DF Tax Appeals Court is an example in dealing with taxpayers

BY EDUARDO LOURENÇO AND PEDRO RIBAS

“Every unjust disposition, every bad institution, and recognized as such by the people, implies an attack on the legal feeling of the nation and consequently on national strength. It is an offense against the idea of law that falls on the State itself, which most of the time must pay for it dearly and with usury.” (Rudolf Von Ihering)[1]

On the 8th, Resolution 1, dated February 1, 2017, of the Administrative Court of Tax Appeals was published in the official gazette of the Federal District, which provides “on the days, time and duration of the ordinary Tarf trial sessions, and other procedures”.[2]

In general terms, the standard establishes parameters to limit the duration and number of cases scheduled for judgment in each session, thus determining that i) Plenum sessions last up to four hours and chamber sessions up to three hours, with the last 30 minutes intended for reading summaries of rulings and distribution of cases, if any; ii) sessions last one hour and 30 minutes, when there are, on the same day, judgments scheduled for both Chambers, with the last 30 minutes also being used for reading the ruling summaries and distributing cases, if any; iii) a maximum of seven cases are handled in the trial by the Full Court and up to five by the chamber; and, finally, iv) remaining, at the end of each session, processes pending judgment, which should be postponed by the President and discussed at the first opportunity [3].

In advance, it must be highlighted that there would not be a better time for the advent of the standard. This is because, in times of economic crisis, the specters of unemployment and inflation end up proving to be even greater storms if we combine them with the exorbitant existing tax burden, which, in painful regressiveness, ends up hindering the consumption and income accumulation capacity of those who should least contribute to the State. Therefore, initiatives that guarantee the fundamental rights of taxpayers deserve special praise, especially when they aim to promote the reasonable duration of a process constructed in contradictory and decided isonomically.

As you can see, the motto resolution's premise is to regulate, in a reasonable and very welcome way, the duration of the judgments of the Administrative Court of Tax Appeals of the Federal District and, more importantly in our view, limiting the number of cases on the agenda. The justification, which is inferred from the caput of article 1, is focused on promoting “speed, optimization and productivity in judgments”. However, we do not think that these are the only possible gains arising from the standard.

It is known that the courts — administrative and judicial — have, for the most part, systematically handled a huge number of cases in tax matters, the assessments of which end up being carried out in long sessions, which, not infrequently, can last more than four hours on end (by the way, during “business hours”). Before we proceed with the understanding that we intend to present, it is necessary to highlight that the focus of this column is not directly focused on trials carried out in judicial courts, since the search for material truth, with a broad factual analysis constructed on a case-by-case basis, inherent to administrative procedures, is what ends up being decisive in increasing the complexity of judging activity in the administrative sphere.

Returning to the new rules imposed on the Tarf-DF judgment agendas, brought by Resolution 01/2017, the optimization of the relationship “number of processes on the agenda x judgment time per process”, in addition to proving to be a salutary measure to protect the taxpayer's rights, they also end up indirectly corroborating the rationalization of the work carried out by the tax authority, when formalizing the Auto de Infringement. Explain.

The first point, that is, the search for greater enforcement of the rights — it should be noted: fundamental — of taxpayers is seen precisely in the quantitative limitation of processes assessed in a single session. Such a measure not only makes it possible for the judge to have full knowledge of the facts brought to the case by the parties, but, mainly, it helps to better define the tax rules. This is important considering that, many times, these norms are set out in obscure and/or contradictory statements and require the judge's reflection for their adequate application to the specific case.

In fact, one can also think of a reflex consequence of improving the court's own jurisprudence, which will serve as a true guide for taxpayers' actions, which, in turn, will be guided by judgments whose reasons will be argumentatively understandable and reliable, pillars of legal certainty.

Note that we are not suggesting an ideal number of processes that should necessarily be subject to consideration on each agenda or that there be too much limitation on the duration of sessions. What we defend is the application of reasonableness in the definition of these parameters, a measure that clearly meets the initiative taken by Tarf-DF. The search to rationalize the time that each case will take to be judged emerges as a commendable and urgent measure to be observed throughout the country, especially when respecting the acts inherent to the implementation of the broad defense of the parties.

Finally, moving on to the second point raised previously, namely, in the consequence that Resolution 1/2017 of the TARF-DF may have in relation to the work carried out by the tax authority at the time of drawing up Tax Assessment Notices, an extremely relevant benefit for the taxpayer is conceived, if carried out by the Treasury Administration. As is common knowledge, there are countless opportunities in which taxpayers are summoned to defend a single Infraction Notice, in which there are different entries without any relationship of factual relevance between one alleged infraction and another. In fact, this procedure practically makes judicial discussion unfeasible (due to the need to fully guarantee the debts), makes it difficult to issue documents of fiscal regularity and, therefore, confronts the broad defense and contradiction of the resistant party.

Specifically in relation to this last point, the question arises: how can a taxpayer defend himself diligently against different assessments, if we consider that his patron only has a few minutes for oral arguments in the trial sessions? And the Farm? How will it be able to defend the treasury with excellence if its operations are also limited? Finally, what about the judges? Will they be able to establish an understanding of a subject when it is occupied by several others? We believe there is only one answer to these questions: no.

Therefore, initiatives such as Tarf-DF are worthy of praise, concerned with the protection of citizens' rights and the speed, optimization and productivity of their judgments. The message was given with praise. Let us agree that the best productivity report is the one that results from the exact application of constitutional and legal dictates, to the detriment of the one that masks any unfounded attempt to impose the payment of undue amounts. Justice thanks you.

By: Eduardo Lourenço and Pedro Henrique Ribas

Source: Legal Consultant

1 VON IHERING, Rudolf. The fight for the Law. Rio de Janeiro, Forense, 2000. 18th ed.

2 Source: Official Gazette of the Federal District, p. 11, available at:

http://www.buriti.df.gov.br/ftp/diariooficial/2017/02_Fevereiro/DODF%20028%2008-02-2017/DODF%20028%2008-02-2017%20INTEGRA.pdf

3 (TARF Resolution No. 1, of February 1, 2017)

“Article 1 The duration of ordinary sessions, aiming at speed, optimization and productivity in TARF judgments, is determined as follows:

I – Plenary sessions will last up to 4 hours and Chamber sessions will last up to 3 hours, with the last 30 (thirty) minutes of each session being used for reading the ruling summaries and distributing processes, if any.

II – The sessions will last 1 hour and 30 minutes, when there are, on the same day, judgments scheduled for both Chambers, with the last 30 (thirty) minutes dedicated to reading the ruling summaries and distribution of cases, if any.

III – Up to 7 cases will be considered in the trial by the Full Court and up to 5 by the Chamber.

IV – At the end of each session, if there are cases pending judgment, the President will postpone them and they will be discussed at the first opportunity.”