Facts
Parties: A. GmbH (taxable entity) against Federal Tax Administration (FTA)
Court: Federal Administrative Court
Date: November 27, 2024
Facts: The taxable entity A. GmbH criticizes the allegedly unconstitutional limitation of jurisdiction that the Federal Administrative Court has imposed on itself. It particularly objects to the statements in E. 2.6.1 of the contested judgment A-2814/2023 of April 19, 2024, in which the Federal Administrative Court exercises "a certain restraint" in reviewing the FTA's discretionary assessments. The taxable entity argues that the result of the discretionary assessment and the underlying methods should be reviewed "unrestricted," as a restriction of the right to a legal remedy under Art. 29 para. 2 Cst. requires a legal basis, a public interest, and proportionality.
Considerations
The Federal Administrative Court is obliged to fully exercise its jurisdiction. An unlawful limitation of jurisdiction constitutes a formal denial of justice and can violate the right to be heard and the right to a legal remedy. The provision of Art. 79 VATA 2009 grants the FTA a margin of appreciation (factual discretion), but not a margin of discretion in terms of legal consequences. The provision is therefore justiciable. When reviewing an appeal decision that refers to a discretionary assessment, the Federal Administrative Court may exercise "a certain restraint" by merely checking whether the discretion exercised by the FTA is reasonable.
The practice of the Federal Administrative Court to exercise a certain restraint in reviewing discretionary assessments has been established for decades and has been approved by the Federal Supreme Court. This practice is based on administrative-organizational and separation-of-powers reasons. The restraint is necessary because the FTA has the personnel, administrative, and technical means…