AS TO THE ADMISSIBILITY OF

Application No. 11919/86

by S. M.

against Austria

        The European Commission of Human Rights sitting in private on

8 May 1987, the following members being present:

                    MM. C.A. NØRGAARD, President

                        G. SPERDUTI

                        F. ERMACORA

                        G. JÖRUNDSSON

                        G. TENEKIDES

                        S. TRECHSEL

                        B. KIERNAN

                        A. WEITZEL

                        J.C. SOYER

                        H.G. SCHERMERS

                        G. BATLINER

                        H. VANDENBERGHE

                   Mrs  G.H. THUNE

                   Sir  Basil HALL

                   Mr.  F. MARTINEZ

                   Mr.  H.C. KRÜGER, Secretary to the Commission

        Having regard to Article 25 of the Convention for the

Protection of Human Rights and Fundamental Freedoms;

        Having regard to the application introduced on 14 December 1984

by S. M. against Austria and registered on 7 January 1986

under file No. 11919/86;

        Having regard to:

-       the report of May 1986 provided for in Rule 40 of the Rules of

        Procedure of the Commission;

-       the observations submitted by the respondent Government on

        19 January 1987 and the reply thereto submitted by the

        applicant on 29 January 1987;

        Having deliberated;

        Decides as follows:

THE FACTS

        The facts of the case, as submitted by the parties, may be

summarised as follows:

        The applicant, an Austrian citizen born in 1938, is a florist

resident in Vienna.  Before the Commission she is represented by

Mr.  P. Scheichelbauer, a lawyer practising in Vienna.

        As from 1 January 1965 the applicant ran, together with her

two sisters, a flower business in Vienna in the form of a general

partnership (Offene Handelsgesellschaft).  The applicant's share in

the profits and losses as well as in the assets of the company

amounted to 50%, the shares of her two sisters to 25% each.

I.

        On 10 April 1969 the then husband of the applicant, Mr.  E.P.,

notified the Tax Department (Finanzamt) by means of a

"self-accusation" (Selbstanzeige) that he wanted to correct tax

declarations for himself and his wife.  In particular, the turnovers

and profits for the years 1966 and 1967, as well as the turnover for

the year 1968, had been considerably higher than the ones hitherto

assessed and declared, respectively.  This statement, which at first

was only signed by E.P., was eventually also signed by the applicant

herself on 21 April 1969 and supplemented to the effect that "the

self-accusation overleaf also relates to the period of time from

1 January 1965 to 3 March 1966 (date of marriage)".

        On 10 December 1976 the Vienna Regional Court (Landesgericht)

in criminal cases convicted the applicant and two other persons of

offences of tax evasion under S.33(1) of the Code of Financial

Offences (Finanzstrafgesetz).  She was sentenced to a fine of

250,000 AS and four months' imprisonment suspended for three years.

The Court found in particular that the applicant had in the years 1965

to 1967, inter alia by not entering the turnover, falsifying balance

sheets and filing incorrect or incomplete tax declarations, violated

the duty under tax law to disclosure (Offenbarungspflicht) and

therefore together with the other persons reduced the amount of taxes

by a total of approximately 600,000 AS.

        In its judgment the Court stated, inter alia:

        "From the very day when this company was established, the

        tax evasions described in the judgment were committed.  This

        was done by not entering part of the turnovers attained, by

        drawing up incomplete and thus incorrect cash reports which,

        in turn, led to incorrect balance sheets and, finally, by

        filing tax returns, which because they were incorrect and

        incomplete then became the basis of tax assessments which

        did not correspond to the actual circumstances.

        Investigations on the part of the tax authorities in

        connection with the responsibility of the accused

        demonstrate that all the three accused were involved in all

        business activity that arose and that all three were

        acquainted with the company's business practices.  This also

        shows that all three accused had knowledge of the fact that

        the records, which are the basis of proper accounting, were

        incomplete and that therefore any further bookkeeping and

        fiscal transactions based on these records had to be incorrect.

        The accused were in the opinion of the Court also

        aware, due to their personal abilities, of the consequences

        with regard to bookkeeping and fiscal matters.  This

        knowledge, together with the fact that the accused

        maintained this practice, leads to the conclusion that their

        conduct can be regarded as amounting to a system ...

        It is ... not of importance whether the accused were aware

        of the full extent of the success of the system practised by

        them.  Rather, the fact suffices - and this has been

        established by the Court - that the accused approvingly

        (billigend) put up with committing tax evasions for

        themselves and the Brothers and Sisters M.OHG (the

        applicant's flower company) respectively, in the way

        described above."

        The applicant thereupon filed a plea of nullity which was

upheld by the Supreme Court (Oberster Gerichtshof) on 19 June 1979.

The latter quashed the previous decision and acquitted

(freigesprochen) the applicant of the offences on the ground of their

prescription.

        The Court found in particular that, according to the

respective legal provisions, prescription would have occurred if five

years had elapsed between the end of the year following the first

measure of prosecution and the date of judgment.  On 10 April 1969 the

applicant had filed a self-accusation, whereupon the auditing

commenced on 12 May 1969.  This date interrupted the period of

prescription.  The period then started again to run at the end of

1969.  Accordingly, the period of prescription had expired at the end

of 1974, i.e. long before the date of the first instance's decision

for which reason the offences with which the accused had been charged

were no longer punishable.

II.

        In 1980 the applicant requested in a supplement to her tax

declaration for that year that 89,600 AS should be deducted as

company expenses in view of the fact that she had expended this amount

for counsel in the criminal proceedings leading to the decision of the

Supreme Court of 19 June 1979.  The conditions therefore had been met

inasmuch as she had been acquitted.

        When the Tax Department (Finanzamt) refused to qualify these

expenses as company expenses the applicant unsuccessfully filed an

appeal with the Regional Finance Direction (Finanzlandesdirektion).

Thereupon, on 6 June 1984 the Administrative Court dismissed the

applicant's further complaint.  In its decision which was served on

the applicant on 17 June 1984 the Court found in particular:

        "Only costs for counsel of an accused who has been acquitted

        can be seen as having been caused by the company and

        therefore qualify as company expenses if the person is

        acquitted from the offence of which he has been accused.

        Thereby the offences must be able to be explained on the

        basis of strict criteria as having resulted directly from

        his company activity and having direct effects thereupon.

        Moreover, the accused must have been criminally acquitted of

        the offences because, according to the statements in the

        Court decision, the accused could not be charged with the

        respective criminal offence and, therefore, the respective

        suspicion had unjustifiably (zu Unrecht) been raised against

        him.  The Court sees no reason to depart from this legal

        opinion.

        In the present case neither the documents nor any

        submissions of the applicant in the proceedings permit the

        conclusion that the latter has in fact not committed the

        financial offences according to S.33(1)(a) of the Code of

        Financial Offences of which she has been accused, and that

        for this reason she was acquitted by the Supreme Court.

        Rather, the acquittal occurred after the decision of the

        convicting first instance decision had been quashed

        exclusively in view of the prescription.

        It cannot therefore successfully be contested if the

        authorities reached on the basis of these facts the

        conclusion that the disputed costs for counsel amounted to

        living expenses rather than to company expenses inasmuch as

        in the criminal proceedings conducted only the prescription

        which had occurred had been determined and not the

        applicant's innocence."

III.

        In 1981 the applicant again unsuccessfully requested the Tax

Department to consider 40,000 AS expended for counsel in the previous

criminal proceedings as company expenses.  Upon an unsuccessful appeal

her further complaint was rejected by the Administrative Court on

5 June 1985 on the same grounds as on 6 June 1984.  In its decision

the court noted that the legal issue was the same as that with which

it had previously been confronted, the only difference being that the

present case referred to the year 1981.  The Court found in particular

that the applicant had not contested the statements made in the

decision of 6 June 1984 according to which there was nothing which

would indicate that the applicant had in fact not committed the

offences.  The Court stated in this respect:

        "It has not been disputed - as also in the proceedings

        - either in the

        documents or in any of the submissions of the applicant

        during the proceedings that the latter had in fact not

        committed the offences according to S. 33 (1)(a) of the Code

        of Finance Criminal Law with which she had been charged."

IV.

        S.29 of the Austrian Code of Financial Offences concerns

"self-accusation" (Selbstanzeige).  In the version applicable at the

time when the judgment was passed, S.29 reads as follows:

        "(1)    Those who have committed a financial offence shall

        be exempt from punishment if they notify the public

        authority in charge of enforcing the applicable tax or

        monopoly regulations or the competent authority for

        financial offences of their misconduct (self-accusation).  A

        self-accusation is impossible when caught in the act.

        (2)     If such misconduct was accompanied by a tax evasion

        or another shortfall in receipts, exemption from punishment

        shall be granted only insofar as the authority is notified

        without undue delay of the circumstances material to the

        determination of the evasion or shortfall and the resulting

        amounts owed by the informant or for which he may be held

        liable are paid in conformity with the tax or monopoly

        regulations.  If facilitated terms of payment are granted,

        the period of grace must not exceed one year; when taxes

        have to be calculated by the taxpayer himself (S.201 and 202

        of the Federal Tax Code )this period

        commences with the self-accusation; in all other cases with

        the date on which the informant is notified of the amount

        due.

        (3)     Exemption from punishment shall not be granted

        a)      if, at the date of filing the self-accusation,

        prosecution (S.14, para. 3) had already been levied against

        the informant, against other persons involved in the offence

        or against receivers;

        b)      if, at the date of filing the self-accusation, the

        offence had already been discovered in whole or in part and

        this fact was known to the informant, or

        c)      if, in the case of a deliberate financial offence,

        on the occasion of a search, inspection, clearance, or

        auditing of accounts or records by a fiscal authority the

        self-accusation is not filed as early as at the beginning of

        the official act.

        (4)     Regardless of the exemption from punishment,

        monopoly goods (spirits, salt, products covered by the

        tobacco monopoly) as well as the objects mentioned in S.39

        para. 2 shall be ordered forfeited.  This shall also apply

        to such receptacles and means of transportation as described

        in S.17 para. 2 sub-para. b, unless the special devices can

        be removed; the costs shall be borne by the informant.

        Compensation for lost value shall not be imposed.

        (5)     The self-accusation only applies to those for whom

        it is filed."

COMPLAINTS

        The applicant complains under Article 6 para. 2 of the

Convention that, even though she had been acquitted of the offences

with which she had been charged, the Administrative Court found in its

decisions of 6 June 1984 and 5 June 1985 that acquittal on account of

prescription did not amount to the applicant's innocence.  The

applicant states that in the respective criminal proceedings she had

claimed that she was not guilty.

PROCEEDINGS BEFORE THE COMMISSION

        The application was introduced on 14 December 1984 and

registered on 7 January 1986.

        On 13 October 1986 the Commission decided to bring the

application to the notice of the respondent Government and to invite

them to submit observations on its admissibility and merits pursuant

to Rule 42 para. 2 (b) of the Rules of Procedure.

        The respondent Government's observations were submitted on

19 January 1987 and the reply thereto by the applicant on

29 January 1987.

SUBMISSIONS OF THE PARTIES

A.      The respondent Government

I.     Requirements under Article 26 of the Convention

        The Government submit that the conditions of Article 26 of the

Convention have not been complied with.

        According to the Commission's case-law, Article 26 of the

Convention implies that in States in which the Convention attains the

status of constitutional law and in which there is a constitutional

court a complaint must have been raised before that court - if and to

the extent that State actions are subject to judicial review by a

constitutional court - before all domestic remedies have been

exhausted (see e.g.  No. 6965/75, Dec. 5.3.76, D.R. 5 p. 130).  However,

the applicant failed to file a complaint with the Austrian

Constitutional Court against the ruling of the Regional Finance

Direction in accordance with Article 144 of the Federal Constitution.

There is no established practice of the Constitutional Court

concerning this particular question of law which would have discharged

the applicant from her obligation to appeal to that Court.  On the

contrary, the decisions handed down by the Court so far with regard to

Article 6 para. 2 of the Convention show that a complaint filed with

the Constitutional Court in the present case would by no means have to

be regarded as hopeless, when taking into account the legal principle

of the presumption of innocence.

        Under Article 144(1) of the Federal Constitution an appeal may

be filed with the Constitutional Court on the ground of a violation of

constitutionally guaranteed rights after all administrative remedies

have been exhausted.  Insofar as the applicant considers the refusal

to recognise the costs for counsel as company expenses a violation of

Article 6 para. 2 of the Convention, she would have had to apply to

the Constitutional Court to exhaust all domestic remedies.  This

possibility was explicitly referred to in the directions given to her

concerning time and manner of appealing against the decision quoted

above.

        If it is objected that the issue of the violation of the legal

principle of the presumption of innocence was contained in the

complaint filed with the Administrative Court and that in accordance

with Article 140 of the Federal Constitution the Administrative Court

is entitled to apply to the Constitutional Court for checking the

constitutionality of a law, it must be pointed out that both

possibilities, namely the direct as well as the indirect appeal to the

Constitutional Court certainly require within the meaning of

Article 26 of the Convention that the applicant makes use of the

possibility to appeal directly to the Constitutional Court.

        Due to the combination of the circumstances of the present

case, this would have been required if only because the

constitutionality of an interpretation by the Administrative Court was

the decisive question in this case.  According to its practice, the

Constitutional Court is by no means bound by such an interpretation,

but also quashes decisions which are based on an unconstitutional

interpretation of a law by the Administrative Court.

II.    Complaint under Article 6 para. 2 of the Convention

1.      The Government recall at the outset with reference to the

Commission's case-law that the guarantees in Article 6 para. 2 apply

only to those "charged with a criminal offence".  However, the present

case is neither a criminal case nor a financial offence under criminal

law.  Furthermore, the Commission has repeatedly stated that tax

proceedings do not concern claims and obligations under civil law.

2.      The provision relevant to the question of the admissibility of

deducting company expenses is S.4(4) of the Income Tax Act, according

to which "Company expenses are expenses caused by the company".  These

expenses reduce the profits in consistent compliance with the

separation of company and external affairs.  Therefore, company

expenses are solely caused by the management of company affairs and

not by the possibly unobjectionable conduct of the taxpayer in terms

of criminal law.  In this respect therefore Article 6 para. 2 of the

Convention cannot be applied.  Thus, also in respect of the question

whether the applicant's costs for counsel in the criminal proceedings

could be qualified as company expenses, the only relevant issue could

be whether or not these expenses were attributable to the management

of company affairs or to her private life.

3.      In principle due to S.4 of the Income Tax Act the costs for

counsel in criminal proceedings could be regarded as costs of living

and thus as private expenses.  It is from this point of vantage that

the somewhat strict interpretation of the concept of company expenses

discussed here must be understood.  According to this interpretation

these costs, which are much more on the private side, can be regarded

as company expenses only to the extent that it is demonstrated beyond

doubt that the party concerned acted in strict compliance with the

law.  The relatively narrow limitation to a "true acquittal" (echter

Freispruch) results both from the need for enforceability and the need

to provide an absolute security that in cases of unlawful action the

costs of criminal proceedings do not reduce the profits.

        The argument of enforceability requires an explanation.  In

particular, the result of a less narrow limitation would be that in

cases of an "acquittal in law" (unechter Freispruch) the tax authority

at first would have to determine whether an offence has been

committed.  It goes without saying that it would be difficult for an

authority without criminal jurisdiction to determine such a question.

On the other hand, objections in terms of equality before the law

would have to be raised against an even broader interpretation, namely

that the costs of criminal proceedings could be qualified as company

expenses in the case of both a "true acquittal" and an "acquittal in

law".  Such an interpretation would make it possible to deduct these

costs as company expenses both in the case of lawful and unlawful

action.  Then, however, a deduction of the costs of criminal

proceedings as company expenses could not be denied even in case of a

conviction.

        As a result, depending on the nature of the acquittal, the

costs for counsel arising in the course of the criminal proceedings

can be regarded either as company expenses within the meaning of the

Income Tax Act or merely as private costs of living.

4.      The judgment of the Supreme Court of 19 June 1979 contains no

findings as to whether the accused could not be charged with the

respective offense or whether she was wrongfully suspected of having

committed the offence, since she was acquitted exclusively on the

ground of prescription.  The judgment contains neither positive nor

negative statements concerning her guilt.

5.      Therefore, the decision of the Administrative Court of

6 June 1984 cannot be regarded as implying that in view of the

decision of the Supreme Court the party concerned had committed the

offence.  The Supreme Court was not obliged to determine the issue of

the applicant's guilt and the acquittal was based exclusively on the

ground of prescription.  It was also not the concern of the tax

proceedings to comment on the existence of a suspicion of a criminal

act.  Thus, the presumption of innocence has not been violated insofar

as the Administrative Court regarded the judgment of the Supreme Court

as a decision which did not comment on the existence of the suspicion

of a criminal act and, as a result, comes to concrete conclusions,

namely by qualifying the amount expended by the applicant for counsel

in the criminal proceedings as private costs of living.

6.      Article 6 para. 2 of the Convention does not entitle the

accused to demand reimbursement of the amount spent on counsel when

the criminal proceedings are dismissed or the accused is acquitted.

According to this provision, it is not even prohibited to order the

acquitted person to pay part of the costs of the proceedings.  Only an

excessive and seemingly arbitrary imposition on the acquitted person

of the costs of the proceedings may be regarded as a violation of the

presumption of innocence.  The merely indirect burdening of the

applicant with the costs of the proceedings owing to the refusal to

qualify them as company expenses can by no means be considered as

being excessive or arbitrary.

7.      In its decision of 6 June 1984, the Administrative Court did

not determine the issue of guilt but only stated that it cannot be

inferred from the acquittal that the applicant's innocence had been

ascertained.  Following its consistent practice, the Administrative

Court thus only wanted to express that the suspicion had not been

raised unjustifiably.

        Differentiations of this kind in laws or in court decisions

which do not contain the presumption of guilt but merely state that

the guilt cannot be proven or that the suspicion cannot be refuted,

thus leaving the question of guilt as such unanswered, do not

contravene Article 6 para. 2 of the Convention, at least not in

connection with court orders as to costs, claims for compensation, and

in particular in connection with the permission or refusal to afford

deductions (see I. and C. v.  Switzerland, Comm.  Report 4.12.85,

para. 61).

8.      The aim of S.29 of the Code of Financial Offence concerning

"self-accusation" (quoted above in THE FACTS) is to encourage

taxpayers to disclose tax evasions by ensuring that they will be

exempt from punishment if they refund the taxes due, thus recovering

the losses.  Hence, the public interest in the collection of taxes

takes priority over the interest in the punishment of the offender.

Both self-accusation and prescription are grounds for quashing a

judgment.  Prescription absolutely disregards the question of guilt

and is based solely on the expiry of a certain period of time.

Conversely, the benefit of the self-accusation presupposes, according

to its definition ("those who have committed a financial offence

..."), a financial offence.

        In the present case the suspicion raised against the applicant

does not seem totally unjustified if it is considered that in her plea

of nullity she challenged the decision of the court of first instance

in the first place because of its refusal to exempt her from

punishment in spite of her self-accusation, while explicitly leaving

uncontested the facts ascertained in this decision.

III.     Conclusion

        The respondent Government therefore request the Commission to

declare the application inadmissible either under Article 26 of the

Convention for non-exhaustion of domestic remedies, or, subsidiarily,

as being manifestly ill-founded within the meaning of Article 27 para.

2 of the Convention.

B.      The applicant

I.     Requirements under Article 26 of the Convention

        The applicant submits that Article 26 embraces only admissible

remedies.  In the present case domestic remedies were exhausted by the

further complaint lodged with the Administrative Court.  A complaint

to the Constitutional Court is not possible if it is alleged that

ordinary law - in the present case the Code of Criminal Procedure -

has been violated.  A complaint to the Constitutional Court alleging a

violation of Article 6 of the Convention would have had no prospect

of success, particularly since that Court takes the view that Article

6 is not directly applicable in the domestic legal order.  In this

respect attention is drawn to the fact that the Constitutional Court

punishes wanton complaints.

        In the further complaint to the Administrative Court a

violation of Article 6 was alleged.  According to the prevailing

case-law of the Constitutional Court, the Administrative Court is

under no obligation to refer an application alleging a violation of a

right under the Convention to the Constitutional Court.

II.    Complaint under Article 6 para. 2 of the Convention

1.      The applicant first points out that the applicability to tax

matters of the Convention has already been accepted in certain cases.

In this respect he refers to an article by Berka, Die Europäische

Menschenrechtskonvention und die österreichische Grundrechtstradition

in the Austrian Law Journal 1979 at p. 369.

2.      Article 6 para. 2 of the Convention states that everyone must

be presumed innocent until proved guilty according to the law.  It is

irrelevant in this context that the applicant herself admitted the tax

evasion, since the present issue concerns the refusal of the

authorities to consider defence costs as company costs.  However,

Article 6 para. 2 expressly provides that guilt must be proved

according to the law.  In non-legal tax proceedings, in which the

true facts must be established through official channels, a confession

is no substitute for legal proof of guilt.  A confession may be true

or false; it may also be withdrawn.  Guilt is proved according to the

law only where the person who has confessed is convicted by a decision

having the force of law taken in accordance with the relevant legal

provisions, provided that such provisions do not infringe rights under

the Convention.

        The Government overlook the fact that an acquittal on the

grounds of prescription does not alter the fact that the applicant was

not proved guilty according to the law.  Since everyone is innocent

until he has been convicted in proceedings conducted according to the

law, it is immaterial whether he is innocent because no charge has

been laid, because criminal proceedings have been discontinued,

possibly because the charge has been withdrawn, or whether the accused

is acquitted because in doubt his innocence has been established,

because he is not responsible for his actions, on account of

prescription, or for other grounds.

        No legal proceedings have established the applicant's guilt.

The judgment of the Vienna District Criminal Court which convicted the

applicant was quashed by the Supreme Court and is therefore devoid of

effect.  It follows that the applicant must clearly be regarded as

innocent within the meaning of Article 6 para. 2 of the Convention.

The Government's arguments concerning the self-accusation are

irrelevant in that respect, since under the Convention a person is not

regarded as guilty if he has made a confession but - and with good

reason - only if he has been convicted in proceedings conducted

according to the law.  After all, people may confess because they are

afraid or because they have been put under pressure to do so.

3.      Thus the question of the applicant's guilt in no way remains

open, as the Government claim.  In the absence of a conviction she has

always been innocent.  It does also not depend on whether the

Administrative Court made no finding of innocence and thereby intended

to express the view that the suspicion raised against the applicant

was groundless.  The only question under Article 6 para. 2 can be

whether the applicant was found guilty in proceedings conducted

according to the law.  Ultimately the onus is not on the applicant to

show her innocence but on the public prosecutor to establish her

guilt.  There is an irreconcilable contradiction in the fact that the

Administrative Court states, on the one hand, that the defence costs

in criminal proceedings are to be regarded as incurred by the

business, and therefore as business expenses, if the accused is

acquitted of the offence with which she is charged while, on the other

hand, the Court states that the evidence failed to demonstrate that

the applicant had not committed the offence in question and that she

was acquitted by the Supreme Court "only" because the proceedings were

statute-barred.

THE LAW

        The applicant complains that, even though she had been

acquitted of the offences with which she had been charged, the

Administrative Court found in its decisions of 6 June 1984 and

5 June 1985 that this acquittal on account of prescription did not

amount to the applicant's innocence.  It is submitted that the onus

was not on the applicant to show her innocence but on the public

prosecutor to establish her guilt.  However, there have been no legal

proceedings which established the applicant's guilt.  The applicant

relies on Article 6 para. 2 (Art. 6-2) of the Convention which states:

        "Everyone charged with a criminal offence shall be

        presumed innocent until proved guilty according to law."

        The Government submit that according to the Commission's

case-law tax proceedings do not concern the determination of a person's civil

rights and obligations within the meaning of Article 6 para. 1 (Art. 6-1).

Moreover, the present case involves neither a criminal offence nor a financial

offence under criminal law, whereas Article 6 para. 2 (Art. 6-2) applies only

to those "charged with a criminal offence".

        The Commission has considered in the light of the case-law

established by the Convention organs whether the charges brought

against the applicant in the proceedings before the Vienna Regional

Court were "criminal" within the meaning of Article 6 para. 2 (Art. 6-2)

(cf. Eur. Court H.R., Engel judgment of 8 June 1976, Series A no. 22,

p. 34 f. para. 82; Öztürk judgment of 21 February 1984, Series A

no. 73, para. 48 p. 17).  The Commission finds that the provisions

defining the offences concerned belong under Austrian law to criminal

law since the respective Code of Financial Offences itself refers in

its German title to criminal offences (Finanzstrafgesetz).

Moreover, in the Commission's opinion, the nature of the offence,

namely the violation of the duty of disclosure, is criminal in

character.  Finally, the Commission considers that the degree of

severity of the sentence which the applicant incurred, namely a fine

of 250,000 AS and four months' imprisonment suspended for three years,

was of such a severity as to satisfy the criteria for a penal sanction

within the meaning of Article 6 (Art. 6) of the Convention as interpreted by

the Court in its judgments on the Engel and Öztürk cases.

        The Commission is therefore satisfied that in proceedings

before the Vienna Regional Court the applicant was "charged with a

criminal offence" within the meaning of Article 6 (Art. 6).

        The Government also submit that the conditions of Article 26

(Art. 26) of the Convention have not been complied with.  In particular, the

applicant failed to file a complaint with the Austrian Constitutional

Court against the ruling of the Regional Finance Direction in

accordance with Article 144 of the Federal Constitution.  There is no

established practice of the Court concerning this particular question

of law which would have discharged the applicant from her obligation

to appeal to it.  On the contrary, the decisions handed down by the

Constitutional Court so far with regard to Article 6 para. 2 (Art. 6-2)

of the Convention show that a complaint filed with it in the present case

would by no means have to be regarded as hopeless, when taking into

account the legal principle of the presumption of innocence.

        The Commission observes that the applicant's complaint is in

fact directed against a formulation employed by the Administrative

Court in its decision of 6 June 1984 and again of 5 June 1985, and

that there was no further remedy at the applicant's disposal to

challenge this decision before the Austrian Constitutional Court.

        The Commission concludes that the application cannot,

therefore, be rejected under Article 26 (Art. 26) of the Convention for

non-exhaustion of domestic remedies.

        The Government further submit that Article 6 para. 2 (Art. 6-2) of the

Convention does not entitle the accused to demand reimbursement of the

amount spent on counsel when the accused is acquitted.  Moreover, the

judgment of the Supreme Court of 19 June 1979 contains no findings as

to whether the accused could not be charged with the respective

offence or whether she was wrongfully suspected of having committed

the offence, since she was acquitted exclusively on the ground of

prescription.  Equally in its decision of 6 June 1984, the

Administrative Court only stated that it could not be inferred from

the acquittal that the applicant's innocence had been ascertained.  The

Court thus only wanted to express that the suspicion had not been

raised unjustifiably.  In the present case the suspicion raised

against the applicant does not seem totally unjustified if it is

considered that in her plea of nullity, directed against the decision

of the Regional Court, she explicitly left uncontested the facts

ascertained in that decision.

        The Commission observes that in the respective decision of

5 June 1985 the Administrative Court upheld its previous decision of

6 June 1984 according to which the applicant could not in her tax

declaration claim the respective expenses for counsel as being company

expenses.

        However, neither Article 6 para. 2 (Art. 6-2) nor any other provision

of the Convention guarantees a right to claim expenses for counsel as being tax

deductible in a case where the accused is eventually acquitted or the

proceedings are discontinued.

        On the other hand, the Commission and Court have admitted that

the application of Article 6 para. 2 (Art. 6-2) is not limited to cases where a

prosecution ends in the conviction or acquittal of the accused and

that the presumption of innocence will be violated if, without the

accused's having previously been proved guilty according to law, a

judicial decision concerning him reflects an opinion that he is guilty

(Eur. Court H.R., Minelli judgment of 25 March 1983, Series A no. 62,

p. 18 para. 37).

        It is true that in the present case the applicant complains of

a statement of the Administrative Court according to which her

acquittal of the criminal offences of tax evasion was only based on

the prescription of these offences and had not established her

innocence.  She complains in particular that this official statement

by a court, according to which she is presumed guilty because she

failed to prove her innocence constitutes a violation of her right to

be presumed innocent as set out in Article 6 para. 2 (Art. 6-2) of the

Convention.

        The Commission, having just found that in the previous

proceedings before the Vienna Regional Court the applicant had been

"charged with a criminal offence" within the meaning of Article 6

(Art. 6) of the Convention, observes that the applicant's complaint

concerns the subsequent tax proceedings relating to the deduction of

costs for counsel on company expenses.  The Commission notes in

particular that the present case has certain similarities with the

Minelli case where the Court concerned had first decided not to hear

that applicant as the limitation period had expired and thereafter

decided on the side effects of that case, namely by directing the

applicant to bear part of the court costs (see Eur.  Court H.R.,

judgment of 25 March 1983, Series A No. 62 para. 12).  However, the

present case differs from the Minelli case in that the deduction of

costs for counsel was decided upon in different subsequent

proceedings.  It is therefore in no way evident that at the relevant

time the applicant was still "charged with a criminal offence" within

the meaning of Article 6 para. 2 (Art. 6-2) of the Convention.

        However, the Commission does not find it necessary to resolve

the question whether Article 6 para. 2 (Art. 6-2) is also applicable to these

proceedings, since the application must in any event be declared

inadmissible for the following reasons.

        The Commission finds that the incriminated statement must not

be read in isolation, but in the context of the legal question which

the Administrative Court was called upon to decide.  In fact, the

latter was faced with the problem of the interpretation of S.4(4) of

the Income Tax Act according to which expenses for defence counsel can

be deducted from the taxable income if the criminal proceedings in

question have lead to an "acquittal".

        The Administrative Court came to the conclusion that only an

acquittal on the merits of the case can be accepted as the

prerequisite for deducting defence expenses from income.  In the

applicant's case the acquittal was based on prescription and did not,

therefore, meet that particular requirement.  This had been the only

point at issue.

        The Commission accepts that the finding of the Administrative

Court could have been formulated in less equivocal terms.

Nevertheless, in the circumstances of the present case, it finds that

the terms employed do not amount to a violation of the applicant's

rights under Article 6 para. 2 (Art. 6-2) of the Convention.  It

follows that the application is manifestly ill-founded within the

meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

        For these reasons, the Commission

        DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the Commission               President of the Commission

       (H.C. KRÜGER)                            (C.A. NØRGAARD)