Information Note on the Court’s case-law 207
May 2017
Chap Ltd v. Armenia - 15485/09
Judgment 4.5.2017 [Section I]
Article 6
Article 6-3-d
Examination of witnesses
Order, based on statements by absent witnesses, to pay tax fine and surcharges: violation
Facts – The applicant company was a licensed television broadcaster. In 2007 the tax authorities produced a report in which they found that the applicant company had underreported its tax liability by hiding advertising revenues. The tax authorities relied, inter alia, on documents they had requested from the head of the National Television and Radio Commission (NTRC) and statements from witnesses who claimed that they had not been given a receipt for payments they had made after placing advertisements with the television station. The applicant company was subsequently ordered by the Administrative Court to pay unpaid tax, a 60% fine and surcharges for late payment. In the Convention proceedings, it complained under Article 6 §§ 1 and 3 (d) that the Administrative Court had not given it the opportunity to examine the head of the NTRC or the other witnesses at the trial.
Law – Article 6 § 1 in conjunction with Article 6 § 3 (d): Substantial penalties – fines and surcharges amounting to more than 60% of the amounts of tax due – had been imposed on the applicant company. Article 6 was thus applicable under its criminal head. Although the way in which the guarantees of Article 6 applied in the context of tax-surcharge proceedings could in certain cases be different from that applied in the hard core criminal law, in the instant case, the applicant company disputed the factual findings of the tax authorities which were based on the witness statements not supported by relevant documentation.
Without considering whether there were good reasons for their not appearing, the Administrative Court had refused to grant the applicant company’s application to summon the witnesses as it considered that their evidence was not relevant. However, the documents provided by one of the witnesses (the head of the NTRC)* and the statements made by the other witnesses were admitted in evidence against the applicant company and, while not the only evidence against the applicant company, could be considered decisive for the determination of its tax surcharges. There were no procedural safeguards to compensate for the handicaps caused to the applicant company as a result of its being unable to examine the witnesses in question. Accordingly, the applicant company had been unreasonably restricted in its right to examine the witnesses in the proceedings against it.
Conclusion: violation (unanimously).
Article 41: EUR 2,400 in respect of non-pecuniary damage; claim in respect of pecuniary damage dismissed.
* The Court found that the head of the NTRC was a “witness” in respect of whom the guarantees of Article 6 §§ 1 and 3 (d) of the Convention applied despite the fact that he had not made any oral or written statements in relation to the applicant company and had provided the relevant documents in his official capacity. For the Court, the fact that he had not made any statements against the applicant company was of no relevance. What mattered was that the information contained in the documents he had provided constituted evidence for the tax authorities and the courts.
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This summary by the Registry does not bind the Court.
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