AS TO THE ADMISSIBILITY OF
Application No. 15464/89
by A.P.
against Austria
The European Commission of Human Rights sitting in private
on 8 October 1991, the following members being present:
MM. C.A. NØRGAARD, President
J.A. FROWEIN
S. TRECHSEL
F. ERMACORA
G. SPERDUTI
G. JÖRUNDSSON
A. WEITZEL
J.C. SOYER
H.G. SCHERMERS
H. DANELIUS
Mrs. G.H. THUNE
Sir Basil HALL
Mr. F. MARTINEZ
Mrs. J. LIDDY
MM. L. LOUCAIDES
J.-C. GEUS
M.P. PELLONPÄÄ
B. MARXER
Mr. H.C. KRÜGER, 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 4 June 1989 by
A.P. against Austria and registered on 8 September 1989
under file No. 15464/89;
Having regard to the report provided for in Rule 47 of the
Rules of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case, as submitted by the parties, may be
summarised as follows.
Particular circumstances of the case
The applicant, born in 1952, is an Austrian citizen residing
in Graz. Before the Commission he is represented by Mr. Kurt Bielau,
a lawyer practising in Graz.
On 17 December 1986 the applicant acquired land in Graz by
auction for AS 4,955,000,-.
On 10 February 1987 the applicant informed the Graz Tax Office
for levies and taxes on transactions (Finanzamt für Gebühren und
Verkehrssteuern) of the purchase. He objected to any imposition of
taxes under the 1955 Land Acquisition Taxation Act (Grunderwerb-
steuergesetz), referring to a decision of the Constitutional Court
(Verfassungsgerichtshof) of 10 December 1986.
On 31 March 1987 the Graz Tax Office imposed 8% tax (= AS
396,400,-) against the applicant by virtue of the 1955 Act on the
grounds that the annulment of Section 1 para. 1 (1) of the 1955 Act by
the Constitutional Court became effective after 30 November 1987, so
that the provision continued to apply to all transactions effected
until that date except those exempted by the Constitutional Court.
On 30 June 1987, the applicant appealed against the decision
of 31 March 1987. On 20 April 1988 the Styrian Regional Directorate
of Finance (Finanzlandesdirektion) dismissed the appeal.
It found that Section 1 para. 1 (2) of the 1955 Act, and not
Section 1 para. 1 (1) was applicable to the applicant's case. Section
1 para. 1 (2) had been annulled on 10 March 1987 but continued to
apply to transactions effected before 30 November 1987. The
transaction by the applicant was effected on 17 December 1986 and was
accordingly subject to tax under Section 1 para. 1 (2) of the 1955
Act. In its reasoning the Regional Directorate added that also
Section 12 para. 2 of the new 1987 Land Acquisition Taxation Act
expressly provided for the old version of the Act to apply to all
transactions effected before 1 July 1987.
On 7 June 1988 the applicant lodged a complaint with the
Constitutional Court, invoking the principle of equality and his
constitutional right to property.
On 27 September 1988 the Constitutional Court in non-public
proceedings refused to deal with the case on the ground that it lacked
sufficient prospects of success. The decision was served on the
applicant on 14 December 1988.
Relevant domestic law and practice
I. The 1955 Land Acquisition Taxation Act
Section 1 para. 1 of the 1955 Land Acquisition Taxation Act in
its former version provides, as far as relevant:
[Translation]
"(1) The following legal transactions are subject to land
acquisition tax, insofar as they concern domestic land:
1. A sales contract or any other legal transaction
creating a claim to transfer of property,
2. the acquisition of property, if no legal
transaction creating a claim to transfer
of property preceded,
3. ..."
[German]
"(1) Der Grunderwerbsteuer unterliegen die folgenden
Rechtsvorgänge, soweit sie sich auf inländische Grundstücke
beziehen:
1. Ein Kaufvertrag oder ein anderes Rechtsgeschäft,
das den Anspruch auf Übereignung begründet,
2. die Erwerbung des Eigentumes, wenn kein den
Anspruch auf Übereignung begründendes
Rechtsgeschäft vorausgegangen ist,
3. ..."
II. The annulment judgments of the Constitutional Court
In its decision of 10 December 1986 the Constitutional Court
annulled Section 1 para. 1 (1) of the 1955 Act, according to which
sales contracts or other legal transactions of domestic land are
subject to land acquisition tax.
In its reasoning the Constitutional Court referred to its
considerations in its decision to introduce norm control
proceedings. It stated the following:
"... the Constitutional Court has one further doubt about
the constitutionality of the basic elements determining
liability to land acquisition tax, which it has not yet
considered in its case-law on the subject: it seems that
liability to land acquisition tax, which may be explained
primarily in fiscal terms, is open to a large number of
casuistic exceptions, leading, as is well-known to the
court, both on the part of tax-payers (collectively) and on
the part of the public authorities, to enormous
administrative expenditure which is out of proportion to the
proceeds from the tax. This seems to contradict the
principle of objectivity deriving from that of equality laid
down in the Federal Constitution insofar as it appears in
general to preclude efficient administrative activity based
on the criteria of economy, expediency, and appropriateness".
The Constitutional Court decided that the annulled provisions
should continue to apply to any cases based on facts which occurred
before 30 November 1987, not, however, to proceedings in which an
appeal was pending on 22 November 1986 (i.e. the day of
the announcement of the hearing before the Constitutional Court) or in
which a complaint has been lodged with the Administrative Court
(Verwaltungsgerichtshof) before 5 December 1986, 10.30 a.m. (i.e. the
beginning of the hearing before the Constitutional Court).
On 10 March 1987 the Constitutional Court annulled Section 1
para. 1 (2) of the 1955 Act, according to which the acquisition of
property is subject to land acquisition tax, if no legal transaction
creating a claim to transfer preceded. The Constitutional Court gave
the following reasoning for declaring this provision unconstitutional:
"By decision of 10 December 1986 ... the Constitutional
Court annulled Section 1 para. 1 (1) of the Land Acquisition
Taxation Act as being unconstitutional. It had found this
provision contrary to the principle of equality with regard
to the lack of objectivity in the exemptions from the
liability to tax provided for in Section 4 para. 1 (7) (a)
of the Land Acquisition Taxation Act.
The same must apply to the present case. The provision
allowing exemptions - found to be contrary to the principle
of equality - is not only relevant for the liability to land
acquisition tax which is based on the conclusion of sales
contracts or other legal transactions creating a claim to
transfer of property (Section 1 para. 1 (1) of the Land
Acquisition Taxation Act ...), but also for the acquisition
of property where no legal transaction creating a claim to
transfer of property preceded (Section 1 para. 1 (2) of the
Land Acquisition Taxation Act).
Therefore the provision under examination is unconstitutional
for the very same reasons which led to the annulment of
Section 1 para 1 (1) in the repeatedly quoted decision G 167/86."
According to the decision the annulled provision should
continue to apply to any cases based on facts prior to 30 November
1987. However, it would not apply to proceedings in which an appeal
was pending on 27 January 1987 (announcement of the hearing) or in
which a complaint has been lodged with the Administrative Court before
10 March 1987 (day of the hearing before the Constitutional Court).
COMPLAINTS
1. The applicant alleges that the taxation on the basis of the
annulled 1955 Land Acquisition Taxation Act violated his rights under
Article 1 of Protocol No. 1 to the Convention. He submits in
particular that the 1955 Act had been declared unconstitutional,
but continued to be in force and could not be challenged by the
applicant in the circumstances of his case.
2. He also complains under Article 14 of the Convention about
discrimination in that the Constitutional Court exempted only a group
of cases from the application of the annulled law, namely those in which
an appeal was pending or a complaint to the Administrative Court was
lodged.
3. The applicant further claims under Article 13 of the
Convention that he did not have an effective remedy to challenge the
taxation based on an unconstitutional law.
4. Finally, the applicant complains that in the proceedings
before the Constitutional Court, he did not have a fair and oral
hearing within the meaning of Article 6 of the Convention.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 4 June 1989 and registered
on 8 September 1989.
On 4 December 1989 the Commission decided to give notice of
the application to the respondent Government and to invite them
to submit observations in writing on the admissibility and merits of
the application.
The Government submitted their observations on 12 March 1990
and the applicant replied on 25 April 1990.
THE LAW
1. The applicant complains that he was required to pay tax under
the 1955 Land Acquisition Taxation Act although the Constitutional
Court had annulled the relevant provisions of this Act as being
unconstitutional. He considers that there has been a violation of his
right to the peaceful enjoyment of his possessions, as guaranteed by
Article 1 of Protocol No. 1 (P1-1) to the Convention, which reads as
follows:
"Every natural or legal person is entitled to the peaceful
enjoyment of his possessions. No one shall be deprived of
his possessions except in the public interest and subject to
the conditions provided for by law and by the general
principles of international law.
The preceding provisions shall not, however, in any way
impair the right of a State to enforce such laws as it deems
necessary to control the use of property in accordance with
the general interest or to secure the payment of taxes or
other contributions or penalties."
The Government submit that the taxation of the applicant's
acquisition was lawful as Section 1 para. 1 (2) of the 1955 Act was
still in force when the acquisition took place.
The Commission first of all observes that the second paragraph
of Article 1 of Protocol No. 1 (P1-1) expressly leaves unimpaired the
State's right to enforce such laws as it deems necessary to secure the
payment of taxes. Therefore, the duty to pay tax falls within its
field of application (cf. Eur. Court H.R., Darby judgment of 23
October 1990, Series A no. 187, p. 12, para. 30).
The Commission further notes that the Constitutional Court had
annulled the relevant provision on 10 March 1987, ruling that it should
continue to apply until 30 November 1987. It follows that Section 1
para. 1 (2) of the 1955 Act was in force on 17 December 1986 when the
applicant acquired the land in question.
The Commission observes that the finding of
unconstitutionality did not make the application of the 1955 Act to
the present case unlawful, as it remained part of the Austrian legal
system until 30 November 1987. It follows that the applicant's
complaint of unlawful taxation under Article 1 of Protocol No. 1
(P1-1) of the Convention is manifestly ill-founded within the meaning
of Article 27 para. 2 (Art.27-2) of the Convention.
2. The applicant also complains under Article 1 of Protocol No. 1
(P1-1) in conjunction with Article 14 (Art. 14) of the Convention
about discrimination in that the Constitutional Court exempted only a
group of cases from the application of the annulled law. He also
submits that the 1955 Act itself was discriminatory within the meaning
of Article 14 (Art. 14) of the Convention.
The Government contend that neither the decision of the
Constitutional Court nor the 1955 Act itself were discriminatory.
The Commission recalls that a treatment is discriminatory if
it has no objective and reasonable justification, that is, if it does
not pursue a legitimate aim or if there is no reasonable relationship
of proportionality between the means employed and the aim sought to be
realised. In this respect the Contracting States enjoy a certain margin
of appreciation in assessing whether and to what extent differences in
otherwise similar situations justify a different treatment in law
(Eur. Court H.R., Lithgow and Others judgment of 8 July 1986, Series A
no. 102, p. 66 et seq., para. 177).
The Commission further recalls that the prohibition against
discrimination under Article 14 (Art. 14) of the Convention is also
applicable in relation to taxation (Application No. 11089/84, Lindsay
v. the United Kingdom, Dec. 11.11.86; Eur. Court H.R., Darby judgment
of 23 October 1990, Series A no. 187, p. 12, para. 30).
The Commission notes that the exemption by the Constitutional
Court's ruling was based on Article 140 para. 7 of the Austrian
Federal Constitution according to which a law shall continue to apply
to the circumstances that have occurred before the annulment decision,
the case in point excepted, unless the Court in its judgment decides
otherwise. If the Court has in its judgment set a time-limit, the law
shall apply to all the circumstances occurring, the case in point
excepted, until the expiry of this time-limit. According to Article
140 para. 5 of the Federal Constitution the Constitutional Court may
set a time-limit for the repeal of up to one year.
In its judgment of 10 March 1987, the Constitutional Court
fixed a time-limit of nearly nine months, which means that the
annulled legislation continued to apply until 30 November 1987.
The Commission notes that the Constitutional Court's decision
affected all cases the circumstances of which occurred before the
annulment entered into force except those which were pending before a
higher instance at a certain stage of the Constitutional Court's
proceedings.
As a consequence the Commission considers that, by exempting
cases in which an appeal was pending on certain dates and by setting a
time-limit, the Constitutional Court laid down an interim regulation
of general application which was neither arbitrary nor based on any
criteria of personal status incompatible with Article 14 (Art. 14) of the
Convention.
The Commission furthermore recalls the finding of the
Constitutional Court that Section 1 para. 1 (2) of the 1955 Act was
annulled as the exemption allowed by Section 4 para. 1 (7) (a) of the
Act was unreasonable and therefore the basic provision was contrary to
the principle of objectivity deriving from that of equality laid down
in the Austrian Federal Constitution.
The applicant has not produced any evidence to show that
persons in a situation similar to his who acquired their land but did
not get a decision before 10 March 1987 were treated under that Act in
a way different from that in which he was treated.
The Commission, therefore, cannot find that the applicant
could not enjoy his right of property without discrimination on any
of the grounds mentioned in Article 14 (Art. 14) of the Convention.
The Commission therefore concludes that the applicant's
complaint of discriminatory taxation is manifestly ill-founded within
the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.
3. The applicant further complains that he did not have an
effective remedy within the meaning of Article 13 (Art. 13) by which
he could have challenged the allegedly discriminatory legislation
applied to him. Article 13 (Art. 13) provides:
"Everyone whose rights and freedoms as set forth in this
Convention are violated shall have an effective remedy
before a national authority notwithstanding that the
violation has been committed by persons acting in an
official capacity."
The applicant submits that the Constitutional Court having
ruled on the effect of the relevant legislation, and his own
application to that Court having been rejected, he had no effective
remedy.
The Commission recalls the case-law of the Convention organs
according to which Article 13 (Art. 13) does not go so far as to
guarantee a remedy allowing a legislative act as such to be challenged
on the ground of being contrary to the Convention or to equivalent
domestic norms (cf. Eur. Court H.R., James and Others judgment of 21
February 1986, Series A no. 98, p. 47, para. 85; Lithgow and Others
judgment of 8 July 1986, Series A no. 102, p. 74, para. 206).
The Commission therefore concludes that this complaint must be
rejected as being manifestly ill-founded within the meaning of Article
27 para. 2 (Art. 27-2) of the Convention.
4. The applicant finally complains that the Constitutional
Court's proceedings violated Article 6 (Art. 6) of the Convention.
Article 6 (Art. 6), insofar as relevant, reads as follows:
"1. In the determination of his civil rights and
obligations or of any criminal charge against him, everyone
is entitled to a fair and public hearing within a reasonable
time by an independent and impartial tribunal established by
law. ..."
The Commission recalls that disputes as to the liability for
payment of taxes do not fall within the ambit of Article 6 (Art. 6) of the
Convention. The proceedings before the Constitutional Court therefore
also fall outside the scope of application of Article 6 (Art. 6) of
the Convention.
It follows that this complaint is incompatible with the
provisions of the Convention ratione materiae and must be rejected
according to Article 27 para. 2 (Art. 27-2) of the Convention.
For these reasons, the Commission, by a majority,
DECLARES THE APPLICATION INADMISSIBLE.
Secretary to the Commission President of the Commission
(H.C. KRÜGER) (C.A. NØRGAARD)
Full & Egal Universal Law Academy