a special irregularity penalty cannot be deducted by considering an invoice that has not been issued within 7 days as unregulated.
COUNCIL OF TAX LITIGATION DEPARTMENTS OF THE COUNCIL OF STATE 2021/1236 E. , 2022/1726 K.
“Case Law Text”
T.C.
D A N I S T A Y
BOARD OF TAX LITIGATION DEPARTMENTS
Original No. : 2021/1236
Decision No : 2022/1726
THE APPELLANT (THE DEFENDANT) : …The Department of the DEFENDANT
(… directorate of Tax Administration)
DEPUTY : Av. …
COUNTERPARTY (plaintiff) : … Industry and Trade Limited Company
SUBJECT OF THE REQUEST :… it is requested that the insistence decision of the tax Court … dated and numbered E:…, K:… be overturned on appeal.
JUDICIAL PROCESS:
Subject matter of the lawsuit claim: On behalf of the plaintiff, since he did not issue an invoice within seven days for the performance of some services in accordance with the minutes issued as a result of the audit conducted at work, bet 353 of the Tax Procedure Law No. 213 for the period of March 2014. a lawsuit has been filed with the request to cancel the special irregularity penalty imposed in accordance with paragraph (1) of the article.
… The decision of the Tax Court … dated and numbered E:…, K:…:
The following determinations are included in the minutes dated 16/09/2015 issued as a result of the audit conducted at the plaintiff company’s workplace:
i. Taxpayer in the elections held in March 2014 … his party served the Antalya Provincial Presidency in the election work and afterwards.
ii. The mentioned service fee amounts to TL 431,032.60 including value added tax, TL 369,547.52 and TL 61,485.08.
iii. Although the service provided with a price of 369.547,52 TL was completed in the March period of 2014, the invoice issued for this service is dated 11/07/2014 and the invoice price is 431.032,60 TL.
Although the minutes issued by the plaintiff company’s official are of a judgemental nature about the plaintiff, it is necessary to examine whether the determination made is sufficient to impose a penalty for special irregularities.
231 of the Tax Procedure Law No. 213. in paragraph (5) of the article, it is stated that the invoice will be issued within a maximum of seven days from the date of delivery of the goods, and it is attached to the provision that invoices that are not issued within this period will be considered never issued.
The aforementioned article mentions the necessity of issuing an invoice within seven days and 353 of the Law No. 213 regulating the situations in which a special irregularity penalty may be imposed. in order to be fined for special irregularities, it is stated in the article that it should be clearly determined that the invoice has not been received and has not been issued.
Considering the principle of investigation of the true nature, which is one of the general principles of tax law, although the invoice was issued after a seven-day period, the fact of “non-regulation”, which requires a special penalty for irregularities, did not occur in the case, and the situation was that the invoice was issued late.
Accordingly, when the invoices arranged by the plaintiff are taken into consideration, there is no compliance with the law in the penalty imposed.
The court has abolished the special irregularity penalty for this reason.
The Third Chamber of the Council of State examining the defendant’s appeal request dated 18/04/2019 and E:2016/14960 , K:2019/2711 numbered decision:
It is clear that compliance with the maximum regulation period specified in Law No. 213 is mandatory for the acceptance of the issued document as an invoice.
In other words, it is not possible to accept that the invoice issued after the expiration of the period specified in the Law is a valid invoice.
There is no doubt that an invoice that is not issued within the period stipulated in the Law will not be valid and will constitute an act of not issuing an invoice from the point of view of the organizer and not receiving an invoice from the point of view of the area.
In this case, since it is clear that the plaintiff issued an invoice after the seven-day period has elapsed from the date of performing the service, there is no illegality in the special irregularity penalty subject to the dispute.
The Department overturned the decision on this grounds; it also rejected the plaintiff’s request for correction of the decision.
… The Tax Court’s … date and insistence decision numbered E:… K:…:
The court insisted on the legal reasons and justification contained in its first decision.
APPELLANT’S CLAIMS: It is stated that there is no illegality in the special irregularity penalty that is the subject of the dispute and it is suggested that the insistence decision should be overturned.
DEFENSE OF THE OTHER SIDE: No answer was given.
OPINION OF THE AUDIT JUDGE OF THE COUNCIL OF STATE …: Since the allegations put forward in the appeal petition are not in place and in the nature of overturning the decision, in the face of the legal reasons and justification on which the insistence decision is based, it is considered that the request should be rejected.
ON BEHALF OF THE TURKISH NATION
The Council of Tax Litigation Departments of the Council of State, which made the decision, discussed the need after hearing the statements of the Audit Judge and reviewing the documents in the file:
LEGAL ASSESSMENT :
The claims put forward in the appeal petition have not been deemed in a position to require the decision to be overturned.
DECISION RESULT :
For the reasons explained;
To the REJECTION of the defendant’s appeal request,
according to the Law No. 2577 (Provisional 8. continued implementation in accordance with article 54). article 1. in accordance with the paragraph, the decision was made by a majority of votes on 28/12/2022, so that the way for correcting the decision is open within fifteen days from the day following the notification date of this decision.
X – VOTE AGAINST:
We do not agree with the decision with the acceptance of the appeal request and the vote that the insistence decision should be overturned in accordance with the legal reasons and justification contained in the decision of the Third Chamber of the Council of State.