“Mega Shin” LLC Successfully Challenged the Content of a Tax Inspection Report Issued by the State Revenue Committee
- 2025-06-03
On behalf of “Mega Shin” LLC, we filed a claim with the RA Administrative Court against the State Revenue Committee (SRC) of the Republic of Armenia, seeking partial annulment of a tax inspection report—specifically with regard to profit tax and value-added tax (VAT). The claim asserted that the contested administrative act failed to meet several fundamental legal requirements:
- Lack of substantiation and legal certainty:
The administrative act did not specify which transactions formed the basis for the profit tax and VAT reassessments. This omission violated Article 342(4)(7) of the RA Tax Code, as well as Articles 55, 56, and 57 of the RA Law on the Fundamentals of Administration and Administrative Proceedings.
- Restrictions on the taxpayer’s rights:
The tax inspection assignment did not include the taxpayer's rights and obligations as required by Article 339(1)(8) of the RA Tax Code. Furthermore, the SRC failed to adhere to the notification principles set forth in Article 34 of the same code.
- Lack of evidentiary support:
The administrative act lacked sufficient supporting evidence. Additionally, the SRC failed to provide the relevant documents despite the claimant’s requests, thus obstructing the effective exercise of the right to appeal.
The Administrative Court concluded that the SRC’s administrative act failed to meet the substantive content requirements set by Armenian legal acts.
- The Court relied on both the relevant provisions of the RA Law on the Fundamentals of Administration and Administrative Proceedings and the RA Tax Code.
- It emphasized that the administrative act lacked specific descriptions of the transactions in question, failed to identify the alleged violations, and did not include legal or factual evaluations—thereby violating the principle of legal certainty.
- The Court also referred to precedents of the RA Court of Cassation, which affirm that the application of legal norms must be based on a clearly articulated set of factual circumstances.
The Court decided to partially annul Administrative Act No. 3004529 dated 30.06.2021, specifically in regard to the profit tax and VAT reassessments.
This case demonstrates that administrative acts issued by the SRC—despite appearing well-structured or justified on the surface—can be deemed unlawful if they fail to comply with procedural and substantive requirements of administrative proceedings.
Through this judicial ruling, not only were the substantive deficiencies of the contested act revealed, but the following legally significant facts were also proven with high legal rigor:
- The act lacked a clear description of the relevant transactions.
- The claimant’s rights to exercise and protect legal interests were violated.
- There was insufficient evidence to justify the decisions made in the act.
This legal process reaffirms that even in tax matters, administrative bodies must fully comply with statutory procedural and substantive standards. At the same time, taxpayers—by utilizing lawful means of protection—have an effective opportunity to challenge and eliminate the adverse consequences of such administrative acts through the courts.
Notice:
The judgment of the RA Administrative Court in Administrative Case No. VD/9128/05/21 has entered into legal force.