CASE OF BURG OIL AD v. BULGARIA

THIRD SECTION

CASE OF BURG OIL AD v. BULGARIA

(Application no. 25466/20)

JUDGMENT
 

STRASBOURG

9 December 2025

This judgment is final but it may be subject to editorial revision.

In the case of Burg Oil AD v. Bulgaria,

The European Court of Human Rights (Third Section), sitting as a Committee composed of:

 Peeter Roosma, President,
 Diana Kovatcheva,
 Canòlic Mingorance Cairat, judges,
and Olga Chernishova, Deputy Section Registrar,

Having regard to:

the application (no. 25466/20) against the Republic of Bulgaria lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 15 June 2020 by Burg Oil AD (“the applicant company”), a joint-stock company whose registered office is in Burgas, Bulgaria, and which was represented by Mr G. Stoychev, a lawyer practising in Sofia;

the decision to give notice of the complaint under Article 1 of Protocol No. 1 to the Bulgarian Government (“the Government”), represented by their Agent, Ms V. Tsaneva from the Ministry of Justice, and to declare the remainder of the application inadmissible;

the Government’s observations;

the decision to dismiss the Government’s objection to examination of the application by a Committee;

Having deliberated in private on 13 November 2025,

Delivers the following judgment, which was adopted on that date:

SUBJECT MATTER OF THE CASE

1.  The case concerns the tax authorities’ repeated refusal to refund overpaid taxes to the applicant company, despite several final court judgments in its favour, and the subsequent dismissal by the Supreme Administrative Court (hereinafter “the SAC”) of the applicant company’s claims in that regard. The applicant company complained under Article 1 of Protocol No. 1 to the Convention.

2.  In July 2003 the tax authorities issued a tax assessment imposing liabilities on the applicant company. The company challenged the assessment, and on 1 August 2005 the SAC annulled it in part, cancelling some of the taxes imposed.

3.  In September 2005 a State bailiff collected 135,930 Bulgarian levs (BGN – equivalent to 69,500 euros (EUR)) from the applicant company’s bank account, in order to cover the liabilities imposed in the 2003 tax assessment, and an additional unspecified amount claimed by the tax authorities. The company challenged the relevant enforcement order. On 31 May 2007 the SAC ruled that the entire sum had been unlawfully collected, finding on the basis of expert reports that as of 30 November 2003 the applicant company’s debts under the 2003 tax assessment had already been settled.

4.  The company requested a refund. The tax authorities reimbursed BGN 32,504 (EUR 16,620) but refused to return the remainder of the sum in question. On 6 April 2007 the SAC set aside that refusal and ordered the repayment of BGN 118,089 (EUR 60,378), noting that the sum in question was subject to a possible set-off.

5.  In November 2007 the tax authorities again refused to reimburse the amount, claiming that it covered the tax due under the 2003 assessment. In a judgment dated 9 June 2009, the SAC rejected that argument and, after reviewing its prior rulings, held that the tax authorities still owed the applicant company BGN 118,089.

6.  Over the following years the applicant company repeatedly requested reimbursement of the unduly collected taxes in respect of the 2003 tax assessment, but the tax authorities continued to reject the requests. They later split the amount into two parts – BGN 63,623 (EUR 32,530 – hereinafter “the first amount”) and BGN 54,466 (EUR 27,848 – hereinafter “the second amount”) – and issued separate refusals for each sum.

7.  In 2014 the tax authorities again refused to reimburse the first amount. On 21 June 2017 the SAC set aside that refusal, noting that the authorities had disregarded previous final court rulings. The SAC also rejected the tax authorities’ argument that the applicant company’s claim was time-barred.

8.  In 2017 the authorities acknowledged that the first amount had been unduly collected but refused to reimburse it, maintaining that repayment had become time-barred. However, in a final judgment of 20 February 2019 the SAC set aside that refusal, considering it undisputed that the first amount was subject to reimbursement. It also noted that the time-bar argument had already been dismissed in its previous judgment of 21 June 2017 (see paragraph 7 above).

9.  As for the second amount, the authorities acknowledged in 2016 that it had been unduly collected, but also asserted that repayment had become time‑barred. On 26 October 2017 the SAC rejected that argument, confirming that the amount was refundable and not time-barred.

10.  In July 2018 the authorities once more refused to reimburse the second amount, arguing that it was to be set off against the applicant company’s liabilities under the 2003 tax assessment. The lower court annulled their refusal, referring to an expert report which stated that there was no outstanding debt that would justify a set‑off. However, in a final summary judgment of 16 December 2019, the SAC reversed that decision, stating that a set-off was valid under Article 128 § 1 of the 2005 Code of Fiscal Procedure (see paragraph 13 below). It noted that the tax authorities had demonstrated that they had an established and payable claim against the applicant company under the 2003 tax assessment. The applicant company’s claim against the tax authorities had become payable as a result of the SAC’s judgment of 6 April 2007 (see paragraph 4 above), at which time its liabilities under the 2003 tax assessment had not yet been time-barred.

11.  The applicant company also unsuccessfully sought compensation under the 1988 State and Municipalities Responsibility for Damage Act (hereinafter “the 1988 Act”) and lodged a criminal complaint with the prosecuting authorities.

12.  The applicant company alleged a violation of Article 1 of Protocol No. 1, arguing that for over 12 years the tax authorities had refused to return overpaid taxes, despite multiple final judgments ordering them to do so. It further claimed that the SAC’s 2019 ruling on the second amount (see paragraph 10 above) had been arbitrary and had undermined legal certainty, in that it had disregarded the earlier final judgments and had lacked adequate reasoning.

relevant Domestic law and practice

13.  The relevant domestic legal provisions concerning tax assessments and tax refund proceedings have been set out in Antonov v. Bulgaria (no. 58364/10, §§ 30-35, 28 May 2020). In particular, Article 128 § 1 in fine of the 2005 Code of Fiscal Procedure provides that a set-off may be performed in relation to a time-barred obligation, provided that the debtor’s claim became payable before the public debt in question was extinguished through expiry of the limitation period.

14.  The relevant provisions governing the enforcement of final administrative court judgments under the 2006 Code of Administrative Procedure (hereinafter “the 2006 Code”) have been summarised in detail in Stoyanov and Tabakov v. Bulgaria (no. 34130/04, §§ 53-59, 26 November 2013) and Dimitar Yanakiev v. Bulgaria (no. 2) (no. 50346/07, §§ 30-37, 31 March 2016).

15.  Specifically, Article 250 § 1 of the 2006 Code provides that anyone who has a legal interest may request the termination of actions, carried out by an administrative authority or an official, that are not based on an administrative act or on the law. According to the domestic case-law, the protection under Article 250 § 1 concerns the termination of actions carried out by an administrative authority that lack a statutory or administrative basis, and is not applicable in cases involving the issuance of an administrative decision (see, for instance, решение № 7275 от 29.05.2014 г. на ВАС по адм. Д. № 11027/2013 г., and определение № 2129 от 13.02.2012 г. на ВАС по адм. Д. № 2106/2012 г.).

THE COURT’S ASSESSMENT

16.  The Government argued that the application was inadmissible for several reasons. The applicant company did not comment.

17.  First, the Government submitted that the application was inadmissible for failure to exhaust the domestic remedies. In particular, the applicant company had failed to (i) ask the tax authorities to reopen the proceedings and amend the 2003 tax assessment in respect of those parts that had become final; (ii) sue the State bailiff under the 1988 Act for damages in respect of the invalidated enforcement order, as described in paragraph 3 above; and (iii) request, under Article 250 of the 2006 Code, the termination of actions carried out by an administrative body or official that were not based on an administrative act or legal provision (see paragraph 15 above).

18.  The Court notes that the first avenue suggested by the Government concerns the reopening of administrative proceedings by the administrative authorities in respect of final administrative decisions. However, that procedure is discretionary and constitutes an extraordinary remedy. Applicants are normally not required to pursue such remedies for the purposes of Article 35 § 1 of the Convention (see, among other authorities, Kiiskinen v. Finland (dec.), no. 26323/95, ECHR 1999-V). Remedies dependent on the discretion of public authorities are also not considered effective (see Kucherenko v. Ukraine (dec.), no. 41974/98, 4 May 1999; A. v. Finland (dec.), no. 44998/98, 8 January 2004; and Nenkov v. Bulgaria (dec.), no. 24128/02, 7 October 2008).

19.  Nor could a claim for damages under the 1988 Act against the State bailiff’s enforcement order (which was set aside by the courts – see paragraph 3 above) afford appropriate redress to the applicant company. It should be noted that the complaint under examination is that the tax authorities failed to comply with final court judgments in the applicant company’s favour (see, for a similar finding, Stoyanov and Tabakov (no. 2), no. 64387/14, § 41, 7 December 2021).

20.  Lastly, the third remedy suggested by the Government (see paragraph 17 above), concerns judicial protection against actions by administrative bodies or officials that lack a statutory or administrative basis. However, that remedy is not applicable in cases involving the issuance of an administrative decision, such as a decision on the set-off and refund of unduly paid or collected taxes (see paragraph 15 above).

21.  Accordingly, the Court dismisses the Government’s objection alleging non-exhaustion of domestic remedies.

22.  The Government further argued that, as concerns the first amount (see paragraph 6 above), the applicant company had lodged its application outside the six-month time-limit under Article 35 § 1 of the Convention, given that the final judgment regarding that sum had been delivered on 20 February 2019 (see paragraph 8 above).

23.  The Court notes that the applicant company complained of the non‑enforcement of several final court judgments in its favour, including the SAC’s judgment of 20 February 2019, which confirmed that the amount in question was to be reimbursed. Since those judgments remained unexecuted by the time the present application was lodged with the Court, the situation complained of is a continuous one. It is in general only when such a situation ends that the six-month period actually starts to run (see Stoyanov and Tabakov (no. 2), cited above, § 39). Accordingly, no issue arises under the six-month rule set out in Article 35 § 1 of the Convention, and the Court dismisses this objection.

24.  Lastly, the Government argued that the applicant company had abused its right of individual application under Article 35 § 3 (a) of the Convention by failing to inform the Court of the proceedings instituted by it under the 1988 Act and of its criminal complaint (see paragraph 11 above), of which the Court had been apprised by the Government. They also submitted that the applicant company had withheld certain documents that were allegedly to its advantage.

25.  Given that the relevant sets of proceedings did not end in the applicant company’s favour, and that there is nothing to indicate that the applicant company’s omission was intended to mislead the Court, the failure to disclose those sets of proceedings and documents cannot be considered essential for determining the outcome of the complaints. Accordingly, this objection must likewise be dismissed (see, mutatis mutandis, Anatoliy Marinov v. Bulgaria, no. 26081/17, §§ 30-32, 15 February 2022).

26.  The Court further finds that the application is not manifestly ill‑founded within the meaning of Article 35 § 3 (a) of the Convention or inadmissible on any other grounds. It must therefore be declared admissible.

27.  Between 2007 and 2019 the applicant company obtained several court judgments in its favour establishing that the disputed amount of BGN 118,089 – later split into the first and second amounts (see paragraphs 4-9 above) – had been unduly collected and was subject to reimbursement. In particular, the SAC’s final judgments of 26 October 2017 and 20 February 2019 explicitly confirmed that the disputed sums were to be refunded (see paragraphs 9 and 8 above). The Court therefore finds that the applicant company had a legitimate expectation, and hence a “possession” within the meaning of Article 1 of Protocol No. 1, consisting of the right to recover the unduly paid taxes (see Buffalo S.r.l. in liquidation v. Italy, no. 38746/97, §§ 28-29, 3 July 2003; Eko-Elda AVEE v. Greece, no. 10162/02, § 27, ECHR 2006-IV; and Antonov, cited above, § 58).

28.  It is also not disputed that the repeated refusal by the tax authorities to reimburse the amounts constituted an interference with the applicant company’s property rights as guaranteed by Article 1 of Protocol No. 1. That situation falls to be examined under the first sentence of the first paragraph of Article 1 of Protocol No. 1, which lays down the general principle of peaceful enjoyment of possessions (see Antonov, cited above, § 59, with further references).

29.  As to whether a fair balance was struck between the general interest and the applicant company’s rights, the Court observes that after the enforcement order issued by the State bailiff had been set aside in 2007 (see paragraph 3 above), the applicant company submitted multiple refund requests and was involved in seven sets of court proceedings over a 12‑year period (2007-2019). While the tax authorities were formally entitled to verify whether the conditions for a potential set-off had been met, the court rulings setting aside their refusals –rulings that were supported by expert reports, the conclusions of which were not disputed by the authorities – clearly indicated that the applicant company had no outstanding debts against which a set-off could be applied (see paragraphs 3, 7 and 10 above), including under the 2003 tax assessment. That conclusion was further substantiated by the fact that the tax authorities ultimately acknowledged that they had unduly collected the first and second amounts, but argued that repayment had become time-barred (see paragraphs 7-9 above).

30.  In that context, the SAC’s conclusion in its judgment of 16 December 2019 regarding the second amount – namely, that the tax authorities had demonstrated that they had an established and payable claim in respect of the applicant company’s tax liabilities under the 2003 assessment, justifying a set-off against the applicant company’s claim (see paragraph 10 above) – appears unconvincing. That conclusion disregarded the SAC’s earlier final findings that, as of 30 November 2003, the company’s debts under the 2003 tax assessment had been settled and it had had no outstanding liabilities, and that both amounts were to be reimbursed (see paragraphs 3-4 and 7-9 above). The SAC failed to provide adequate reasoning for that reversal, thereby undermining its own prior rulings.

31.  It is not disputed that the first amount was due, in particular under the SAC’s judgment of 20 February 2019 (see paragraph 8 above), and that the applicant company had not received it by the time that the present application was lodged. No justification for that failure to comply with the judgment has been put forward by the Government.

32.  It follows from all the above that an excessive burden was placed on the applicant company, which was compelled to engage in prolonged litigation for over a decade without being able to recover its funds, despite multiple favourable judgments clearly stating that the amounts had been unduly collected and had to be returned. The authorities’ actions thus upset the requisite fair balance between the demands of the public interest and the protection of the right to peaceful enjoyment of possessions.

33.  Accordingly, there has been a violation of Article 1 of Protocol No. 1.

APPLICATION OF ARTICLE 41 OF THE CONVENTION

34.  The applicant company did not submit a claim for just satisfaction. Accordingly, the Court considers that there is no call to award it any sum on that account.

FOR THESE REASONS, THE COURT, UNANIMOUSLY,

Done in English, and notified in writing on 9 December 2025, pursuant to Rule 77 §§ 2 and 3 of the Rules of Court.

 Olga Chernishova Peeter Roosma
 Deputy Registrar President