Decision of 19 September 2018, Case No 5 Tdo 1534/2017 –⁠⁠⁠⁠⁠⁠ Inadmissibility of the criminal prosecution and ne bis in idem

Decision of the Supreme Court of 19 September 2018, Case No 5 Tdo 1534/2017
(Ne bis in idem principle, inadmissibility of the criminal prosecution, Article 4 of the Protocol No. 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms)

By a judgment of the District Court in Prostějov, the accused, J. A., was found guilty of an offence of misrepresentation of data on the state of economy and assets according to Section 254 of the Criminal Code. As an attorney in the period of 2010-2014, he committed the offence by not keeping or ensuring proper administration of tax records and books. He was further found guilty of the failure to submit a tax return even though he was aware of such obligation. He was therefore aware of the fact that he did not provide a tax authority with supporting documents for correct and timely tax assessment and thus the Tax Office had to assess the tax with the auxiliary mechanisms. Consequently, the Tax Office notified a competent prosecuting attorney’s office that the accused had committed a crime of reduction of taxes, fees and other similar mandatory payments. By the judgment of conviction, the first instance court imposed on the accused a prison sentence as well as a sentence of disqualification. The appellate court dismissed the subsequent appeal of the accused as unjustified.

The Supreme Court addressed the claim of the accused that there was a violation of ne bis in idem principle. The Supreme Court recalled that the right not to be tried or punished twice is guaranteed in the Article 4 of the Protocol No. 7 to the Convention for the Protection of Human Rights and Fundamental Freedoms. To assess whether there was a violation of this principle, the Supreme Court had to answer two questions - whether both proceedings are criminal in their nature and whether both proceedings concerned the same act. The Supreme Court, while referring to the case-law of the European Court of Human Rights, answered the first question by stating that the penalties or fines for the delayed tax statement are sanctions of a criminal nature. Concerning the second question the Supreme Court recalled that the Article 4 of the Protocol No. 7 must be understood as prohibiting the prosecution or judicial proceedings for the second “offence”, in so far as it arises from identical facts or facts which are substantially the same. According to the Supreme Court, the description of the facts of the case in both proceedings represent substantial basis for the assessment of the question whether the facts are the same in both proceedings irrespective of possible different legal qualifications. In this case, the Supreme Court reached the conclusion that the factual circumstances within the tax proceedings and within the criminal proceedings are substantially linked and partly overlap. The Supreme Court did not have doubts that the tax and criminal proceedings pursue the complementary objective and react in concreto on the different aspects of the unlawful acting. It also stated that tax and criminal proceedings in the Czech Republic are proceedings sufficiently integrated into one complex and as a consequence they do not usually lead to a disproportionate burden on the accused person since they are properly linked and foreseeable for the accused person. The Supreme Court thus evaluated that if a court does not in any way justify the relationship between the tax and accounting delict from the perspective of the sameness of the act, and particularly in the situation where a factual sentence of a judgment state both delicts but the accused is found guilty only for the accounting delict, such a court does not proceed correctly and in accordance with the law. Especially, the court has to carry out the analysis of substantial and time connection of the tax and accounting delict. Since in this case, the court of first instance did not proceed according to the above-mentioned rules, the Supreme Court quashed the decision of the appellate court and the judgment of the court of the first instance. In the new proceedings, the court of first instance has to make an assessment whether there is sufficient connection in substance and in time between the tax and criminal proceedings so that both proceedings could be considered as an integral response to the acting of the accused and so that there are no doubts that the accused is prevented from disproportionate burden or injustice by imposing upon him different sanctions by two different authorities in different proceedings. The court of first instance has to deal also with the question whether the accounting and tax delict of the accused concerns the same act and if it founds that it is not the same act, it has to closely deal with the acting of the accused towards other subjects. If it is found, based on the results of discovery, that the accused in fact endangered the property rights of other subjects, the accounting delict alone could be accepted, in other words, it would not be possible to consider it only as a preparation of a tax delict.