POPOVIĆ AND OTHERS v. SERBIA
Inadmissible
Alvina Gyulumyan;Ján Šikuta;Johannes Silvis;Josep Casadevall;Luis López Guerra
1. The applicants are Serbian nationals and residents of the town of Majdanpek (their further personal details are set out in the Appendix to this decision). They were all represented before the Court by Mr D. Vasiljević, a lawyer practising in the same town. The Serbian Government (“the Government”) were initially represented by their former Agent, Mr S. Carić, and subsequently by their current Agent, Ms Vanja Rodić. 2. The facts of the case, as submitted by the parties, may be summarised as follows. 1. The imposition and collection of a specific local tax 3. An assembly of the Majdanpek local community (Gradska mesna zajednica Majdanpek) referred a proposal to its residents to levy a selfimposed local tax (samodoprinos, hereinafter “the SILT”) to fund the building/maintenance of certain facilities/utilities for the local community. 4. As a result of a ballot held between 10 June and 10 July 2006 in the Majdanpek local community, the proposal was approved. 5. On 11 July 2006 the Council of the Majdanpek local community (hereinafter “the Council”) enacted an Ordinance introducing the SILT and elaborating on its purpose, administration and levying. The Ordinance, inter alia, (a) specified the persons liable for the SILT (poreski dužnici), the basis, rate and the method of its collection (in the case of taxable incomes, “deduction at source”, the tax being paid by intermediary institutions (poreski platci), that is, the taxpayers’ employers (Articles 6-10; see also paragraph 44 below); (b) identified the local community’s current account X, held by the Majdanpek field office of the Zaječar Public Revenue Service (Uprava za javna plaćanja Zaječar, filijala Majdanpek), as the account to be used for the collection of the SILT (Article 15); (c) identified the exact amounts to be allocated per year for services, and entrusted the Council with adopting annual plans in that regard (Articles 4.2 and 5); (d) limited, temporarily, the local community’s power to levy the SILT to five years (Article 3) or until the resources needed to fund the designated projects had been collected (Article 4.1); (e) designated the local community’s finance departments to carry out the necessary financial administrative tasks and to track income and expenditure in accordance with the law (Article 12); (f) stated that if the targeted amount was collected before the expiry of the time allotted for levying the SILT, the process should be discontinued and any overpayments repaid to the intermediary institutions in order to be passed on to the SILT taxpayers (Article 16); and (g) provided that the legislation governing tax proceedings and tax administration should be applicable, as relevant, to various issues (Article 11). 6. It would appear that on an unspecified date, following certain legislative changes (see paragraph 42 below), the finance department of the Majdanpek municipality (Opštinska uprava opštine Majdanpek-odeljenje za budžet, finansije i trezor) informed all of its local communities, by an instruction of 17 December 2007, that all public revenues should be paid into the municipality’s current account Y. It would appear that the Majdanpek local community received this instruction on 19 December 2007, but did not inform the applicants’ employers of it. 7. The applicants’ liability to pay the SILT was discharged by their employers, who withheld their contributions on a “pay-as-you-earn” basis in the form of a periodic monthly deduction from their taxable wages. It would appear that various employers, including those of the applicants, continued to pay all or most of the contributions into account X. 2. Discontinuation of imposition of the SILT and the related refund proceedings 8. On 6 October 2010 a non-governmental organisation informed the officials of the Majdanpek municipality that, in analysing the annual financial reports of the Majdanpek local community, it had discovered that by June 2010 twice the targeted amount had already been collected. 9. It would appear that on 13 December 2010, on receiving the above information, the Majdanpek municipality requested an opinion on the collection of the SILT from the Finance Ministry and the Ministry of State Administration and Local Self-Government. 10. On 7 February 2011 the Finance Ministry, referring to Article 16 of the Ordinance (see paragraph 5(f) above), stated that the Council should have monitored the collection of incomes from the SILT on a regular basis and, if the required amount was collected before the expiry of the period of five years, should have informed the taxpayers that collection of the SILT was being discontinued and that any overpayments would be refunded to them. 11. Following pressure from the inhabitants of Majdanpek and the re-election of the Council’s members, the newly formed Council issued a decision on 23 March 2011 to discontinue the levying of the SILT. On the same date the Council also formed a Commission to establish the total amount collected in respect of the SILT. On 6 April 2011 the levying of the SILT was discontinued. 12. On 16 May 2011, on the basis of the data provided by the relevant finance departments of the Majdanpek municipality and the corresponding local community, the Commission found that: (a) the targeted amount had been collected by the end of February 2009 and, thereafter, a further RSD 33,410,126.99 dinars (RSD; 335,000 euros on that date) had been collected unlawfully and without cause; (b) each taxpayer was entitled to claim a refund of the amounts deducted from his or her income after the said date; and (c) a total of RSD 3,422,524.32 remained in the current accounts into which the SILT had been paid. 13. On 26 August 2011 the Ministry of Finance stated that the reimbursement of the overpaid public revenues – if the ground for collection of the public income had been wrong – should be carried out in accordance with the law governing the collection of public revenues and that refunds should be made from the relevant revenue account. 14. On an unspecified date in 2011 the finance department of the Majdanpek municipality announced that it would refund overpayments to the SILT taxpayers once they had filed their claims in that regard. 15. According to a report from the finance department submitted by the Government, it dismissed twelve applications as incomplete and adopted 1,869 decisions for the refund of overpayments, of which twenty-two were the subject of appeals. Two out of the twenty-two appeals are pending, while twenty have been decided upon. The first claim was submitted on 20 June 2011 and, since then, a total amount of RSD 12,938,571.70 has been reimbursed to citizens, the latest payment being made on 22 July 2013. The finance department further clarified that it had refunded only the overpaid SILT which the taxpayers’ employers as intermediary institutions had paid into current account Y (see paragraph 6 above). Following the instruction of 17 December 2007 (ibid.), the contributions paid into current account X (see paragraph 5(b) above) could not be considered as overpaid SILT, but only as “funds paid into the wrong current account”. 16. According to the documents submitted by the applicants, the first four applicants and twenty-four other SILT taxpayers filed a claim with the finance department of the Majdanpek municipality requesting the refunding of overpayments made after 1 March 2009. Between 30 July 2011 and 7 May 2012 the finance department ruled on their claims as follows. 17. In two cases, on 30 July 2011 and 7 May 2012 respectively, the finance department refunded the claimants without making reference to any current account. 18. Between 8 August 2011 and 30 January 2012 the finance department, referring to its instruction of 17 December 2007, agreed to refund the other claimants, including the first four applicants, only the overpaid SILT which their employers had paid into account Y, and rejected the remainder of their claims. In so doing, it informed the first four applicants and another two claimants that they could appeal to the Niš Regional Centre of the Ministry of Finance’s Public Revenue Service, and directed the remaining claimants to appeal to the Majdanpek municipality’s executive council (Opštinsko veće Opštine Majdanpek). On 21 February 2012 the latter authority rejected all the appeals in a one-sentence decision, on the same ground as that cited by the finance department. 19. It would appear that the first four applicants and the other two claimants did not appeal against the first-instance decisions. 20. The remaining three applicants and the majority of SILT taxpayers did not institute tax proceedings, but filed civil claims instead. 3. The relevant civil proceedings 21. Between 15 July and 2 November 2011 all of the applicants filed separate civil claims for unjust enrichment (tužba zbog sticanja bez osnova) with the Negotin Court of First Instance – Majdanpek unit (Osnovni sud u Negotinu – Sudska jedinica Majdanpek; hereinafter “the Court of First Instance”), seeking a refund of the overpaid SILT from the Majdanpek municipality and the Majdanpek local community jointly, together with the statutory interest accrued. It would appear that several hundred SILT taxpayers in Majdanpek pursued the same remedy. 22. On 17 August 2011 the Court of First Instance ruled in favour of one of the claimants. On 16 November 2011 the Negotin High Court quashed this judgment, stating that the matter in issue should not be considered as a civil matter. 23. On 23 and 25 November 2011 respectively the applicants’ lawyer applied to the Court of First Instance and its President, requesting them to initiate proceedings before the Supreme Court of Cassation to resolve the issue of civil jurisdiction in respect of the SILT refunds, in order to harmonise the domestic case-law (see paragraphs 48-50 below). On 26 November 2011 he also submitted a request to the Supreme Court of Cassation urging it to adopt an opinion on that issue. He did not receive any response to his requests. 24. Between 24 November 2011 and 6 January 2012 the Court of First Instance stated that it did not have competence ratione materiae to hear the applicants’ cases. In its reasoning, the court considered the SILT as a source of primary income for municipalities (izvorni prihod opštine). It observed that the Tax Proceedings and Tax Administration Act, which defined tax matters as public-law matters between the Central Revenue Service on the one hand and natural and legal persons on the other, empowered the latter to request a refund of overpaid or erroneously levied tax and ancillary contributions in tax proceedings. The court further stated that the provisions of that Act should accordingly be applicable to various SILT-related matters not specifically covered by the Local Government Act, and that, according to the Tax Proceedings and Tax Administration Act, the powers of local government departments as regards the assessment, levying and control of the primary incomes of municipalities should correspond to the powers of the Central Revenue Service. Therefore, and also given that the Majdanpek local community had never adopted a decision revoking the SILT, the present disputes could not be characterised as civil-law disputes coming within the competence ratione materiae of the civil courts. 25. Between 26 January 2012 and 21 February 2012 the Negotin High Court upheld the first-instance decisions on appeal. 4. Other civil suits 26. The Constitutional Court declared null and void several ordinances enacted by other local governments imposing or extending the levying of the SILT as being unlawful or unconstitutional for various reasons. 27. On 29 June 2006 the Constitutional Court declared null and void one such ordinance adopted by the Prijepolje local community as it had, inter alia, retroactively imposed the SILT between March 2003 and July 2006. In apparently more than three thousands cases examined between February 2010 and November 2011, the Prijepolje Court of First Instance and the Užice High Court accepted jurisdiction and upheld the claims for a refund of the above-mentioned unlawfully imposed SILT as being civil in nature. Referring to Articles 210-214 of the Obligations Act and the Local Government Finance Act (see paragraphs 60 and 45 below), the courts in question ordered the Prijepolje municipality and one of its local communities to jointly refund the claimants (see, for example, the final decisions of the Prijepolje Basic Court P. 1571/10 of 1 December 2010, P. 3124/10 of 25 November 2011 and P. 420/12 of 7 August 2012; and the decisions of the Užice High Court upholding the first-instance decisions of the Prijepolje Basic Court, Gž. 1675/10 of 13 December 2010; Gž. 65/11 of 19 January 2011; 62/11 of 21 January 2011; 58/11 of 18 January 2011; 172/11 of 4 February 2011; 70/11 of 24 January 2011 and 1234/11 of 15 July 2011). 5. Constitutional remedies 28. In a constitutional appeal of 23 March 2012 the first applicant contested the relevant judicial decisions in civil proceedings, relying on various Articles of the Constitution (see paragraph 35 below). He claimed that (i) the summary dismissal of his civil claim had arbitrarily deprived him of judicial protection and of the expected refunds; (ii) the municipal bodies had acted unlawfully, in an untimely manner and in breach of the rule of law and property rights when collecting the SILT and, thereafter, when ruling on his and others’ claims; and (iii) the divergent case-law of the competent courts in his case and of the domestic courts which had accepted jurisdiction ratione materiae in similar cases amounted to legal uncertainty, unequal protection of citizens before the law and discrimination against him. The applicant did not, however, provide the Constitutional Court with copies of any of the judgments in which the civil courts had accepted jurisdiction in cases similar to his own. 29. On 14 April 2012 the Constitutional Court, referring to Article 85 § 2 of the Constitutional Court Act (see paragraph 39 below), requested the applicant to provide a copy of the first-instance administrative decision in his case and, if he had appealed against it, of the second-instance decision. 30. On 25 April 2012 the first applicant provided a copy of the finance department’s decision of 16 August 2011, clarifying that he had not appealed against that decision to the executive council (compare and contrast with paragraph 18 above). He considered that avenue of redress to be futile in view of overall municipal policy and the rejection of claims in respect of contributions that had been paid into account X. 31. In its decision of 11 September 2012 the Constitutional Court held that the applicant had not been denied access to a court, given that the dispute in issue had been a “tax administrative” matter to be decided by the tax authorities rather than a civil matter for the civil courts. 32. It further dismissed the property-related complaints on the grounds that it “could not identify any link between the applicant’s allegations and the contested judicial decisions in civil proceedings”. Nevertheless, the Constitutional Court pursued its analysis, considering that the applicant and other SILT taxpayers should not have suffered harm on account of the Majdanpek local community’s failure to amend its Ordinance and inform the tax intermediaries in a legally valid manner of the change in the relevant current account. It concluded that “the applicant and his employer were entitled to request the reimbursement of overpayments from the Majdanpek local community in tax (administrative) proceedings, within the time-limits and prescription periods laid down by law, given that the overpayments had been paid into its current account”. 33. The Constitutional Court further summarily dismissed the applicant’s complaint alleging unequal protection of rights, considering that the general allegations before it, which were unsupported by evidence (paušalno izneti navodi), provided no constitutional basis for claiming a breach of that right. It also stated that there was no constitutional basis for examining the alleged violations of the general principles set out in Articles 18 to 21 (see paragraph 35 below), given that no violation of substantive constitutional rights had been found. 34. Throughout 2012 the other six applicants lodged constitutional appeals identical or very similar to that lodged by the first applicant. The Constitutional Court’s decisions rendered in their cases between 26 November 2012 and 18 December 2012 were summarised versions of its leading ruling in the first applicant’s case. 35. The relevant provisions of the Constitution relevant to the applicants’ appeals are as follows: Article 18 (direct application of guaranteed rights), Article 19 (purpose of constitutional guarantees), Article 20 §§ 1 and 3 (restriction of human rights), Article 21 §§ 1, 2 and 3 (equality and prohibition of discrimination), Article 22 § 1 (right to judicial protection of human rights), Article 32 § 1 (right to a fair trial), Article 35 § 2 (right to be awarded damages) and Article 58 §§ 1 and 4 (right to peaceful enjoyment of property). 36. Article 36 § 1 (3) provides, inter alia, that the Constitutional Court shall reject (odbaciće) a constitutional appeal when the appellant has failed, following an additional request issued in this regard, to furnish the court with all the relevant details indispensable for the proper conduct of the proceedings before it. 37. Article 36 § 1 (4) provides, inter alia, that the Constitutional Court shall reject a constitutional appeal whenever the relevant legal conditions for its examination have not been fulfilled. It is not required to issue any additional warning in this regard. 38. Article 85 § 1 refers to the compulsory information which must be contained in any constitutional appeal. This information includes: (a) the appellant’s personal data; (b) information concerning his or her legal counsel; (c) the particulars of the decision being challenged; (d) an indication of the relevant provisions of the Constitution; (e) a description of the violations alleged; (f) the redress sought by the appellant; and (g) the appellant’s personal signature. 39. Article 85 § 2 provides that appellants should also substantiate their constitutional appeals with any and all evidence of relevance for the determination of their case, provide a copy of the impugned decision, and demonstrate by means of supporting documents that all other effective remedies have already been exhausted. 40. According to this opinion, where a constitutional appeal lacks any of the compulsory elements (obavezni elementi) mentioned in Article 85 of the Constitutional Court Act, the appellant should be invited to provide the additional information by a certain deadline or have the appeal rejected pursuant to Article 36 § 1 (3) of the Constitutional Court Act. 41. The provisions regarding the legal nature and administration of local taxation, including the self-imposed local tax (“the SILT”), are set out in the following legal acts which have been amended or repealed on numerous occasions over the years: (a) the Local Government Act 2002 (Zakon o lokalnoj samoupravi, published in OG RS nos. 9/02, 33/04 and 135/04); (b) the Local Government Act 2007 (OG RS no. 129/07, which came into force on 1 January 2008 and repealed the Local Government Act 2002); (c) the Local Government Finance Act (Zakon o finansiranju lokalne samouprave, OG RS nos. 62/06, 47/11 and 93/12, which came into force on 1 January 2007 and repealed Article 5, Chapter V on local government financing and Articles 77 to 104 of the Local Government Act 2002); (d) the Budgetary System Act 2002 (Zakon o buǆetskom sistemu, OG RS nos. 9/02 ... 86/06); (e) the Budgetary System Act 2009 (OG RS nos. 54/09, 73/10 and 101/10); (f) the Act on Public Income and Public Expenditure (Zakon o javnim prihodima i javnim rashodima, OG RS nos. 76/91 ... 135/04); and (g) the Tax Proceedings and Tax Administration Act (Zakon o poreskom postupku i poreskoj administraciji, OG RS nos. 80/02 ... 2/2012). 42. The legal status of the SILT at the relevant time for the present cases will be summarised below. With the gradual decentralisation of governmentance in the early 2000s, the assessment, collection and control of several taxes and revenues, including the SILT, were redefined and transferred entirely from central to local government level (the Local Government Finance Act, Articles 60 and 6 in that order). Accordingly, the local government units (municipalities, towns and the city of Belgrade) have, in principle, the same rights and duties as the Central Revenue Service of the Ministry of Finance with its field offices (there are certain exception which are not relevant for the present case; see Articles 2a and 62 of the Tax Proceedings and Tax Administration Act). 43. The SILT was initially defined as a source of primary public revenue either for local government units such as municipalities or for the lower tier of government, the local communities (mesne zajednice), depending on whether the contributions in question were collected on and for the territory of the whole municipality or only the particular local community (Articles 78 § 14 and 73 § 1.2 of the Local Government Act 2002). However, the Local Government Act 2007 and the Local Government Finance Act (Articles 75 § 1.1 and 6 § 15 respectively) stipulated that the SILT was designed as a source of primary revenue exclusively for the local government units, and that the collected funds were credited to their budgets and strictly intended for specific purposes, while funds for the functioning of the local communities were provided only under specific budget headings. 44. Pursuant to the Local Government Finance Act, where a majority of citizens vote in favour of imposing the SILT for specific investments (for instance, to fund the building or maintenance of utility services or buildings of value to the community), contributions become mandatory and are required from all citizens with different taxable incomes, including those who voted against the SILT or did not vote at all (Article 26). The competent local government authorities subsequently define the procedures for calculating and collecting the SILT in the relevant decision, except where this is done by applying the principle of “deduction at source”. In the latter case, the deduction of the SILT from taxable income is the responsibility of those who pay these personal incomes and/or revenues (intermediaries; poreski platci), who deduct it when paying other applicable taxes and benefits (Article 28). The Act also provides that the legislation governing tax proceedings and tax administration should be applicable, as relevant, to issues such as the manner of determination and assessment of the SILT, its collection, deadlines for payments, statutes of limitation, calculation of interest and other issues not specifically covered by the relevant legislation (Article 30). 45. Lastly, the municipality’s administrative departments (opštinsko uprava) and the executive council (opštinsko veće) respectively decide at first and second instance on administrative matters which fall within the competence of the municipality (Articles 52 § 3 and 46 § 5 respectively of the Local Government Act 2007). 46. Article 4 provides that a court of law cannot refuse to consider a claim in respect of which its jurisdiction has been established by law or by the Constitution. 47. Article 29 provides that the Administrative Court adjudicates in administrative matters. 48. Article 31 provides that the Supreme Court of Cassation, inter alia, shall adopt general legal positions in order to ensure uniform application of the law by the courts. 49. Article 176 provided that where there was a large number of cases pending at first instance raising the same preliminary legal issue, the court of first instance could, either of its own motion or at the request of one of the parties, institute separate proceedings before the Supreme Court requesting the latter to resolve the issue in question. The lawsuits pending at first instance were stayed in the meantime. Article 178 provided that the Supreme Court determined the request under the procedure for the adoption of its legal opinions and could refuse to examine it if the preliminary legal issue was not of prejudicial importance in a large number of pending cases. 50. The Civil Procedure Act 2011 entered into force on 1 February 2012, thereby repealing the 2004 Act. Articles 180 to 185 correspond, in principle, to the provisions of the 2004 Act described at paragraph 49 above, save that the Supreme Court of Cassation has competence to rule on the request within sixty days of receiving it and to adjudicate on the issue. 51. Under Articles 19 and 56 §§ 3 and 4, no administrative authority may take over an administrative matter which is within the jurisdiction of another authority and decide thereon, save where so provided by law. If the authority finds that it is not competent to receive written submissions, its officer shall advise the claimant or appellant accordingly and refer him or her to the competent authority. If the submission was received by mail, the authority shall immediately send the submission to the competent authority and notify the party thereof. If the authority which does not have competence cannot establish with certainty which authority is competent in the matter, it must decline competence and serve that decision immediately on the party concerned. 52. Article 3 of the Act provides, inter alia, that the Administrative Court adjudicates on the lawfulness of final decisions rendered in administrative matters and/or in the determination of rights, duties or direct personal interests based on the law, where judicial protection has not been secured otherwise. 53. Under Article 5, an administrative matter within the meaning of this Act is an individual situation of public interest where the necessity to legally and authoritatively determine the future conduct of a party arises directly from the provisions of the law. 54. According to Article 6, the competent authorities for the purposes of this Act are, inter alia, local government bodies. 55. Articles 18 § 1 and 19 provide that judicial review proceedings may be brought within thirty days from the date on which the final decision was served on the party in question, or where an appellate administrative body fails to decide on an appeal lodged more than sixty days previously and again fails to do so within a further seven days after receipt of the plaintiff’s repeated request to this effect. The competent court should, in principle, hold a public hearing and may also rule in accordance with the principle of equity (načelo pravičnosti). 56. Article 42 § 1 provides that if the competent court decides to uphold the action it shall quash the impugned administrative act in part or whole and order fresh consideration of the case (spor ograničene jurisdikcije). Article 43 § 1 provides, however, that the competent court may instead rule on the merits of the claim, if the facts of the case and the very nature of the dispute in question allow for this particular course of action (spor pune jurisdikcije). Articles 41 §§ 1 to 4, 61 and 62 provide details of other situations in which a claimant’s request may be decided on the merits. 57. When deciding in a case concerning collection of the SILT, the Administrative Court considered that the municipality rather than the local community was the creditor in respect of the SILT for the purposes of standing to sue (see 9 U. 740/11 of 30 August 2011; see also Administrative Court Bulletin no. 3/2012). 58. No details of the practice of the Administrative Court on SILT refunds, if any, have been provided. However, between 9 December 2010 and 15 October 2012 the Administrative Court rendered six judgments in cases concerning tax refunds. In two of these judgments it quashed the administrative acts and/or ordered fresh consideration of the case, while in four cases it rejected (odbio) the applications for judicial review (see 7 U 427/10, 9 U 23584/10, 7 U 6202/10, 9 U 9004/10, 12 U 30082/10 and I-2 U 25802/10). 59. Furthermore, in six judgments rendered between 8 December 1999 and 9 April 2009 the Supreme Court and the Supreme Military Court (formerly the competent courts for judicial review in administrative matters), respectively, ruled on the merits of administrative disputes concerning property-related municipal decisions, pension entitlements, disability benefits, the right to stand for election and a proposed change in the registration of persons authorised to represent political parties (see Up. br. 2530/03, Už. 133/92, Už. 11/08, U.br. 1739/08, U.br. 48/08 and U.br. 1093/02). 60. Articles 210 to 219 set out provisions concerning unjust enrichment (sticanje bez osnova; condictio sine causa). Under the general rule set forth in Article 210, when a part of the property of one person passes, by any means, into the property of another person and that transfer has no basis in a legal transaction or statute, the beneficiary is required to return the property. If restitution is not possible, he or she is required to provide compensation equal to the value of the benefit received. The obligation to return the property or provide compensation for its value arises even when it was received in connection with a cause which did not come into existence or which subsequently ceased to exist.