Review Of Judicial Practice Of The Cassation Court And The Supreme Court In Administrative Cases

Hereby we present for your attention a review of judicial practice of the Cassation Court and the Supreme Court in administrative cases, formed as a result of consideration of tax disputes.

1. Appeal of notifications based on the results of desk control: significance of procedural time limits[1]

In a number of cases, the subject of judicial review was the legality of notifications on elimination of violations issued by tax authorities based on the results of desk control, in the context of compliance with procedural time limits for their submission to the taxpayer.

The established judicial practice demonstrates a consistent position of the cassation instance, according to which compliance with the deadline for issuing a notification is a key element of its legality.

The court proceeds from the fact that the time limit established by tax legislation for sending a notification is 10 working days from the date when the author of the notification identified a violation within the framework of desk control, and such time limit is of a mandatory nature.

At the same time, the court emphasizes that subsequent actions of the tax authority (including additional control measures, obtaining information from other authorities, as well as the existence of judicial acts) do not affect the course of this time limit.

The cassation instance expressly indicates the inadmissibility of broad interpretation of the relevant provisions, as well as the impossibility for the tax authority to arbitrarily determine the starting point of the time limit. At the same time, the cassation instance distinguished between the concepts of “limitation period” and “time limit for sending a notification,” which are not identical and are regulated by different provisions of tax legislation. A notification may be issued within the limitation period, but subject to compliance with the time limit for its issuance.

Thus, violation of the established 10-day time limit is qualified by the courts as a material procedural violation resulting in the illegality of the notification.

Conclusion:

Failure to comply with the time limit for sending a notification on elimination of violations is regarded by the courts as an independent and sufficient ground for declaring such notification unlawful, regardless of the existence or absence of a tax offence on the merits.

At the same time, the Cassation Court notes that cancellation of a notification on procedural grounds does not prevent the tax authority from implementing other tax control measures, including conducting a tax audit.

2. VAT refund: obligation of the tax authority to accrue penalty fee[2]

In cases related to late refund of the excess VAT amount, the subject of the dispute was the legality of the tax authority’s refusal to accrue a penalty fee for the delay period.

Judicial practice demonstrates a consistent approach, according to which the obligation of the tax authority to accrue a penalty fee is unconditional and arises directly from the fact of violation of the VAT refund deadline.

The court indicates that upon establishing the fact of delayed tax refund, the tax authority is obliged to:

• calculate the penalty fee for the entire period of delay;  
• ensure its actual payment to the taxpayer.

At the same time, arguments of the tax authorities related to:  

• absence of a separate request from the taxpayer;
•  lack of budget funds;
•  technical or procedural specifics of the refund;  
• or other formal circumstances

are not accepted by the courts as grounds relieving the tax authority from this obligation.

Conclusion:

Accrual of a penalty fee in case of late VAT refund is an obligation of the tax authority, not its right, and does not depend on the discretion of the tax authority or the existence of additional conditions.

Footnotes

^{1. Ruling of the Cassation Court in administrative cases No. 6003-25-00-4к/1314 dated 23 September 2025, Ruling of the Cassation Court in administrative cases No. 6003-25-00-4к/965 dated 7 October 2025.}

^{2. Ruling of the Supreme Court in administrative cases 6003-25-00-4к/1030 dated 27 August 2025.}

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.