Taxpayers Must Know! One Formal Error Can Cause Your SKP Cancellation Request to Be Absolutely Rejected by the DGT

The issuance of a Tax Assessment Letter (SKP) that is deemed incorrect by the Taxpayer (WP) has a specific administrative dispute resolution process. In the context of the implementation of the General Provisions and Tax Procedures Law (KUP Law), taxpayers have the option to submit a request for reduction or cancellation of an incorrect SKP to the Director General of Taxes (DJP) as mandated by Article 36 paragraph (1) letter b. However, this administrative channel is accompanied by strict formal requirements, and Tax Court Decision Number PUT-008269.99/2024/PP/M.IIIA of 2025 is a clear case study of the legal consequences of failing to meet these formal requirements. The core of the conflict in this case involves PT ANUGERAH SAWIT DOI (Plaintiff) and the DGT (Defendant), which centers on the legality of DGT Letter Number S-1077/WPJ.01/2024, which returned the Plaintiff's request for a Reduction or Cancellation of an Incorrect Tax Assessment Letter (SKP).

PT ASD, as the Plaintiff, initially filed a request for cancellation of the Tax Assessment Letter for Underpayment (SKPKB) of Income Tax Article 23 for the July 2017 Tax Period. The basis for the Plaintiff's request was the alleged substantial error in the SKPKB, one of which was the claim that a proper tax audit had never been conducted in accordance with Article 29 of the Tax Administration Law before the SKPKB was issued. When the request was returned by the DGT through Letter Number S-1077/WPJ.01/2024, on the grounds that the request violated the formal provisions of Article 14 paragraph (2) letter c of PMK 8/2013, the Plaintiff strongly rejected the DGT's action. The Plaintiff argued that the DGT should have issued a decision to reject or grant the alleged error in the SKPKB, rather than returning the application. The Plaintiff considers the action of returning the application to be an abuse of authority and arbitrary (violating Article 70 of the Government Administration Law), so that the return letter must be canceled and considered null and void.

The Directorate General of Taxes (DGT) as the Defendant defended the action of returning the application. The DGT argued that the return letter was issued because the Plaintiff's application did not meet the applicable formal requirements. During the trial, the DGT presented a response that focused on the formal defects of the lawsuit itself, rather than just the initial petition. The DGT argued that: (1) The Request for Return Letter (S-1077/WPJ.01/2024) was not a valid object of the lawsuit based on Article 23 paragraph (2) of the KUP Law; (2) The Lawsuit Letter was not signed by one of the registered attorneys; and (3) The Special Power of Attorney was not attached to the Lawsuit Letter received by the DGT. In short, the DGT asserted that due to violations of formal requirements, both in the initial petition and in the filing of the lawsuit, the return was valid.

In resolving this dispute, the Tax Court Panel of Judges focused on procedural-administrative examination. The subject of the lawsuit examined was the administrative decision (Refund Letter), not the substance of the tax contained in the SKPKB itself. The Panel of Judges concluded that the DGT had acted in accordance with the authority granted by the KUP Law and its implementing regulations. Because the Plaintiff failed to convincingly prove that the Refund Letter issued by the DGT was based on erroneous grounds or violated legal provisions, the DGT's action to return the application was deemed valid. Therefore, the Plaintiff's Lawsuit was Rejected.

The implications of this ruling are very significant for taxpayers' litigation strategies. This ruling emphasizes that formal requirements, both in the submission of administrative applications (Article 36(1)b of the Tax Administration Law) and in the filing of legal remedies (lawsuits), are absolute requirements. Failure to comply will result in rejection without addressing the substance of the dispute. The direct consequence is that taxpayers must conduct an in-depth analysis of the history of legal actions against tax assessment decisions and ensure the formal completeness of each document, including powers of attorney and other attachments, to avoid rejection on formal grounds.

A Comprehensive Analysis and the Tax Court Decision on This Dispute Are Available Here