Examples from judiciary practice:The order of the Presidium of the Supreme Arbitration Court of the RF from October, 18, 2005 ¹ 4047/05
The Presidium of the Supreme Arbitration Court of the Russian Federation including:
the members of the presidium: Babkin A.I., Valiavina E.U., Vitriansky V.V., Ivannikiva N.P., Isaichev V.N., Kozlova A.S., Sukhova G.I., Uhnei M.F., Tumarkin V.M., Kireev U.A., Pershutov A.G., Strelov I.M., Slesarev V.L. –
tried the application of the Inspection of the Federal tax service in Oktiabrsky area of Irkutsk (the assignee of the Inspection of the Ministry of the RF in the taxes and collections in Oktiabrsky area of Irkutsk) about the revision in the order of supervision of the decision of the Arbitration Court of Irkutsk region from 06/24/04 according to the case ¹ A19-5032/04-40 and the order of the Federal Arbitration Court of the East-Siberian area from 12/21/04 according to the same case.
In the session took part the representatives of
The applicant - the Inspection of the Federal tax service in Oktiabrsky area of Irkutsk – Elina N.V., Civan A.P., Shafran T.V.
Having heard and discussed the report of the judge Babkin A.I and also the explanations of the representatives of the applicant, the Presidium established the following.
On September, 22, 2003 the individual entrepreneur Percev S.K. (further – the entrepreneur) presented into the Inspection of the Ministry of the RF in the taxes and collections in Oktiabrsky area of Irkutsk (further - the inspection) the declaration for the VAT according to the tax rate in 0% for August, 2003.
As the result of the checking of the declaration the inspection by means of the decision from 12/22/03 ¹ 07/07/5-244 (taking into account the change made by the decision of the Inspection of the Ministry of the RF in the taxes and collections in Irkutsk area from 01/26/04 ¹ 08-30/10986-24) refused to return 5 745 751 rubles of the VAT from the federal budget.
The entrepreneur presented into the Arbitration court of Irkutsk area with the application about the acceptance of the presented decision invalid in the part of the refusal to return 4 563 803 rubles 48 copecks of the VAT.
The decision of the court of the first authority from 06/24/04 admitted the decision of the inspection in the disputable part illegal because it is not according to clauses 164, 165, 169, 171, 172 and 176 of the Tax Code of the RF (further – the code).
The order of the court of the appeal authority from 10/05/04 cancelled the decision of the court of the first authority and refused to satisfy the presented demands because of his non-observation of the demands giving the bases for the return of the VAT established by the Law of the RF about the taxes and collections.
The federal arbitration court of the East-Siberian area cancelled the order of the court of the appeal authority by means of its order from 12/21/04 and left in force the decision of the court of the first authority.
In the application given into the Supreme Arbitration Court of the RF about the revision in the order of supervision of the decision of the court of the first authority and the order of the court of the appeal authority the inspection asks to cancel them pleading the infringement of the uniformity in the interpretation and use by the arbitration courts of the norms of the right.
In the recall to the application the entrepreneur asks to leave the order of the court of the appeal authority without any changes because he presented the full folder of documents established by item 2 of clause 165 of the Code the authenticity of which did not give rise to doubt; the court of the first authority valued the presented proves and made the right conclusion confirmed by the court of the appeal authority.
Checking the validity of the arguments represented in the application, the recall to it and the performance of the representatives attended in the session the Presidium thinks that the order of the court of the cassation authority is subject to be cancelled and the order of the appeal authority is subject to be left unchangeable according to the following reasons.
According to item 2 of clause 171 of the Code the sums of the VAT presented to the taxpayer and paid by him during the buying of the goods (works, services) are subject to the deductions.
The tax deductions established by clause 171 of the Code are made on the basis of the invoices laid down by the sellers during the buying of the goods (works, services) by the taxpayer and of the conforming initial documents. Item 3 of clause 172 of the Code says that the deductions of the sums of the tax established by clause 171 of the code concerning the operations of the selling of the goods (works, services) presented in item 1 of clause 164 of the Code ( i.e. during the export of the output) are made only in case of the presenting into the tax bodies of the conforming documents listed in clause 165 of the Code.
Hence in order to use the deductions for the VAT the taxpayer must prove the lawfulness of his demands. Herewith the documents presented by the taxpayer must answer the established demands and have the reliable information about the circumstances with which the legislation connects the legal results.
According to part 1 of clause 9 of the Federal law from 11/21/96 ¹ 129-FL “About the book-keeping” all economic operations providing by the organization are proved by the initial account documents on the basis of which the book-keeping is made.
The information of the initial documents made during the economic operation including the persons provided the operations of the exporting, transmission and the acceptance of the freight must correspond to the factual circumstances. Hence, the invoices are made on the basis of the previous initial documents and must reflect the concrete facts of the economic activity proved by these documents. The demands for the order of the composition of the invoices are related not only to the fullness of the filling of all requisites but to the reliability of all information in them.
With the declaration of the VAT for August, 2003 the entrepreneur as the confirmation of the declared tax deductions and the return of the tax presented the set of documents established by clause 165 of the Code and also the invoices putting to him by the JSC “Vostok” and the documents confirming the payment of the bought goods including the VAT.
Item 2 of clause 173 of the Code give the opportunity for the return to the taxpayer of the sums of the VAT in the case of the exceeding of the tax deductions presented in the declaration under the sums of the tax accounted in the connection with the realization of the goods (works, services) according to the definite tax period.
Hence the court of the appeal authority made the consideration that the reality of the negotiated deals with the paying to the providers of the conforming sums including the VAT was not confirmed in this case.
The court of the appeal authority gave the right value to the circumstances and the proves because of which it cancelled the decision of the court of the first authority and refused to satisfy the presented demands.
Taking into account the said above and acting in accordance with clause 303, item 5 of part 1 of clause 305, clause 306 of the Arbitration code of practice of the RF, the Presidium of the Supreme Arbitration court of the RF established:
to cancel the order of the Federal arbitration court of East-Siberian region from 12/21/04 according to the case ¹ A19-5032/04-40 of the Arbitration court of Irkutsk region.
To leave in effect the order of the court of the appeal authority of the Arbitration court of Irkutsk region from 10/05/04 according to the same case.
Chairman A.A.Ivanov
