Hila Volgmot, Adv, Gill Nadel, Adv.
In this article, we will tell about two decisions dealing with the exercise of authority granted to the Customs Authority, in cases where the law establishes a limited amount of time for their exercise. The trend of the court in these decisions is to be strict with the Authority, and to void its decisions if they were not issued by the date established by law and if they were not sufficiently reasoned.
The decision of the Supreme Court (ע"א 5954/04 Assessment Official of Jerusalem 1 v. Moshe Sami) discussed two appeals of the assessment official on two decisions given by the district court, in which it was ruled that two writs issued by the assessment official were void since they were not issued within the time established according to the law.
The legal question raised was what does the Authority need to do to stop the “time clock” established in law for performing a certain decision (e.g: giving a decision regarding a protest): is it enough that the official enter the writ into the computer and/or in writing and leave it on his desk, or must it be published or transferred to the assessee?
The court ruled that this authority should be seen as having been used if no notice of any kind of having done so was given to the assessee. The authority of the official does not become realized as long as the writ is within the sole knowledge of the official.
The court reached this result after examining the purpose of the set amount of time in which the administrative authority must reach a decision, which is, among other things, to minimize the legal uncertainty in which a person remains when he has not yet received a decision on his case. The court ruled that it is impossible to fulfill the purpose of the time limitation which the legislator established for the assessment official without the limitation being known to the assessor himself.
It should be noted that in this ruling, the court strayed from the rule that had been established thus far (ע"א 568/78 Assessment Official v. Yitzchak Bir) according to which the “time clock” stopped when the official established the tax in a written writ, whether it was made available to the assessee immediately or it remained with the official without anyone else's knowledge. The decision in Bir, given decades ago, was based on a literal interpretation of the statute, while the court in the new decision before us preferred the purpose-based interpretation over it.
Another decision that we wish to describe is the decision of the District Court of Tel Aviv, בע"ש 1107/06 Sport-Inn Warehouses Ltd. v. Tax Authority. In that case, the Tax Authority delayed the refund of surplus assessment tax, according to the instruction of paragraph 39(a)2 of the VAT Law, which grants authority to delay refund of the tax until 180 days, in the case of investigation of illegal activity by the party involved. The Tax Authority informed the assessee of this.
And then, before the 180 days allowed for delay had ended, the Tax Authority issued a notice of penalty to the assessee according to a different paragraph of the law, for bookkeeping with substantial deviation. According to the law, on the date that the notice of penalty was issued, the Tax Authority gained a cause to fail to return tax surpluses according to the instructions of the other paragraph- paragraph 39(b) to the VAT law which allows 90 days to delay the money.
However, the Tax Authority never issued a notice to the assessee of the delay based on the instructions of the “other” paragraph- 39(b) to the VAT law, and the only notice that was given was based on paragraph 39(a)2 to the law, as stated above. The Tax Authority claims that, despite the fact that no notice or decision regarding the additional cause was sent, the cause stands.
The court ruled, based on the above decision of the Supreme Court, that the Customs Authority is obligated to give a detailed, reasoned, notice before the fact regarding a decision to withhold the money. In order to delay money of the assessee based on paragraph 39(b), the Tax Authority ought to have been active by sending a reasoned notice to the assessee. Since the Authority did not do so, it did not realize its power in the time established. Accordingly, the court instructed the Tax Authority to return to delayed money to the assessee.
We will note that the Customs Code also establishes powers of the customs officials limited in time. Thus, for example, paragraph 190 to the Customs Code which establishes a duty of reasoned notice to the owner of goods regarding the seizure of those goods and its reason. Paragraph 192 to the code establishes that if within three months of receiving a claim of the seizure, the customs collector does not ask the claimant to file an action, the seized property is given to the claimant.
For examining the above cases it seems that if the notice of customs collector was not given to the claimant within three month, with the owner of the goods being given the reason for the goods' seizure, so that the latter can filed an appropriate action- the seizure of the goods will be voided and the the goods will be transferred to the claimant.
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