IUC Vehicle Tax Liquidation Challenge: Arbitral Decision on Road Circulation Tax Liability (CAAD 604/2014-T)

ARBITRATION DECISION

I - REPORT

A - PARTIES

A, SA, with registered office at …, Setúbal, with corporate identification number … and B, SA with registered office at …, Setúbal, with corporate identification number …, designated as "Applicants", challenging parties in the above-referenced and marginally identified tax procedure, hereby come, invoking the provisions of articles 2º, no. 1, paragraph a) of the Legal Regime for Tax Arbitration, approved by Decree-Law no. 10/2011, of 20 January (hereinafter RJAT), and of articles 1º and 2º of Order no. 112-A/2011, of 22 March, to request the constitution of a singular arbitral tribunal, with a view to the consideration of the following claim opposing them to the TAX AND CUSTOMS AUTHORITY, hereinafter designated as "Respondent" or "AT".

B - REQUEST

1 - The request for constitution of the Arbitral Tribunal was accepted by His Excellency the President of CAAD on 05/08/2014 and notified to the Tax and Customs Authority (AT) on the same date.

2 - Pursuant to the provisions of no. 1 of article 6º and paragraph a) of no. 1 of article 11º of Decree-Law no. 10/2011, of 20 January, the Deontological Council appointed, on 19/09/2014, as sole arbitrator António Correia Valente, who communicated acceptance of the assignment.

3 - On 19-09-2014 the Parties were notified of this appointment, in accordance with the provisions jointly contained in article 11º, no. 1, paragraph b) of the RJAT, in the version introduced by article 228º of Law no. 66-B/2012, of 31 December, and in articles 6º and 7º of the Deontological Code, and neither party manifested its intention to challenge the arbitrator's appointment.

4 - In these circumstances, in accordance with the provisions of paragraph c) of no. 1 of article 11º of Decree-Law no. 10/2011, of 20 January, in the version introduced by article 228º of Law no. 66-B/2012, of 31 December, the arbitral tribunal was duly constituted on 06/10/2014.

5 - Within the framework of the order issued by the Arbitral Tribunal on 08-01-2015, entered in the SGP, and taking into account both the circumstance that the object of the dispute concerns fundamentally a matter of law, and the circumstance that the exceptions raised by the AT for consideration and decision were subject to written response by the Applicant and the relevant documents are in the proceedings, with the administrative procedure file attached to the case, the meeting provided for in article 18º of the RJA, taking into account the provisions of article 16º, paragraph c) of the same instrument, was considered unnecessary.

6 - The present Applicants request that this Arbitral Tribunal:

a) - Declare the illegality of all IUC assessments and the consequent annulment, both of the assessment acts relating to the Single Circulation Tax (hereinafter designated as IUC), and of those relating to the corresponding compensatory interest, relating to the years 2013 and 2014, with respect to the seven vehicles identified in the proceedings and hereby given as entirely reproduced;

b) - Condemn the AT to reimburse the sum of € 2,839.34, corresponding to the total amount paid as IUC and compensatory interest relating to the years and vehicles aforementioned;

c) - Condemn the Tax and Customs Authority to pay indemnificatory interest for the payment of IUC and compensatory interest improperly assessed and paid.

d) - Condemn the Tax and Customs Authority to payment of the amount spent as attorney's fees for legal representation, estimated at the value of € 1,000.00

C - CAUSE OF ACTION

7 - The Applicants, in the substantiation of their request for arbitral pronouncement, affirm, in summary, the following:

8 - That they were confronted with the existence of IUC debts entered into the computer system by the AT, which presupposed a prior assessment of the said tax and were prohibitive of obtaining a certificate of regularized tax situation.

9 - That they promoted the payment of said debts, having obtained for that purpose from the Finance Portal the respective payment slips with the indication of the corresponding IUC.

10 - That, when the fourteen IUC assessments, identified in the case, were made, relating to the years 2013 and 2014, they had already transferred ownership of the seven vehicles identified, to which they say they relate.

11 - That the sale of the seven mentioned vehicles occurred on dates prior to those on which the referenced IUC assessments were made, and were not, therefore, in the years to which such assessments relate, passive subjects of that tax.

12 - That article 3º of the CIUC establishes a presumption and that all elements pertaining to its interpretation point in the direction that such presumption has been rebutted.

13 - That the principle of equivalence established in article 1º of the CIUC is a structuring and unifying principle of IUC, which is clearly demonstrated in Annex II to Legislative Proposal no. 118/X, which gave rise to Law no. 22-A/2007, of 29 June, which approved the CISV and the CIUC.

14 - That the transfer of vehicle ownership occurs by mere effect of the vehicle purchase and sale contract, not being dependent on any special formality, being valid even when celebrated verbally.

15 - That registration does not have constitutive value of the right of ownership of vehicles, but merely declarative, with the instrument regulating vehicle registration establishing the presumptive nature of the right of vehicle ownership.

16 - That although facts subject to registration only produce effects against third parties after the date of their respective registration, as provided in article 5º, no. 1 of the Property Registration Code, it is nonetheless true that, pursuant to no. 4 of article 5º of the said Code, third parties for registration purposes are those who have acquired from a common author rights incompatible with each other.

17 - That, in light of the legal notion of third party, the Respondent does not meet the legal requirements inscribed in that concept, and therefore cannot disregard the documented transfer of ownership of the vehicles identified in the proceedings.

18 - That the sales of the vehicles in question are supported by six Debit Notes and one Launch Notice/Warning containing information relating to the buyers.

19 - That by the time the request for arbitral pronouncement was presented, they had already incurred expenses for attorney's fees charged by their legal representative, corresponding to the sum of € 1,000.00, for which they should be reimbursed.

D - RESPONDENT'S ANSWER

20 - The Respondent, Tax and Customs Authority, (hereinafter designated as AT), presented its Answer on 11-11-2014 and a copy of the Tax Administrative Procedure File (PA) on the same date, having then made reference to the Arbitral Decisions handed down in Cases nos. 113/2014-T; 114/2014-T; 170/2014-T; 178/2014-T; 179/2014-T and 183/2014-T which it mentions in article 63º of its Answer, which pronounce on matters related to the exceptions it raises.

21 - In said Answer, the AT presented its defense by raising, immediately, several exceptions, which are concretized in:

• Illegal cumulation of claims;

• Incompetence of the Arbitral Tribunal ratione materiae, regarding the request for reimbursement of fees paid to the attorney;

• Untimely presentation of the request for arbitral pronouncement;

• Incompetence of the Arbitral Tribunal ratione materiae, regarding the lack of subject-matter of the request for arbitral pronouncement.

22 - The said exceptions support and translate the defense of the Respondent as follows:

BY DILATORY EXCEPTION

23 - The Respondent understands that the cumulation of claims, in light of the provisions of no. 1 of article 3º of the RJAT, is only admissible if the success of the claims depends on the consideration of the same factual circumstances and the interpretation and application of the same principles or rules of law, which in the case at bar is not verified, given that the requirement of coincidence as to factual circumstances is not met.

24 - It adds that in the cumulation of claims embodied in the request for arbitral pronouncement, underlying the present proceeding, we are faced with disparate factual situations embodied in different vehicles, with different sale dates and values and with completely disparate owners, and therefore the cumulation of claims made by the Applicants is illegal.

25 - With respect to the incompetence of the Arbitral Tribunal ratione materiae, regarding the request for reimbursement of fees paid to the attorney, the Respondent understands that the compensation for the costs incurred by the Applicants with their legal representative, within the framework of the present proceeding, is not inscribed in the provisions of article 2º of the RJAT, and is not, therefore, within the competence of arbitral tribunals.

26 - With respect to the mentioned request, the AT, in defense of its understanding, makes reference to the jurisprudence of the Central Administrative Court of the South which points in the direction that the reimbursement of amounts paid to judicial representatives, as attorney's fees, assumes the nature of indemnification based on the State's non-contractual civil liability.

27 - On the presentation of the request for arbitral pronouncement, the Respondent understands that it was, in part, untimely presented, given that, in its view, seven of the assessments referenced in said request have payment deadline dates which, relating four of them to 31-01-2013 and the remainder to 28-02-2013, 01-08-2013 and 28-02-2014, evidence that their challenge did not observe the 90-day period legally established for that purpose, counted from the end of the period for voluntary payment of the tax obligation.

BY PEREMPTORY EXCEPTION

28 - The Respondent understands that the request for arbitral pronouncement underlying the present proceeding stems from an error which the Applicants partially incurred, insofar as they react against "mere billing notes" as if they were official assessments. (Cf. articles 27º, 28º, 29º and 40º of the Answer)

29 - The "mere billing notes" aforementioned are those relating to motor vehicles with license plates …; …; …; … and … and which are, respectively, integrated in Documents nos. 2, 3, 4, 5, 8, 9, 10, 11, 12 and 13 identified in the case.

30 - It adds that the impugned acts, to be official assessments, would have had to have been generated by the Respondent and sent by it to the Applicants, which did not occur in the present case.

31 - It likewise considers that said billing notes were generated and extracted by the Applicants themselves in the Finance Portal via the internet, which means that it was the said Applicants who, without having been notified for that purpose, proceeded with the issuance of the mentioned billing notes.

32 - It concludes that the Singular Arbitral Tribunal constituted is materially incompetent to consider and decide on the claim that is the subject matter of the dispute regarding Documents nos. 2, 3, 4, 5, 8, 9, 10, 11, 12 and 13 aforementioned, given the non-existence of acts of official IUC assessment issued by the Respondent.

33 - Finally, it further understands that even in the hypothesis of considering that we are not faced with billing notes but rather with self-assessments generated by the Applicants themselves in the Finance portal, the request for arbitral pronouncement cannot proceed, given that the reaction against such self-assessments depends on prior and necessary Gracious Complaint, in accordance with the provisions of article 131º/1 of the CPPT, which did not occur, adding that, cautiously and without conceding, even if this is not so understood, the impugned acts do not suffer from any illegalities, alleging, in summary and in essence, the following:

BY CHALLENGE

34 - The allegations of the Applicants cannot at all proceed, insofar as they make an interpretation and application of the legal norms applicable to the case, notoriously wrong, insofar as it incurs not only "in a skewed reading of the letter of the law", but in the adoption "of an interpretation that does not heed the systematic element, violating the unity of the regime" enshrined throughout the CIUC and, more broadly, throughout the entire tax-legal system, also following an "interpretation that ignores the rationale of the regime enshrined in the article in question". (Cf. articles 90º and 91º of the Answer)

35 - The tax legislator, in establishing in article 3º, no. 1 of the CIUC, who are the passive subjects of IUC, expressly and intentionally established that they are the owners of vehicles, being considered as such the persons in whose name they are registered, noting that,

36 - The said legislator did not use the expression "presumes" as it could have done, for example, in the following terms: "the passive subjects of the tax are the owners of vehicles, being presumed as such the natural or legal persons, of public or private law, in whose name they are registered". (Cf. article 97º of the Answer)

37 - The wording of article 3º of the CIUC does not manifestly allow for invoking, as the Applicants do, that it establishes a presumption, insofar as what is established in said article corresponds to a clear legislative policy choice embraced by the legislator, whose intention within its freedom of legislative configuration was that, for purposes of IUC, those who appear as such in vehicle registration shall be considered owners, adding that it is in this sense that points,

38 - The "understanding already adopted by the Jurisprudence of our courts", transcribing for this purpose part of the judgment of the Administrative and Fiscal Court of Penafiel, handed down in Case no. 210/13.OBEPNF. (Cf. articles 108º and 110º of the Answer)

39 - On the systematic element of interpretation, it considers that the solution espoused by the Applicants is intolerable, finding the understanding suffraged by them no legal support. (Cf. no. 119º of the Answer)

40 - On the ignorance of the "rationale" of the regime, the AT considers that the interpretation espoused by the Applicants is manifestly wrong, insofar as what was aimed at by the tax legislator was the creation of a tax based on the taxation of the vehicle owner, as it appears in vehicle registration.

41 - It adds that the new CIUC taxation regime substantially altered the vehicle taxation regime, with the owners appearing in the property register becoming passive subjects of the tax, regardless of vehicle circulation on public roads, with the Single Circulation Tax now being owed by persons appearing in the register as owners of vehicles. (Cf. nos. 149 and 150 of the Answer)

42 - In this sense, it refers that this is the understanding inscribed, notably, in recommendation no. 6-B/2012, of 22/06/2012, by the Ombudsman addressed to the Secretary of State for Public Works, Transportation and Communications.

43 - The interpretation conveyed by the Applicants is also, in addition to what has already been mentioned, non-conforming with the Constitution, namely because among others, it violates the principle of efficiency of the tax system, insofar as it results in an obstruction and increase in costs of the competencies attributed to the Respondent, with obvious prejudice to the interests of the Portuguese State of which both the Applicants and the Respondent are part. (Cf. nos. 158 of the Answer)

44 - It also states that the Applicants failed to produce documentary evidence capable of substantiating the alleged transfer of ownership of the vehicles in question, given that the debit notes and launch notices presented are not apt to prove the celebration of a synallagmatic contract, as is purchase and sale.

45 - The Respondent further adds that, being the tax acts in issue valid and legal, because conforming to the legal regime in force at the time of the tax facts, no error occurred that is attributable to the services.

46 - Finally, in light of all the arguments it has adduced, it considers that the request for arbitral pronouncement underlying the present proceeding should be judged without merit, with the tax assessment acts impugned remaining in the legal order, and the Respondent entity should be accordingly absolved.

E - ISSUES TO BE DECIDED

47 - It is therefore necessary to consider and decide.

48 - Given the above, relative to the positions of the Parties and the arguments presented, it is necessary to consider and decide:

a) The dilatory exceptions relating to illegal cumulation of claims; to Incompetence of the Arbitral Tribunal ratione materiae, regarding the request for reimbursement of fees paid to the attorney and to the untimely presentation of the request for arbitral pronouncement (1);

b) The peremptory exception of incompetence of the Arbitral Tribunal ratione materiae, regarding the lack of subject-matter of the request for arbitral pronouncement;

c) The establishment, or otherwise, of a presumption in the norm of subjective incidence contained in article 3º no. 1 of the CIUC;

d) The legal value of vehicle registration in the economy of the CIUC, particularly for purposes of the subjective incidence of this tax;

e) If, at the date of occurrence of the tax-generating fact, the vehicle has already been previously alienated, although the right of ownership thereof continues to be registered in the name of its previous owner, the passive subject of IUC, for purposes of the provisions of article 3º, no. 1 of the CIUC, is the previous owner or the new owner;

f) Whether the Applicants have the right to indemnificatory interest.

F - PROCEDURAL REQUIREMENTS

49 - The Arbitral Tribunal is duly constituted and is materially competent, pursuant to paragraph a) of no. 1 of article 2º of Decree-Law no. 10/2011, of 20 January.

50 - The Parties have legal personality and capacity, are legitimate and are legally represented (cf. article 4º and no. 2 of article 10º of Decree-Law no. 10/2011 and article 1º of Order no. 112/2011, of 22 March).

51 - The proceeding does not suffer from vices that would invalidate it.

52 - Taking into account the tax administrative procedure, a copy of which was duly presented by the AT, and the documentary evidence joined to the case, it is now appropriate to present the factual matter relevant to understanding the decision, which is fixed in the following terms.

G - RAISED EXCEPTIONS

53 - Taking into account the provisions of no. 1 of article 608º of the CPC and article 13º of the Code of Procedure in Administrative Courts (CPTA), applicable here respectively by force of article 29º, no. 1, paragraphs c) and e), of the RJAT, the said exceptions should be known first,

DILATORY EXCEPTIONS

REGARDING CUMULATION OF CLAIMS

54 - The Respondent understands that the cumulation of claims, in light of the provisions of no. 1 of article 3º of the RJAT, is only admissible if its success depends on consideration of the same factual circumstances and the interpretation and application of the same principles or rules of law.

55 - It adds that the claim formulated by the Applicants does not satisfy the aforesaid requirements, insofar as we are faced with disparate factual situations embodied in different vehicles, with different sale dates and values and with completely disparate owners, and therefore the cumulation of claims in question is illegal.

56 - The said understanding does not heed what essentially characterizes the factual circumstances for purposes of the cumulation of claims, as provided in article 3º, no. 1 of the RJAT, given that it does not understand them as relating to the identity of facts, in the measure of their relevance for purposes of the decision.

57 - In truth, for purposes of the cumulation of claims in question in the case at bar, the relevant factual identity does not reside, namely, in the dates on which the vehicles were sold, nor in the different values of their respective sales, nor in the persons acquiring such vehicles, as contingent elements that integrate the mentioned factual circumstances, but rather, as mentioned above, in that which in the facts has essential relevance for purposes of the corresponding decision, which in this case is reduced to the transfer of ownership of vehicles from the Applicants to the entities that acquired them and to the dates on which this occurred, having particularly in view to know whether it occurred at moments prior to those of the exigibility of the tax in question.

58 - In this framework, it cannot but be understood that the cumulation of claims in question has legal basis, and therefore the exception raised by the Respondent does not proceed.

REGARDING INCOMPETENCE OF THE ARBITRAL TRIBUNAL RATIONE MATERIAE FOR REIMBURSEMENT OF FEES PAID TO THE ATTORNEY

59 - With respect to the request for reimbursement of the sum of € 1,000.00, as attorney's fees paid by the Applicants, the Respondent understands that such request is not inscribed in the provisions of article 2º of the RJAT, and is not therefore within the competence of arbitral tribunals, and indeed, it is so. In effect,

60 - The scope of competence of tax arbitral tribunals, in light of the provisions of no. 1 of article 2º of the RJAT, in the version given to it by Law no. 64-B/2011, of 30 December, comprises: a) The declaration of illegality of acts of tax assessment, self-assessment, withholding at source and payment on account; b) The declaration of illegality of acts of determination of taxable matter, of acts of determination of collectable matter and of acts of fixing patrimonial values, which evidences the absence of competencies of tax tribunals for consideration of requests for reimbursement of amounts paid by the Applicants to their attorney.

61 - What the law manifestly favored, regarding the competencies of arbitral tribunals in tax matters, was the adjudication of causes that in administrative and fiscal tribunals assume the procedural form of judicial challenge, in accordance with the provisions of paragraph a) of article 101º of the LGT and paragraphs a) to f) of no. 1 of article 97º of the CPPT, with it being noted that even in this domain there are limitations, as results, namely, from the provisions of no. 2 of Order no. 112-A/2011, of 22 March.

62 - Thus, the request made by the Applicants for reimbursement of the sum paid as attorney's fees is not inscribed within the framework of arbitrable claims, and this tribunal cannot have knowledge of it.

63 - The request for reimbursement of the sum of € 1,000.00, formulated by the Applicants aims at the reparation of damages suffered, as a result of the presentation of the request for arbitral pronouncement underlying the present proceeding.

64 - This is a request which, intended to hold the State responsible for the costs resulting from the practice of tax acts deemed illegal by the Applicants, can only be inscribed in the non-contractual civil liability of the State, governed, as results from what is established in Law no. 67/2007, of 31 December, amended by Law no. 31/2008, of 17 July, not by norms of tax law, but by norms of civil and administrative law, and which, although having as remote origin the impugned tax assessment acts, does not correspond to a conflict emerging from a tax relationship tout court, being moreover a cost clearly subsequent to the said tax acts.

65 - In these circumstances, it is concluded that the exception raised by the Respondent is well-founded, and therefore this Arbitral Tribunal is not competent, ratione materiae, to know of the request for reimbursement of the sum of € 1,000.00 paid by the Applicants as attorney's fees for work performed by their attorney, within the framework of the present proceeding.

REGARDING UNTIMELY PRESENTATION OF THE REQUEST FOR ARBITRAL PRONOUNCEMENT

66 - On the presentation of the request for arbitral pronouncement, the Respondent understands that it was, in part, untimely presented, given that, in seven of the assessments mentioned in said request, namely those embodied in Documents nos. 4, 8, 9, 10, 11, 12 and 13 identified in the case, there appear, in its view, payment deadline dates that lead one to consider the non-observance of the 90-day period legally established for that purpose, counted from the end of the period for payment contained in those documents.

67 - In this framework, it is important to know what fact from which the 90-day period for presenting the request for arbitral pronouncement should be counted in the part relating to vehicles …; …; … and … referenced, respectively, in Documents nos. 4, 8, 9, 10, 11, 12 and 13, identified in the case.

Let us see,

68 - From the said Documents two dates appear: one, relating to the date on which they were issued; another, marking the payment deadline dates.

69 - The cited Documents nos. 4, 8, 9, 10, 11, 12 and 13 thus have, respectively, the dates of 16-07-2014/01-08-2013; 06-05-2014/28-02-2013; 06-05-2014/28-02-2014; 06-05-2014/31-01-2013; 06-05-2014/31-01-2014; 06-05-2014/31-01-2013 and 06-05-2014/31-01-2014.

70 - The Administrative Procedure file joined to the case is, namely, integrated by the document/information prepared by the Setúbal 1 Finance Service, where it is expressly stated that, among the dates of the referenced assessments, made via the internet, the oldest one, coinciding, moreover, with the date of payment of the corresponding tax, is reported to the day 06-05-2014 and the most recent to 16-07-2014.

71 - Regarding the counting of time periods for purposes of timely presentation at CAAD of the request for arbitral pronouncement, it is important to take into account that the AT, within the period of prescription of the right to assessment, may proceed with notification of the taxpayer, and therefore, if regarding the documents in question the deadline dates stated therein for payment of the tax are considered as being the relevant dates for purposes of challenge and not the dates on which they were issued by the AT's computer system, one would be precluding the right of the injured party to complaint, to judicial challenge or to appeal.

72 - Otherwise and given that, on the one hand, the Applicants only became aware of the content of the assessments in question on the dates on which said Documents were issued and that, on the other, Notifications can always be made within the prescription period, the passive subject would be, definitively, inhibited from defending the aforesaid rights within the 90-day period legally established for that purpose, if the same were to be counted from the payment deadline date that appears in the Documents created by the AT's computer system and not from the date on which those Documents are issued.

Note, moreover, that said right of challenge, in addition to being inscribed in articles 20º, no. 1 and 268º, no. 4, both of the Constitution, has legal consecration in article 96º of the CPPT, whose no. 1, as teaches Jorge Lopes de Sousa, in Code of Procedure and Tax Process, Annotated and Commented, Volume II, 6th Edition, Áreas Editora, SA, Lisbon, 2011, p. 28, establishes an option for the subjectivist doctrine, for which the primary function of tax litigation is "[…] the guarantee of judicial protection of rights or legitimate interests, with the object of judicial proceedings being the tax legal relationship […]". The mentioned right of challenge has its implementation established in articles 9º, no. 1 and 95º, no. 1, both of the LGT, with it being noted 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. 824, when regarding the said right they state that the "[…] importance given to the right of challenge […] of harmful acts is explained solely by the fact that one is in a domain in which the activity of the Administration is an activity essentially aggressive of rights and interests legally protected and not an activity of provision and in which that aggression is carried out, as a rule, through acts of favorable positive content for the taxpayer (tax assessment) or of equally unfavorable negative content (non-recognition of tax benefits)".

73 - Not having the Applicants been notified in the formal terms provided for Official Assessments, the counting of the 90-day period for presentation of the request for arbitral pronouncement shall be based on the dates on which such documents (Assessment Notes/Assessment Demonstration) were issued in the Finance Portal. (Cf. article 102º, no. 1, paragraph f) of the CPPT).

74 - In these circumstances, having the request for arbitral pronouncement been presented on 02-08-2014, it is concluded that the exception raised by the Respondent is without merit, regarding the partial untimeliness of the request for arbitral pronouncement, relating to the assessments referred to in the previous point no. 66.

PEREMPTORY EXCEPTION

75 - The Respondent, as has already been mentioned, bases said exception on what it considers to be an error which the Applicants partially incur, by confusing billing notes with official assessments, understanding that,

76 - Documents nos. 2, 3. 4, 5, 8, 9, 10, 11, 12 and 13 identified in the case cannot be held to be embodiments of official assessments, given that they were not generated nor sent by the Respondent to the Applicants.

77 - Such documents, not having been issued by the Respondent entity, are nothing more than mere billing notes that the Applicants voluntarily issued and extracted from the Finance Portal, via the internet.

78 - Thus, the AT considers that the "subject-matter of the present request for arbitral pronouncement is not based on acts of 'official assessment' issued by the Respondent, but rather on billing notes that the Applicants generated and extracted completely voluntarily from the Finance Portal and for which it proceeded to payment", from which it concludes that not constituting the billing note a tax act, there occurs in the present case a situation of lack of subject-matter, which embodies a peremptory exception and gives rise, to that extent, to the absolution of the Respondent from the claim.

79 - It further adds that, even if this is not so judged, and it is understood that we are faced with self-assessments generated by the Applicants themselves in the Finance Portal, the "present request for arbitral pronouncement cannot proceed", given that, although self-assessments constitute tax acts, the reaction of the Applicants against such self-assessments depends on prior and necessary filing of Gracious Complaint, as established by article 131º/1 of the CPPT, which did not occur in the case of the present proceeding.

80 - The Applicants, for their part, notified of the AT's response, pronounce on the mentioned exception, stating that "The billing notes from which the applicants extracted the references to proceed to payment of tax that prevented them from obtaining negative debt certificates, presuppose precisely the existence of tax assessment […]".

81 - They further consider that the billing notes, which were attached to the request for arbitral pronouncement, reveal IUC assessments, also identified by the information prepared by the Setúbal 1 Finance Service, attached to the case, adding that, before the very first intervention of the Applicants, with respect to the IUC referenced in the case, in order for the AT's computer system to provide them with billing notes so they could pay the debts contained in that same system, IUC debts had already been registered in said system, relating to the assessments identified in the proceeding.

82 - They add that before any intervention by the taxpayer, with respect to the ICU in question in the case, IUC debts had already been registered in the AT's computer system relating to the assessments in question in the proceeding.

83 - The Applicants conclude their considerations by stating that there is no possibility, in the case at bar, of self-assessment of IUC, given that all content of IUC assessments is pre-determined by the AT's computer system without taxpayer interference.

Let us see,

84 - The documents attached to the proceeding, and on which the Applicants relied to proceed with payment of IUC relating to the vehicles identified in the aforementioned documents nos. 2, 3. 4, 5, 8, 9, 10, 11, 12 and 13 identified in the case, in addition to being properly identified through own AT numbering and having the date of their issuance stated therein, contain the tax identification and address of the Applicants, mention the certain sum/amount of IUC to be paid and have, both the indispensable reference for payment, so that the same can be effected, as well as the indication of the various possible payment modalities, as well as the deadline for that purpose.

85 - The amount to be paid, while relating to the sum resulting from the addition of IUC owed and corresponding compensatory interest, is nonetheless properly itemized in said documents, given that there the respective assessments are demonstrated, whether as to IUC, where, namely, the vehicle license plate is mentioned, the year and month of registration, as well as its engine displacement, or regarding said interest.

86 - Having arrived here, it will be important to remember that assessments are acts of the administration that, combining a complex of elements, which, in this case, correspond to those left stated above, determine the amount of tax owed.

Moreover,

87 - It is certain that the Applicants retrieved from their page in the Finance Portal the documents designable as Assessment Notes/Assessment Demonstration, which are attached to the case, and proceeded to payment of the amounts inscribed therein, which cannot but mean that the corresponding and underlying tax assessments had already been "generated" (made) based on computer programming, given that their automaticity necessarily results from a computer program with clear and precise objectives, previously outlined by the programmer, that is to say, by the Tax Administration.

88 - In the case at bar, the Applicants became aware of the tax acts, in accordance with their disclosure in "their page" in the Finance Portal, having proceeded to payment of the amounts of assessed tax, acts which, although performed in the Computer System, bind the Tax Administration.

89 - In these circumstances, we are, unequivocally, before IUC assessments made by the AT, brought to the sphere of knowledge of the Applicant via their placement in "the page" that "is reserved to her" in the Finance Portal, constituting harmful acts that, in light of what is provided and established in no. 2 of article 9º and in no. 1 of article 95º, both of the LGT, can be challenged by interested parties.

90 - In light of the foregoing, the tribunal cannot accompany the Respondent's understanding regarding the lack of subject-matter of the request for arbitral pronouncement, concluding, thus, in the sense that we are before the existence of IUC assessment acts susceptible to challenge, and therefore the peremptory exception invoked by the AT does not proceed.

91 - Thus, the understanding is also set aside that we are faced with a situation of self-assessment, given that self-assessment is that which is entirely made by private parties, as opposed to assessment which is made by the Tax Administration, being able to speak of self-assessment only when it is the taxpayer himself who makes the accounts/calculations of the tax to be paid, that is, when it is the passive subject who applies the tax rate to the collectable matter, which absolutely does not happen in the case at bar (Cf. particularly, José Casalta Nabais, in Tax Law - (Reprint) Almedina, Coimbra - March - 2002, p. 252; Vitor Faveiro, in Fundamental Notions of Portuguese Tax Law, 1st vol., Coimbra Editora - 1984, pp 409/410 and Pedro Soares Martinez, in Manual of Tax Law, Almedina, Coimbra, 1983, pp. 295/296.

92 - To this effect, it is pertinent to note, similarly to what is done in the Judgment of the STA, of 31-05-2006, Case JSTA00063227, available at www.dgsi.pt., that the "latest development" regarding the concept of self-assessment is established in article 120º, no. 1 of the Spanish General Tax Law, approved by Law 58/2003, of 17 December, when it provides that "self-assessments are declarations in which the obligated taxpayers, in addition to communicating to the Administration the data necessary for the assessment of the tax and other information content data, make by themselves the operations of qualification and quantification necessary to determine and pay the amount of the tax liability or, if applicable, determine the quantity to be returned or compensated".

93 - In these circumstances we are before acts of IUC assessment, which are integrated in the list of claims subject to consideration by the arbitral tribunal, as results from what is established in article 2º, no. 1, paragraph a) of the RJAT, and therefore the Singular Arbitral Tribunal constituted is materially competent to know of the request for arbitral pronouncement underlying the present proceeding.

II - SUBSTANTIATION

H - SUBSTANTIATION OF FACT

94 - On factual matter relevant, the present tribunal takes as established the following facts:

95 - The Applicants proceeded with the sale of the seven vehicles identified in the proceeding, as appears from the six Debit Notes and the Launch Notice presented as proof of said sales, where, namely, the sale dates of each of the vehicles are referenced, as well as their acquirers.

96 - The sale of said vehicles, in light of the mentioned Debit Notes and Launch Notice presented, occurred on a date prior to the tax-generating fact and to the moment of its exigibility.

97 - The Applicants proceeded with payment of IUC relating to vehicles …; …; … and …, referenced in Documents nos. 4, 8, 9, 10, 11, 12 and 13 identified in the case, based on Assessment Demonstrations/Assessment Notes available in their "page" in the Finance Portal.

98 - The Respondent understands that the Documents that supported payment of IUC relating to vehicles …, …; … and …, mentioned above, are "mere billing notes" generated and extracted by the Applicants themselves from the Finance Portal, via the internet.

99 - The Applicants understand that no. 1 of article 3º of the CIUC establishes a presumption, and that all elements pertaining to its interpretation point in the direction that such presumption is rebuttable.

100 - The Respondent considers that the wording of article 3º, no. 1 of the CIUC does not allow understanding that it establishes a presumption, insofar as the option embraced by the legislator was to establish, expressly and intentionally, that the passive subjects of IUC are the owners of vehicles, being considered as such the persons in whose name they are registered.

SUBSTANTIATION OF PROVEN FACTS

101 - The facts taken as proven are based on the documents mentioned, regarding each of them, insofar as their correspondence to reality was not questioned.

UNPROVEN FACTS

102 - There are no facts taken as unproven, given that all facts deemed relevant for consideration of the claim were proven.

I - SUBSTANTIATION OF LAW

103 - The factual matter is fixed, it being important now, with no more exceptions to know and decide, and with competence of the arbitral tribunal fixed, to enter into the substantive issue in the present case, which is reduced to the consideration of acts of IUC assessment, relating to the tax periods of the years 2012 and 2013, relating to vehicles, numbering seven, identified in the case, which the Applicant considers afflicted with illegality, which is impugned by the AT. It is thus necessary to proceed now with the legal subsumption of the underlying facts and determine the applicable Law, in accordance with the issues decided set out in no. 48.

104 - The question which, in light of the foregoing, stands out as essential, regarding which there are, moreover, absolutely opposed understandings between the Applicant and the AT, is reduced to knowing whether the norm of subjective incidence contained in no. 1 of article 3º of the CIUC establishes or does not establish a rebuttable presumption.

105 - The positions of the parties are known. In fact, for the Applicants, said norm establishes a rebuttable legal presumption, while for the Respondent the interpretation that the Applicants make of the provisions of no. 1 of article 3º of the CIUC is notoriously wrong, insofar as it results from a "skewed reading of the letter of the law", does not heed the "systematic element" of interpretation, violating the "unity of the regime established throughout the CIUC" and "ignores the rationale of the regime" established in the said article, also translating a non-conformity with the Constitution, namely because among others, it violates the principle of efficiency of the tax system. (Cf. article 34 of the Answer).

J - INTERPRETATION OF THE NORM OF SUBJECTIVE INCIDENCE CONTAINED IN NO. 1 OF ARTICLE 3º OF THE CIUC

106 - It should be noted first, it being undisputed understanding in doctrine, that in the interpretation of fiscal laws the general principles of interpretation apply fully. This is an understanding which, moreover, has been accepted in article 11º of the General Tax Law.

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

108 - With respect to the interpretation of tax law, it is appropriate to recall, as jurisprudence has moreover been noting, namely in Judgments of the STA of 05/09/2012 and 06/02/2013, cases nos. 0314/12 and 01000/12, respectively, available at: www.dgsi.pt, the importance of the provisions of article 9º of the Civil Code (CC), as a fundamental precept of legal hermeneutics, which in this framework cannot but be considered.

109 - Interpretative activity is thus unavoidable in resolving doubts raised by the application of the legal norms in question.

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

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

112 - 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 actual will of the law, not its will at the moment of application: it is not, therefore, a will of the past, but an ever-present will while the law does not cease to be in force. That is to say that law, once formed, detaches itself from the legislator, gaining autonomous consistency; and more than that, it becomes a living entity, which is not merely an inanimate body […]".

ON THE LITERAL ELEMENT

113 - It is in this framework that it will be important to find an answer to the decided issues, particularly to that which aims to know whether article 3º, no. 1 of the CIUC establishes or does not establish a presumption, starting immediately from the literal element.

114 - Being the literal element the first which matters to use, in search of legislative thinking, it is necessarily by there that one should begin, seeking to reach the sense of the expression considered as such the persons registered in the said article 3º, no. 1 of the CIUC.

115 - The said no. 1 of article 3º of the CIUC provides that "The passive subjects of the tax are the owners of vehicles, being considered as such the natural or legal persons, of public or private law, in whose name they are registered." (underlined)

116 - The formulation used in said article, it will be important to note first, resorts to the expression "being considered", which raises the question of whether to such expression a presumptive sense can be attributed, thereby equating it with the expression "being presumed". These are expressions frequently used with equivalent senses, as is evident in various situations of the Portuguese legal order.

117 - In truth, there are countless norms that establish presumptions, combining for that purpose, moreover, the verb "consider" in various forms. It is not therefore difficult to identify situations in various areas of law in which the expression "being considered" or "consider" is used with a sense equivalent to the expression "being presumed" or "presumes", expressions to which, whether at the level of irrebuttable presumptions, whether in the framework of rebuttable presumptions, an equivalent meaning is assigned countless times.

118 - Not considering it pertinent to reference examples again revealing these situations, given that such examples are abundantly cited in some of the decisions of tax arbitral tribunals, of which those handed down within the scope of Cases nos. 14/2013 - T, 27/2013 - T and 73/2013 - T are examples, we consider them here entirely reproduced.

119 - In these circumstances, given that the said expressions are recurrently used with a purpose and equivalent significance, 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, namely, occurs with the expression "being considered", which is, in our view, precisely what is verified in no. 1 of article 3º of the CIUC.

This is thus an understanding which, not appearing to correspond to a skewed reading of the letter of the law, as the AT considers, reveals itself in harmony with the provisions of no. 2 of article 9º of the CC, insofar as it ensures to legislative thinking the minimum verbal correspondence required there.

120 - In the literal perspective, in light of what is left stated, there is no doubt that the interpretation that considers a rebuttable presumption established in no. 1 of article 3º has full support in the formulation established there, in light of the mentioned equivalence between the expression "being considered as such" and the expression "being presumed as such".

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

121 - In effect, as is drawn from the work of MANUEL DE ANDRADE, cited above, p. 28, "[…] 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 thinking and will […] or rather the grammatical delimitation of the possible consistency of the law […], the framework within which resides its true content".

122 - Thus being so, let us then see the rational (or teleological) element.

ON THE HISTORICAL AND RATIONAL (OR TELEOLOGICAL) ELEMENT

123 - Attending to elements of interpretation with a historical bent, it is appropriate from the outset to recall what expressly appears in the statement of reasons of Legislative Proposal No. 118/X of 07/03/2007, underlying Law no. 22-A/2007 of 29/06, when it states there that the reform of vehicle taxation is accomplished 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 environmental costs that each individual causes to the community", adding, with respect to the tax in question and the different types and categories of vehicles, that "as a structuring and unifying element […] the principle of equivalence is established, thus making it clear that the tax, as a whole, is subordinated to the idea that taxpayers should be burdened in the measure of the cost they cause to the environment and the road network, this being the reason for this tax figure".

124 - In this framework, it seems clear that the logic and rationality of the new system of vehicle taxation can only coexist with a passive subject of the tax, on the presumption of being that, and no other, the real and effective subject causing road and environmental damage, as results from the principle of equivalence, inscribed in article 1º of the CIUC.

125 - The said principle of equivalence, which informs the current Single Circulation Tax, has at least insofar as it specifically relates to the environment, underlying the polluter-pays principle, and achieves the idea inscribed therein that whoever pollutes should, for that reason, pay. The said principle which, in some way, has constitutional foundation, insofar as it represents a corollary of the provisions of paragraph h) of no. 2 of article 66º of our Constitution, also has consecration in the community law sphere, whether at the level of primary law, which has been the case since 7 February 1992, when the Treaty on European Union was signed in Maastricht, in whose article 130º-R, no. 2, the aforesaid principle came to appear as support for Community policy in the environmental domain, whether at the level of derived law.

126 - What is aimed to be achieved through the said principle is to internalize negative environmental externalities, which, after all, in the case at bar, means nothing more than to ensure that the prejudices arising to the community, resulting from the use of motor vehicles, are assumed by their "owners - economic - users", as costs that only they should bear.

127 - In this sense, it is appropriate, moreover, to note that the single circulation tax has notorious affinities with environmental taxes, insofar as the same aim, in particular, at the pursuit of extra-fiscal purposes, which in this case are embodied in the taxation of negative externalities/environmental damage.

128 - Returning to the mentioned principle of equivalence, it will be said that the same has, in the economy of the CIUC, an absolutely structuring role, with the normative edifice of the Code in question being founded thereupon. The said principle cannot therefore but constitute a purpose that it is legally intended to pursue, embodying, to that extent, a light of remarkable brilliance which, constant and continuously, cannot but illuminate the path of the interpreter.

129 - Regarding the said principle, it is appropriate to note what Sérgio Vasques tells us when, in Special Consumption Taxes, Almedina, Coimbra, 2001, p. 122, with respect to the technical implementation 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 his own activity".

130 - Addressing specifically the IUC, the mentioned author adds, 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 road wear and environmental cost, pay different tax also", adding that the implementation of said principle "[…] dictates other requirements still regarding the subjective incidence of the tax […]".

131 - In light of what has just been mentioned, it is clear that the taxation of the real and effective polluters corresponds to an important purpose pursued by the law, in this case by the CIUC, purpose which, 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, given that, as the mentioned author states there, "[…] legal interpretation is by its nature essentially teleological".

132 - Thus, it should be noted that, whether in light of the mentioned historical elements, whether in light of elements of rational or teleological interpretation which are referenced above, it is equally necessary to conclude that no. 1 of article 3º of the CIUC can only establish a rebuttable presumption.

133 - It is still necessary to consider the systematic element of interpretation.

ON THE SYSTEMATIC ELEMENT

134 - On the systematic element BAPTISTA MACHADO tells us, in Introduction to Law and Legitimizing Discourse, p. 183, that "this element comprises the consideration of other provisions that form the complex of norms of the institute in which the interpreted norm 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 interpreted norm in the global legal order, as well as its harmony with the spirit or intrinsic unity of the entire legal order".

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

136 - With respect to the systematization of the CIUC, environmental concerns were determinative in order that the mentioned principle of equivalence be, from the outset, inscribed in the 1st article of the Code, which necessarily leads to the subsequent articles, insofar as they are founded on such principle, being influenced by it. This occurred, namely, with the tax base, which came to be constituted by various elements, particularly those relating to pollution levels, and with the tax rates, established in articles 9º to 15º, which were influenced by the environmental component, and naturally also with the subjective incidence itself, provided for in article 3º of the CIUC, which cannot escape the mentioned influence.

137 - The systematic element of interpretation and the interaction between the various articles and principles that integrate the system inscribed in the CIUC, also appeal to the understanding that what is established in no. 1 of article 3º of the CIUC cannot but embody a presumption.

138 - The provisions of no. 1 of article 9º of the CC establish that the search for legislative thinking should have "[…] especially 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 which today more than ever are of sensitivity regarding the environment and respect for matters related to it.

In this context, the considerations formulated on the mentioned elements of interpretation, whether of a literal or historical character, whether of a rational or systematic nature, point in the direction that article 3º of the CIUC establishes a presumption, that is to say the ratio legis of that norm, while reason or purpose that should reasonably be attributed to it, cannot but perspective the expression "being considered as such" used in the said article as revelatory of the establishment of a presumption, which means that the passive subjects of IUC, in principle being the owners of vehicles, being considered as such the persons in whose name they are registered, may ultimately be others.

It will also be said that the establishment of a presumption in the mentioned norm will correspond to the only interpretation that accords with the principle of equivalence, mentioned above.

139 - Here arrived, it is appropriate to recall the provisions of article 73º of the LGT, when it establishes that "Presumptions established in tax incidence norms always admit proof to the contrary", (underlined), which means that the legal presumption which appears to be established in no. 1 of article 3º of the CIUC will necessarily be rebuttable.

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

141 - In effect, if the owner in whose name the vehicle is registered comes to indicate and prove who was the owner of the vehicles in question, nothing justifies, in our understanding, that the former owner be held responsible for payment of the IUC which may be owed.

142 - Moreover, it is this interpretation of no. 1 of article 3º of the CIUC which, in our view, best suits the principles to which the AT should subordinate its activity, namely the principle of inquiry, in order to discover material truth.

143 - With respect to the said principle of inquiry, it is appropriate 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 said article 58º, they state that it falls to the administration a dynamic role in the collection of elements with relevance to the decision, adding that the "[…] lack of diligences deemed necessary for the construction of the factual basis of the decision will affect it not only in the hypothesis that they are mandatory (violation of the principle of equality), but also if the materiality of the facts considered is not proved or if, in that basis, relevant facts are lacking, alleged by the interested party, due to insufficiency of proof that the Administration should have collected […]".

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

144 - The material truth, in the present case, is embodied in the circumstance that the vehicles identified in the request for arbitral pronouncement have been sold by the Applicant at a moment prior to that of the exigibility of the tax, that is to say, at the date from which the tax creditor could assert, before the debtor, its right to payment of the tax, was, in light of the administrative procedure, known to the AT.

145 - It should not be said, as the AT does, that the establishment of a presumption in article 3º of the CIUC and the consequences resulting therefrom would offend the principle of efficiency of the tax system, insofar as they would lead, namely to the "obstruction and increase in costs of the competencies attributed to the Respondent". (Cf. article 158 of the Answer)

The efficiency of the Administration in general, or of the AT in particular, in current sense, would correspond to the capacity/work methodology oriented to the optimization of the work performed or of the services provided, which would mean producing the maximum in quantity and quality with the minimum of costs, having nothing to do with the observance of legally established principles and with respect for the rights of citizens, whether in the capacity of taxpayers or otherwise.

146 - In technical sense, it will be said that the principle of efficiency of the tax system is commonly held in the domain of tax procedure as a corollary of the principle of proportionality, which as is well known imposes an adequate proportion between legal purposes and the means chosen to achieve those purposes, or as mentioned by 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, in annotations to article 55º of the LGT, this is a principle that obliges "[…] the tax administration to refrain from imposing on taxpayers obligations that are unnecessary to the satisfaction of the purposes it intends to pursue".

In this framework, the said principle of efficiency of the tax system would mean the capacity to achieve the legally fixed objectives given the available means, or rather with the minimum of means, which will also have nothing to do with respect for the rights of citizens, nor with the need to observe the principles to which the tax administration should subordinate its activity, namely that of inquiry and the discovery of material truth, and obviously the application of the mentioned principle of efficiency cannot be made to the prejudice of the rights of citizens.

L - ACQUISITION OF VEHICLE OWNERSHIP AND VALUE OF REGISTRATION

147 - Before anything, it should be added, in light of what will later be explicitly said on the value of registration, that the acquirers of vehicles become owners of the same vehicles through the celebration of the corresponding purchase and sale contracts, with or without registration.

148 - There are three articles of the Civil Code which are important to take into account with respect to the acquisition of ownership of a motor vehicle. They are, first and foremost, article 874º, which establishes the notion of a purchase and sale contract as being "[…] the contract by which ownership of a thing, or another right, is transferred, through a price"; article 879º, in whose paragraph a) is established as essential effects of the purchase and sale contract "the transfer of ownership of the thing or the title of the right" and article 408º which has as its heading contracts with real efficacy, and establishes in its no. 1 that "the constitution or transfer of real rights over a determined thing is given by mere effect of the contract, save the exceptions provided in the law". (underlined)

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

149 - With respect to the said contracts with real efficacy, it is appropriate to note the teachings of Pires de Lima and Antunes Varela, when in annotations to article 408º of the CC they tell us that "These contracts called real (quoad effectum), by having as their immediate effect the constitution, modification or extinction of a real right (and not merely the obligations tending to that result) are distinguished from the so-called real contracts (quoad constitutionem), which require the delivery of the thing as an element of their formation (cf. articles 1129º, 1142º and 1185º)".

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

150 - Also from jurisprudence, namely from the Judgment of the STJ no. 03B4369 of 19/02/2004, available at: www.dgsi.pt, it is drawn that, in light of the provisions of article 408º, no. 1 of the Civil Code, "the constitution or transfer of real rights over a determined thing is given by mere effect of the contract, save the exceptions provided in the law". This is the case of the motor vehicle purchase and sale contract (articles 874° and 879º al. a) of the Civil Code), which does not depend on any special formality, being valid even when celebrated verbally - conf. Judgment of the STJ of 3-3-98, in CJSTJ, 1998, year VI, Volume I, p. 117". (underlined)

151 - Having the purchase and sale contract, in light of what is left stated, a real nature, with the mentioned consequences, it is necessary to also consider the legal value of vehicle registration subject to that contract, insofar as the transaction of said good is subject to public registration.

152 - It does in effect establish no. 1 of article 1º of Decree-Law no. 54/75, of 12 February, relating to the registration of motor vehicles, (amended several times, the last of which was by Law no. 39/2008, of 11/08), that "Vehicle registration has essentially as its purpose to publicize the legal situation of motor vehicles and respective trailers, with a view to the security of legal commerce". (underlined)

153 - Becoming clear, in light of the said norm, what is the purpose of registration, there is however no clarity within the scope of the said Decree-law on the legal value of such registration, it being important to consider article 29º of the mentioned legal instrument, relating to vehicle property registration, when it provides that "The provisions relating to property registration are applicable, with the necessary adaptations, to the registration of automobiles, […]". (underlined)

154 - In this framework, in order that we can achieve the sought knowledge on the legal value of vehicle property registration, it is important to take into account what is established in the Property Registration Code, which approved by Decree-Law no. 224/84, of 6 July, and amended for the last time through Decree-Law no. 125/2013, of 30 August, provides in its article 7º that "definite registration constitutes a presumption that the right exists and belongs to the registered holder, in the precise terms in which registration defines it". (underlined)

155 - The combination of the provisions in the articles mentioned above, particularly the establishment in no. 1 of article 1º of Decree-Law no. 54/75, of 12 February and in article 7º of the Property Registration Code, allows one to consider that the fundamental function of registration is to publicize the legal situation of vehicles, permitting on the other hand to presume that the right exists and that such right belongs to the holder in favor of whom the same is registered, in the precise terms in which it is defined in the registration.

156 - Thus, definite registration constitutes nothing more than a presumption that the right exists and belongs to the registered holder in the exact terms of the registration, but a rebuttable presumption, admitting therefore proof to the contrary, as results from the law and jurisprudence has been noting, and it can be noted in this respect among others the Judgments of the STJ nos. 03B4369 and 07B4528, respectively of 19/02/2004 and 29/01/2008, available at: www.dgsi.pt.

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

158 - It should however be noted that while it is true that the non-existence of registration has the relevance that was mentioned above, it is no less true that its non-existence prevents the full efficacy of the purchase and sale contract. To this effect it is appropriate to note the provisions of nos. 1 and 4 of article 5º of the Property Registration Code applicable to vehicle property registration by force of the establishment in article 29º of Decree-Law no. 54/75, of 12 February.

159 - The provisions of no. 1 of article 5º of said Property Registration Code provide that "Facts subject to registration produce effects against third parties only after the date of their respective registration" establishing on its side no. 4 of the same article that "Third parties, for purposes of registration, are those who have acquired from a common author rights incompatible with each other".

160 - In these circumstances it will be easy to conclude that the AT given that it did not acquire from the same seller rights over the vehicle incompatible with the rights of the buyer does not meet the concept of third parties for purposes of registration as legally fixed.

161 - Thus if the buyers of the vehicles as their "new" owners do not promote immediately the adequate registration of their right it is presumed for purposes of no. 1 of article 3º of the CIUC and in accordance with the provisions of article 7º of the Property Registration Code that the vehicle continues to be property of the person who sold it and who in the registration remains its owner being however certain that such presumption is rebuttable whether by force of the establishment in no. 2 of article 350º of the CC whether in light of the provisions of article 73º of the LGT. Hence that from the moment in which said presumption is set aside by means of proof of the respective sale the AT 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 - MEANS OF PROOF PRESENTED

162 - Not being legally required the written form for the purchase and sale contract of motor vehicles the proof of the corresponding sale can be made by any means namely by way of testimonial or documentary evidence this including namely invoices or other equivalent documents relating to the sale of vehicles.

163 - As a means of proof that they proceeded with the sale of the seven vehicles identified in the present proceeding in a date prior to that of the exigibility of the tax the Applicants attached for the motor vehicles with license plates …; ...; …; …; … and … copies of six Debit Notes and for the vehicle with license plate … a Note/Launch Notice.

164 - On the said Documents presented by the Applicants as proof of sale of the vehicles in question the AT considers that the same are not apt to prove the purchase and sale of the vehicles given they do not prove a synallagmatic contract (Cf. article 168º of the Answer) but with all due respect does not have complete reason.

Let us see,

165 - Debit Notes are not in light of the norms currently in force recognized to support the transmission of goods. In effect in light of the provisions of paragraph b) of no. 1 of article 29º of no. 5 of article 36º and of no. 2 of article 40º all of the CIVA in the version introduced by Decree-Law no. 197/2012 of 24 August it is clear that only the invoice the invoice-receipt and the simplified invoice embody documents recognized for purposes of the transmission of goods or the provision of services.

166 - It is thus important to know whether such Documents were issued after the date of entry into force of Decree-Law no. 197/2012 of 24 August or whether they were issued before the mentioned date. In the first case Debit Notes can only be legally issued as documents intended for the rectification of invoices; in the second case Debit Notes if they contain all the elements of information that should appear in invoices will have a value equivalent to those same invoices. This is what on the one hand results from the provisions of articles 29º no. 7 and 36º no. 6 of the CIVA in the version given to it by Decree-Law no. 197/2012 of 24 August and on the other from the establishment in no. 5 of article 36º of the CIVA in the version in force prior to the entry into force of the aforementioned Decree-Law no. 197/2012 of 24 August.

167 - The issuance of the Debit Notes attached to the case for purposes of proof of the transmission of vehicles with license plates …; …; …; …; … and … relate to dates that are situated between 26-08-1994 and 01-07-2005 prior consequently to that of the entry into force of the above-mentioned Decree-Law being able in such circumstances to be issued invoices or equivalent documents within the framework of the transmission of non-current goods or of the provision of services provided that the legally provided requirements are observed which beyond the date and numbering should fundamentally be embodied in the following elements: names of the suppliers and acquirers of goods; quantity and usual denomination of goods; price and other elements included in the taxable value as well as the applicable IVA rates and the amount of tax owed.

168 - With respect to Debit Notes it should moreover be stated that as a rule they are issued when the goods sold in this case motor vehicles are not related to the main activity of the companies in light of their corporate purpose which by way of mere example would occur when a company whose social activity is the development of Software sells a vehicle that it has in fixed assets or as in the case of the case when the Applicants whose main activity does not notoriously and manifestly relate to the sale of motor vehicles proceed with the sale of vehicles in identical circumstances.

169 - The Note/Launch Notice presented for purposes of proof of the transmission of the vehicle relates to the motor vehicle with license plate …. This is a merely internal Document prepared by the companies themselves and with relevance at that level. In effect,

170 - Notes/Launch Notices are mere internal documents produced by the companies themselves as in the case happens with respect to which it is important to take into account their purpose within the companies which is to establish the transmission of internal information between the various services that integrate them namely between the services responsible for ventilating the costs of a determined good produced or between the commercial services and the accounting services for which such Notes/Launch Notices are issued.

171 - In these circumstances the Note/Launch Notice in question presented by the Applicants as proof of the transmission of the vehicle with license plate … cannot be held to be a Document equivalent to the invoice and cannot therefore be held as capable of proving the sale of said vehicle not having therefore sufficient probative force to with certainty and security demonstrate the reality of the said transmission.

172 - In the case at bar it is verified that the Debit Notes presented reveal the inscription of the elements mentioned above while essential requirements of invoices.

173 - The documents in question presented by the Applicants as means intended to prove the transaction of the vehicles in question are substantially adjusted to the legal norms then in force and enjoy on the other hand the presumption of veracity provided in no. 1 of article 75º of the LGT,

174 - The presumption of veracity which is conferred to the facts inscribed in the said Documents allows one to understand that the transmission of the vehicles to their acquirers should be held as true with it falling to the AT in light of the provisions of article 75º no. 2 of the LGT in the framework of the founded and objective reasons it had to demonstrate that such sales did not actually occur not being enough to state as it does that the said Documents are not apt to prove the purchase and sale of the vehicles given they do not prove a synallagmatic contract.

175 - The presumption established in the above-mentioned article 75º no. 1 of the LGT when it establishes that the said documents enjoy the presumption of veracity implies in effect that if it is not demonstrated by the AT the absence of correspondence between the content of such Documents and reality as it was not its content should be considered true.

176 - The Documents/Debit Notes presented by the Applicant as means intended to prove the transactions of the vehicles in question enjoying thus the mentioned presumption of veracity appear with sufficient idoneity in order to the demonstration of said transactions constituting in our view an appropriate and capable means of proof to rebut the presumption established in no. 1 of article 3º of the CIUC.

177 - Nothing permits in effect to consider that the elements inscribed in the said Documents are non-conforming with the reality that contractually occurred which means that the Debit Notes in question do not appear as embodying any simulated contract quite the contrary everything indicates that they reflect and prove the facts mentioned therein that is the effective sale of the vehicles to the persons therein indicated as being their acquirers.

178 - Thus in light of what has just been mentioned and taking into account both the presumption established in no. 1 of article 3º of the CIUC and the transfer of ownership of the six vehicles in question by mere effect of the contract before the date of the exigibility of the tax and the legal value of vehicle registration in the economy of the CIUC the tax acts in issue cannot merit our agreement whether because there was not taken into account an adequate interpretation and application of the legal norms of subjective incidence which embodies an error as to the legal premises whether because the said acts were founded on a matter of fact clearly divergent from the effective reality which embodies an error as to the factual premises.

179 - In these circumstances taking into account on the one hand that the presumption established in article 3º no. 1 of the CIUC has been rebutted and that on the other hand six of the seven vehicles referenced in the case namely those with license plates …; …; …; …; … and … were sold on dates prior to the moment in which the Administration could exact the tax obligation one cannot but consider that at the time of the exigibility of the tax in light of the provisions of no. 3 of article 6º combined with no. 2 of article 4º both of the CIUC the Applicant was not a passive subject of the tax in question.

180 - The AT when it understands that the passive subjects of IUC are definitively the persons in whose name the motor vehicles are registered without considering that article 3º of the CIUC embodies a presumption nor taking into account the evidentiary elements that were presented to it is proceeding to the illegal assessment of IUC founded on the wrong interpretation and application of the norms of subjective incidence of the Single Circulation Tax contained in the said article 3º of the CIUC whether at the level of the provision whether of the enactment which configures the practice of a tax act deficient in legality due to error as to the factual and legal premises which determines the annulment of the corresponding tax acts by violation of law.

N - REIMBURSEMENT OF AMOUNT PAID AND INDEMNIFICATORY INTEREST

181 - Pursuant to the provisions of paragraph b) of no. 1 of article 24º of the RJAT and in accordance with what is established there the arbitral decision on the merits of the claim of which there is no appeal or challenge binds the tax administration from the end of the period provided for appeal or challenge needing this in the exact terms of the success of the arbitral decision in favor of the passive subject and until the end of the period provided for the voluntary execution of the judgments of judicial tax courts to "Restore the situation that would exist if the tax act subject of the arbitral decision had not been practiced adopting the acts and operations necessary for the effect." (underlined)

182 - These are legal commands that are in total harmony with the provisions of article 100º of the LGT applicable to the case by force of the provisions of paragraph a) of no. 1...

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