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On refusing to interpret the Constitutional Court’s ruling of 26 September 2006

Case No. 29/04

 

 

THE CONSTITUTIONAL COURT OF THE REPUBLIC OF LITHUANIA

 

DECISION

ON THE PETITION OF THE STATE TAX INSPECTORATE UNDER THE GOVERNMENT OF THE REPUBLIC OF LITHUANIA, THE PETITIONER, REQUESTING THE CONSTRUCTION OF THE CONSTITUTIONAL COURT’S RULING “ON THE COMPLIANCE OF PARAGRAPH 3 OF ARTICLE 39 (WORDING OF 26 JUNE 2001) OF THE REPUBLIC OF LITHUANIA’S LAW ON TAX ADMINISTRATION AND PARAGRAPH 3 OF ARTICLE 18 (WORDING OF 19 FEBRUARY 1998) OF THE REPUBLIC OF LITHUANIA’S LAW ON CUSTOMS TARIFFS WITH THE CONSTITUTION OF THE REPUBLIC OF LITHUANIA” OF 26 SEPTEMBER 2006

 

20 November 2006

Vilnius

 

The Constitutional Court of the Republic of Lithuania, composed of the Justices of the Constitutional Court: Armanas Abramavičius, Toma Birmontienė, Egidijus Kūris, Kęstutis Lapinskas, Zenonas Namavičius, Ramutė Ruškytė, Vytautas Sinkevičius, Stasys Stačiokas, and Romualdas Kęstutis Urbaitis,

The court reporter—Daiva Pitrėnaitė

The Constitutional Court of the Republic of Lithuania, pursuant to Article 28 of the Law on the Constitutional Court of the Republic of Lithuania, on 20 November 2006, at a procedural sitting, considered the petition of the State Tax Inspectorate under the Government of the Republic of Lithuania, the petitioner, requesting the construction of the Ruling of the Constitutional Court of the Republic of Lithuania “On the Compliance of Paragraph 3 of Article 39 (Wording of 26 June 2001) of the Republic of Lithuania’s Law on Tax Administration and Paragraph 3 of Article 18 (Wording of 19 February 1998) of the Republic of Lithuania’s Law on Customs Tariffs with the Constitution of the Republic of Lithuania” of 26 September 2006.

The Constitutional Court

has established:

I

1. On 26 September 2006, in constitutional justice case No. 29/04, subsequent to the 19 May 2004 petition of the Šiauliai Regional Administrative Court, the petitioner, requesting an investigation into whether Article 39 of the Republic of Lithuania’s Law on Tax Administration, to the extent that it establishes that the size of late payment interest for unpaid or not duly paid taxes and the procedure according to which the late payment interest shall be paid and calculated shall be established by the Minister of Finance by taking into account the leveraged indicator of the average interest rate of the last calendar quarter of the Republic of Lithuania, paid on Government bonds issued for a term of one year, in litas, as well as that the size of late payment interest shall be determined by increasing the average interest rate by up to 10 points, and Article 18 of the Republic of Lithuania’s Law on Customs Tariffs, to the extent that it establishes that the size of late payment interest for unpaid or not duly paid duties shall be established by the Minister of Finance by taking into account the average annual interest rate payable the preceding calendar quarter on Government bonds issued for a term not exceeding one year, as well as that the Minister of Finance shall increase the above rate but not more than by 10 points, are not in conflict with Item 15 of Article 67 and Paragraph 3 of Article 127 of the Constitution of the Republic of Lithuania and with the constitutional principle of a state under the rule of law, the Constitutional Court adopted the Ruling “On the Compliance of Paragraph 3 of Article 39 (Wording of 26 June 2001) of the Republic of Lithuania’s Law on Tax Administration and Paragraph 3 of Article 18 (Wording of 19 February 1998) of the Republic of Lithuania’s Law on Customs Tariffs with the Constitution of the Republic of Lithuania” (hereinafter also referred to as the Constitutional Court ruling of 26 September 2006).

2. By the Constitutional Court ruling of 26 September 2006 it was inter alia recognised that Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration

to the extent that it prescribed that the size of late payment interest for unpaid or not duly paid taxes shall be established by the Minister of Finance by taking into account the leveraged indicator of the average interest rate of the last calendar quarter of the Republic of Lithuania, paid on government bonds issued for a term of one year, in litas, was not in conflict with the Constitution (Item 1 of the operative part);

the extent that it entrenched the powers of the Minister of Finance to decide, at his own discretion, but not exceeding the established 10-point limit, by how many points to increase this interest rate, was in conflict with Item 15 of Article 67 and Paragraph 3 of Article 127 of the Constitution and with the constitutional principle of a state under the rule of law (Item 2 of the operative part).

3. The State Tax Inspectorate under the Government of the Republic of Lithuania (hereinafter also referred to as the State Tax Inspectorate), the petitioner, requests the Constitutional Court to construe the Constitutional Court’s Ruling “On the Compliance of Paragraph 3 of Article 39 (Wording of 26 June 2001) of the Republic of Lithuania’s Law on Tax Administration and Paragraph 3 of Article 18 (Wording of 19 February 1998) of the Republic of Lithuania’s Law on Customs Tariffs with the Constitution of the Republic of Lithuania” of 26 September 2006 in the following aspects:

whether the late payment interest calculated under Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration should be annulled altogether, or recalculated by applying a different size; should the late payment interest be recalculated by applying another size, what size of the late payment interest should be applied for a corresponding time period;

until which date, 30 April 2004 or 30 April 2004 (including), the late payment interest should be recalculated (or not calculated).

4. This petition was received at the Constitutional Court on 19 October 2006.

II

The State Tax Inspectorate, the petitioner, that submitted the petition requesting the construction of the Constitutional Court’s ruling of 26 September 2006 substantiates it by the following reasoning.

1. The Constitutional Court’s ruling of 26 September 2006 recognised that to some extent Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration was in conflict, while to some other extent it was not in conflict with the Constitution. Namely, this paragraph was ruled to be in conflict with the Constitution to the extent that it entrenched the powers of the Minister of Finance to decide, at his own discretion, but not exceeding the established 10-point limit, by how many points to increase the interest rate specified in this paragraph, while it was ruled to be not in conflict with the Constitution to the extent that it established that the size of late payment interest for unpaid or not duly paid taxes shall be established by the Minister of Finance by taking into account the leveraged indicator of the average interest rate of the last calendar quarter of the Republic of Lithuania, paid on Government bonds issued for a term of one year, in litas.

It is not clear to the State Tax Inspectorate, the petitioner, which submitted the petition requesting the construction of the Constitutional Court’s ruling of 26 September 2006, whether in the course of the execution of the Constitutional Court’s ruling of 26 September 2006 the late payment interest calculated under Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration should be annulled altogether, or recalculated by applying a different size.

It is also noted in the petition that the State Tax Inspectorate does not have any powers to establish the size of the late payment interest. Therefore, it is not clear to the State Tax Inspectorate, the petitioner, which submitted the petition requesting the construction of the Constitutional Court’s ruling of 26 September 2006, what size of the late payment interest “for this time period” should be applied, if the late payment interest is recalculated by applying a different size.

2. The Minister of Finance established the size of the late payment interest for the second quarter of 2004 by invoking Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration, which, according to the State Tax Inspectorate, the petitioner, which submitted the petition requesting the construction of the Constitutional Court’s ruling of 26 September 2006, was in force till (and including) 30 June 2004. Meanwhile, Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration under which the Minister of Finance decided, at his own discretion, but not exceeding the established 10-point limit, by how many points to increase the interest rate, was in force till (and including) 30 April 2004. In the opinion of the State Tax Inspectorate, the petitioner, which submitted the petition requesting the construction of the Constitutional Court’s ruling of 26 September 2006, in the course of the execution of the Constitutional Court’s ruling of 26 September 2006, the late payment interest should be recalculated (or not calculated) for the period till (and including) 30 June 2004, however, it still inquires as to until which date, 30 April 2004 or 30 June 2004 (including), the late payment interest should be recalculated (or not calculated).

The Constitutional Court

holds that:

1. Article 61 of the Law on the Constitutional Court consolidates the Constitutional Court’s powers to officially construe its rulings.

1.1. While construing Article 61 of the Law on the Constitutional Court, the Constitutional Court has held that the Constitutional Court also has the powers to officially construe its other final acts, inter alia, conclusions (the Constitutional Court’s decision of 6 April 2004).

1.2. The Constitutional Court officially construes its ruling at the request of the parties to the case, of other institutions or persons to whom it was sent, or on its own initiative (Paragraph 1 of Article 61 of the Law on the Constitutional Court).

1.3. A ruling of the Constitutional Court, within 2 days of its adoption, shall be sent to the justices of the Constitutional Court, the parties to the case, the Seimas, the President of the Republic, the Government, the President of the Supreme Court, the Prosecutor General, and the Minister of Justice (Paragraph 1 of Article 61 of the Law on the Constitutional Court). The President of the Constitutional Court may order that a ruling of the Constitutional Court be sent to other institutions, officials, or citizens (Paragraph 2 of Article 61 of the Law on the Constitutional Court).

1.4. The first paragraph of Item 14 of Section 1 of Chapter VI of the Rules of the Constitutional Court provides that a ruling of the Constitutional Court is construed upon the request of the subjects specified in Paragraph 1 of Article 60 of the Law on the Constitutional Court, as well as upon the initiative of the Constitutional Court. The second paragraph of the same item provides that a ruling of the Constitutional Court is also construed upon the request of the subjects to which the ruling of the Constitutional Court was sent and where it is indicated that this is done according to Paragraph 2 of Article 60 of the Law on the Constitutional Court; the instruction to send the ruling according to Paragraph 2 of Article 60 of the Law on the Constitutional Court is given by the President of the Constitutional Court by issuing an order. The Constitutional Court does not construe its rulings upon requests of other subjects (the third paragraph of Item 14 of Section 1 of Chapter VI of the Rules of the Constitutional Court).

2. Upon the instruction of the President of the Constitutional Court, the Constitutional Court’s ruling of 26 September 2006 was sent, inter alia, to the State Tax Inspectorate under the Government of the Republic of Lithuania.

3. The State Tax Inspectorate requests the Constitutional Court to construe the Constitutional Court’s ruling of 26 September 2006 in the following aspects:

whether the late payment interest calculated under Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration should be annulled altogether, or recalculated by applying a different size; should the late payment interest be recalculated by applying another size, what size of the late payment interest should be applied for a corresponding time period;

until which date, 30 April 2004 or 30 April 2004 (including), the late payment interest should be recalculated (or not calculated).

4. It needs to be held that the petition of the State Tax Inspectorate, the petitioner, requesting the construction of the Constitutional Court’s ruling of 26 September 2006 (the petition to construe this ruling of the Constitutional Court in the aspects specified by the State Tax Inspectorate, the petitioner, which submitted this petition) is a petition requesting the construction, inter alia, of the provisions of Paragraph 3 of Article 39 (wording of 26 June 2001) of the Law on Tax Administration (wording of 28 June 1995 with subsequent amendments and supplements made till 1 May 2004 after the Republic of Lithuania’s Law on Tax Administration was adopted , which was adopted by the Seimas on 13 April 2004, by Article 170 whereof the Law on Tax Administration that had been valid until then was recognised as no longer valid) which were ruled by the said ruling of the Constitutional Court to be not in conflict with the Constitution.

5. In its acts, the Constitutional Court has held more than once that, under the Constitution and the Law on the Constitutional Court the Constitutional Court does not decide issues of application of law, also, that such issues are decided by the institution that enjoys powers to apply legal acts. If the laws contain obscurities, ambiguities, and gaps, it is the duty of the legislature to eliminate them (the Constitutional Court’s decision of 23 September 2002). The Constitutional Court has also held that the questions of application of law which have not been decided by the legislature are a matter of judicial practice (the Constitutional Court’s ruling of 9 July 1998). This doctrinal provision of the Constitutional Court’s ruling of 9 July 1998 means that the questions of application of law which have not been decided by the legislature may be decided by courts, when they consider disputes regarding the application of corresponding legal acts (parts thereof).

The petitions requesting the construction of how the provisions of a law (other legal acts) should be applied are not within the jurisdiction of the Constitutional Court (the Constitutional Court’s decision of 23 September 2002).

6. Under Item 2 of Paragraph 1 of Article 69 of the Law on the Constitutional Court, by its decision, the Constitutional Court shall refuse to consider petitions to investigate the compliance of a legal act with the Constitution if the consideration of the petition does not fall under the jurisdiction of the Constitutional Court.

It needs to be held that this provision is applicable mutatis mutandis also to the petitions, provided for in Article 61 of the Law of the Constitutional Court, requesting the construction of acts of the Constitutional Court.

7. Taking account of the arguments set forth, the petition of the State Tax Inspectorate, the petitioner, requesting the construction of the Constitutional Court’s ruling of 26 September 2006 (the petition to construe this ruling of the Constitutional Court in the aspects specified by the State Tax Inspectorate, the petitioner, which submitted this petition) is not within the jurisdiction of the Constitutional Court and one must refuse to construe the said ruling of the Constitutional Court subsequent to this petition.

Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles of the Law on the Constitutional Court of the Republic of Lithuania, the Constitutional Court of the Republic of Lithuania adopts the following

decision:

To refuse to construe the Ruling of the Constitutional Court of the Republic of Lithuania “On the Compliance of Paragraph 3 of Article 39 (Wording of 26 June 2001) of the Republic of Lithuania’s Law on Tax Administration and Paragraph 3 of Article 18 (Wording of 19 February 1998) of the Republic of Lithuania’s Law on Customs Tariffs with the Constitution of the Republic of Lithuania” of 26 September 2006 subsequent to the petition of the State Tax Inspectorate under the Government of the Republic of Lithuania, the petitioner, which submitted the petition requesting the construction of this ruling of the Constitutional Court in the following aspects:

whether the late payment interest calculated under Paragraph 3 of Article 39 (wording of 26 June 2001) of the Republic of Lithuania’s Law on Tax Administration should be annulled altogether, or recalculated by applying a different size; should the late payment interest be recalculated by applying another size, what size of the late payment interest should be applied for a corresponding time period;

until which date, 30 April 2004 or 30 April 2004 (including), the late payment interest should be recalculated (or not calculated).

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

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

Justices of the Constitutional Court:        Armanas Abramavičius

                                                                             Toma Birmontienė

                                                                             Egidijus Kūris

                                                                             Kęstutis Lapinskas

                                                                             Zenonas Namavičius

                                                                             Ramutė Ruškytė

                                                                             Vytautas Sinkevičius

                                                                             Stasys Stačiokas

                                                                             Romualdas Kęstutis Urbaitis