The Constitutional Court recently considered a case where the
first instance court ruled that VAT applied to the applicant,
despite being presented with many court precedents stating
otherwise (2013/3244). The Constitutional Court held that the
applicant's constitutional property rights had been violated on
the basis of unpredictability. It unanimously awarded the
applicant's legal and attorney's fee be paid.
In the case, the tax authority levied an attachment on an
individual's vehicle and real estate because the person had not
submitted a VAT statement, nor paid the amounts allegedly due for
the individual's lease of a canteen from a school council. The
applicant initiated an action against the tax authority's
decision. The first instance court ruled that the canteen was
subject to VAT, despite the applicant presenting many prior court
decisions supporting the applicant's claim.
The applicant bought the case to the Constitutional Court, which
Constitutional property rights can
only be restricted by law in accordance with public interests and
general principles regarding restriction of fundamental rights and
Legal provisions must be reasonably
accessible, predictable and determined by force of legal security
pursuant to the European Convention on Human Rights and Article 36
of the Constitution.
Determinism is a primary principle
for a state of law (Article 2 of the Constitution). Accordingly,
public authorities cannot act in an arbitrary manner and legal
provisions must be explicit, obvious, understandable and applicable
without doubt, applying to persons as well as to authorities.
Individuals should clearly understand
the legal consequences of their acts or transactions, as well as
which authority is entitled to intervene.
Legal security requires
The Constitutional Court agreed that many past decisions by the
Council of State and District Administrative Court have held
School councils cannot be deemed to
be commercial enterprises.
Real estate leased by school councils
to third parties should be determined to be a lease of real estate,
not transfer of an enterprise.
Real estate leased by school councils
to third parties should be exempt from VAT.
The Constitutional Court stated that principles of
predictability require the first instance court to give
consideration to the prior decisions on the topic made by the
Council of State and act in line with these precedents. Therefore,
the Constitutional Court unanimously ruled that the first instance
court's decision had violated applicant's constitutional
property rights on the basis of unpredictability.
Please see this link for the full text of the Constitutional
Court's decision (only available in Turkish).
The content of this article is intended to provide a general
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