Where an individual has a debt to the budget, the tax authority first serves a demand for payment. If the time for complying with the demand has expired, the tax authority may go to court within six months. At the first stage the tax authority must apply to a justice of the peace for a court order recovering the debt. If a court order is refused, or if it is set aside, the tax authority goes to court by way of an action, and the parties are summoned.
The courts used to take the view that, if the tax authority filed a claim within six months after the court order was set aside, it did not matter whether the earlier time limits for recovery had been observed.
The Constitutional Court disagreed. In its view, the courts must assess observance of every time limit at each stage of recovery, both the time limit for applying for a court order and the time limit for filing a claim. If those time limits have been missed, the court must refuse to recover the debt.
The Constitutional Court has once again stopped a situation in which a taxpayer could, in substance, remain for an unlimited time under the threat of adverse consequences for his property at the hands of the state. How the time limits for recovering a tax debt are regulated is an extremely important question, and a sensitive one for taxpayers. This judgment is, without doubt, a further guarantee of taxpayers' rights, comments Andrey Rymarev, head of tax practice at Consul Group.
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