“GALA” vs tax inspection: 11-year-old case will be tried in the criminal domain

The administrative court made a decision to start a new trial of the case “CHAP” LLC, founder of “GALA” TV company vs Gyumri tax inspection. This case has a history of 11 years. The decision to try the case at the RA administrative court was made after the decision by the ECHR on May 4, 2017 and the quashing the decision at the RA court of Cassation on April 7, 2018.

With a counter-claim, “CHAP” LLC representative Karen Toumanyan claims to invalidate the decision about the fine of AMD 25212700 made by the tax bodies in 2007 (in fact AMD 25.116.700 was levied from the founder of the TV company). The court should find out whether the administrative fine is founded or not. Moreover, the dispute should be tried in the criminal domain, as the matter is about abuse of a huge amount of money, which was not taken into consideration when the case went through three RA judicial instances, starting 2007, something that the European Court of Human Rights drew attention to.

The ECHR also found that after receiving an order from the state tax inspection under the RA Government, during that period Grigor Amalyan, acting Chairperson of the NCTVR, as it is mentioned in the court decision, “provided certain documents about the broadcasting of the company, whereas a motion was brought by the Company to invite him to Court to be questioned about those documents. It means, in fact the reliability of the information provided by the Chairperson of the NCTVR was also being questioned, and that motion was not met.” Besides, the European Court has stated that the motion by the “CHAP” LLC to bring witnesses to court was also rejected: their testimonies were considered “irrelevant”.

Nevertheless, according to the ECHR, when defining a tax liability for the Company, the Armenian court was based on the witness testimonies, “consequently it should be presumed that, however, the testimonies given by those witnesses were decisive.”

As a result, the European Court considered the aforementioned fact as sufficient to conclude that the rights of the claimant Company to interrogate the Chairperson of the NCTVR and the witnesses during the proceeding against it was groundlessly limited.

By the decision on 04.05.2017, the European Court confirmed that a violation of the Company rights took place in accord with Article 6.1 of the Convention, along with Article 6.3.d): The European Court has stated in particular, that “(…) all testimonies should usually be introduced during public hearings in presence of the defendant, ensuring the opportunity of presenting the arguments while maintaining the principle of the arbitrariness. Article 6.1 and .3.d) of the Convention stipulates giving the defendant adequate and proper opportunity to argue the testimony given by the witness against it or to interrogate him during the testimony and at later stages (…)”.

In accord with Article 6.3.d) of the Convention, “any person charged with a criminal act has the following minimum rights: to interrogate the witnesses who testified against him or have the interrogated, to call his witnesses and to interrogate them under the same conditions as the witnesses who testified against him.”

Thus, on August 16, at the Administrative court the SRC should prove that “CHAP” LLC has committed a crime deserving prosecution, and “CHAP” should prove that it did not abuse anything, and if it did not do that, then the state has to return the fine exceeding AMD25mln: That means that the subsequent two articles will follow, that the ECHR has not referred yet: reimbursement of material damage and restriction of the freedom of speech

In relation to violations registered at this stage, the European Court has decided that Armenia should pay “CHAP” LLC a total of 3900 EUROs, of which 2400EUROs for the incurred material damage and 1500EUROs for court expenses. Those payments have already been made.

 

On September 21, 22 and October 14, 2017, “GALA” TV Company in Gyumri covered the speech by the First President of Armenia Levon Ter-Petrosyan criticizing the authorities, after which political, tax and judicial pressure against the TV Company started.

After the tax inspections, the “GALA” TV Company was charged in tax evasion, in particular, hiding the proceeds received from the advertisement. The charges were based on the documents by the National Commission on TV and Radio and the statements by the businessman who ordered advertisements to the “GALA” TV Company. During the court proceeding the advocate of the Company argued the claims on tax evasion and asked to invite for testimony the chairperson of the NCTVR and the businessman to prove the information given by them, but the recommendations were rejected by the Administrative court.

 On March 13, 2009, “CHAP” LLC, founder of “GALA” TV Company turned to the ECHR believing that Article 6.1 and .3 of the European Convention were violated.

 

 

HASMIK BUDAGHYAN

CPFE expert

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