It is a sad fact that taxpayers in the Czech Republic find it very difficult to seek support from the appellate bodies of the financial administration. Simply put, if the local customs or revenue authority decides against a taxpayer, the chances of him / her succeeding with an appeal to the Appellate Financial Directorate or the General Customs Directorate are extremely low. After all, the first institution has long been referred to by the tax community as the “Confirmatory Financial Directorate”, and I feel that their cynical attitude towards taxpayers – “be mean to them, let them fight for it” – is a philosophy dictated from above. Hence some entities (mainly smaller companies and private individuals) simply prefer not to appeal but pay up. There is no need to emphasize that I consider this approach by the state towards its “clients” – who subscribe to its services in the form of considerable taxes – to be completely perverted.
This is all the sadder as for several years I have been observing a trend of taxpayers not being able to exercise their rights even before courts. More and more often, at least some administrative chambers of regional courts and some chambers of the Supreme Administrative Court of the Czech Republic act more like civil servants rather than independent judges. I remember that a judge at the Supreme Administrative Court of the Czech Republic said, during a lecture, that when fundamental decisions against the state were rendered, someone from the Ministry of Finance quite often spoke up and said something like, “so we will probably find it difficult to finance the Hall of Justice from the budget”.
The fact that courts privilege financial and customs authorities has been known for a long time and, to some extent, is justifiable. The state can hardly afford to pay its employees in the same way as top tax advisers, auditors and lawyers are paid in the private sector, and it is probably right that the courts correct this imbalance to some extent. Yet there should be limits. I sometimes wonder about the reasons for the persecution of taxpayers in the administrative justice system. Near is my shirt but nearer is my skin? Evil will and grudges? Envy, smallness, or just the point of view of a deskbound person who only knows the warmth of his / her court office?
In this context, a series of administrative and court decisions in the VIAMONT case are interesting. The essence of the matter is simple. Section 170 of the Insolvency Act (IA) states that default interest on debts incurred during insolvency shall not be paid in insolvency proceedings. In the VIAMONT case, however, the revenue authority assessed this default interest and did not refund excessive VAT payments to VIAMONT, instead setting them off against the default interest. The situation seems perfectly clear: all entities, including the state, are equal in law (we have not had privileged socialist ownership for decades) and yet, in this respect, I lost the first few cases to the local revenue authority, the Appellate Financial Directorate, the Regional Court in Ústí nad Labem, the Tenth Chamber of the Supreme Administrative Court, and the Constitutional Court. Only after several years and many lost cases, another case of the same kind reached the Extended Chamber of the Supreme Administrative Court, which finally decided in our favour in accordance with common sense and entirely elemental law (9 Afs 4/2018-65) and things took a different turn.
However, to make things a bit more complicated, the Regional Court in Ústí nad Labem gave us a hard time. It decided in our favour inasmuch as it would have been difficult to do anything else after the decision of the Extended Chamber of the Supreme Administrative Court, nevertheless decided to slap us in respect of the costs of the proceedings. The court combined several cases with similar content and said that we had prepared 5 lawsuits of the same type and were only entitled to receive the costs of one because they were all the same. This was a completely unprecedented decision against which even a standard cassation complaint could not be applied, so I could not do anything but bring the case to the Constitutional Court in the form of a constitutional complaint and wait to see if the Constitutional Court would be willing to deal with this issue as it has long believed itself responsible only for really important legal issues, not a few thousand insignificant insolvency creditors.