A.K. v. Austria



AS TO THE ADMISSIBILITY OF

Application No. 19630/92

by A.K.

against Austria

The European Commission of Human Rights sitting in private on

14 October 1994, the following members being present:

MM. C.A. NØRGAARD, President

S. TRECHSEL

A. WEITZEL

F. ERMACORA

E. BUSUTTIL

G. JÖRUNDSSON

J.-C. SOYER

H.G. SCHERMERS

H. DANELIUS

MM. F. MARTINEZ

C.L. ROZAKIS

Mrs. J. LIDDY

MM. L. LOUCAIDES

J.-C. GEUS

M.P. PELLONPÄÄ

G.B. REFFI

M.A. NOWICKI

I. CABRAL BARRETO

B. CONFORTI

N. BRATZA

I. BÉKÉS

J. MUCHA

E. KONSTANTINOV

D. SVÁBY

G. RESS

Mr. M. de SALVIA, Deputy Secretary to the Commission

Having regard to Article 25 of the Convention for the Protection

of Human Rights and Fundamental Freedoms;

Having regard to the application introduced on 13 November 1991

by A.K. against Austria and registered on 12 March 1992 under file No.

19630/92;

Having regard to :

- reports provided for in Rule 47 of the Rules of Procedure of the

Commission;

- the observations submitted by the respondent Government on

27 January 1993 and the observations in reply submitted by the

applicant on 23 March 1993 ;

- the Government's further observations on 5 April 1994, the

applicant's reply dated 8 June 1994 and the Government's letter

of 18 July 1994;

Having deliberated;

Decides as follows:

THE FACTS

The applicant is an Austrian citizen born in 1927. He is

represented before the Commission by Mr. A. Laimer, a lawyer practising

in Vienna.

The facts of the case as submitted by the parties may be

summarised as follows.

The particular circumstances of the case

Between 4 June 1986 and 5 August 1986 the Corporations Tax Office

(Finanzamt für Körperschaften), by a series of decisions, re-assessed

the liability of a company owned by the applicant and his wife to

turnover tax, corporation tax and trade tax for the years 1978, 1980,

1981 and 1982. The company was required to pay additional sums of

AS 450,000 in respect of turnover tax for 1978; AS 1,440,000 in respect

of turnover tax, AS 30,870 in respect of corporation tax and AS 15,765

in respect of trade tax for 1980; AS 411,000 in respect of corporation

tax and AS 131,751 in respect of trade tax for 1981, and AS 476,459 in

respect of corporation tax and AS 159,981 in respect of trade tax for

1982 The reason for the re-assessment was that the company was found

to have declared purchases of trade marks with a view to reducing its

tax liability even though no such trade marks were actually acquired.

After the re-assessment to tax, criminal proceedings were brought

against the applicant, as de facto manager of the company, for tax

evasion (Abgabenhinterziehung), contrary to Section 33 (1) of the Tax

Offences Act (Finanzstrafgesetz).

On 16 August 1990 the applicant was convicted by the Vienna

Regional Court (Landesgericht), in the second round of proceedings, of

tax evasion. The Court found, inter alia, as follows:

[Translation]

"According to its consistent case-law the Court is bound,

pursuant to Section 55 of the Tax Offences Act, both as to the

existence of the tax liability and as to its extent (cf. EvBl.

1979/225, SSt 48/36). The Senate is not entitled to make new

findings of fact, and not permitted to review the accuracy of

this finding. Pursuant to Article 115 of the Federal Tax Code

the administrative authority is under an ex officio duty to

establish the actual facts in determining taxes. The courts are

thus bound, without limit, by the finding of a tax liability.

Only in determining the question of guilt is the Court not bound.

Accordingly it must be assumed in the present case that the

acquisition of the trade marks, which according to the defendant

was for consideration, was merely a fictitious transaction

without any financial effect. This can however only have taken

place with the defendant's knowledge and wish. ... For these

reasons there can be no ground ... to assume that the defendant

acted merely negligently."

[German]

"Im Sinne der ständigen Rechtsprechung (EvBl. 1979/225, SSt 48/36

u.a.) ist das Gericht an das Bestehen der Abgabenschuld ihrem

Grund und ihrer Höhe nach gemäß Art. 55 FinStrG gebunden. Der

Senat ist nicht berechtigt, neue Feststellungen zu treffen und

ist auch nicht darüber befugt, die Stichhaltigkeit dieser

Festsetzung zu überprüfen. Gemäß Art. 115 BAO besteht nämlich

auch für das Verfahren zur Festsetzung einer Abgabe die

Verpflichtung der Behörde zur amtswegigen Erforschung der

materiellen Wahrheit. Die Bindung der Gerichte an die

rechtskräftige Abgabenfestsetzung ist somit eine

uneingeschränkte. Lediglich bei der Beurteilung der Schuldfrage

ist das Gericht in keiner Weise gebunden.

Im gegenständlichen Fall ist also davon auszugehen, daß die vom

Angeklagten behauptete entgeltliche Erwerbung der Markenrechte

lediglich ein Scheingeschäft ohne finanzielle Auswirkung gewesen

ist. Dies kann jedoch nur mit Wissen und Wollen des Angeklagten

geschehen sein. ... Für die Annahme, daß der Angeklagte

lediglich fahrläßig gehandelt hat ... , bleibt aus den erwähnten

Umständen heraus kein Raum."

The applicant's nullity appeal to the Supreme Court (Oberster

Gerichtshof) was rejected on 9 April 1991. The decision was received

by the applicant's representative on 15 May 1991. In rejecting the

applicant's nullity appeal, the Supreme Court found, inter alia, as

follows:

[Translation]

"... in the present tax offences case, the existence of a sham

purchase of trade marks by the accused is a necessary condition

for the liability to tax as established by the tax authorities,

and the tax authorities' establishment of that liability is valid

for the present court proceedings (cf. EvBl. 1979/225, SSt.

48/36). Accordingly, there is no room for assuming that such a

purchase did in fact take place."

[German]

"... in der vorliegenden Finanzstrafsache [ist] die Fingierung

eines entgeltlichen Erwerbes von Markenrechten durch den

Angeklagten notwendige Grundlage der von der Finanzbehörde mit

Wirkung auch für das gerichtliche Verfahren (EvBl. 1979/225,SSt.

48/36 ua) festgestellten Abgabenschuld, weshalb für die

gegenteilige Annahme, daß ein derartiger Erwerbsvorgang real

stattgefunden hätte, kein Raum bleibt".

Relevant domestic law and practice

The Tax Offences Act (Finanzstrafgesetz) provides, so far as

relevant, as follows:

Section 33 (1)

[Translation]

"The offence of tax evasion is committed by any person who, in

dereliction of a tax-law duty to report, to disclose or to inform

truthfully, intentionally brings about a reduction of tax."

[German]

"Der Abgabenhinterziehung macht sich schuldig, wer vorsätzlich

unter Verletzung einer abgabenrechtlichen Anzeige-, Offenlegungs-

oder Wahrheitspflicht eine Abgabenverkürzung bewirkt."

Section 55

[Translation]

"In criminal proceedings for tax evasion ... the trial hearing

may only be conducted if a final tax assessment has been made for

the period to which the offence related."

[German]

"Im Strafverfahren wegen Hinterziehung ... darf ... die

Hauptverhandlung erst durchgeführt werden, wenn das Ergebnis der

rechtskräftigen endgültigen Abgabenfestsetzung für den Zeitraum

vorliegt, den die strafbare Tat betrifft."

On 21 November 1991 the Supreme Court (13 Os 127/90) modified the

case-law referred to in its judgment in the present case. It recalled

that the factual element of the offence of tax evasion was specific

behaviour on the part of the defendant, rather than the fact that a

final tax assessment had been made. In cases where the actions of a

defendant were strongly indicative of his subjective state of mind, to

accept the findings of fact as established by the tax assessment was

to leave the judge with relatively little to decide. The Supreme Court

referred to Article 6 para. 2 of the Convention, and to a Commission

decision (No. 5523/72, Dec. 4 and 5.10.74 [Coll. 46, p. 99]) in which

the Commission stated that judges should not "start with the assumption

that the accused committed the act with which he is charged." The

Supreme Court recalled that the presumption of innocence is included

in Section 6 (2) of the Tax Offences Act. It considered the

possibility of the criminal courts coming to a different conclusion

from the tax authorities, and although it regarded this as not

desirable, it gave more weight to the principle that the criminal

courts should be able to establish truth themselves. It referred in

particular to the different presumptions and burdens of proof applying

before the administrative authorities and the criminal courts. Finally

it made reference to the fact that neither the tax authorities nor the

subsequent appeal authorities (the Appeal Division of the Regional

Finance Directorate (Berufungssenate der Finanzlandesdirektion)) were

independent organs, before concluding that it should change its

existing case-law, so that in future courts should not be bound either

by the amount or the reasoning in tax assessments when determining

charges of tax evasion.

COMPLAINTS

The applicant alleges violation of Article 6 para. 1 of the

Convention in that he was convicted by criminal courts which were

unable to establish essential facts themselves. In his observations

in reply to the Government's observations, submitted on 23 March 1993,

the applicant also added reference to the presumption of innocence

contained in Article 6 para. 2 of the Convention.

PROCEEDINGS BEFORE THE COMMISSION

The application was introduced on 13 November 1991 and registered

on 12 March 1992.

On 19 October 1992 the Commission decided to bring the

application to the attention of the respondent Government and to invite

them to submit written observations on its admissibility and merits.

The Government submitted their observations on 27 January 1993

and the applicant submitted his observations in reply on 23 March 1993.

On 10 March 1994 the Commission decided to put further questions

to the parties. The Government submitted their observations thereon

on 5 April 1994, and the applicant submitted his observations in reply

on 8 June 1994. The Government submitted further comments on

18 July 1994.

THE LAW

The applicant initially alleged violation of Article 6 para. 1

(Art. 6-1) of the Convention in that he was convicted by criminal

courts which were unable to establish essential facts themselves. He

subsequently added reference to Article 6 para. 2 (Art. 6-2).

Article 6 (Art. 6) provides, so far as relevant, as follows:

"1. In the determination of ... any criminal charge against him,

everyone is entitled to a fair ... hearing ... by an independent

and impartial tribunal established by law.

2 Everyone charged with a criminal offence shall be presumed

innocent until proved guilty according to law."

The Government submit that the applicant has failed to comply

with the requirements of Article 26 (Art. 26) of the Convention in that

he could have made an administrative complaint to the Administrative

Court (Verwaltungsgerichtshof), and that a court would thereby have

been able to review the factual aspects of the tax assessment. The

applicant submits that such an appeal could not have been successful.

He also underlines that he is complaining not about the tax assessments

but about the criminal proceedings before the Vienna Regional Court and

the Supreme Court, and that in any event his company and not he was the

subject of the tax assessments.

The Commission recalls that the European Court of Human Rights

has held that the review provided by the Administrative Court can, in

certain circumstances, comply with the requirements of Article 6

(Art. 6) of the Convention (cf. Zumtobel judgment of 21 September 1993,

Series A no. 268-A). Whilst the issues in the present case are

different in that the present case concerns criminal proceedings before

the ordinary courts, and the question of the administrative authorities

is relevant only insofar as the criminal courts were bound by the

findings of those authorities (to which extent the case resembles the

case of Obermeier (Eur. Court H.R., judgment of 28 June 1990,

Series A no. 179)), the Commission finds that the possibility of a

review of factual issues by the Administrative Court is a matter which

is so closely related to the merits of the case that it should not be

considered as a separate issue.

The Government point out that the binding nature of tax

assessments on criminal courts derived not from statute, but from the

case-law of the Supreme Court. They state that the Supreme Court took

the view that the courts were bound both as to the existence and the

amount of the tax liability. They note that the tax liability was

regarded as a fact in the criminal proceedings, and that that fact

could be considered by the Administrative Court as an authority of

final instance in the tax proceedings. They also point out that only

the criminal courts make findings as to guilt. With regard to the

Supreme Court's decision of 21 November 1991, they state that the

question of whether the Administrative Court complies with Article 6

(Art. 6) was apparently disregarded by the Supreme Court.

The applicant points out that the Supreme Court's interpretation

in its decision of 21 November 1991 conforms with his view of Article

6 (Art. 6) of the Convention, but does not affect his case at all. He

also emphasises that what he was contesting in the domestic proceedings

was the basis of the tax assessments, not the assessments as such. He

adds that presumption of innocence was violated.

After a preliminary examination of the parties' observations the

Commission has reached the conclusion that the case raises serious

issues as to the interpretation and application of Article 6 (Art. 6)

of the Convention and that these issues can only be determined after

a full examination of their merits. It follows that the application

cannot be regarded as manifestly ill-founded within the meaning of

Article 27 para. 2 (Art. 27-2) of the Convention. No other ground for

declaring the application inadmissible has been established.

For these reasons, the Commission unanimously

DECLARES THE APPLICATION ADMISSIBLE, without prejudging the

merits of the case.

Deputy Secretary to the Commission President of the Commission

(M. de SALVIA) (C.A. NØRGAARD)