CEDH · CASELAW;DECISIONS;ADMISSIBILITYCOM;ENG — 16 avril 2024

.s800EAC49 { font-size:12pt } .sFE10DC93 { margin-top:0pt; margin-bottom:0pt; text-align:center } .sBB9EE52A { font-family:Arial } .s2EF17D91 { margin-top:0pt; margin-bottom:0pt; text-align:center; font-size:2pt } .s5E1364CA { margin-top:0pt; margin-bottom:12pt; text-align:center; page-break-inside:avoid; page-break-after:avoid; font-size:14pt } .s339D85E6 { margin-top:0pt; margin-bottom:14pt; text-align:center; page-break-inside:avoid; page-break-after:avoid } .s5FFF0A77 { margin-top:0pt; margin-bottom:0pt; font-size:1pt } .s10950C61 { margin-top:0pt; margin-bottom:0pt; text-indent:14.2pt; text-align:justify } .s32563E28 { margin-top:0pt; margin-bottom:0pt } .sB9D5CABB { width:28.35pt; display:inline-block } .sA36B60A1 { font-family:Arial; font-style:italic } .s3AAE10DF { margin-top:14pt; margin-bottom:12pt; text-align:justify; page-break-inside:avoid; page-break-after:avoid; font-size:14pt } .s3CA22BA { font-family:Arial; text-transform:uppercase } .s9F46BEC9 { margin-top:14pt; margin-bottom:12pt; text-align:justify; font-size:14pt } .s2D9C6089 { margin-top:12pt; margin-bottom:12pt; text-indent:14.2pt; text-align:justify; page-break-inside:avoid; page-break-after:avoid } .s84651E4E { margin-top:14pt; margin-left:14.2pt; margin-bottom:3pt; text-align:justify } .s69DCC830 { margin-top:36pt; margin-bottom:0pt } .sC986E16F { font-family:Arial; color:#ffffff } .sB6A7F5BF { width:17.54pt; display:inline-block } .s6E24AFEB { width:129.08pt; display:inline-block } .s5D826FD4 { width:25.88pt; display:inline-block } .s1B61D60 { width:156.43pt; display:inline-block }     SECOND SECTION DECISION Application no. 80852/17 Pavo JELIĆ against Croatia   The European Court of Human Rights (Second Section), sitting on 16   April 2024 as a Committee composed of:   Pauliine Koskelo , President ,   Lorraine Schembri Orland,   Davor Derenčinović , judges , and Dorothee von Arnim, Deputy Section Registrar, Having regard to: the application (no.   80852/17) against the Republic of Croatia lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) on 22 November 2017 by a Croatian national, Mr Pavo Jelić (“the applicant”), who was born in   1965, lives in Šumarina and was represented by Ms T. Urdaneta Wittek, a lawyer practising in Vienna; the decision to give notice of the complaint concerning the right to property to the Croatian Government (“the Government”), represented by their Agent, Ms Š. Stažnik, and to declare inadmissible the remainder of the application; the parties’ observations; Having deliberated, decides as follows: SUBJECT MATTER OF THE CASE 1.     The application concerns administrative proceedings in which the applicant, an agricultural entrepreneur, was ordered to pay excise duty ( trošarina ) on account of unauthorised use of a specific type of oil. 2 .     In the course of an inspection, having examined oil samples taken from several of the applicant’s agricultural machines and an outdoor and an indoor tank, the competent authorities established that all the samples corresponded to the specific type of oil intended for use in agriculture. However, the oil in the indoor tank had been used for heating the applicant’s home and office, a purpose which was contrary to domestic law. The authorities also examined the applicant’s accounting records, including the invoices related to the purchase of the oil in question, but noted that the applicant did not keep any records from which the amount of oil used in each machine or tank could be established. 3.     By a decision of 28 November 2013, the Osijek Regional Customs Office ordered the applicant to pay excise duty on the oil used for unauthorised purposes in the amount of some EUR 70,230, increased by statutory default interest. They calculated that amount by multiplying the volume of the indoor tank by one hundred. The first-instance decision was upheld by the Ministry of Finance. 4.     In 2015 enforcement proceedings were initiated against the applicant and the entire amount of the excise duty owed was collected from him. 5.     The applicant lodged an action in judicial review against the decision ordering him to pay the excise duty contesting, inter alia , the method used for calculating the amount due. His action was finally dismissed by a judgment of the High Administrative Court of 14 September 2016, and his subsequent constitutional complaint was declared inadmissible by the Constitutional Court by a decision of 5 April 2017, served on the applicant’s representative on 24 May 2017. 6.     Before the Court, the applicant complained, relying on Article 1 of Protocol No. 1 to the Convention, that the amount of excise duty he had been ordered to pay had been disproportionate to the severity of the infringement and had imposed an excessive burden on him. THE COURT’S ASSESSMENT 7.     The general principles under Article 1 of Protocol No. 1 to the Convention concerning taxation, and more specifically, measures to secure the payment of taxes or other contributions or penalties, have been summarised in S.C. Zorina International S.R.L. v. Romania , no.   15553/15, §§   40-44, 27 June 2023. 8 .     In determining whether the interference with the applicant’s property rights by the imposition of the excise duty was prescribed by law, the Court notes that the excise duty was imposed on the applicant in accordance with section 76(2) read in conjunction with sections 92(4) and 77 of the Excise Duties Act. According to those provisions, there were two methods for calculating the amount of oil to which the excise-duty rate would be applied in cases of unauthorised use: either by multiplying the volume of the tank in which the oil had been found by one hundred or by multiplying the amount of oil that had been used for unauthorised purposes by ten. As clarified by the relevant domestic practice of the tax authorities submitted by the Government (see, for instance, the decisions of the Vukovar Customs Office of 17   November 2010 and 5 September 2011), the latter method was applicable only in cases where the amount of oil used for unauthorised purposes was established on the basis of accounting records and other documents. 9.     The applicant’s main argument was that the excise duty in his case should have been calculated based on his accounting documents. However, the Court observes that from the documents provided to them the domestic authorities were unable to determine the quantity of oil used by each machine on the premises, as these consisted merely of invoices for the purchase of the oil which had been used both for the authorised agricultural purposes, as well as for heating the applicant’s premises which had amounted to unauthorised use (see paragraph 2 above). Therefore, only the first method of calculation had been practicable in the applicant’s case, as the unauthorised use of oil could not be established from the accounting documents, but only by inspecting the tank in which the oil had been kept. 10.     The Court concludes that the method for the calculation of the excise duty had been set out in the Excise Duties Act and clarified through the practice of the domestic authorities (see paragraph 8 above). It further follows from the above that the provisions relied on by the domestic authorities were accessible and foreseeable in their application to the applicant, as the latter should have been aware that, if he were to use the oil in question for purposes other than agricultural, he would be ordered to pay the increased amount of the excise duty, calculated on the basis of the volume of the tank. The interference in question was therefore provided for by law. 11.     That interference pursued the legitimate aim of securing the payment of taxes, more specifically excise duty, and preventing tax evasion, within the meaning of the second paragraph of Article 1 of Protocol No. 1 to the Convention. 12.     As to the proportionality of the interference, the Court notes that the amount of the excise duty that the applicant was ordered to pay was not in itself exorbitant (see Christian Religious Organization of Jehovah’s Witnesses v. Armenia (dec.), no. 73601/14, § 53, 29 September 2020). While the applicant did suggest that he had faced certain difficulties arising from the enforcement proceedings in that his bank accounts were blocked over a period of time and he had to dismiss two employees, there is nothing to indicate that imposing the excise duty on him fundamentally undermined his financial situation or that of his agricultural business, which appears to still be operating – one of the factors to which the Court has given weight when gauging whether a fair balance has been struck in a given case (see   S.C.   Zorina International S.R.L. , cited above, § 53; and IOFIL AE v.   Greece (dec.), no.   50598/13, §   48, 7 September 2021, and the case-law cited therein). 13.     The applicant also argued that the application of the calculation method provided for by the Excise Duties Act resulted in imposing an excise duty in amount disproportionate to the amount of tax that had been evaded by the unauthorised use of oil. However, the purpose of the rule imposing the excise duty in the present case was not merely compensatory but also deterrent and punitive, its amount being aimed also at punishing the applicant for attempted tax evasion (see Milošević v. Croatia , no. 12022/16, §§ 32 and 39, 31 August 2021). That being so, and having regard to the domestic authorities’ wide margin of appreciation in tax matters (see, for instance, S.C.   Zorina International S.R.L. , cited above, § 49), the Court finds that it cannot be said that the rule imposing increased excise duty on account of illegal use of oil was at odds with the principle of proportionality inherent in Article 1 of Protocol No. 1 to the Convention (see, mutatis mutandis , Matić v.   Croatia (dec.), no. 1962/12, § 54, 11 June 2019). 14.     Finally, the applicant had at his disposal a procedure enabling him to challenge the imposed sum, specifically the possibility of bringing judicial review proceedings. He made use of that remedy and was able to effectively participate in those proceedings and raise his various arguments before the domestic authorities. There is nothing to show that the decision-making process confirming the imposition of the amount of excise duty complained of was unfair or arbitrary. 15.     In view of the above, the Court concludes that this application is manifestly ill-founded and must be rejected in accordance with Article   35   §§   3 (a) and 4 of the Convention. For these reasons, the Court, unanimously, Declares the application inadmissible. Done in English and notified in writing on 23 May 2024.     Dorothee von Arnim   Pauliine Koskelo   Deputy Registrar   President