A tax inspection agency initiated an on-site audit of a company. The organization challenged this decision with a higher administrative body, but its complaint was rejected.
Believing its rights had been violated, the taxpayer filed a lawsuit demanding that the tax authority’s decision be declared invalid.
The first instance court sided with the plaintiff, nullifying the tax authority’s decision. Its reasoning was based on two key points:
- At the time the contested decision was issued, the company met all the necessary criteria established for such cases (likely referring to special conditions for businesses with mobilized personnel).
- The company’s sole founder and director had been called up for military service through mobilization and deployed to the Armed Forces.
However, the appellate court overturned this ruling and dismissed the plaintiff’s claim. The court arrived at the following conclusions:
- It was formally documented that the designated (nominal) director had no, and never had any, actual involvement in the company’s operations.
- Furthermore, the serviceman himself denied any participation in the organization’s work, having only become its founder and director *after* his mobilization.
The cassation court concurred with the appellate court’s findings, upholding its decision. Consequently, the initial decision to conduct the tax inspection was affirmed as lawful.