Appeal Rejected Formally (NO)? Don't Give Up! The Door to Justice via Article 36 KUP Is Still Wide Open

The Conflict: Procedural SOPs vs. Substantive Justice

The conflict began when PT JBE submitted an Article 36 paragraph (1) letter b KUP Law application to the DJP, requesting a reduction or cancellation of a tax assessment deemed incorrect. However, the DJP, through its decision letter, immediately returned (refused to process) the application. The basis for rejection was purely procedural: referring to the Director General of Taxes Decree (KEP-146/PJ/2018 jo. KEP-206/PJ/2021), the DJP system detected that the Taxpayer had previously filed an appeal regarding the same SKP. For the DJP, the phrase "has filed an appeal" is a fixed price that closes the door to Article 36, regardless of the fact that the previous appeal decision had an NO status, meaning the subject matter had never been examined.

Before the Panel of Judges of the Tax Court, a battle of legal narratives ensued. The DJP persisted in strict adherence to internal SOPs as a manifestation of administrative order. Conversely, the Taxpayer argued that rejecting an Article 36 application solely due to a formally defective appeal decision was a violation of the sense of justice. The Taxpayer asserted that since the material dispute (the substance of the tax debt) had never been touched by the judge's gavel, their right to seek substantive justice through the Article 36 mechanism should remain guaranteed by the Law, which holds a higher position than a mere Director General of Taxes Decree.

Judicial Resolution: The Victory of Lex Superior

The Panel of Judges VIII-A of the Tax Court finally delivered a relieving decision for justice seekers. In its legal considerations, the Panel firmly rejected the application of internal DJP rules that excessively limit Taxpayer rights. The Judges applied the principle of Lex Superior Derogat Legi Inferiori, asserting that the Director General of Taxes Decree cannot annul rights granted by the KUP Law. Furthermore, the Judges stated that an NO decision does not possess res judicata force (a matter already adjudicated) regarding the material dispute. Therefore, the DJP's action of returning the application was declared invalid, and the Taxpayer is entitled to have their Article 36 application processed.

Implications for Indonesian Tax Strategy

This decision brings major implications for tax strategy in Indonesia. It serves as a precedent that a formal failure in one stage of legal remedy (NO Appeal) does not immediately extinguish the civil rights of the Taxpayer to pursue other available legal avenues (Article 36). This decision sends a strong message to tax authorities not to hide behind rigid administrative walls that injure substantive justice, while reminding Taxpayers to continue fighting for their rights as long as the material dispute has not been finally adjudicated.

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