In its tax forced execution practice, the team of Costaș, Negru & Asociații is confronted with several practical problems, which are not easily solved even by the courts. One of these problems relates to appeals against enforcement acts of public authorities.
By way of example, in a judgment recently handed down by the Cluj Napoca Court and upheld on appeal by the Cluj Court, the team of lawyers from Costaș, Negru & Asociații managed to achieve a victory for the appellant. In concrete terms, it was shown that the forced execution initiated by the municipality was unlawful, which is why the contestations to execution was admitted. We intend to elaborate on the legal issue below.
Therefore, the dispute was initiated following the opening of an enforcement file and the issuance of a summons by the public administration, accusing the defendant of not having paid the water tax. The documents in question were never communicated to the appellant, the municipality having done so by means of advertising. Nor is there any document justifying this tax.
So, the client’s question was what to do in this situation? Clearly, in the context presented, the legally logical and obvious course of action was to lodge an execution challenge.
Further, in relation to the favorable judgment obtained in court, we note that the court decided that the communication of the enforcement documents was unlawful in this case. Specifically, the enforceable title and the writ of execution were served by advertisement in a collective notice, without any attempt being made to serve them by post. Therefore, they were not lawfully communicated, since they were not served by post with acknowledgment of receipt, but were served directly by advertisement. In other words, the subsidiary nature of communication by advertising was not complied with.
We consider the argument presented by the court to be well-founded, given that article 47 para. 4 of the Fiscal Procedure Code provides expressis verbis that the procedure of communication by publicity is lawful only if it was not previously possible to communicate by registered mail with acknowledgment of receipt.
We further emphasize that according to art. 226 para. 2 of the Fiscal Procedure Code, no enforceable title cannot be issued in the absence of a tax debt title issued and communicated in accordance with the law or of a document which, according to the law, constitutes an enforceable title.
It is also important to note that if a document such as the one in question is not lawfully served, the sanction is unenforceability.
Lack of enforceability or unenforceability means the non-existence of the taxpayer’s obligation to comply with the enforcement effects of a tax administrative act issued in his name. At the same time, in the legislator’s view, unenforceability results in the tax administrative act being deprived of legal effects.
An unenforceable act is an not executable one, since it is devoid of legal effects. As a result, invoking a tax administrative act that cannot be enforced and ordering the taxpayer to enforce the obligation appears to be an abuse/excess of power, with all the consequences that flow from this situation.
Opposability is conditional on the fulfillment of the formality of communication, meaning the legal communication according to article 47 of the Fiscal Procedure Code. In other words, the moment from which an act is enforceable and produces the effects of execution is the moment of communication. The rule is important, as it has legal consequences: from that moment onwards, the taxpayer must execute his obligations.
Until the moment of communication, the act, although it exists, does not produce legal effects vis-à-vis the taxpayer to whom it is addressed, but it does produce legal effects vis-à-vis the issuer. The effects relate to the obligation to communicate the act or, where appropriate, the possibility of revoking the act not communicated.
Moreover, the opposability conditional on communication and, as the case may be, on the moment of communication appears, according to the doctrine, to be something natural: “it is natural, even if the administrative legislation does not contain an express text in this regard, not to be able to claim the obligation to execute the act if it has not been brought to the knowledge of the subjects of law to whom this obligation is incumbent.”
Therefore, the conclusion is as simple as it can be: opposability can only be conditional on the actual knowledge of the act by the person to whom it is addressed.
In addition to the unlawful communication, in the case at issue, it was also found that the document constituting the enforceable title was not individualized. In order to make it possible to verify the existence of the instrument permitting enforcement, it must be individualized. That condition was not fulfilled in the present case, which is an additional argument that led, in the end, to the admission of the challenge to enforcement.
In fact, it is expressly stated in Article 226 of the Fiscal Procedure Code that the main and accessory tax obligations are individualized by debt titles issued and communicated in accordance with the law, which become enforceable titles when they become due.
In conclusion, when we are talking about an unlawful communication of enforcement documents, as well as when the legal provisions on enforcement are not respected, the only solution is to lodge an execution challenge. As we have shown, in such situations, the court’s decision is to admit such a request.
This article was prepared for the blog of the law firm Costaș, Negru & Asociații by atty. Loredana Feier, from the Cluj Bar Association.
Costaș, Negru & Asociații is a law firm with offices in Cluj-Napoca, Bucharest and Arad, which provides assistance, legal representation and advice in several practice areas through a team of 18 lawyers and consultants. Details of the legal services and the composition of the team can be found at https://www.costas-negru.ro.
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