Tax Assessment Cancelled as Tax Office Uses Expired Verification Procedures.

Tax Lawsuit Analysis: Supreme Court Decision No. 73 P/HUM/2013 and the Invalidation of Verification Procedures in YU's VAT SKPKB

The Directorate General of Taxation (DGT) is prohibited from issuing Underpaid Tax Assessment Letters (SKPKB) through verification procedures since the enactment of Supreme Court Decision Number 73 P/HUM/2013, which annulled the legal basis for verification in GR 74/2011. This dispute began when the Defendant issued a VAT SKPKB in the name of YU based on verification results in 2015, claiming that bonuses received by YU as an MLM distributor were VAT objects that had not been reported. YU filed a lawsuit arguing that the verification procedure was invalid as it contradicted the KUP Law, which requires an audit or "other information" as the basis for issuing an SKP, and cited the Supreme Court's annulment of the verification articles.

Judicial Considerations: Hierarchy of Laws and Violation of Legal Certainty Principles

The Board of Judges emphasized that the hierarchy of laws and regulations must be upheld, where the KUP Law exhaustively regulates the mechanism for issuing tax assessments. Supreme Court Decision Number 73 P/HUM/2013 declared Article 14 paragraph (1) letter a and paragraph (2) letter b of GR 74/2011 to have no binding legal force because they contradicted the KUP Law. The court opined that the Defendant should have followed up on "other information" data through an audit procedure rather than verification, especially after the Supreme Court's final ruling. The Defendant's persistence in using verification was deemed a violation of the principle of legal certainty within the General Principles of Good Governance (AUPB).

Conclusion and Legal Implications for Taxpayer Procedural Oversight

In conclusion, the Board of Judges granted the Plaintiff's entire lawsuit and canceled the tax assessment. The implication of this ruling serves as a stern warning to tax authorities to always comply with formal procedures in accordance with the law. For taxpayers, this case reinforces the importance of monitoring the procedural aspects of every administrative action by tax officials, as a legal defect in procedure can invalidate a tax assessment in its entirety without needing to further examine the merits of the dispute.