THIRD SECTION
Application no. 31081/12
Gheorghe ŞIMANDAN against Romania
lodged on 27 April 2012
STATEMENT OF FACTS
The applicant, Mr Gheorghe Şimandan, is a Romanian national who was born in 1944 and lives in Arad.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
In 2003 the applicant, in his capacity of administrator of the company S.C. Californ Construction S.R.L. (“the supplier of services”), signed a contract with P.T., administrator of the company S.C. Gomera Arizona S.R.L. (“the beneficiary”), undertaking to build a holiday home in Moneasa.
The applicant issued eight invoices for the services provided by his company. The total cost of the services was 858,796 Romanian lei (ROL) (approximately 245,370 euros (EUR)).
In March 2004 P.T. filed a VAT return on behalf of the beneficiary for the period between 1 November 2003 and 31 March 2004.
On an unspecified date the Arad tax authorities conducted a VAT audit of the beneficiary. The applicant was mandated by P.T. to represent the beneficiary before the tax authorities during the audit.
The tax authorities ordered an expert report to determine the real value of the services provided by the supplier of services as they considered that the cost of the services quoted in the invoices was too high. According to the expert report, produced on 27 October 2004, the value of the works performed by the supplier of services was ROL 165,000 (approximately EUR 47,142). The tax authorities therefore concluded that certain services mentioned in the invoices had never actually been provided (inter alia, the cutting down of fifty-two trees and the clearing of a forest). Consequently, they decided that the beneficiary was not entitled to deduct VAT for those services. After recalculating the VAT already deducted in connection with the same investment they ordered the beneficiary to pay the said VAT together with interest and penalties.
On 16 November 2004 the tax authorities issued a distraint order against the beneficiary in order to ensure the payment of its tax debts.
On 15 December 2004 the Arad Tax Office lodged a criminal complaint against the applicant, the administrator and son of the beneficiary (who was also involved in the running of the company) for fiscal evasion and forgery. They claimed that the real price of the services provided by the supplier was not ROL 858,796 but ROL 165,000.
The prosecutor’s office attached to the Ineu District Court ordered two new expert reports. The report produced at the applicant’s request established the value of the investment at ROL 938,847, and the other report at ROL 860,549.
On 17 October 2006 the prosecutor’s office decided to discontinue the criminal investigation. It stated that “the value of the investment was correctly calculated and registered in the accounting books of the company S.C. Gomera Arizona S.R.L., as confirmed by the last two expert reports”.
That decision was confirmed by the chief prosecutor on 23 November 2006.
The tax authorities complained before the Ineu District Court.
On 7 March 2007 the first-instance court dismissed the complaint, holding that the situation described by the tax authorities did not have any criminal relevance. It noted that the acts allegedly committed by the defendants could be considered contraventions but not offences.
The tax authorities lodged an appeal on points of law claiming that the first‑instance court had wrongly assessed the evidence in the file.
On 30 April 2007 the Arad County Court allowed the appeal and set aside the judgment. Noting the different values established by the three expert reports in connection with the beneficiary’s investment, the appeal court considered that a new expert report was necessary. Therefore, it remitted the case file to the prosecutor’s office and ordered the reopening of the criminal investigation. It also stated that new evidence was necessary in order to clarify whether certain works had indeed been carried out.
On 20 July 2011 the prosecutor’s office noted that according to a letter from the tax authorities, the defendants had met their fiscal obligations. It also noted that according to Article 10 of Law no. 241/2005 on the prevention and repression of fiscal evasion (“Law no. 241/2005”), a defendant could avoid criminal liability for his acts if his fiscal debts amounted to less than EUR 50,000 and he paid them before the end of the investigation. Taking into account the principle of the most favourable criminal law, the prosecutor’s office considered that these legal provisions were applicable to the defendants even though they had not been in force at the time when the offences were committed. Consequently, the prosecutor’s office decided to discontinue the investigation and impose an administrative fine amounting to ROL 1000 (approximately EUR 238) on each defendant. It also ordered the fine of each defendant to be registered in the criminal records.
The applicant lodged a complaint against that decision, arguing that he had never acknowledged that he had committed any offence. He also pointed out that the appeal court had ordered the reopening of the criminal investigation in order for a new expert report to be produced. He further stressed that the fiscal obligations had been met by the beneficiary of his services and not by him or his company, and that the only purpose of the payment had been to avoid an increase in the interest and penalties.
On 25 August 2011 the chief prosecutor confirmed the decision of 20 July 2011 without taking into account the arguments raised by the applicant.
The applicant lodged a complaint with the Ineu District Court, arguing that according to Article 13 of the Romanian Code of Criminal Procedure he was entitled to request the continuance of the criminal proceedings even though a finding of impunity had been made. He also reiterated all the arguments raised before the prosecutors.
On 3 November 2011 the Ineu District Court dismissed his complaint without referring to his arguments; it merely reiterated the reasoning of the prosecutors. Its decision was final and not subject to any further appeal.
B. Relevant domestic law
Article 10 of Law no. 241/2005 provides for a finding of impunity and the imposition of an administrative fine, registered in the criminal record of the perpetrator, where sums of up to EUR 50,000 are recovered before the end of the investigation.
According to Article 2781 of the CCP, as amended by Law no. 202/2010, a person dissatisfied with a prosecutor’s decision to discontinue criminal proceedings against him or her may lodge a complaint with the court which has jurisdiction to examine the case. The court can dismiss the complaint as inadmissible, as lodged outside the time-limit, or as unfounded. The court’s judgment is final and binding.
Article 13 of the CCP stipulates that the defendant has the right to ask for the continuation of the criminal proceedings even where a finding of impunity has been made.
COMPLAINTS
1. The applicant complains under Article 6 § 1 of the Convention that the Ineu District Court did not properly examine all his arguments raised in the complaint against the prosecutor’s decision to discontinue the proceedings against him. He claims that the prosecutor and the first‑instance court did not comply with the decision given by the Arad County Court on 30 April 2007; instead of re-opening the criminal investigation and ordering a new expert report they preferred to close the investigation on another legal basis.
2. Relying on Article 13 of the Convention, he complains of a lack of effective remedies for his complaint of unfair proceedings.
3. The applicant also complains that he was the victim of a violation of his right to an appeal in criminal matters as guaranteed by Article 2 of Protocol No. 7.
QUESTIONS TO THE PARTIES
1. Did the applicant have a fair hearing in the determination of the criminal charges against him, in accordance with Article 6 § 1 of the Convention? Did the Ineu District Court properly examine the applicant’s arguments and give adequate reasons for its decision?
2. Was the applicant afforded the right of appeal envisaged by Article 2 § 1 of Protocol No. 7?
Did the absence of an appeal in the present case fall within the exceptions laid down by Article 2 § 2 of Protocol No. 7?
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