presumption, which in light of the provisions of art. 73 of the General Tax Law always admits contrary proof, which is extensively grounded in the decisions of Tax Arbitration.

19 - That not having paid the IUC for the years 2009 to 2012, it suffered the penalties that were applied to it by the TCA, and, furthermore, tax enforcement proceedings were instituted against it, which in such context forced it to pay the sum of €221.69.

20 - That after presenting the Request for Arbitral Pronouncement it was notified of an IUC assessment made on 13-12-2014, concerning the same motor vehicle and relating to the year 2013.

21- That, in such circumstances, it requested the inclusion in the file of the aforementioned IUC assessment, given that it concerned the same motor vehicle and the same factual and legal grounds were involved.

D - RESPONSE OF THE RESPONDENT

22 - The Respondent, Tax and Customs Authority, (hereinafter referred to as TCA), presented its Response, on 15-10-2014, having also, on the same date, attached to the file the Arbitral Decisions rendered in the context of Cases no. 63/2014-T; 150/2014-T and 220/2014-T.

23 - In the said Response, the TCA understands that the factual and legal reasons invoked by the Claimant cannot stand, since and foremost,

24 - The tax legislator in determining in art. 3, no. 1 of the IUC Code who are the passive subjects of IUC, intended and expressly and intentionally established that such subjects be the owners, considering as such the persons in whose names the same are registered.

25 - 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 owners of vehicles, it being presumed that such are natural or legal persons, of public or private law, in whose names the same are registered". (Cf. art. 10 of the Response)

26 - It considers that the understanding that the legislator enshrined a presumption in art. 3 of the IUC Code, as the Claimant understands it, would unequivocally constitute an interpretation against the law. (Cf. art. 16 and 17 of the Response)

27 - It understands that in light of the wording of art. 3, no. 1 of the IUC Code it is manifestly not possible to invoke that it is a presumption, being rather a clear legislative policy choice adopted by the legislator, whose intention, within its freedom of legislative formulation, was that for purposes of IUC, those persons be considered owners who, as such, appear in the registration.

28 - It refers that the aforementioned understanding has already been adopted by the Jurisprudence of our courts, transcribing for that purpose part of the judgment of the Administrative and Tax Court of Penafiel, rendered in Case no. 210/13.OBEPNF. (Cf. art. 19 and 20 of the Response)

29 - Referring to the systematic element of interpretation, the TCA considers that the solution advocated by the Claimant is inadmissible, insofar as it has no legal support, neither in art. 3, no. 1 of the IUC Code, nor in other norms enshrined in the said Code.

30 - It considers equally that in light of a teleological interpretation of the regime enshrined in the entire IUC Code, the interpretation advocated by the Claimant, to the effect that the passive subject of IUC is the effective owner regardless of not appearing in the vehicle registration as such, is manifestly wrong, insofar as it is the very rationale of the regime enshrined in the IUC Code that constitutes clear proof that what the tax legislator intended was to create a tax based on the taxation of the vehicle owner, as it appears in the vehicle registration. (Cf. art. 39 of the Response)

31 - It adds that the IUC Code carried out a reform of the vehicle taxation regime in Portugal, substantially altering the automobile taxation regime, with the passive subjects of the tax becoming the owners appearing in the property registration, regardless of the circulation of vehicles on the public roadway. (Cf. art. 40 of the Response)

32 - It adds that the documents presented by the Claimant, being private and unilateral, have, in the scope of substantive evidentiary law, diminished probative value.

33 - It also considers that the Arbitral Tribunal should refrain from hearing the request formulated by the Claimant, relating to the annulment of the penalties that were applied to it, for reasons inherent to its competence, noting that the amounts paid for reasons associated with tax enforcement are not susceptible to reimbursement.

34 - It understands that the request presented by the Claimant, on 02-02-2015, with a view to the inclusion in the file of the assessment made on 31-12-2014, concerning the same motor vehicle and relating to the year 2013, lacks legal support.

35 - It states, to conclude, that, in light of the arguments adduced, the contested tax assessment acts should be judged unfounded, consequently maintaining themselves in the legal order, adding that it is incontestable that the legal prerequisites conferring the right to the requested interest are not gathered.

E - QUESTIONS TO BE DECIDED

36 - It is incumbent, therefore, to examine and decide.

37 - In light of the foregoing, concerning the positions of the Parties and the arguments presented, the main questions to be decided are whether:

a) - The Arbitral Tribunal is materially competent to examine the request for annulment of the penalties, with the consequent reimbursement of the corresponding amounts paid by the Respondent.

b) - The tribunal is materially competent to examine the request for annulment of the tax enforcement proceedings and determine the reimbursement of the amounts paid in such context.

c) - It is legally possible to cumulate, to the request for arbitral pronouncement, the IUC assessment act made on 13-12-2014, relating to the year 2013 and relating to the same motor vehicle, with registration number ...-...-....

d) - Whether the norm of subjective incidence contained in article 3, no. 1 of the IUC Code establishes or does not establish a presumption.

e) - What is the legal value of vehicle registration in the economy of the IUC Code, particularly for purposes of the subjective incidence of this tax.

f) Whether, on the date of occurrence of the fact generating the tax, the vehicle had already been previously transferred, although the right of ownership of it continues to be registered in the name of its previous owner, for purposes of the provisions of article 3, no. 1 of the IUC Code, the passive subject of IUC is the previous owner or the new owner.

F - PROCEDURAL PREREQUISITES

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

39 - The Parties enjoy legal personality and capacity, are legitimate and are legally represented (cf. art. 4 and no. 2 of art. 10 of Decree-Law no. 10/2011 and art. 1 of Ordinance no. 112/2011, of 22 March).

40 - The process is not affected by flaws that invalidate it.

41 - Having regard to the administrative tax process, whose copy was sent by the TCA, and the documentary evidence attached to the file, it is now incumbent to present the material facts relevant to the understanding of the decision, as are fixed in the terms mentioned below, being important, however, before all else, to examine the tribunal's competence regarding both the request for annulment of the penalties and the reimbursement of the amounts paid for that purpose, and the request for annulment of the tax enforcement proceedings and the reimbursement of the amounts paid in such context.

G - ANNULMENT OF PENALTIES AND TAX ENFORCEMENT PROCEEDINGS

42 - Having regard, on the one hand, to the provisions of articles 97, 577, 578 and 608 of the Code of Civil Procedure and considering, on the other, the provisions of article 13 of the Code of Procedure in Administrative Courts (CPTA), applicable here by virtue of article 29, no. 1, subparagraph c), of the LFATM, it is important to examine, first, the issue related both to the request for reimbursement of the amounts paid as penalties, and to the request for annulment of the tax enforcement proceedings with the consequent reimbursement of the amounts paid in such context, insofar as the same raises the issue of whether the arbitral tribunal has competence for such purpose, the examination of which precedes that of any other matter.

43 - The Claimant, in its request for arbitral pronouncement, in addition to requesting the annulment of the ex officio assessments of IUC and of the corresponding compensatory interest, as identified in the file, relating to the years 2009, 2010, 2011, 2012 and 2013, concerning the vehicle with registration number ...-...-..., identified in the file, also requested the annulment of the penalties that were applied to it, as well as the annulment of the tax enforcement proceedings with the consequent reimbursement of the amounts paid in such context.

REGARDING PENALTIES

44 - Penalties, as sanctions of an administrative nature, do not fall, from the outset, within tax law relations, nor can the amounts associated with them be confused with taxes.

45 - It is known that the tax law relation, as in particular results from the provisions of no. 2 and 3 of art. 1 of the General Tax Law and of art. 30 of this same statute, implies, in addition to the active and passive subjects of such relation, that its object concerns the assessment and collection of taxes or the resolution of conflicts arising from it.

46 - The scope of competence of tax arbitral tribunals concerns, precisely, the claims that fall within the aforementioned tax law relation. It is established, in effect, in no. 1 of art. 2 of the LFATM, in the wording given to it by Law no. 64-B/2011, of 30 December, that the competence of the said tribunals comprises: a) The declaration of illegality of acts of tax assessment, of self-assessment, of withholding at source and of payment on account; b) The declaration of illegality of acts of determination of taxable matter and of acts of fixing patrimonial values, which evidences the absence of competences of tax tribunals for purposes of examining decisions relating to the application of penalties, in the context of infractions associated with the failure to timely pay the taxes owed.

47 - What the law manifestly favoured, concerning the competences of arbitral tribunals in tax matters, was the judgment of cases that in administrative and tax courts take the procedural form of judicial review, in accordance with the provisions of subparagraph a) of art. 101 of the General Tax Law and of subparagraphs a) to f) of no. 1 of art. 97 of the Tax Procedure Code, being noted that, even in this domain, there are limitations, as results, in particular, from the provisions of art. 2 of Ordinance no. 112-A/2011, of 22 March.

48- To this effect, Jorge Lopes de Sousa refers, in Commentary on the Legal Framework for Tax Arbitration, included in the Guide to Tax Arbitration, Almedina, March, 2013, p. 105, that remain "[...] thus, outside the competence of these arbitral tribunals the examination of disputes generated [...] in tax administrative infraction proceedings".

49 - Thus, the request submitted by the Claimant for annulment of the penalties that were applied to it following the failure to timely pay IUC, does not fall within the scope of arbitrable claims, and this tribunal cannot examine them.

50 - In such circumstances, this Arbitral Tribunal cannot hear, ratione materiae, the invalidity of decisions relating to the application of the penalties in question.

REGARDING TAX ENFORCEMENT PROCEEDINGS

51 - The Claimant, as evidenced by documents in the file, proceeded, before the Finance Office of Oeiras-…, to the payment of the sum of €221.69 as a guarantee provision, in the form of security, in the context of the four tax enforcement proceedings that were instituted against it, as a consequence of non-payment of IUC relating to the assessment acts, concerning the vehicle with registration number ...-...-..., relating to the years 2009, 2010, 2011 and 2012, requesting in its request for arbitral pronouncement the reimbursement of the aforementioned sum.

52 - The said sum of €221.69, whose reimbursement the Claimant requests in the aforementioned request, is, in large measure, inseparable from the said tax enforcement proceedings, given that part of that sum, represented in the amount of €83.65 concerns IUC and compensatory interest, with €75.56 of that value relating to the amounts associated with the four IUC assessments and €8.09 to the said compensatory interest.

53 - Thus, in the context of the total amount paid by the Claimant as security, in the context of the institution of the four tax enforcement proceedings identified in the file, subject of the request for reimbursement, a part of that amount, corresponding to €138.04 does not relate to the amounts paid in the context of eliminating the effects directly produced by the contested acts, as it is not an amount that the Claimant paid by virtue of the contested assessment acts.

54 - Arbitral tribunals, as already mentioned above, have at the core of their competences the judgment of cases that in administrative and tax courts take the procedural form of judicial review, consequently not contemplating the examination and decision of specific issues of tax enforcement proceedings that have been instituted.

55 - In this sense, it is again appropriate to refer to Jorge Lopes de Sousa, idem, when he tells us that remain "[...] thus, outside the competence of these arbitral tribunals the examination of disputes generated in tax enforcement proceedings [...]".

56 - In such circumstances, this Arbitral Tribunal cannot hear, on the grounds of the subject matter, the requested extinction of the tax enforcement proceedings, duly instituted for collection of the IUC debt and of the interest associated with it.

II - GROUNDS

H - FACTUAL GROUNDS

57 - Regarding relevant factual matters, this tribunal considers the following facts to be established:

58 - The Claimant, A..., taxpayer number ..., was notified of IUC assessments and the compensatory interest associated with them, relating to the years 2009, 2010, 2011, 2012 and 2013, concerning the vehicle with registration number ...-...-..., identified in the file.

59 - The Claimant lodged administrative complaints against the aforementioned assessments, which, by order of the Head of the Finance Office of Oeiras - …, were dismissed on the ground that "[...] IUC is due by the owner of any vehicle subject to it, regardless of its circulation or possession [...] thus, the ownership of vehicles is taxed and not their respective use or enjoyment [...]".

60 - The vehicle referenced in the request for arbitral pronouncement was sold to Stand B..., SA on 08-06-2005, as evidenced by documents concerning the trade-in by the said Stand of the vehicle with registration number ...-...-..., in the context of the sale to the Claimant of the Ford Focus 1.8 TDCi X-Trend vehicle.

61 - The vehicle with registration number ...-...-... was, on 30-06-2005, sold by the said Stand to C..., taxpayer no. …, as evidenced by invoice no. 880466, of 30-06-2005, included in the file.

62 - The said C..., as acquirer of the vehicle in question, issued a declaration to Stand B..., SA, which is attached to the file, in which the same assumes all and any responsibility arising from the acquisition of ownership of the vehicle.

63 - The Claimant, as proof of the mentioned sales and to rebut, in particular, the presumption that it considers to be enshrined in no. 1 of art. 3 of the IUC Code, attached, both when it lodged the administrative complaints and in the context of this proceeding, copies of the mentioned trade-in documents of the vehicle with registration number ...-...-... by Stand B..., SA and of invoice no. 880466, relating to the sale of the same vehicle to C....

64 - On the dates relating to the facts giving rise to the tax, and to its exigibility, to which the IUC assessments in question in this proceeding refer, the ownership of the vehicle in question did not belong to the Claimant but rather to other persons, as identified in the file.

65 - The Claimant, after presenting the Request for Arbitral Pronouncement, was notified of an IUC assessment made on 13-12-2014, concerning the same motor vehicle and relating to the year 2013, whose inclusion in the file it requested by application of 02-02-2015.

GROUNDS OF PROVEN FACTS

66 - The facts considered proven are based on the documents mentioned, regarding each of them, insofar as their conformity with reality was not questioned.

FACTS NOT PROVEN

67 - There are no facts considered as not proven, given that all facts considered relevant to the examination of the request were proven.

I - LEGAL GROUNDS

68 - The factual matter is fixed, being now incumbent to proceed to its legal subsumption and determine the Law applicable to the underlying facts, in accordance with the questions to be decided enumerated in no. 34.

69 - The decisive issue in the present case, regarding which there are absolutely opposed understandings between the Claimant and the TCA is reflected in knowing whether the norm of subjective incidence contained in no. 1 of art. 3 of the IUC Code establishes or does not establish a rebuttable presumption.

70 - The positions of the parties are known. In effect, for the Claimant, the expression "considering as such" contained in no. 1 of art. 3 of the IUC Code constitutes a rebuttable legal presumption, allowing the person inscribed in the registration as owner of the vehicle to present evidence intended to demonstrate that such ownership is inserted in the legal sphere of another person, to whom such ownership was transferred.

71 - The Respondent, for its part, considers not only that the interpretation defended by the Claimant is manifestly wrong, insofar as it is the very rationale of the regime enshrined in the IUC Code that constitutes clear proof that what the tax legislator intended was to create a tax based on the taxation of the vehicle owner as it appears in the vehicle registration, but also that the request presented by the Claimant to the effect of including in the file the IUC assessment made on 13-12-2014, relating to the year 2013 and concerning the same motor vehicle, lacks legal support. However, with all due respect, it is mistaken.

Let us see,

INCLUSION IN THE FILE OF THE IUC ASSESSMENT ACT MADE ON 13-12-2014 RELATING TO THE VEHICLE WITH REGISTRATION NUMBER ...-...-..., WITH A VIEW TO EXAMINING ITS LEGALITY

72 - The Claimant, as recorded in the SGP, presented its Request for Arbitral Pronouncement on 08-07-2014, having been notified in December 2014 of the IUC assessment made on 13-12-2014, relating to the year 2013, concerning the vehicle identified in the file, with registration number ...-...-..., whose inclusion in the ongoing proceeding it requested on 02-02-2015.

73 - It is important to take into account, from the outset, regarding the request for cumulation of claims formulated by the Claimant on 02-02-2015, the principle of procedural economy, it being noted what Manuel A. Domingues de Andrade says about it, in Coimbra Publisher - 1979 - p. 387/388, when, to this effect, he refers that the same is "[...] an expression of the principle of least effort or economy of means. One should seek the maximum procedural result with the minimum use of activity; the maximum yield with the minimum cost. In this conformity, each proceeding should resolve as many disputes as possible (economy of proceedings); and should, on the other hand, contain only the necessary or useful acts and formalities (economy of acts and economy of formalities)".

74 - Regarding the aforementioned principle of procedural economy, related to the cumulation of claims provided for in no. 1 of art. 3 of the LFATM, Jorge Lopes de Sousa tells us, in Commentary on the Legal Framework for Tax Arbitration, included in the Guide to Tax Arbitration, Almedina, March, 2013, p. 145, that the possibility of cumulation of requests for illegality of tax acts, provided for in the said legal norm, is justified by the "[...] economy of means that they provide and by contributing to the uniformity of decisions". The aforementioned author also refers, op. cit., that if the "[...] cumulation [...] were not admitted, the taxpayers who were passive subjects of taxes assessed in various acts by the Tax Administration organ, in similar situations, would have to request the declaration of illegality of each of the acts in isolation, presenting in all requests the same substantiation, with the tribunal having to pronounce multiple identical decisions, possibly with repetition of proof production acts. On the other hand, the admissibility of cumulation potentiates the uniformity of decisions, ensuring the realization of the constitutional principle of equality".

75 - It will also be important to consider, in addition to the aforementioned principle of procedural economy, the principle of simplification which, being a framework for the proceedings pertaining to tax arbitration processes, would also not be respected with the dismissal of the request for cumulation presented by the Claimant on 02-02-2015, relating to the IUC assessment act made on 13-12-2014, concerning the same vehicle, which was not, nor could have been, contested in the initial request.

76 - It is important to take into account, with respect to the said request, that to the cumulation of claims are applied by analogy the rules of amendment of claims provided for in article 265 of the Code of Civil Procedure by the non-existence of specific rules, as is extracted, in particular from the Decision of the Appellate Court of Évora, Case 6475/03.9TBSTB.E1, of 07-04-2011, which in our case, in light of the provisions of no. 2 of the said article, applicable in accordance with subparagraph e) of no. 2 of art. 29 of the LFATM, is reflected in the admissibility of cumulation of the request presented by the Claimant on 02-02-2015, provided such occurred up to the closure of discussion in first instance, which appears to coincide with the date of the arbitral order that closed this procedural phase, which, in the context of this proceeding, was issued on 24-02-2015, whereby the request in question was timely presented.

77 - It is further added that, in addition to this temporal condition, the request in reference, having framing both in art. 104 of the Tax Procedure Code, applicable ex vi of subparagraph e) of no. 1 of art. 29 of the LFATM, and in no. 1 of art. 3 of the LFATM, can only be admitted, with the conditions provided for in the said legal norms being verified.

78 - Such conditions, as established in the last of the mentioned norms, imply that the merits of cumulation of the claim depend on the examination of the same factual circumstances and on the interpretation of the same principles or rules of law, which occurs in the present case.

79 - The cumulation of the request in question has, moreover, the same cause of action; has identical factual and legal grounds; the tribunal competent for the decision is the same and the taxes have the same nature, as we are dealing with special consumption taxes and, in that context, taxes of the same type.

80 - In such circumstances, it is considered that nothing opposes the requested cumulation of claims, thus examining together the four IUC assessment acts initially petitioned in the Request for Arbitral Pronouncement, with the IUC assessment act made on 13-12-2014, relating to the year 2013 and concerning the same vehicle with registration number ...-...-..., which the Claimant could not inscribe in the said Request, for the simple reason that it did not then have, nor could have, knowledge of it.

INTERPRETATION OF ART. 3, NO. 1 OF THE IUC CODE, WITH A VIEW TO IDENTIFYING THE PASSIVE SUBJECT OF IUC AND THE LEGAL VALUE OF VEHICLE REGISTRATION

J - INTERPRETATION OF THE NORM OF SUBJECTIVE INCIDENCE CONTAINED IN NO. 1 OF ARTICLE 3 OF THE IUC CODE

81 - It should be noted, before all else, that it is common ground in the doctrine that in the interpretation of tax laws the general principles of interpretation fully apply. This is an understanding that is accommodated in article 11 of the General Tax Law.

82 - It is commonly accepted that, with a view to grasping the meaning of the law, interpretation resorts to various means, being important, first of all, to reconstruct the legislative thought through the words of the law, which means seeking, from the outset, its literal sense. The said sense, as is also common ground, corresponds to the lowest degree of interpretive activity, being important, therefore, to assess and measure it in light of other criteria, intervening to this effect, the so-called elements of a logical nature, whether of rational (or teleological) sense, of a systematic character or of a historical order.

83 - Regarding the interpretation of tax law, it is pertinent to recall, as indeed the jurisprudence has been pointing out, in particular in the Decisions of the Supreme Administrative Court of 05/09/2012 and 06/02/2013, Cases no. 0314/12 and 01000/12, respectively, available at: www.dgsi.pt, the importance of the provision of article 9 of the Civil Code, as a fundamental precept of legal hermeneutics, which in this context cannot fail to be considered.

84 - Interpretive activity is, therefore, unavoidable in resolving the doubts raised by the application of the legal norms in question.

85 - In the view of FRANCESCO FERRARA, in Interpretation and Application of Laws, translation of MANUEL DE ANDRADE, (2nd ed.), Arménio Amado, Editor, Successor - Coimbra, 1963, p. 131, the said interpretive activity "[...] is unique [and] complex, of a logical and practical nature, as it consists in inducing from certain circumstances the legislative will", adding, ibidem, p.130, that "Looking at the practical application of law, legal interpretation is essentially teleological by its nature".

86 - The purpose of interpretation, the said author also tells us, ibidem, pp. 134/135, is "[...] to determine the objective meaning of the law [...]". The law, being the expression of the will of the State, is a "[...] will that persists in an autonomous manner, detached from the complex of thoughts and tendencies that animated the persons who contributed to its emanation". Hence the activity of the interpreter should be to "[...] seek not what the legislator wanted, but what appears objectively desired in the law: the mens legis and not the mens legislatoris".

87 - For MANUEL DE ANDRADE, citing FERRARA, in Essay on the Theory of Interpretation of Laws, p. 16 (2nd ed.), Arménio Amado, Editor, Successor - Coimbra, 1963, "Interpretation seeks the voluntas legis, not the voluntas legislatoris [...], and seeks the current will of the law, not its will at the moment of application: it is not, therefore, a will of the past, but a will always present while the law does not cease to be in force. It is to say that the law, once formed, detaches itself from the legislator, gaining autonomous consistency; and, more than that, becomes a living entity, not merely an inanimate body [...]".

THE LITERAL ELEMENT

88 - It is in this framework that it is important to find answers to the questions to be decided, particularly to the one aimed at knowing whether article 3, no. 1 of the IUC Code establishes or does not establish a rebuttable presumption, beginning, from the outset, with the literal element.

89 - As the literal element is the first that needs to be used, in search of legislative thought, it is necessarily with that one that one should begin, seeking to reach the meaning of the expression considering as such the persons inscribed in the said article 3, no. 1 of the IUC Code.

90 - Article 3, no. 1 of the IUC Code provides that "The passive subjects of the tax are the owners of vehicles, considering as such the natural or legal persons, of public or private law, in whose names the same are registered." (our emphasis)

91 - The formulation used in the said article, it will be important to note, first of all, resorts to the expression "considering", which raises the issue of whether to such expression can be attributed a presumptive sense, thus equating it with the expression "presuming". These are expressions frequently used with equivalent meanings, as is evident in various situations in the Portuguese legal order.

92 - In truth, there are countless norms that enshrine presumptions, resorting for that purpose, moreover, to the verb "consider" in various forms. It is not, therefore, difficult to identify situations, in various areas of law, in which the expression "considering" or "considers" is used with a meaning equivalent to the expression "presuming" or "presumes", expressions to which, whether at the level of irrebuttable presumptions, whether in the context of rebuttable presumptions, is conferred, countless times, an equivalent meaning.

93 - As it does not seem pertinent to again reference examples revealing these situations, given that such examples are abundantly listed in some of the decisions of tax arbitral tribunals, examples of which are those rendered in the context of Cases no. 14/2013 - T, 27/2013 - T and 73/2013 - T, we here give the same as entirely reproduced.

94 - In such circumstances, as the mentioned expressions are recurrently used with an equivalent purpose and meaning, it can be concluded that it is not only the use of the verb "presume" that places us before a presumption, but also the use of other terms can serve as a basis for presumptions, as in particular occurs with the expression "considering", which, in our view, will precisely be what occurs in no. 1 of art. 3 of the IUC Code.

It is thus an understanding that, while not appearing to correspond to a skewed reading of the letter of the law, as the TCA considers, is in harmony with the provision of no. 2 of art. 9 of the Civil Code, insofar as it ensures, to legislative thought, the minimum of verbal correspondence required there.

95 - From a literal perspective, in light of what has been stated, there is no doubt that the interpretation which considers that a rebuttable presumption is established in no. 1 of art. 3 has complete support in the formulation enshrined there, in light of the aforementioned equivalence between the expression "considering as such" and the expression "presuming as such".

The linguistic element, as mentioned above, being the first that should be used in search of legislative thought, should, however, in order to find the true meaning of the norm, be subjected to the control of the other elements of interpretation of a logical nature. (whether such elements are of rational (or teleological) sense, of a systematic character or of a historical order).

96 - In effect, as is extracted from the work of MANUEL DE ANDRADE, cited above, p. 28, "[...] the purely linguistic analysis of a legal text is merely the beginning [...], the first degree [...] or the first act of interpretation. In other words, it only furnishes us the probable legislative thought and will [...] or, better, the grammatical delimitation of the possible consistency of the law [...], the framework within which resides its true content".

97 - Thus being, let us then examine the rational element (or teleological).

THE HISTORICAL AND RATIONAL (OR TELEOLOGICAL) ELEMENT

98 - Taking into account the elements of interpretation with a historical leaning, it is first of all appropriate to recall what is expressly stated in the explanatory statement of Bill no. 118/X of 07/03/2007, underlying Law no. 22-A/2007 of 29/06, when there it states that the reform of automobile taxation is realized through the displacement of part of the tax burden from the moment of vehicle acquisition to the circulation phase and aims to "form a coherent whole" which, although intended for the raising of public revenue, intends that the same be raised "in the measure of the environmental costs that each individual causes to the community", adding, to this effect about the tax in question and the different types and categories of vehicles, that "as a structuring and unifying element [...] the principle of equivalence is enshrined, thus making it clear that the tax, as a whole, is subordinate to the idea that taxpayers should be burdened in the measure of the cost they cause to the environment and the road network, being this the reason for being of this tax figure".

99 - In this framework, it seems clear that the logic and rationality of the new automobile taxation system can only coexist with a passive subject of the tax, on the assumption that it be that one, and not another, the real and actual subject causing road and environmental damage, as results from the principle of equivalence, inscribed in art. 1 of the IUC Code.

100 - The said principle of equivalence, which informs the current Sole Vehicle Circulation Tax, has, at least insofar as it specifically concerns the environment, underlying the polluter-pays principle, and realizes the idea, inscribed in it, that whoever pollutes should, therefore, pay. The said principle has, moreover, in some way, constitutional grounding, insofar as it represents a corollary of the provision of subparagraph h) of no. 2 of art. 66 of the Constitution.

101- What is aimed to be achieved through the said principle is to internalize negative environmental externalities, which, after all, in the case of the present file, means no more than making the prejudices that result to the community, arising from the use of motor vehicles, be assumed by their owners, as "economic - user" subjects, as costs that only they should bear.

102 - Returning to the mentioned principle of equivalence, it will be said that the same has, in the economy of the IUC Code, an absolutely structuring role, with the normative edifice of the Code in question being founded on it. The said principle cannot, therefore, fail to constitute an aim that is intended to be legally pursued, embodying in that measure a light of remarkable brilliance that, constant and continuously, cannot fail to illuminate the path of the interpreter.

103 - Regarding the said principle, it is pertinent to note what Sérgio Vasques tells us, when, in Special Consumption Taxes, Almedina, Coimbra, 2001, p. 122, regarding the technical realization of that principle considers that "In obedience to the principle of equivalence, the tax should 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".

104 - Specifically addressing IUC, adds the aforementioned author, op. cit., that "Thus, a tax on automobiles based 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 as well", adding that the realization of the said principle "[...] dictates other requirements still regarding the subjective incidence of the tax [...]".

105 - In light of what has just been stated, it is clear that the taxation of the real and actual polluters corresponds to an important aim pursued by the law, in the case by the IUC Code, an aim that, in the words of Francesco Ferrara, in Interpretation and Application of Laws, 2nd Edition, Arménio Amado, Editor, Successor, Coimbra, 1963, p. 130, should always be before the eyes of the jurist, as the aforementioned author there refers, "[...] legal interpretation is by its nature essentially teleological".

106 - Thus, it should be noted that, whether in light of the said historical elements, whether in light of the elements of a rational or teleological character of interpretation that are left referenced, it is equally imperative to conclude that no. 1 of art. 3 of the IUC Code can only enshrine a rebuttable presumption.

107 - The systematic element of interpretation should also be considered.

THE SYSTEMATIC ELEMENT

108 - Regarding the systematic element BAPTISTA MACHADO tells us, in Introduction to Law and to Legitimating Discourse, p. 183, that "this element comprises the consideration of the other provisions that form the normative complex of the institute in which the norm to be interpreted is integrated, that is, that 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 belongs to the norm to be interpreted in the overall legal order, as well as its consonance with the spirit or intrinsic unity of the entire legal system".

109 - It is known that a legal principle, in the case the principle of equivalence, does not exist in isolation, rather is linked by an intimate nexus with other principles that integrate, at a more global level, the respective legal order, in the case, with the other principles embodied in the system inscribed in the IUC Code. In that sense, each article of a given legal statute, in the case of the IUC Code, will only be understandable if we place it before the other articles that follow or precede it.

110 - Regarding the systematization of the IUC Code, environmental concerns were decisive in determining that the mentioned principle of equivalence was inscribed in the first article of the said Code, which necessarily leads to the subsequent articles, insofar as they are founded on such principle, being influenced by it. This occurred, in particular, with the tax base, which came to be constituted by various elements, particularly those relating to pollution levels, 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 very subjective incidence, provided for in article 3 of the IUC Code, which cannot escape the influence referred to.

111 - The systematic element of interpretation and the interaction between the various articles and principles that integrate the system inscribed in the IUC Code also appeal to the understanding that what is established in no. 1 of art. 3 of the IUC Code cannot fail to constitute a presumption.

112 - No. 1 of art. 9 of the Civil Code provides that the search for legislative thought should have "[...] above all in account [...] the unity of the legal system, the circumstances in which the law was elaborated and the specific conditions of the time in which it is applied", circumstances and conditions those which, today more than ever, are of sensitivity toward the environment and respect for questions related to it.

In this context, the considerations formulated on the mentioned elements of interpretation, whether of a literal character or with a historical leaning, whether of a rational or systematic nature, point to the effect that article 3, no. 1 of the IUC Code establishes a presumption, or that is, the ratio legis of that norm, as the reason or aim that should be reasonably attributed to it, cannot fail to view the expression "considering as such", used in the said article, as revelatory of the establishment of a presumption, which means that the passive subjects of IUC being, in principle, the owners of vehicles, considering as such the persons in whose names the same are registered, may, ultimately, be others.

It will be said, moreover, that the establishment of the presumption in the mentioned norm will correspond to the only interpretation that is in harmony with the principle of equivalence, mentioned above.

113 - Still regarding the presumption that has been referred to and which is understood to be enshrined in no. 1 of art. 3 of the IUC Code, it is pertinent to note what is written in the preamble of the recently published Decree-Law no. 177/2014, of 15 December, when, referring to motor vehicles, considers that "The failure to update the property registration presents serious consequences, both for those who remained owners in the registration, and for those who acquired and did not promote registration in their favor, as well as for the various public entities that base their decisions on ownerships that they presume to be substantively true". (our emphasis)

114 - Here arrived, it is pertinent to recall the provision of art. 73 of the General Tax Law, when it establishes that "Presumptions enshrined in the norms of tax incidence always admit contrary proof", (our emphasis), which means that the legal presumption, which appears to be established in no. 1 of art. 3 of the IUC Code, will necessarily be rebuttable.

115 - In this framework, the passive subjects of the tax are, presumptively, the persons in whose names the vehicles are registered, or that is, the said passive subjects are, in principle, and only in principle, the persons in whose names such vehicles are registered.

116 - In effect, if the owner in whose name the vehicle is registered comes, as occurs in the present proceeding, to indicate and prove who were the owners of the vehicles in question, nothing justifies, in our understanding, that the previous owner be made responsible for the payment of IUC that is owed.

117 - It is further added that this interpretation of no. 1 of article 3 of the IUC Code is that which, in our opinion, best adjusts to the principles to which the TCA should subordinate its activity, in particular to the principle of inquisitorial nature, with a view to discovering material truth.

118 - Regarding the said principle of inquisitorial nature, it is pertinent to allude to the teachings of Diogo Leite Campos, Benjamim Silva Rodrigues and Jorge Lopes de Sousa, in General Tax Law, Annotated and Commented, 4th Edition 2012, Encontro de Escrita, Lda, Lisbon, p. 488/489, when, in annotations to the cited art. 58, they refer that the administration has a dynamic role in the collection of elements with relevance for the decision, adding that the "[...] lack of diligences deemed necessary for the construction of the factual basis of the decision will affect this not only in the hypothesis where they are mandatory (violation of the principle of equality), but also if the materiality of the facts considered is not proven or if relevant facts, alleged by the interested party, are missing from that basis, due to insufficiency of proof that the Administration should have collected [...]".

The principle of inquisitorial nature, the said authors add, op. cit, "[...] has to do with the powers (-duties) of the Administration to proceed with the investigations necessary for the knowledge of the essential or determinant facts for the decision [...]".

119 - The material truth, embodied, in the present case, in the circumstance that the ownership of the vehicle identified in the request for arbitral pronouncement had been transferred by the Claimant at a time prior to the date of tax exigibility, or that is, to the date from which the tax creditor could assert, before the debtor, its right to payment of the tax, was, in light of the elements inscribed in the administrative process, known to the TCA.

L - ACQUISITION OF VEHICLE OWNERSHIP AND THE VALUE OF REGISTRATION

120 - Before all else, it should be added, in light of what will be explicitly stated below regarding the value of registration, that the acquirers of vehicles become owners of those same vehicles through the celebration of the corresponding contracts of purchase and sale, with registration or without it.

121 - There are three articles of the Civil Code that are important to take into account, regarding the acquisition of ownership of a motor vehicle. They are, first of all, art. 874, which establishes the notion of a contract of purchase and sale, as being "[...] the contract by which ownership of a thing, or another right, is transferred, by means of a price"; art. 879, in whose subparagraph a) it is provided, as essential effects of the contract of purchase and sale, "the transfer of ownership of the thing or of the holding of the right" and art. 408, which has as its heading contracts with real effect, and establishes in its no. 1, that "the constitution or transfer of real rights over a determined thing takes place by mere effect of the contract, save the exceptions provided for in law". (our emphasis)

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

122 - Regarding the said contracts with real effect, it is pertinent to note the teachings of Pires de Lima and Antunes Varela, when, in annotations to art. 408 of the Civil Code, they tell us that "From these so-called real contracts (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 its formation (cf. arts. 1129, 1142 and 1185) ".

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

123 - Also from jurisprudence, in particular from the Decision of the Supreme Court of Justice no. 03B4369 of 19/02/2004, available at: www.dgsi.pt, it results that, in light of the provision of art. 408, no. 1, of the Civil Code, "the constitution or transfer of real rights over a determined thing takes place 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 (art. 874 and 879 subparagraph a) of the Civil Code), which does not depend on any special formality, being valid even when celebrated verbally - in accordance with the Decision of the Supreme Court of Justice of 3-3-98, in CJSTJ, 1998, year VI, Volume I, p. 117". (our emphasis)

124 - The contract of purchase and sale having, in light of what has been stated, a real nature, with the aforementioned consequences, it is also necessary to consider the legal value of the vehicle registration, the subject matter of that contract, insofar as the transaction of the said good is subject to public registration.

125 - It establishes, in effect, no. 1 of art. 1 of Decree-Law no. 54/75, of 12 February, relating to vehicle registration, that "Vehicle registration has essentially as its purpose to give publicity to the legal situation of motor vehicles and their trailers, with a view to the safety of legal commerce". (our emphasis)

126 - As it becomes clear, in light of the said norm, what the purpose of registration is, there is not, however, clarity, within the scope of the said Decree-Law, on the legal value of that registration, being important to consider article 29 of the aforementioned statute, relating to vehicle property registration, when there it provides that "To vehicle registration are applicable, with the necessary adaptations, the provisions relating to land registration, [...]". (our emphasis)

127 - In this framework, in order that we may reach the sought knowledge on the legal value of vehicle property registration, it is important to take into account what is established in the Land Registration Code, approved by Decree-Law no. 224/84, of 06 July, when it provides in its article 7 that "definitive registration constitutes presumption that the right exists and belongs to the holder inscribed in the precise terms in which the registration defines it". (our emphasis)

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

129 - 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 thus contrary proof, as results from law and jurisprudence has been pointing out, and in this regard may be seen, among others, the Decisions of the Supreme Court of Justice nos. 03B4369 and 07B4528, respectively, of 19/02/2004 and 29/01/2008, available at: www.dgsi.pt.

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

131 - Thus, if the buyers of vehicles, as their "new" owners, do not promptly promote the proper registration of their right, it is presumed, for purposes of no. 1 of art. 3 of the IUC Code and of the provision of art. 7 of the Land Registration Code, that the vehicles continue to be property of the person who sold them and who remains in the registration their owner, such person being the passive subject of the tax, in the certainty, however, that such presumptions are rebuttable, whether by virtue of the establishment of no. 2 of art. 350 of the Civil Code, whether in light of the provision of art. 73 of the General Tax Law. Hence, from the moment in which the presumptions in question are set aside, by proof of the respective sale, the TCA cannot persist in considering as the passive subject of IUC the seller of the vehicle, who, in the registration, continues to appear as its owner.

M - EVIDENCE PRESENTED

132 - As written form is not legally required for the contract of purchase and sale of motor vehicles, proof of the corresponding sale may be made by any means, in particular through documentary means, in which are included, in particular, invoices relating to the sales of vehicles.

133 - As a means of proof that it proceeded to the sale of the vehicle with registration number ...-...-..., identified in the present proceeding, the Claimant attached not only copies of the trade-in documents of the vehicle in question by Stand B..., SA, dated 08-06-2005, but also invoice no. 880466, relating to the sale of the same vehicle, made on 30-06-2005, by the said Stand B..., SA to C....

134 - Regarding the value of invoices and other documents capable of proving sales relating to motor vehicles, it is pertinent to recall the provisions of Decree-Law no. 177/2014, of 15 December, especially the establishment in no. 2 of its article 2, in which, in particular, are considered the "invoices [...] or other discharge documents, which contain the registration number of the vehicle, the name and address of the seller and the buyer" as documents adequate to prove the sale of vehicles.

135 - The trade-in documents of the vehicle with registration number ...-...-... issued, on 08-06-2005, by Stand B..., SA, combined with invoice no. 880466 of 30-06-2005, equally issued by the said Stand relating to the subsequent sale of the said vehicle to C..., leave no doubt that the Claimant proceeded to the actual transfer of ownership of the vehicle on 08-06-2005.

136 - Thus, in light of the presumption of veracity which in no. 1 of art. 75 of the General Tax Law is conferred to the facts inscribed in the said documents and the transfer of the vehicle to its acquirers being considered true, it would behoove the TCA, in light of the provision of art. 75, no. 2 of the General Tax Law, in the context of the well-founded and objective reasons it might have, to demonstrate that such sales, in reality, did not occur.

137 - The presumption established in the aforementioned art. 75, no. 1 of the General Tax Law, when it provides that the said documents enjoy the presumption of veracity, implies, in effect, that if it is not demonstrated by the TCA the absence of correspondence between the content of such documents and reality, as it was not, its content should be considered true.

138 - The documents presented by the Claimant, as means intended to make proof of the transaction of the vehicle in question, enjoying thus the aforementioned presumption of veracity, appear with sufficient propriety, with a view to demonstrating the sale of the vehicle with registration number ...-...-..., constituting, in our view, an adequate means of proof and capable of rebutting the presumption established in no. 1 of art. 3 of the IUC Code.

139 - In light of what has just been stated, and having regard, both to the presumption established in no. 1 of art. 3 of the IUC Code, and to the transfer of ownership of the vehicle in question, by mere effect of the contract, prior to the date of tax exigibility, and to the legal value of vehicle registration in the economy of the IUC Code, the contested tax acts cannot merit our agreement, whether because an adequate interpretation and application of the legal norms of subjective incidence was not taken into account, which constitutes an error regarding the legal prerequisites, or because the said acts were based on a matter of fact, clearly divergent from the actual reality, which constitutes an error regarding the factual prerequisites.

140 - In such circumstances, having regard, on the one hand, to the fact that the presumption enshrined in art. 3, no. 1 of the IUC Code was rebutted and that, on the other, the ownership of the vehicle in question was transferred at a date prior to the dates of tax exigibility, we have that, in light of the provision of no. 3 of article 6, combined with no. 2 of article 4, both of the IUC Code, the Claimant was not a passive subject of the tax in question.

141 - The TCA, when it understands that the passive subject of IUC is, definitively, the person in whose name the motor vehicle is registered, without considering that art. 3, no. 1 of the IUC Code constitutes a presumption, nor taking into account the evidentiary elements that were presented to it, as results from the administrative process, is proceeding to the illegal assessment of IUC, based on the erroneous interpretation and application of the norms of subjective incidence of the Sole Vehicle Circulation Tax, contained in the said art. 3 of the IUC Code, whether at the level of provision, or of enactment, which constitutes the commission of a tax act lacking in legality due to error regarding the factual and legal prerequisites, which determines the annulment of the corresponding tax acts, by violation of law.

N - REIMBURSEMENT OF AMOUNT PAID AND COMPENSATORY INTEREST

142 - In accordance with the provision of subparagraph b) of no. 1 of art. 24 of the LFATM, and in accordance with what is there established, the arbitral decision on the merits of the claim for which there is no appeal or challenge binds the tax administration from the end of the period provided for appeal or challenge, and this - in the exact terms of the merits of the arbitral decision in favor of the passive subject and until the end of the period provided for the spontaneous execution of judgments of tax judicial courts - "Restore the situation that would exist if the tax act which is the subject of the arbitral decision had not been committed, adopting the necessary acts and operations for that effect." (our emphasis)

143 - These are legal commands that are in complete harmony with the provision of art. 100 of the General Tax Law, applicable to the case by virtue of the provision of subparagraph a) of no. 1 of art. 29 of the LFATM, in which it is established that "The tax administration is obliged, in the event of total or partial merits of complaints or administrative remedies, or of judicial proceedings in favor of the passive subject, to immediate and full restoration of the situation that would exist if the illegality had not been committed, including the payment of compensatory interest, in the terms and conditions provided for in law." (our emphasis)

144 - The case contained in the present file raises the manifest application of the mentioned norms, given that as a consequence of the illegality of the assessment acts, referenced in this proceeding, there must, by virtue of those norms, be a reimbursement of the amounts paid, whether as tax or as compensatory interest, as a way of achieving the restoration of the situation that would exist if the illegality had not been committed, amounts which in the case of the file are concretized in the value of €83.65, with €75.56 of that value being related to the amounts associated with the four IUC assessments and €8.09 to the said compensatory interest.

145 - Regarding compensatory interest, it appears manifest that, in light of the establishment of article 61 of the Tax Procedure Code and the requirements of the right to compensatory interest being satisfied, that is, verified the existence of error imputable to the services resulting in the payment of the tax debt in an amount greater than that legally owed, as provided for in no. 1 of art. 43 of the General Tax Law, the Claimant is entitled to compensatory interest at the legal rate, calculated on the sum of €83.65.

CONCLUSION

146 - In the circumstantial framework that has been referred to, the TCA, in committing the assessment acts that are the subject of this proceeding, founded on the idea that article 3, no. 1 of the IUC Code does not enshrine a rebuttable presumption, makes an erroneous interpretation and application of this norm, committing an error regarding the legal prerequisites, which constitutes a violation of law.

147 - On the other hand, because the TCA, on the date of occurrence of the tax facts, considered the Claimant owner of the vehicle referenced in this proceeding, considering it as such a passive subject of the tax, when such ownership, regarding the vehicle in question, was no longer inscribed in its legal sphere, basing itself thus on a matter of fact divergent from the actual reality, commits an error regarding the factual prerequisites, and therefore a violation of law.

III - DECISION

148 - Therefore, in view of all the foregoing, this Arbitral Tribunal decides:

• To judge meritorious, as proven, on the grounds of a violation of law, the request for arbitral pronouncement as it concerns the annulment of the IUC assessment acts, concerning the vehicle identified in the file, relating to the years 2009; 2010; 2011; 2012 and 2013;

• To annul, consequently, the IUC assessment acts, relating to the years 2009, 2010; 2011; 2012 and 2013 concerning the vehicle aforementioned;

• To condemn the TCA to the reimbursement of the sum of €83.65, relating to the IUC and the compensatory interest that were paid, concerning the years 2009; 2010; 2011 and 2012 and to the payment of compensatory interest at the legal rate, counted from the date of payment of the said sum, until the full reimbursement of the same;

• To condemn the TCA to pay the costs of this proceeding.

VALUE OF THE PROCEEDING

In accordance with the provisions of articles 306, no. 2 of the Code of Civil Procedure (former 315, no. 2) and 97-A, no. 1 of the Tax Procedure Code and article 3, no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the proceeding is set at €221.60.

COSTS

In accordance with the provisions of article 12, no. 2, at the end, and art. 22, no. 4, both of the LFATM, and art. 4 of the Regulation of Costs in Tax Arbitration Proceedings and Table I attached thereto, the amount of total costs is set at €306.00.

Notify the parties.

Lisbon, 10 March 2015

The Arbitrator

António Correia Valente

(The text of this decision was prepared by computer, in accordance with article 131, no. 5 of the Code of Civil Procedure (former 138, no. 5), applicable by reference of article 29, no. 1, subparagraph e) of Decree-Law no. 10/2011, of 20 January (LFATM), its writing being governed by the orthography prior to the Orthographic Agreement of 1990.)