SECOND SECTION
DECISION
Application no. 1964/07
Düriye KARALAR
against Turkey
The European Court of Human Rights (Second Section), sitting on 11 June 2019 as a Committee composed of:
Julia Laffranque, President,
Ivana Jelić,
Arnfinn Bårdsen, judges,
and Hasan Bakırcı, Deputy Section Registrar,
Having regard to the above application lodged on 3 January 2007,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Ms Düriye Karalar, is a Turkish national who was born in 1953 and lives in Istanbul. She was represented before the Court by Ms A. Akboğa, a lawyer practising in Antalya.
2. The Turkish Government (“the Government”) were represented by their Agent.
3. The applicant alleged under Article 6 § 3 (b) and (c) of the Convention that she had not had a fair trial because she had not been given the time and facilities necessary to prepare her defence against the tax penalty imposed on her, as service of that fine and the payment order had been defective. She further alleged that the imposition of a tax penalty for potential lost revenue while the criminal proceedings against her had been ongoing had breached her right to be presumed innocent under Article 6 § 2 of the Convention. She also alleged that the imposition of a fine on her on the basis of a legal provision that had subsequently been annulled by the Constitutional Court had contravened her rights under Article 7 of the Convention. Lastly, relying on Article 2 § 2 of Protocol No. 4 to the Convention, she complained of an infringement of her freedom of movement as a result of a ban on her leaving the territory.
4. On 1 September 2010 notice of the application was given to the Government with the exception of the complaint under Article 2 § 2 of Protocol No. 4 to the Convention.
A. The circumstances of the case
1. Criminal proceedings against the applicant
5. On 6 February 2001 the public prosecutor’s office attached to the İzmir State Security Court indicted the applicant and seventy-five other individuals and brought them before the court on charges of directing and being members of a profit-oriented criminal organisation under Law no. 4422 on the Prevention of Profit-Oriented Criminal Organisations.
6. On 17 January 2002 the İzmir State Security Court declined jurisdiction and referred the matter to the İzmir public prosecutor’s office. The material submitted by the parties to the Court does not contain any other information as to the outcome of those criminal proceedings.
7. Meanwhile, on 11 December 2001 the İzmir public prosecutor’s office filed a bill of indictment against the applicant and eight other individuals, charging them with tax evasion and complicity therein under sections 359 and 360 of the Tax Procedure Act (Law no. 213). The public prosecutor noted that the applicant, in her capacity as a certified public accountant, had confirmed the contents of forged invoices of companies which had been conducting fictitious exports (hayali ihracat). According to the public prosecutor, some of her co-accused had then used those invoices when drawing up value-added tax (Katma değer vergisi –VAT) refund claims in respect of those companies, which had thus obtained illegal VAT refunds from the State. The public prosecutor therefore accused the applicant of complicity in tax evasion for confirming the contents of invoices and being part of a scheme set up to obtain unlawful tax refunds from the State.
8. On 13 November 2006 the İzmir Assize Court, referring mainly to a report by the Committee of Expert Accountants of the Ministry of Finance (Maliye Bakanlığı Hesap Uzmanları Kurulu) and another expert report, acquitted the applicant for lack of sufficient evidence of her participation in the offence in question.
9. On an unspecified date some of her co-accused lodged an appeal against the trial court’s judgment with the Court of Cassation.
10. On 19 March 2009 the Court of Cassation dropped the charges against all the accused, including the applicant, holding that the statutory time‑limit for the offences with which they had been charged had become time‑barred. It accordingly dismissed the case.
2. Taxation proceedings
11. On 20 March 2001 the Antalya Tax Office (Vergi Dairesi) issued a tax penalty notice (vergi ceza ihbarnamesi) against the applicant, ordering her to pay a tax penalty for potential lost revenue (vergi ziyaı cezası) in the sum of 111,430,880,000 liras (TRL) pursuant to sections 341 (loss of tax), 344 § 3 and 360 (complicity) of the Tax Procedure Act (Law no. 213) for causing loss of tax and complicity in tax evasion. This amount corresponded to a tax penalty of 100 % plus interest, which was calculated in accordance with section 344 of that Act as in force at the material time.
12. On 24 May 2001 the tax penalty was served on the applicant in the prison where she was detained. According to a document drawn up by the prison warden and signed by both the applicant and the warden, the applicant received the tax inspection report and tax penalty notice attached to letters sent by the İzmir Revenue Office (Defterdarlık). However, the applicant maintained before the Court that she had not received the inspection report in full, alleging that certain attachments had been missing. The Government submitted that the report had not been served on the applicant in full due to the confidential information contained therein about other taxpayers, whereas the domestic courts found it established that it had been served on her in full.
13. It appears that the applicant failed to lodge an action against the tax penalty before the tax courts within the statutory period of thirty days provided for in section 7 of Administrative Procedure Act (Law no. 2577), and it thereby became final.
14. On 19 March 2002 the Kalekapı Tax Office issued a payment order (ödeme emri) for TRL 111,430,880,000 which, according to the applicant, was served on her on 2 April 2002.
15. The applicant lodged an action dated 17 October 2002 with the Antalya Tax Court, seeking annulment of the payment order. She alleged, in particular, that service on her of the penalty in prison had been deficient, as the tax inspection report on which the tax penalty had been based had not been provided to her in full. She claimed that she could not challenge the tax penalty within the prescribed time-limit because of those deficiencies and denied having any links with the company accused of tax evasion.
16. On 14 November 2002 the Antalya Tax Court (merits no. 2002/462), noting that the disputed payment order had been duly served on the applicant, dismissed her action. According to the court, as the tax penalty had become final without an objection having been lodged, the subsequent issuance of the payment order had been lawful. In the court’s view, it was undisputed that complaints concerning the levying and assessment of tax could not be examined in actions lodged against payment orders.
17. On 8 January 2003 the applicant lodged an appeal against that decision with the Supreme Administrative Court. She complained of procedural deficiencies which, according to her, had tainted service of the tax penalty in question and harmed her defence rights. She contended that the service in question should be regarded as invalid.
18. On 17 June 2004 the Ninth Division of the Supreme Administrative Court upheld the first-instance court’s judgment.
19. The applicant submitted written observations to the Supreme Administrative Court dated 18 August 2004 seeking rectification of the decision of 17 June 2004.
20. The applicant lodged further written submissions dated 18 November 2005 with the Supreme Administrative Court, pointing to a Constitutional Court judgment dated 6 January 2005 declaring section 344 of the Tax Procedure Act unconstitutional and repealing it. Claiming that the basis of the fine imposed on her had been section 344 (2), the applicant submitted, in the light of that judgment, that the fine in question should be regarded as devoid of any legal basis pursuant to Article 38 of the Constitution.
21. On 20 April 2006 the Ninth Division of the Supreme Administrative Court dismissed the applicant’s application for rectification of its previous decision.
3. Other administrative proceedings initiated by the applicant to challenge the payment order
22. On 9 April 2002, seven days after service, the applicant applied to the Kalekapı Tax Office for a review of the payment order for potential lost revenue. She did not receive any response to that request.
23. On 1 August 2002 the applicant sent a letter of complaint to the Ministry of Finance but to no avail. If an administrative authority fails to respond within the time-limit provided for in section 10 of Law no. 2577, namely sixty days of receipt, the request is considered to have been rejected. In such cases, an individual has thirty days thereafter to lodge an action for annulment of this “tacit refusal”. Following the tacit refusal of her request, on 14 November 2002, the applicant applied to the Antalya Tax Court to have that decision set aside.
24. On 14 November 2002 the applicant, considering that her request had been rejected because of the lack of response from the Ministry of Finance within sixty days, lodged an action seeking annulment of the “tacit refusal” of the Ministry of Finance to lift the tax penalty (Antalya Tax Court, merits no. 2002/1725).
25. On 11 June 2003 the Antalya Tax Court dismissed the action, holding that the thirty-day time-limit for bringing an action under section 7 of Law no. 2577 had expired on 30 October 2002 at the latest, whereas the applicant had lodged her action on 14 November 2002.
26. The applicant lodged an appeal dated 15 July 2003 against that decision, which was dismissed by the Supreme Administrative Court on 20 April 2006.
4. Proceedings concerning the imposition of a travel ban on the applicant
27. On 29 September 2003 the Kalekapı Tax Office imposed a ban on the applicant leaving the territory of Turkey until such time as she paid the penalty imposed on her or gave a pledge capable of covering the amount in question.
28. On an unspecified date the applicant brought an action against the Kalekapı Tax Office, seeking to have the travel ban set aside.
29. On 29 December 2004 the Antalya Administrative Court dismissed the applicant’s action, stating that the imposition of the ban had been lawful.
30. The parties did not inform the Court of the outcome of those proceedings.
B. Relevant domestic law and practice
1. Tax Procedure Act (Law no. 213)
31. Section 341 of the Tax Procedure Act, as applicable at the relevant time, provided as follows:
Loss of tax (vergi ziyaı) means the late or incomplete determination of tax due (verginin tahakkuku) due to non-performance or incomplete performance of duties by a taxpayer or [other person liable] for paying tax.
Loss of tax shall also include incomplete determination of tax or illegal refunds because of false declarations as to a person’s personal, civil or marital situation or for any other reason.
The subsequent assessment or completion of determination of tax or recovery of illegal refunds in the above-mentioned situations shall not prevent the imposition of penalties.
32. Section 344 of the Tax Procedure Act, as applicable at the relevant time, provided as follows:
(1) The offence of [causing] loss of tax shall mean a taxpayer or [other person liable] for paying tax causing loss of tax in the cases laid down in section 341 [of this Act].
(2) A tax penalty for [causing] loss of tax shall be imposed on persons who have committed the offence of [causing] loss of tax and [the amount of] the penalty shall be twice the amount of revenue that has been lost [as a result of the acts] and half the amount of the default interest applied to the amount of revenue that has been lost in accordance with section 112 of this Act for the period between the ordinary due date of the tax in question, which has been specified by law, and the date on which the tax penalty notice has been issued.
(3) Where loss of tax is caused by the acts laid down in section 359 of this Act, the penalty shall be three times the amount [of revenue that has been lost]; it shall be twice the amount [of revenue that has been lost] in cases of complicity in those acts.
33. Section 359 of the Tax Procedure Act, in so far as relevant and as applicable at the relevant time, read as follows:
“...
1. [Whoever] destroys books, records and documents or replaces pages of the books that he or she has destroyed or does not replace those pages or forges the originals or copies of documents fully or partially or utters such documents (a forged document is a document which is drawn up as if there exists a real transaction or situation even though in reality there is not);
...
shall be punished [by a term of] aggravated imprisonment of eighteen months to three years.
...
Imposition of the penalties provided for in this section in respect of persons who have committed [tax] evasion offences does not constitute an impediment to the separate imposition of tax] penalties for potential lost revenue (vergi ziyaı cezası) specified in section 344.
...
34. Section 360 of the Tax Procedure Act, entitled “Complicity”, as in force at the material time, provided as follows:
If more than one person participates in the acts described in section 359, each person who either committed the acts as a principal or joint principal shall be sentenced to the penalty provided for the offence subject to the condition that they acted in pursuit of individual material gain.
Persons who participate in those acts without pursuing material gain shall be sentenced to a quarter of the penalty provided for the offence.
2. Administrative Procedure Act (Law no. 2577)
35. Under section 7 of the Administrative Procedure Act, the time-limit for bringing an action in matters concerning taxes is thirty days, unless otherwise provided by law. It starts to run the day following service of a tax penalty in cases where the service is required by law.
36. Section 10 (2) of Law no. 2577 provides:
“[If the administrative authorities] do not respond ... within sixty days [of receipt], the request shall be considered to have been rejected.”
37. Section 20 of Law no. 2577 states that the Supreme Administrative Court, administrative and tax courts carry out, of their own motion, examinations of any kind in relation to the cases before them.
3. Law no. 6183 on the collection of debts due to the State
38. Section 58 of Law no. 6183, entitled “Objections against payment orders”, as in force at the relevant time, provided that an individual on whom an payment order had been served could lodge an objection against that order with the tax courts within seven days of service on the grounds that he or she owed no debt, it had been paid in part, or it had become statute-barred.
4. Relevant practice
39. In cases where tax has not been paid within the recovery period, section 344 of the Tax Procedure Act provides for payment of a penalty. Thus, when a person has falsified documents, or has circumvented the law in order to avoid the payment of tax, the aforementioned provisions will be applied. The penalties for default are laid down in section 112 of that Act, which refers to section 51 of Law no. 6183, which states that the Committee of Ministers has the competence to determine such rates.
40. On 6 January 2005 the Constitutional Court declared section 344 (2) of the Tax Procedure Act unconstitutional and repealed it (merits no: 2001/3, decision no: 2005/4). In that case, the appellant argued that the determination of the amount of a penalty by an organ of executive power had been contrary to the principle laid down in Article 38 of the Constitution, which exclusively conferred on the legislator the competence to legislate in respect of criminal matters. Noting that under section 51 of Law no. 6183, the penalty rate applicable in the event of tax evasion was determined by the Committee of Ministers, the Constitutional Court held that section 344 (2) of the Tax Procedure Act was contrary to the Constitution, holding that the determination of the penalty rate by an executive body was often variable and resulted in unpredictability for the litigants to which that provision might apply. Determination of that penalty by an executive organ was thus contrary to Article 38 of the Constitution, which enunciated in its first paragraph the principle of legality in criminal law.
41. On 20 October 2005 the aforementioned decision was published in the Official Gazette and took effect six months after its publication therein.
42. The amended version of section 344 (2) of Tax Procedure Act reads as follows:
“Where a taxpayer or [other person liable] for paying tax has caused loss of tax in the cases laid down in section 341 [of this Act], [that person] shall be fined twice the amount of revenue that has been lost.”
COMPLAINTS
43. The applicant complained under Article 6 § 3 (b) and (c) of the Convention that she had been prevented from challenging the tax penalty imposed on her effectively, as she had been served with the expert report on which the penalty had been based when she had been in prison. In the same vein, she also asserted that she had not been provided with a full copy of that report.
44. She further alleged under Article 6 § 2 of the Convention that imposition on her of a tax penalty for potential lost revenue at a time when the criminal proceedings against her had been ongoing had infringed her right to the presumption of innocence.
45. Moreover, she also alleged a violation of Article 7 of the Convention on the account of the Supreme Administrative Court’s failure to take into account the annulment of section 344 (2) of the Tax Procedure Act when dismissing her rectification request.
46. Lastly, she also submitted that her rights under Article 2 § 2 of Protocol No. 4 to the Convention had been violated on account of the travel ban imposed on her.
THE LAW
47. The applicant maintained her allegations.
48. The Government submitted that if the applicant had brought her case before the competent administrative authorities within the specified time-limit provided for by law, the domestic courts would have been in a position to examine all kinds of objections as regards the legal basis of the tax penalty in question as well as the context of service. However, the Government did not specifically ask the Court to declare the application inadmissible for non‑exhaustion of domestic remedies, inviting it to declare the application inadmissible in accordance with Article 35 of the Convention.
A. General Principles
49. The Court has repeatedly held that the six-month rule is a public policy rule which it has jurisdiction to apply of its own motion. As a result, although the respondent State did not raise any objection before the Court based on the six-month time limit, this issue, as a public policy rule, calls for consideration by the Court of its own motion (see Sabri Güneş v. Turkey [GC], no. 27396/06, § 29, 29 June 2012).
50. In assessing whether an applicant has complied with Article 35 § 1, it is important to bear in mind that the requirements contained in that Article concerning the exhaustion of domestic remedies and the six-month period are closely interrelated (see Galstyan v. Armenia, no. 26986/03, § 39, 15 November 2007, and Williams v. the United Kingdom (dec.) no. 32567/06, 17 February 2009).
51. Thus, as a rule, the six-month period runs from the date of the final decision in the process of exhaustion of domestic remedies (see Blokhin v. Russia [GC], no. 47152/06, § 106, ECHR 2016).
52. The pursuit of remedies which do not satisfy the requirements of Article 35 § 1 will not be considered by the Court for the purposes of establishing the date of the “final decision” or calculating the starting point for the running of the six-month rule (see Jeronovičs v. Latvia [GC], no 44898/10, § 75, 5 July 2016, with further references).
53. However, this provision allows only remedies which are normal and effective to be taken into account, as an applicant cannot extend the strict time‑limit imposed under the Convention by seeking to make inappropriate or misconceived applications to bodies or institutions which have no power or competence to offer effective redress for the complaint in issue under the Convention (see, among many other authorities, Lopes de Sousa Fernandes v. Portugal [GC], no. 56080/13, §§ 130-32, 19 December 2017). It follows that if an applicant has recourse to a remedy which is doomed to failure from the outset, the decision on that appeal cannot be taken into account for the calculation of the six-month period (see Jeronovičs, cited above, § 75 in fine, with further references).
54. The obligation to exhaust domestic remedies therefore requires an applicant to make normal use of remedies which are available and sufficient in respect of his or her Convention grievances (see Mozer v. the Republic of Moldova and Russia [GC], no. 11138/10, § 116, 23 February 2016). The existence of the remedies in question must be sufficiently certain not only in theory but in practice, failing which they will lack the requisite accessibility and effectiveness (see Karácsony and Others v. Hungary [GC], nos. 42461/13 and 44357/13, § 76, 17 May 2016).
55. The Court stresses that determining whether a domestic procedure constitutes an effective remedy within the meaning of Article 35 § 1, which an applicant must exhaust and which should therefore be taken into account for the purposes of the six-month time-limit, depends on a number of factors, notably the applicant’s complaint, the scope of the obligations of the State under that particular Convention provision, the available remedies in the respondent State and the specific circumstances of the case (see Lopes de Sousa Fernandes [GC], cited above, § 134).
B. Application to the present case
56. Turning back to the circumstances of the present case, the Court observes that on 24 May 2001 the applicant was served with the Antalya Tax Office’s tax penalty notice (vergi ceza ihbarnamesi) dated 20 March 2001 and the tax inspection report on which it had been based. It is not disputed between the parties that on that date the applicant was in prison.
57. The Court further observes that the applicant did not opt to bring any proceedings before the tax courts within the thirty-day time-limit with a view to benefitting from a full legal review of the tax penalty. Accordingly, it became final. However, the applicant pointed out that she had been prevented from obtaining a review by a body with full jurisdiction mainly because certain attachments of the tax inspection report had not been served on her in full. Likewise, the fact that she had been in prison when she had received the tax penalty and the tax inspection report had only contributed to that. The Government admitted that the report had not been served on the applicant in full, which was in clear contrast to the findings of the national courts.
58. Be that as it may, the Court notes that when the authorities served the applicant with the payment order after the tax penalty had become final, she lodged an action against it, submitting, inter alia, complaints concerning the assessment and service of the tax penalty and the tax report. However, as the scope of review was limited to three grounds laid down in section 58 of Law no. 6183, the Antalya Tax Court dismissed her case and found the payment order lawful, holding that her objections related not to the payment order but to the tax assessment, which should have been raised before the tax courts within thirty days of receipt of the tax penalty.
59. The Court further notes that it is not called upon to decide whether the applicant exhausted the effective domestic remedies available to her in the present case, given that the Government did not raise a non-exhaustion plea. However, even in the absence of a plea of inadmissibility based on non‑exhaustion of domestic remedies in the present case, the Court must examine the effectiveness of the domestic remedies used by the applicant with a view to establishing her compliance with the six-month rule (see Lelyuk v. Ukraine, no. 24037/08, § 32-33, 17 November 2016).
60. As regards the available remedies in Turkish law, the Court observes that section 7 of Law no. 2577 confers on an individual on whom a tax penalty has been imposed the possibility to institute proceedings before the tax courts for a review and annulment of the tax penalty within thirty days of service. In such cases, tax courts enjoy full jurisdiction in relation to complaints concerning tax penalties, including but not limited to the levying and assessment of tax. Where no such proceedings are initiated and the tax penalty becomes final, the authorities issue a payment order to the person concerned with a view to collecting the amount of the penalty and the relevant interest due.
61. In the same vein, the Court further notes that under section 58 of Law no. 6183 on the collection of debts due to the State, as applicable at the material time, an individual had the right to lodge an objection against a payment order before the tax courts within seven days of receipt. However, section 58 limited the scope of review to the following three grounds: the individual did not owe the debt in question, it had been paid in part, or it had become statute-barred.
62. Furthermore, the applicant, who is a certified accountant by profession, did not put forward any arguments capable of casting doubt on this point or otherwise showing that the domestic courts were in fact entitled through the established case-law of the judicial bodies or otherwise to carry out an examination on all aspects of an objection lodged against an order. Therefore, regard being had to the nature of the applicant’s complaints in the instant case, it appears that the remedy provided for in section 58 of Law no. 6183, namely an objection against a payment order, cannot be regarded as an effective remedy within the meaning of Article 35 of the Convention on account of the limited scope of review under that provision.
63. In view of the above, the Court considers that the question whether the applicant should or should not have been expected to challenge the tax penalty imposed on her within the thirty-day time-limit before the tax courts (section 7 of Law no. 2577) constitutes the thrust of the six-month issue in the present case, as it appears that the answer to be given to this question is likely to determine whether she availed herself of the “correct” domestic remedy in respect of the complaints which she now raises before the Court and the intertwined issue of whether she complied with the six‑month time‑limit.
64. In that connection, the Court is mindful of the inherent difficulties the applicant might have faced in her attempts to challenge the tax penalty within the time-limit provided for in section 7 of Law no. 2577, given that she was deprived of her liberty at the time. Nevertheless, it is not prepared to accept that the mere fact of being in prison is per se sufficient to constitute a “special circumstance” absolving her from the requirement to use the above-mentioned effective domestic remedy (see, mutatis mutandis, Kyriacou Tsiakkourmas and Others v. Turkey, no. 13320/02, § 239, 2 June 2015). Besides, the applicant did not argue that she was completely prevented from or otherwise deprived of contacting the outside world while in prison or that it was not possible or unduly burdensome for her to exchange documents with the outside world. Likewise, she did not claim that legal aid had not been available to her or that she had been refused it in her attempts to challenge the tax penalty before the tax courts within the thirty-day time-limit.
65. Furthermore, the Court attaches importance to the fact that the applicant waited until service of the payment order on 2 April 2002, which was more than ten months after service of the tax penalty on her, to raise the complaint that she had not received certain attachments to the tax report. It is also significant that she did not raise any arguments justifying that delay.
66. More importantly, no material before the Court suggests that the applicant had the report in full when lodging an objection against the payment order with the Antalya Tax Court, which is another indication that she was not prevented from, at the very least, complying with the time-limit laid down in section 7 of Law no. 2577. In the Court’s view, this is another element which in fact militates against her contention that she was prevented from effectively challenging the tax penalty on time because she did not receive the tax report in full.
67. In view of the above, the Court cannot accede to the view that the above‑mentioned circumstances were such as to render impossible the effective exercise by the applicant of the remedy provided for in section 7 of Law no. 2577, which was in principle an effective remedy in respect of her complaints.
68. Against the above background, the Court considers that the applicant, by lodging an objection against the payment order, had recourse to a remedy which offered no effective redress for her complaints in the light of the limited scope of the review conducted under section 58 of Law no. 6183. In other words, this was a futile step which was not capable of postponing the beginning of the six-month period (compare Çölgeçen and Others v. Turkey, nos. 50124/07 and 7 others, § 65, 12 December 2017). Therefore, the Court is unable to take into account for the calculation of the six-month period the date of the decision on the applicant’s rectification request, namely the Supreme Administrative Court’s decision dated 20 April 2006.
69. Accordingly, the Court finds that the applicant has failed to comply with the six-month rule.
70. It follows that the application has been lodged out of time and must be rejected in accordance with Article 35 §§ 1 and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 4 July 2019.
Hasan BakırcıJulia Laffranque
Deputy RegistrarPresident
Full & Egal Universal Law Academy