The Supreme Court overturned a million-hryvnia fine imposed on a sole proprietor from the YABLUKA network
The Supreme Court overturned a million-hryvnia fine imposed on a sole proprietor associated with the YABLUKA gadget chain due to procedural errors in the tax authorities’ documents. The decision was made after reviewing the case, in which the court found procedural violations during the issuance of tax assessments.
Entrepreneur Mykhailo Andriyovych Romanyshyn filed a lawsuit after tax authorities imposed a fine of 1.1 million hryvnias on him. The basis for the fine was an on-site audit report that documented “failure to account for inventory.”
The entrepreneur argued that the audit was unlawful because the tax authorities’ order did not list his name as the business entity but only the name of the store—YABLUKA—which is not a legal entity. Furthermore, the address listed in the documents did not match the actual location where business activities were conducted.
The courts of first and appellate instance initially sided with the tax authorities, but the Supreme Court overturned these decisions, pointing out a critical error by the regulatory authority:
- Violation of the principle of individualization: An audit order must clearly identify the taxpayer. Using the store’s trade name instead of the name of sole proprietor M.A. Romanyshyn constitutes a violation of the principle of individuality of an administrative act.
- Inadequate legal basis: An order that does not identify the person (entity) cannot serve as a lawful basis for interference in economic activity.
- Since the order was drafted in gross violation of procedure, all results of the audit (reports, fines) are unlawful, regardless of whether accounting violations were actually identified.
The panel of judges of the Cassation Administrative Court ruled:
- To overturn the decision of the Lviv District Administrative Court and the ruling of the Eighth Administrative Court of Appeal.
- To declare unlawful and revoke the tax assessment notice in the amount of 1.1 million UAH.
- To recover 41,500 UAH in court costs from the budget in favor of M.A. Romanyshyn.
Source: Absolution Leaks
Earlier, the CEO of Ukrposhta made harsh statements about his salary and taxes.
