The Tax Court Judges have officially rejected PT AKJ's lawsuit regarding the request to cancel a Tax Collection Letter (STP) for administrative fines under Article 14 paragraph (4) of the KUP Law. This decision confirms that the tax authority holds discretionary power in evaluating requests to cancel "incorrect" tax assessments based on Article 36 paragraph (1) letter c of the KUP Law.
The dispute arose when the Defendant (DGT) issued a VAT STP for the August 2017 Tax Period after discovering that the Plaintiff had issued Tax Invoices late. Based on audit findings, the delivery of Taxable Goods had occurred, but the Tax Invoices were issued after the deadline stipulated by VAT regulations. PT AKJ subsequently filed a request to cancel the STP through the Article 36 paragraph (1) letter c mechanism, citing system constraints and a heavy financial burden on the company. However, the Defendant rejected the request through KEP-14550/NKEB/PJ/WPJ.12/2023, asserting that the sanction was aligned with the established legal facts.
In court, the Plaintiff argued that the delay was unintentional and pleaded for fairness so that the administrative sanctions could be waived for the sake of business continuity. Conversely, the Defendant maintained that a material violation had occurred and that the issuance of the STP met all formal legal requirements under the KUP Law. The Defendant emphasized that requests to cancel "incorrect" tax assessments can only be granted if there are clear clerical errors, calculation errors, or misapplications of tax regulations.
In its legal consideration, the Board of Judges stated that since the Plaintiff admitted to the late issuance of the Tax Invoices, the basis for the administrative fines in the STP was materially valid. The Judges emphasized that the authority to cancel tax assessments under Article 36 of the KUP Law is a facultative administrative power of the Director General of Taxes, and the review of such requests had been correctly conducted by the Defendant. No evidence of arbitrariness or procedural errors was found in the rejection decision.
This ruling sends a strong message to Taxpayers to be more disciplined in adhering to administrative compliance, particularly in the timely issuance of Tax Invoices. Errors perceived as "merely administrative" by Taxpayers still carry absolute legal consequences if a violation of Article 14 paragraph (4) of the KUP Law is proven. Utilizing the Article 36 KUP pathway is not an automatic guarantee for sanction waivers when the facts of the legal violation are irrefutable.
A Comprehensive Analysis and the Tax Court Decision on This Dispute Are Available Here
tpc.consulting 
tpc.consulting 
info@taxindo.co.id