Fine of UAH 500,000 for “storing fuel without a licence” cancelled

The client’s problem

The tax authority carried out an on-site inspection of the company and, on 26 October 2021, issued a tax assessment notice imposing a fine of UAH 500,000. The ground was an alleged breach of Article 15(1) and (8) of Law No. 481/95-VR: in the State Tax Service’s view, from 1 January to 25 April 2021 the company had stored fuel (liquefied gas) without a fuel storage licence.

What we did

• We challenged the tax assessment notice before the Donetsk District Administrative Court.
• We disputed both the grounds for the inspection and the tax authority’s conclusion that fuel had been stored without a licence.

Outcome

By a judgment of 18 January 2023, the court allowed the claim and cancelled the UAH 500,000 tax assessment notice. Having examined the suppliers’ excise invoices, the court found that the gas had been delivered to the company’s address as a storage place that is not an excise warehouse and was used solely for the company’s own needs – heating its premises. Such activity is not fuel storage requiring a licence. The State Tax Service filed its appeal out of time: the First Administrative Court of Appeal refused to open appeal proceedings, and the Supreme Court refused to open cassation proceedings. By a separate judgment, the client was awarded its legal costs; the appeal court left that judgment unchanged.