In the course of the examination of the merits of the VAT refund, the authorities shall, when issuing decisions, rely on the structure of administrative recognition. However, the provisions of the VAT Act require that the validity of the verification of the conditions of the proceedings be at least similar.
The company called on the Authority to remedy the infringements by repealing the contested provision and to immediately reimburse the excess tax. The Authority did not reply to the above request and did not reimburse the surplus.
The requirement of due justification for the Authority’s position is due to the nature of the verification procedure. The reasons for the decision are the starting point for assessing whether the tax authority has exceeded the limits of administrative discretion. If the provision on this subject does not explain directly what substantial doubts are in the way of VAT reimbursement, that provision shall be repealed.
In the case identified by the Provincial Administrative Court in Poznań with 12 February 2015, reference no. I SA/Po 1082.14, the company submitted a VAT return for July 2014 together with a request for an increase in the tax refund period (VAT-ZT).
In the course of the activities carried out, the Authority considered it necessary to carry out a clearance of accounts Companies with counterparties to determine the regularity and reliability of their intra-Community supply transactions.
This decision was justified by the ongoing review proceedings against the Company for the period covered by the VAT refund application. According to the Authority, this situation was sufficient to prolong the deadline for the reimbursement of the difference in tax shown in the declaration VAT-7 for the month of July 2014
The company called on the Authority to remedy the infringements by repealing the contested provision and to immediately reimburse the excess tax. The Authority did not reply to the above request and did not reimburse the surplus.
This decision was contested by the Company. The complaint raised deficiencies concerning, among others, the lack of an anticipated date when the taxpayer can count on a tax refund, was not indicated to what extent the settlement of the Company raises doubts about the authority and what verification activities were undertaken.
Court position
The Provincial Administrative Court in Poznań repealed the contested decision. In the statement of reasons for the judgment, the court referred to the content Article 87(2). sentence second in the context of the appropriateness of the decision to extend the time limit.
The assessment was based on a statement of reasons which was considered exceptionally laconic by the court and which merely refers to an indication of the factual basis concerning the dates and time limits of the party and the authority.
The Court found that such a design of the justification infringes the rules Tax Ordinance dealing with the proper construction of the tax decision.
The application of the VAT Return Act is based on an administrative discretion, with limited circumstances governing the exercise of that power when the authority finds that ‘the validity of the refund requires additional verification’.
However, a decision based on administrative discretion is subject to judicial review and the reference point is the justification of a provision which, in the context of such a decision-making model, is crucial.
The assessment of such a decision is based on the examination of whether the tax authority has taken into account all the facts which indicate the conditions for the application of the standard laid down in the legislation, and whether free assessment of evidence has not been breached in recognition.
Therefore, it is not in itself to be recognised, but the manner in which the evidence was collected and examined, the justification for the authority’s position, and whether the ‘free recognition of the body has not evolved into any recognition’. It is therefore necessary to consider the entire evidence and to precede it exhaustive meeting and clarification of the facts.
In view of the above, it must be concluded that a provision extending the time limit for tax reimbursement cannot be justified freely. In such situations, the taxpayer is given clear information as to why the return is called into question. The lack of a justification that meets the above conditions violates the general principles of tax proceedings, including the principle of trust of the citizen is the tax authorities.