Circulars from the Fiscal Administration do not constitute "rules" in terms of the Constitutional Court's competence to control constitutionality
RULING Nº 583/2009
18 of November of 2009
The Fiscal Administration’s "circulars" do not constitute “rules” for the purposes of the Constitutional Court’s competence to control constitutionality.
The Public Prosecutors’ Office lodged this appeal against a decision handed down in a Ruling of the Supreme Administrative Court, which refused to apply a rule on the grounds that it was unconstitutional.
The Public Prosecutors’ Office contended that this was an optional appeal, because the rule whose application was denied was not set out in an international convention, a legislative act or a regulatory decree. However, it said that inasmuch as the “Circular” did contain a regulatory decree which manifestly possessed “external efficacy” and whose application was effectively and explicitly denied, the Public Prosecutors’ Office unquestionably possessed legitimacy to bring the appeal, and that its “interest in acting” lay in the need to defend the objective legal order in the face of the argument that the rule in question complied with the Constitution.
The Constitutional Court rejected the respondent’s arguments that the Supreme Administrative Court decision which annulled the charging of Valued Added Tax (IVA) should be maintained, but felt that the Constitutional Court ought to consider a question which might prevent it from hearing the appeal. This question was whether the prescriptive content of the “Circular” was qualified to be the object of an appeal asking for a concrete review of constitutionality. Both the appellant and the respondent felt that the rule which the Supreme Administrative Court refused to apply was a regulatory rule with “external efficacy” and was therefore qualified to be the object of an appeal.
Since 1985 the Constitutional Court has adopted a concept of rule that is functionally suited to the control system which the Constitution imposes on the Court for the purpose of determining what objects are qualified in constitutionality review cases. This concept of what a rule is, covers acts of public authorities that contain a “rule of conduct” for private individuals or the Public Administration, a “decision criterion” for the latter or for the courts, or, in general, a “standard against which to assess forms of behaviour”. However, it is not enough for the legal instrument that contains the rule in question to oblige the Public Administration to comply with a given criterion that it has itself established (and until such time as it changes it), when it undertakes individual, concrete applicative acts.
In terms of purposes, the concept of control is designed to ensure the existence of a legal protection system that typifies a constitutional democratic state based on the rule of law. It is therefore necessary for this criterion to also be made binding on the other subject of the relationship (normative heteronomy) and to constitute a parameter which a judge cannot fail to take into account unless he makes a supplementary finding that it is invalid.
If the source of the “decision criterion” is an administrative one and the criterion is only binding within the administrative department that issued it, there is no need for the type of legal protection and affirmation of the supremacy of the Constitution that would warrant the intervention of the Constitutional Court.
A problem that is frequently posed in fiscal law is that of the normative importance of so-called “administrative guidelines”.
These are internal regulations, which only the Fiscal Administration itself is bound to obey and are only obligatory for the organs that are hierarchically below the organ that issued the regulations. They are not binding on either private individuals or the courts. This is the case of both organisational regulations, which apply to the internal operation of the Fiscal Administration by creating working methods or forms of action, and interpretative regulations, which serve to interpret legal (or regulatory) precepts. These acts, many of which are termed “circulars”, emanate from the Public Administration’s power to organise itself and from its hierarchical power. They contain generic service orders, and it is because of this that compliance with them is assured, but only within their subjective scope (that of the applicable hierarchical relationship). They include directives for future actions, which are transmitted in writing to all the subordinates of the administrative authority that issued them. They are forms of standardised decision-taking, which are implemented in order to rationalise and simplify the way in which departments and services operate. Although they may indirectly protect the legal security of taxpayers and ensure equal treatment by means of a uniform application of the law, they do not regulate their subject matter in disputes with taxpayers, nor do they constitute rules by which courts must abide when they take decisions.
The circumstance that, under the terms of the General Law governing Taxation, the Fiscal Administration is bound by the generic guidelines set out in circulars that are in force at the time of a tax-related fact, and, under certain circumstances, is under a duty to convert the binding information and other types of assessment provided to taxpayers into administrative circulars, does not change this point of view, because it does not transform this content into a rule with external efficacy. There is no doubt that in their disputes with the Public Administration, natural and legal persons can invoke the content of publicised administrative guidelines and, where appropriate, have them enforced by the courts, even if this means sacrificing the principle of legality. However, it is under the principle of good faith and legal security that the content of circulars prevails, and not because of their normative value. Persons who are affected by circulars only abide by them for as long as it suits them to do so.
Circulars consequently do not possess heteronymous binding force in relation to private individuals, nor are they binding on the courts unless it is as the result of any value they may perchance contain in terms of legal theory.
The prescriptions contained in the Fiscal Administration’s “circulars” therefore do not constitute rules for the purposes of the system whereby the Constitutional Court exercises its competence to control constitutionality.