Facts
The Cantonal Tax Office of St. Gallen (KStA/SG) had made an offset of CHF 75,000.-- as a hidden profit distribution in favor of taxpayer [A.] in the tax period 2010. The taxpayer appealed against this offset to the Administrative Appeals Commission of the Canton of St. Gallen, which granted the appeal and referred the matter back to the KStA/SG for re-evaluation. The Administrative Court of the Canton of St. Gallen granted the appeal of the KStA/SG insofar as it recognized the offset of CHF 75,000.-- or CHF 45,000.-- at the level of the taxpayer as justified. The KStA/SG filed a complaint with the Federal Court and requested that the costs of the proceedings before the Administrative Appeals Commission and the Administrative Court be borne by the taxpayer.
The parties to the proceedings are the Cantonal Tax Office of St. Gallen (KStA/SG) and taxpayer [A.] . The proceedings were conducted at the Federal Court under the number 2C_312/2019. The decision of the Federal Court is dated April 23, 2019.
Considerations
The Federal Court examined the complaint of the KStA/SG and came to the conclusion that the lower court had rightly imposed the costs of the administrative court proceedings on the Canton of St. Gallen in accordance with federal law. The KStA/SG had only submitted the tax assessment of the non-cantonal company in the second-instance appeal proceedings, which was considered late and in breach of duty within the meaning of Art. 144 para. 2 DFTA.
The Federal Court found that the Administrative Appeals Commission would not have had to make a referral decision if it had only been presented with the disputed tax assessment. Accordingly, the KStA/SG would have already been granted its rights before the Administrative Appeals Commission. The lower court was entitled to assume, without violating federal law, that the KStA/SG was duty-bound to submit the tax assessment of November 16, 2012, already in the first-instance appeal proceedings.
The Federal Court also pointed out that the official…