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On the installation of cash registers in passenger transport vehicles

Case No. 24/2000

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

RULING

ON THE COMPLIANCE OF ITEMS 3.4.4 AND 3.7.15 OF THE RESOLUTION OF THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA (NO. 664) “ON THE INTRODUCTION AND USE OF CASH REGISTERS” OF 4 JUNE 1998 (WORDING OF 28 DECEMBER 1999) WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA AND PARAGRAPH 1 OF ARTICLE 1 OF THE REPUBLIC OF LITHUANIA’S LAW ON COMPETITION, AND ON THE COMPLIANCE OF ITEM 3.7.15 OF THE SAME RESOLUTION WITH PARAGRAPH 1 OF ARTICLE 2, PARAGRAPH 11 OF ARTICLE 3 AND ITEMS 1 AND 2 OF ARTICLE 9 OF THE REPUBLIC OF LITHUANIA’S LAW ON COMPETITION

 

9 April 2002

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Egidijus Jarašiūnas, Egidijus Kūris, Kęstutis Lapinskas, Zenonas Namavičius, Augustinas Normantas, Jonas Prapiestis, Vytautas Sinkevičius, and Stasys Stačiokas

The court reporter—Daiva Pitrėnaitė

Rimantas Murauskas, the chief specialist of the Inspection Methods’ Group of the State Tax Inspectorate under the Ministry of Finance of the Government of the Republic of Lithuania, acting as the representative of the Government of the Republic of Lithuania, the party concerned

The Constitutional Court of the Republic of Lithuania, pursuant to Paragraph 1 of Article 102 of the Constitution of the Republic of Lithuania and Paragraph 1 of Article 1 of the Law on the Constitutional Court of the Republic of Lithuania, on 28 March 2002, in its public hearing, considered case No. 24/2000 subsequent to the petition of a group of members of the Seimas of the Republic of Lithuania, the petitioner, requesting an investigation into whether Item 3.4.4 of the Resolution of the Government of the Republic of Lithuania (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) was in compliance with Paragraphs 1, 3 and 4 of Article 46 and Paragraph 1 of Article 48 of the Constitution of the Republic of Lithuania as well as Paragraph 1 of Article 1 of the Republic of Lithuania’s Law on Competition, and whether Item 3.7.15 of the same resolution was in compliance with Paragraphs 1, 3 and 4 of Article 46 of the Constitution of the Republic of Lithuania, as well as Paragraph 1 of Article 2, Paragraph 11 of Article 3 and Items 1 and 2 of Article 9 of the Republic of Lithuania’s Law on Competition.

The Constitutional Court

has established:

I

1. On 4 June 1998, the Government adopted the Resolution (No. 664) “On the Introduction and Use of Cash Registers” (Official Gazette Valstybės žinios, 1998, No. 53-1463). On 28 December 1999, the Government Resolution (No. 1493) “On a Partial Amendment of the Resolution of the Government of the Republic of Lithuania (No. 664) ‘On the Introduction and Use of Cash Registers’ of 4 June 1998” (Official Gazette Valstybės žinios, 1999, No. 144-3313) was adopted.

Item 3.4.4 of the Government Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (hereinafter also referred to as the Resolution (wording of 28 December 1999)) established that cash registers must be installed “until 1 January 2000 in the ticket offices of passenger transport enterprises and in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates. Municipal councils may, by their decision, postpone, for up to three months, the term of installation of cash registers in town passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates.”

Item 3.7.15 of the Resolution (wording of 28 December 1999) provides that cash registers are not necessary “in town passenger transport vehicles in which one pays the fare by punching one-off tickets. Not less than half of one-off tickets which are sold by the carrier must be sold permanently at news stalls, in shops or other trading places”.

2. The petitioner, a group of Seimas members, requests the Constitutional Court to investigate whether Item 3.4.4 of the Resolution (wording of 28 December 1999) is in compliance with Paragraphs 1, 3 and 4 of Article 46 and Paragraph 1 of Article 48 of the Constitution as well as Paragraph 1 of Article 1 of the Law on Competition, and also whether Item 3.7.15 of the same resolution is in compliance with Paragraphs 1, 3 and 4 of Article 46 of the Constitution, as well as Paragraph 1 of Article 2, Paragraph 11 of Article 3 and Items 1 and 2 of Article 9 of the Law on Competition.

II

The petition of the petitioner is based on the following arguments.

Items 3.4.4 and 3.7.15 of the Resolution (wording of 28 December 1999) differentiate carriers of passengers: Item 3.4.4 is designated to private carriers, while Item 3.7.15 singles out the passenger transport (carriers) which is within the area of regulation by municipalities. In the opinion of the petitioner, due to the introduction of cash registers the expenses of private carriers of passengers increase, the freedom of economic activity is restricted, private businesses are ruined, the development of private ownership is being blocked. State ownership is given priority over private ownership. Advantageous conditions are created for municipal passenger transport carriers to operate in the market, the freedom of fair competition is violated, and the market is being monopolised. All this is regulated not by law, but by means of a substatutory act, i.e. a governmental resolution. In the opinion of the petitioner, such legal regulation conflicts with Paragraphs 1, 3 and 4 of Article 46 of the Constitution.

2. In the opinion of the petitioner, after cash registers are installed in private passenger transport, the psychological stress of the drivers increases and there appears a danger for the traffic and passengers’ security. Inadequate, insecure and unhealthy working conditions are created for the drivers. In the opinion of the petitioner, such legal regulation conflicts with Paragraph 1 of Article 48 of the Constitution.

3. The petitioner maintains that the legal regulation established in Item 3.4.4 of the Resolution (wording of 28 December 1999) singles out private carriers from among other carriers, e.g. freight carriers, whose activity is not regulated by the said item. The municipal transport, fleets of buses and trolley-buses, due to their scale of operation and state subsidies, are in the dominant position in towns. Item 3.7.15 of the Resolution (wording of 28 December 1999) makes the position of municipal passenger transport an exceptional one and fair competition is thus violated. In the opinion of the petitioner, such legal regulation is in conflict with Paragraph 1 of Article 1 of the Law on Competition.

4. The petitioner points out that under Paragraph 1 of Article 2 of the Law on Competition, activities of economic entities which limit or may limit competition, regardless of the nature of their economic activities, shall be prohibited. Meanwhile, Item 3.7.15 of the Resolution (wording of 28 December 1999) imposes limitations on competition. In the opinion of the petitioner, such legal regulation conflicts with Paragraph 1 of Article 2 of the Law on Competition.

5. In the opinion of the petitioner, Item 3.7.15 of the Resolution (wording of 28 December 1999) is in conflict with Paragraph 11 of Article 3 of the Law on Competition which defines the notion of the dominant position of economic entities. Municipal passenger transport (carriers) dominates in the market, while Item 3.7.15 of the Resolution (wording of 28 December 1999) consolidates this dominance still further.

6. According to the petitioner, Item 3.7.15 of the Resolution (wording of 28 December 1999) conflicts with Items 1 and 2 of Article 9 of the Law on Competition which prohibit the entities having a dominant position in a corresponding market to make abuses by carrying out various actions limiting competition. In the opinion of the petitioner, Item 3.7.15 of the Resolution (wording of 28 December 1999), which is a substatutory act, unreasonably restricts an opportunity of private carriers to operate in the market, due to the compulsory installation of cash registers in private transport the conditions of sale are imposed upon them, and technological development is impeded.

III

In the course of the preparation of the case for the Constitutional Court hearing, written explanations were received from the representative of the party concerned, the Government, who was V. Vasiliauskas, Vice-Minister of Finance.

1. The representative of the party concerned pointed out that by means of the Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 the Government established that in every place of work in which residents pay in cash and in which one may not issue the account documents with all the requisites (code numbers, names, or names and surnames of the purchaser and the seller etc.) which are pointed out in the Republic of Lithuania’s Law on the Principles of Accounting, cash registers must be installed and used. By means of the Resolution (wording of 28 December 1999), the Government attempted to establish such a procedure of cash accounting which might enable to correctly record and control the revenues received from the enterprises of all types of ownership and the due taxes.

2. V. Vasiliauskas noted that the Resolution (wording of 28 December 1999) provides for the same requirements for economic entities of all types of ownership and it in no way limits the freedom of economic activity and private enterprise. Item 3.4.4 of the Resolution (wording of 28 December 1999) establishes the same duty to install cash registers for private enterprises, passenger carriers, and municipal passenger transport enterprises alike, if they do not sell one-off tickets in the manner pointed out in Item 3.7.15. This exemption is applied only by taking account of the manner of selling tickets, i.e. not less than half of one-off tickets are sold at news stalls and in shops in which cash registers are used and every act of tickets’ selling is registered. Such account in cash is easier to be controlled by the administration of the economic entity and the tax inspectorate. V. Vasiliauskas pointed out that this manner is also used by some private enterprises, and that cash registers are installed and used by some municipal carrier enterprises which do not apply the system of selling one-off tickets. In the opinion of V. Vasiliauskas, these provisions of the Resolution (wording of 28 December 1999) do not violate the freedom of individual economic activity and initiative, while due to the improved control over the payment of taxes by carriers of all types of ownership fair competition is secured and the goal is achieved that their activity serve the welfare of the nation. Therefore, in the opinion of the representative of the party concerned, Items 3.4.4 and 3.7.15 of the Resolution (wording of 28 December 1999) are in compliance with Paragraphs 1, 3 and 4 of Article 46 of the Constitution.

3. According to the representative of the party concerned, the use of cash registers in passenger transport (especially in town routes as in such cases the same fare for the service is charged) is not complex, it does not inconvenience the work of the driver. The cash register accumulates cumulative data, therefore, the record of revenues becomes simplified, the number of additional documents to be made at the time of work and after work by the driver is diminished. When cash registers are used in accounting in cash with the residents the work of the drivers does not become more stressful and insecure. Therefore, in the opinion of the representative of the party concerned, the impugned provisions of the Resolution (wording of 28 December 1999) are in compliance with Paragraph 1 of Article 48 of the Constitution.

4. V. Vasiliauskas noted that the freight carriers mentioned by the petitioner most often carry freights of enterprises and residents, while cash registers for settling accounts between enterprises and with the residents are not necessary in such a case since the counting-house of the freight carrier issues an account document for every client, which has all the necessary requisites pointed out in the Law on the Principles of Accounting. In addition, after the expiration of the term established in Item 3.4.4 of the Resolution (wording of 28 December 1999), the procedure under which revenues are registered in passenger transport vehicles is the same as in most of other economic entities conducting different economic activities, which render services for a big number of clients, therefore, the conditions of fair competition are even broadened. The municipal carrier enterprises are in dominant positions in a number of towns, however, this is determined by the existing circumstances but not by the procedure of registering revenues, which is established by the Resolution (wording of 28 December 1999). The representative of the party concerned pointed out that after cash registers had been installed, the portion of private carriers in the market did not diminish. The manner of registering revenues by cash registers has led to technological development, the advantages and facilitation of work due to which are recognised by the carriers themselves. Therefore, in the opinion of V. Vasiliauskas, the impugned norms of the Resolution (wording of 28 December 1999) are in compliance with the provision of the Law on Competition.

IV

In the course of the preparation of the case for the Constitutional Court hearing, written explanations were received from Z. Balčytis, Minister of Transport of the Republic of Lithuania, R. Kairelis, Vice-Minister of Social Security and Labour, P. Koverovas, Vice-Minister of Justice, V. Vadapalas, Director General of the European Law Department under the Government of the Republic of Lithuania, R. Stanikūnas, Chairperson of the Competition Board of the Republic of Lithuania, V. Žukauskas, Chief of the State Road Transport Inspectorate under the Ministry of Transport, Prof. Habil. Dr. A. Pajuodis, Prof. Habil. Dr. V. Vengrauskas, Assoc. Prof. Dr. B. Čereška, Assoc. Prof. Dr. J. Ruževičius, Assoc. Prof. Dr. V. Sūdžius who work at the Faculty of Economics, Vilnius University, as well as from the Civil and Commercial Law Department of the Law University of Lithuania (prepared by D. Švirinas), and from U. Trumpa, President of the Lithuanian Free Market Institute.

V

At the Constitutional Court hearing the representative of the party concerned R. Murauskas virtually reiterated the arguments set forth in the written explanations by the representative of the party concerned V. Vasiliauskas.

The Constitutional Court

holds that:

I

1. On 4 June 1998, the Government adopted the Resolution (No. 664) “On the Introduction and Use of Cash Registers”. In Item 3.4.4 thereof it was established that cash registers must be installed “until 1 January 2000 in the ticket offices of entertainment, culture and sport enterprises, in the ticket offices of passenger transport enterprises, as well as in vehicles of passenger transport in which tickets are sold, which are registered with the territorial state tax inspectorates. In entertainment, culture and sport enterprises as well as in their ticket offices it is permitted to sell information publications designated to the said events.”

On 28 December 1999, the Government adopted the Resolution (No. 1493) “On a Partial Amendment of the Resolution of the Government of the Republic of Lithuania (No. 664) ‘On the Introduction and Use of Cash Registers’ of 4 June 1998”. After this resolution had set forth Item 3.4.4 of the aforementioned government resolution of 4 June 1998 in a new wording, it established that cash registers must be installed “until 1 January 2000 in the ticket offices of passenger transport enterprises and in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates. Municipal councils may, by their decision, postpone, for up to three months, the term of installation of cash registers in town passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates.”

Item 5 of the Government Resolution (No. 1493) “On a Partial Amendment of the Resolution of the Government of the Republic of Lithuania (No. 664) ‘On the Introduction and Use of Cash Registers’ of 4 June 1998” of 28 December 1999 supplemented government resolution No. 664 of 4 June 1998 with Item 3.7.15 which provided that cash registers are not necessary “in town passenger transport vehicles in which one pays the fare by punching one-off tickets. Not less than half of one-off tickets which are sold by the carrier must be sold permanently at news stalls, in shops or other trading places”.

2. The petitioner requests an investigation into whether Item 3.4.4 of the Resolution (wording of 28 December 1999) is in compliance with Paragraphs 1, 3 and 4 of Article 46 and Paragraph 1 of Article 48 of the Constitution and Paragraph 1 of Article 1 of the Law on Competition, and whether Item 3.7.15 of the same resolution is in compliance with Paragraphs 1, 3 and 4 of Article 46 of the Constitution, as well as Paragraph 1 of Article 2, Paragraph 11 of Article 3 and Items 1 and 2 of Article 9 of the Law on Competition.

3. The petitioner requests an investigation into whether Item 3.4.4 of the Resolution (wording of 28 December 1999) is in compliance with Paragraphs 1, 3 and 4 of Article 46 and Paragraph 1 of Article 48 of the Constitution and Paragraph 1 of Article 1 of the Law on Competition.

It is clear from the reasoning presented by the petitioner that he doubts as to the compliance of not entire Item 3.4.4 of the Resolution (wording of 28 December 1999) with Paragraphs 1, 3 and 4 of Article 46 and Paragraph 1 of Article 48 of the Constitution and Paragraph 1 of Article 1 of the Law on Competition but only of the provision of the said item specifying that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates.

4. The petitioner requests an investigation into whether Item 3.4.4 of the Resolution (wording of 28 December 1999) is in compliance with Paragraph 1 of Article 48 of the Constitution.

It is clear from the reasoning presented by the petitioner that he doubts as to the compliance of Item 3.4.4 of the Resolution (wording of 28 December 1999) with not entire Paragraph 1 of Article 48 of the Constitution but only the provision of the said paragraph specifying that every person shall have the right to adequate, safe and healthy working conditions.

5. Subsequent to the petition of the petitioner, the Constitutional Court will consider whether

1) the provision of Item 3.4.4 of the Resolution (wording of 28 December 1999) that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, is in compliance with Paragraphs 1, 3 and 4 of Article 46 of the Constitution, the provision of Paragraph 1 of Article 48 of the Constitution that every person shall have the right to adequate, safe and healthy working conditions, and Paragraph 1 of Article 1 of the Law on Competition;

2) Item 3.7.15 of the Resolution (wording of 28 December 1999) is in compliance with Paragraphs 1, 3 and 4 of Article 46 of the Constitution, as well as Paragraph 1 of Article 2, Paragraph 11 of Article 3 and Items 1 and 2 of Article 9 of the Law on Competition.

II

On the compliance of Items 3.4.4 and 3.7.15 of the Government Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) with Paragraphs 1, 3 and 4 of Article 46 of the Constitution.

1. Article 46 of the Constitution provides:

Lithuania’s economy shall be based on the right to private ownership, freedom of individual economic activity, and initiative.

The State shall support economic efforts and initiative which are useful to the community.

The State shall regulate economic activity so that it serves the general welfare of the Nation.

The law shall prohibit monopolisation of production and the market, and shall protect freedom of fair competition.

The State shall defend the interests of the consumers.”

2. The petitioner points out that Items 3.4.4 and 3.7.15 of the Resolution differentiate passenger carriers: Item 3.4.4 is designated for private carriers, while Item 3.7.15 singles out the passenger transport (carriers) which is within the area of regulation of municipalities. In the opinion of the petitioner, due to the introduction of cash registers the expenses of private carriers of passengers increase, the freedom of economic activity is restricted, private businesses are ruined, the development of private ownership is being blocked. State ownership is given priority over private ownership. Advantageous conditions are created for municipal passenger transport carriers to operate in the market, the freedom of fair competition is violated, and the market is being monopolised. All this is regulated not by law, but by means of a substatutory act, i.e. a governmental resolution. In the opinion of the petitioner, such legal regulation conflicts with Paragraphs 1, 3 and 4 of Article 46 of the Constitution.

3. The notion of individual economic activity and initiative which is entrenched in Paragraph 1 of Article 46 of the Constitution is a broad one. It includes the freedom to freely choose business, freedom to freely conclude contracts, freedom of fair competition, equal rights of entities of economic activity etc. (the Constitutional Court’s rulings of 18 April 1996 and 14 March 2002).

4. Paragraph 3 of Article 46 of the Constitution provides that the state shall regulate economic activity so that it serves the general welfare of the nation. While construing the content of Paragraph 3 of Article 46 of the Constitution, one must pay attention to the fact that the freedom of individual economic activity is not absolute. The state regulates economic activity, while coordinating the interests of individuals and of the society. In this constitutional provision a constitutional principle is consolidated establishing the purposes and limits of regulation of economic activity (the Constitutional Court’s ruling of 14 March 2002). While regulating economic activity, the state may not violate fair competition, the equality of economic entities, and other principles enshrined in the Constitution.

It is noteworthy that Paragraph 3 of Article 46 of the Constitution is related to Paragraph 2 of the same article in which it is established that the state shall support economic efforts and initiative which are useful to the community. While regulating economic activity, the state may not establish any such legal regulation which might create unfavourable and unequal conditions for economic activity of economic entities, which might limit initiative, and which would not create opportunities for the initiative to show its worth.

5. The provision of Paragraph 4 of Article 46 of the Constitution that the law shall protect freedom of fair competition means, inter alia, that the legislature is obligated to establish such legal regulation by law so that production and the market would not become monopolised, that the freedom of fair competition would be ensured and the means and ways for its protection would be provided for. Besides, this provision means that the legal acts issued by other state and municipal institutions may not violate the said constitutional principles.

6. While construing the provisions of Paragraphs 1, 3 and 4 of Article 46 of the Constitution in a systemic manner, one has to note that the state, while regulating economic activity, must ensure the interests of both the private person (an entity of this activity) and the society. Economic activity is inseparable from the duty to pay taxes and other obligatory payments, from the duty to observe the established financial procedure.

The legislature, which has a constitutional duty to regulate economic activity so that it serves the general welfare of the nation, regulates the financial activity of economic entities as well and establishes ways of conducting accounting. Under the Republic of Lithuania’s Law on Accountancy, accountancy is a system of registering, grouping and generalising economic operations and economic events having monetary expression; this system is designated to acquire information for adoption of economic decisions and/or creating financial accountability. In the course of conducting book-keeping, various ways and means of accountancy are used. One of the ways of organising and conducting accountancy is the introduction and use of cash registers.

It needs to be noted that the laws not only provide for a duty to install cash registers but also for responsibility for a failure to accomplish this duty or for its improper accomplishment (e.g. Articles 1633–1638 of the Code of Administrative Violations of Law of the Republic of Lithuania).

7. Item 3.4.4 of the Resolution (wording of 28 December 1999) provides for a duty to install cash registers in the ticket offices of passenger transport enterprises and vehicles of passenger transport in which tickets are sold, which are registered with the territorial state tax inspectorates. Item 3.7.15 of the Resolution (wording of 28 December 1999) provides that cash registers are not necessary “in town passenger transport vehicles in which one pays the fare by punching one-off tickets, if not less than half of one-off tickets sold by the carrier are sold permanently at news stalls, in shops or other trading places.

Item 3.4.4 of the Resolution (wording of 28 December 1999) provides for a duty to install cash registers in all passenger transport vehicles, belonging both to private enterprises and municipal passenger transport enterprises if they do not sell one-off tickets by means of the aforesaid manner. The provision of Item 3.7.15 of the Resolution (wording of 28 December 1999) is worded by taking account of not the subordination of the passenger transport to either private or public sector, but of the way of selling tickets, i.e. if not less than half of one-off tickets are sold permanently at news stalls, in shops or other trading places. The private carriers as well as state and municipal transport enterprises alike may opt for a way of selling one-off tickets at their discretion.

8. The impugned provisions of the Resolution (wording of 28 December 1999) virtually regulate conducting accountancy. Such legal regulation does not deny the freedom of fair competition, and production and the market are not monopolised. Alongside, there exist no grounds to assert that such legal regulation violates the right of private ownership, the persons’ economic freedom and initiative, and the provision that the state shall regulate economic activity so that it serves the general welfare of the nation.

9. On the grounds of the arguments set forth, it should be concluded that the provision of Item 3.4.4 of the Resolution (wording of 28 December 1999) that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, and Item 3.7.15 of the same resolution are in compliance with Paragraphs 1, 3 and 4 of Article 46 of the Constitution.

III

On the compliance of Item 3.4.4 of the Government Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) with the provision of Paragraph 1 of Article 48 of the Constitution that every person shall have the right to adequate, safe and healthy working conditions.

1. Paragraph 1 of Article 48 of the Constitution provides that every person shall have the right to adequate, safe and healthy working conditions.

The right to adequate, safe and healthy working conditions means, inter alia, that every employee has the right to such working conditions which would not exert negative influence on his life, health, and which would be in line with the requirements of security and hygiene. The working environment, the nature of work, the time of work and rest, the means of work should be deemed to be working conditions.

2. The petitioner maintains that after cash registers are installed in private passenger transport, the psychological stress of the drivers increases and there appears a danger for the traffic and passengers’ security. Inadequate, insecure and unhealthy working conditions are created for the drivers. In the opinion of the petitioner, such legal regulation conflicts with Paragraph 1 of Article 48 of the Constitution.

3. After Item 3.4.4 of the Resolution (wording of 28 December 1999) had established that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, the right to adequate, safe and healthy working conditions was not violated. When using the cash registers for ticket selling, one must observe the security requirements linked thereto, which are provided for in legal acts. The impugned legal regulation does not deny such requirements.

4. On the grounds of the arguments set forth, it should be concluded that the provision of Item 3.4.4 of the Resolution (wording of 28 December 1999) that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, is in compliance with the provision of Paragraph 1 of Article 48 of the Constitution that every person shall have the right to adequate, safe and healthy working conditions.

IV

On the compliance of Items 3.4.4 and 3.7.15 of the Government Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) with Paragraph 1 of Article 1 of the Law on Competition.

1. Paragraph 1 of Article 1 of the Law on Competition provides: “The purpose of this Law is to protect freedom of fair competition in the Republic of Lithuania.”

2. The petitioner maintains that Item 3.4.4 of the Resolution (wording of 28 December 1999) singles out private carriers from among other carriers. Item 3.7.15 of the Resolution (wording of 28 December 1999) makes the position of municipal passenger transport an exceptional one and, thus, it violates fair competition. In the opinion of the petitioner, such legal regulation is in conflict with Paragraph 1 of Article 1 of the Law on Competition.

3. It has been held in this ruling of the Constitutional Court that the provision of Item 3.4.4 of the Resolution (wording of 28 December 1999) that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, and Item 3.7.15 of the same resolution do not violate the freedom of fair competition. The impugned legal regulation does not deny the purpose of the Law on Competition.

4. On the grounds of the arguments set forth, it should be concluded that the provision of Item 3.4.4 of the Resolution (wording of 28 December 1999) that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, and Item 3.7.15 of the same resolution are in compliance with Paragraph 1 of Article 1 of the Law on Competition.

V

On the compliance of Item 3.7.15 of the Government Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) with Paragraph 1 of Article 2 of the Law on Competition.

1. Paragraph 1 of Article 2 of the Law on Competition provides: “This Law shall prohibit undertakings from performing actions which limit or may limit competition, regardless of the character of their activity, except in cases where this Law or laws governing individual areas of economic activity provide for exemptions and permit certain actions prohibited under this Law.”

2. The petitioner maintains that the impugned item of the Resolution (wording of 28 December 1999) imposes limitations on competition.

3. Paragraph 1 of Article 2 of the Law on Competition provides for the prohibition for economic entities from performing actions which limit or may limit competition.

It needs to be noted that under Item 3.7.15 of the Resolution (wording of 28 December 1999) economic entities are not empowered to perform any actions which limit or may limit competition.

4. On the grounds of the arguments set forth, it should be concluded that Item 3.7.15 of the Resolution (wording of 28 December 1999) is in compliance with Paragraph 1 of Article 2 of the Law on Competition.

VI

On the compliance of Item 3.7.15 of the Government Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) with Paragraph 11 of Article 3 of the Law on Competition.

1. Paragraph 11 of Article 3 of the Law on Competition provides: “‘Dominant position’ means the position of one or more undertakings in the relevant market directly facing no competition or enabling it to make unilateral decisive influence in such relevant market by effectively limiting competition. Unless proved otherwise, the undertaking with the market share of not less than 40% shall be considered to have a dominant position in the relevant market. Unless proved otherwise, each of a group of three or a smaller number of undertakings with the largest shares of the relevant market, jointly holding 70% or more of the relevant market shall be considered to enjoy a dominant position.”

In the opinion of the petitioner, municipal passenger transport (carriers) dominates in the market, while Item 3.7.15 of the Resolution (wording of 28 December 1999) consolidates this dominance still further.

3. Paragraph 11 of Article 3 of the Law on Competition contains the definition of the dominant position in the market.

It is noteworthy that Item 3.7.15 of the Resolution (wording of 28 December 1999) does not present another definition of the dominant position in the market, which would be different from that established in Paragraph 11 of Article 3 of the Law on Competition. The said items regulates relations of different nature.

4. On the grounds of the arguments set forth, it should be concluded that Item 3.7.15 of the Resolution (wording of 28 December 1999) is in compliance with Paragraph 3 of Article 11 of the Law on Competition.

VII

On the compliance of Item 3.7.15 of the Government Resolution (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) with Items 1 and 2 of Article 9 of the Law on Competition.

1. Items 1 and 2 of Article 9 of the Law on Competition provide: “It shall be prohibited to abuse a dominant position within the relevant market by carrying out actions which limit or may limit competition, limit without cause the possibilities of other undertakings to act in the market, or violate the interests of consumers, including:

1) direct or indirect imposition of unfair prices or other sale or purchase conditions;

2) limitation on trade, production or technical development to the prejudice of consumers.”

2. The petitioner maintains that Item 3.7.15 of the Resolution (wording of 28 December 1999), which is a substatutory act, unreasonably restricted an opportunity of private carriers to operate in the market, and due to the compulsory installation of cash registers in private transport the conditions of sale are imposed upon them, and technological development is impeded. Thus, in the opinion of the petitioner, Item 3.7.15 of the Resolution (wording of 28 December 1999) conflicts with Items 1 and 2 of Article 9 of the Law on Competition.

3. It has already been held in this ruling of the Constitutional Court, that Item 3.7.15 of the Resolution (wording of 28 December 1999) does not violate the freedom of fair competition.

It should be noted that the said item regulates the relations of conducting accountancy but not those of dominance in the market. Thus, Item 3.7.15 of the Resolution (wording of 28 December 1999) regulates relations of a different nature than those regulated in Items 1 and 2 of Article 9 of the Law on Competition.

4. On the grounds of the arguments set forth, it should be concluded that Item 3.7.15 of the Resolution (wording of 28 December 1999) is in compliance with Items 1 and 2 of Article 9 of the Law on Competition.

Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles 53, 54, 55 and 56 of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania gives the following

ruling:

1. To recognise that the provision of Item 3.4.4 of the Resolution of the Government of the Republic of Lithuania (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, and Item 3.7.15 of the same resolution are in compliance with the Constitution of the Republic of Lithuania.

2. To recognise that the provision of Item 3.4.4 of the Resolution of the Government of the Republic of Lithuania (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) that cash registers must be installed in passenger transport vehicles in which tickets are sold, which are registered with the territorial state tax inspectorates, is in compliance with Paragraph 1 of Article 1 of the Republic of Lithuania’s Law on Competition.

3. To recognise that Item 3.7.15 of the Resolution of the Government of the Republic of Lithuania (No. 664) “On the Introduction and Use of Cash Registers” of 4 June 1998 (wording of 28 December 1999) is in compliance with Paragraph 1 of Article 1, Paragraph 1 of Article 2, Paragraph 11 of Article 3 and Items 1 and 2 of Article 9 of the Republic of Lithuania’s Law on Competition.

This ruling of the Constitutional Court is final and not subject to appeal.

The ruling is pronounced in the name of the Republic of Lithuania.

Justices of the Constitutional Court:                                                  Armanas Abramavičius

Egidijus Jarašiūnas

Egidijus Kūris

Kęstutis Lapinskas

Zenonas Namavičius

Augustinas Normantas

Jonas Prapiestis

Vytautas Sinkevičius

Stasys Stačiokas