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Tax Administration of Prulyki v. VAT "Priluki" [Ukraine] [March 31, 2011]
The Tax Administration of Prulyki audited a tobacco company and discovered that the company had violated Ukraine's law on advertising by not devoting five percent of its advertising budget to producing and distributing information on the harms of consuming alcohol and tobacco. The Tax Administration therefore sought recovery of the required public health advertising funds. The company argued that the money spent on advertising was paid on a voluntary basis, and therefore, was not subject to court penalties. The Chernihiv Regional Administrative Court denied the request, finding that the payments were voluntary and not recoverable. On appeal, the Tax Administration claimed that the Regional Administrative Court had violated both procedural and substantive law by not providing a lawful and reasonable decision based on a comprehensive examination of the circumstances. The Kiev Administrative Appeal Court overturned the lower court's decision and ordered the tobacco company to pay the Tax Administration for the disputed amount.
New Engineering Technology v. Kiev Tax Administration [Ukraine] [March 19, 2011]
New Engineering Technology filed a lawsuit against the Kiev Tax Administration in hopes to void the Administration’s decision to apply financial sanctions against them. The Tax Administration conducted an inspection of the Hyatt, a hotel which belongs to New Engineering Technology, and found them to be in violation of Article 17 of Act No. 481/95, which prohibits the storing of tobacco products without excise stamps. New Engineering Technology disputes the charge, arguing that excise stamps should be the responsibility of manufacturers. The Court ruled in favor of New Engineering Technology.
Cafe v. State Tax Inspectorate in Kherson [Ukraine] [February 28, 2011]
The State Tax Inspectorate in Kherson performed an unscheduled audit of a cafe and assessed sanctions against it after determining that the cafe was in violation of a law requiring that certain establishments designate a non-smoking area for patrons, as well as provide public health warnings, including graphic signs, indicating the dangers of tobacco consumption. The cafe filed a civil suit against the Tax Inspectorate, asking the Kherson District Administrative Court to waive the sanctions against it. According to the cafe, it was not required to adhere to each provision of the relevant law because the establishment offered an outdoor patio area. Additionally, the cafe claimed that the Tax Inspectorate did not provide adequate notice of its intention to perform an eventual unscheduled audit. The Administrative Court denied the plaintiff's claim in its entirety.
Tax Administration in Donetsk v. VAT “Philip Morris Ukraine” [Ukraine] [February 21, 2011]
The Tax Administration in Donetsk discovered that a tobacco company, Philip Morris Ukraine, had failed to report its storage of over 9 million dollars USD worth of items. The Tax Administration alleged that the unreported storage violated the relevant tobacco control law and sought a financial penalty of the same amount. The defendant appealed the sanctions to the Kharkiv District Administrative Court, which found that the Tax Administration had fully demonstrated a violation of the law. Accordingly, the Administrative Court ordered payment in the amount requested to the State Budget of Ukraine.
Cafe "Gourmet" v. Tax Administration of the City of Zaporyzjya [Ukraine] [September 27, 2010]
During an unscheduled inspection of the premises of a café, a representative of the Tax Administration for the City of Zaporyzjya discovered that the café had not properly displayed signs explaining the prohibition of smoking in non-smoking areas of the premises, nor did it display health warnings indicating the health risks of tobacco consumption, both of which the tobacco control law required the café to display. The inspector also found patrons smoking in the designated non-smoking areas in violation of that law. Accordingly, the Tax Administration assessed economic sanctions against the café. The café appealed the sanctions to an administrative court, arguing that the Tax Administration inspector had not taken due care to observe the presence of signs that conformed to the law's requirements, including a sign prohibiting smoking at the entrance of the café. The administrative court dismissed the appeal in its entirety.
Committee of Consumer Rights Protection v. Jumbo [Ukraine] [January 20, 2010]
The Committee of Consumer Rights Protection in Kiev conducted an inspection to see if “Jumbo”, a company with foreign capital, was in compliance with legislation on advertising. During the inspection it was found that Jumbo distributed flyers with advertisements for shops selling tobacco products. The Committee of Consumer Rights Protection brought suit against Jumbo, claiming that this was a violation of part 5 of Article 22 of the Law of Ukraine on Advertising, which mandates that advertisements for tobacco products contain information about the amount of tar and nicotine in each cigarette. Jumbo argued that the flyers did not advertise for tobacco products. The Court ruled in favor of the Committee of Consumer Rights Protection.
Hamadey v. Donetsk Tax Administration [Ukraine] [December 11, 2009]
Hamadey, a tobacco company, submitted a lawsuit against the Donetsk Tax Administration regarding their refusal to exchange old stamps of excise duty for tobacco products in return for new stamps. Hamadey argued that this was a violation of the Cabinet of Ministers of Ukraine Resolution Act # 179, which allowed such a transfer to occur. The Tax Administration emphasized their lack of monetary resources to provide new stamps. The Court ruled in favor of Hamadey.