By : Ahdianto – Tax Partner GNV

As we all probably know, the examination of proceedings in the tax court can be conducted by ordinary proceedings – ‘pemeriksaan acara biasa’ (Article 49 of the Tax Court Law) or by fast-track proceedings – ‘pemeriksaan acara cepat’ (Article 65 of the Tax Court Law). In practice, we may have experienced an appeal or lawsuit dispute seems to be examined under the ordinary procedure. Where the course of the dispute seems as usual, that is, there was an appeal brief or response letter received after several months since the appeal letter or lawsuit was submitted to the tax court and there was also a request for rebuttal to the appellant or plaintiff.

The first hearing began over three months after the appeal or lawsuit was submitted. What happened in the first hearing, however, the panel of judges concluded that the dispute was not within the authority of the tax court as stipulated in Article 31 of the Tax Court Law. The question is whether a panel of judges can decide that a dispute is not within the authority of the tax court after going through an examination process that can be characterized as an ordinary procedure examination?

The answer should be NO.

Article 66 paragraph 1 letter d of the Tax Court Law states that:

“(1) The examination with a fast-track procedure is carried out against :
d. disputes which by virtue of legal considerations are not the authority of the Tax Court.”

Therefore, it should be noted that when the panel of judges or the judge decides that a dispute is not under the authority of the tax court, the proceedings in the tax court must be conducted with a fast-track hearing. Why does the examination have to be conducted in a fast-track proceeding? This is because in accordance with Article 82 paragraph 3, the judge’s decision must be made within 30 (thirty) days after the appeal or lawsuit letter is received. Accordingly, the appellant or plaintiff still has sufficient time to file a lawsuit with the competent court. For instance, if it turns out that a dispute should be submitted to the State Administrative Court (‘PTUN’), it must be filed 90 days after the decision being challenged is received.

As a reference, Article 82 paragraph 3 and 4 of the Tax Court Law say that:

“(3) A decision with a fast-track procedure against a dispute based on legal considerations that are not the authority of the Tax Court as referred to in Article 66 paragraph (1) letter d, in the form of unacceptable, shall be made within 30 (thirty) days after the Appeal Letter or Lawsuit Letter is received.

(4) In the event that the decision of the Tax Court is made against a tax dispute as referred to in paragraph (3), the appellant or plaintiff may file a lawsuit with the competent court.”

Disclaimer:

This communication contains general information only.  Before making any decision or taking any action that may affect your tax and finances or your business, you should consult a qualified professional adviser.  GNV shall not be liable or responsible for any loss or damage whatsoever arising directly or indirectly in connection with any person relying on this communication.