The dispute over the cancellation of incorrect tax assessments serves as a crucial instrument for taxpayers to seek administrative justice, as reflected in the Tax Court decision between PT ICS and the Directorate General of Taxes. The primary focus of this dispute is the examination of the validity of the Tax Collection Letter (STP) regarding administrative sanctions under Article 14 Paragraph (4) of the KUP Law concerning the late issuance of Tax Invoices for the September 2017 period. The Defendant insisted on maintaining the administrative sanction, arguing that, based on system and factual data, a violation of the duration for issuing Tax Invoices had occurred according to technical regulations. Conversely, the Plaintiff emphasized that all material obligations, including payment and reporting of VAT, had been fully met without causing any loss to state revenue, making the imposition of the fine groundless.
In its consideration, the Board of Judges made a legal breakthrough by not only looking at the formality of the delay but also reviewing the substance of fairness and the taxpayer's good faith. The Judges concluded that since the tax due had been correctly paid and reported, the existence of the STP became "incorrect" in substance within the framework of Article 36 Paragraph (1) letter c of the KUP Law. The final resolution of the Board of Judges was to annul the Defendant's decision and order the cancellation of the related STP. This decision reaffirms that administrative sanctions should not be purely punitive if the primary objective of taxation has been achieved. The implication is that taxpayers have a strong opportunity to cancel sanctions through a lawsuit if they can prove perfect material compliance.
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