AS TO THE ADMISSIBILITY OF

                      Application No. 19117/91

                      by K.S. and K.S. AG

                      against Switzerland

      The European Commission of Human Rights (First Chamber) sitting in

private on 12 January 1994, the following members being present:

           MM.   A. WEITZEL, President

                 S. TRECHSEL

                 C.L. ROZAKIS

                 F. ERMACORA

                 E. BUSUTTIL

                 A.S. GÖZÜBÜYÜK

           Mrs.  J. LIDDY

           MM.   M.P. PELLONPÄÄ

                 B. MARXER

                 G.B. REFFI

                 B. CONFORTI

                 N. BRATZA

                 I. BÉKÉS

                 E. KONSTANTINOV

           Mrs.  M.F. BUQUICCHIO, Secretary to the Chamber

      Having regard to Article 25 of the Convention for the Protection of

Human Rights and Fundamental Freedoms;

      Having regard to the application introduced on 31 October 1991 by

K.S. and K.S. AG against Switzerland and registered on 21 November 1991

under file No. 19117/91;

      Having regard to the report provided for in Rule 47 of the Rules of

Procedure of the Commission;

      Having deliberated;

      Decides as follows:

THE FACTS

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

summarised as follows:

      The first applicant, a Swiss citizen born in 1930, resides at Kloten

in Switzerland.  He is chairman and principal shareholder of the second

applicant, a company selling painters' equipment.  Before the Commission

the applicants are represented by Mr. E. David, a lawyer practising in

St. Gallen.

Particular circumstances of the case

                                   I.

      In 1982 a tax auditor, when controlling the second applicant's

accounts, found an undeclared bank account through which 2,500,000 SFr

had flowed between 1975 and 1982.  As from 1983 criminal proceedings were

instituted against the book-keeper W. and the first applicant.  These

proceedings, concerning inter alia tax fraud and conducted by the Zürich

District Attorney's Office (Bezirksanwaltschaft), have meanwhile been

terminated.

                                   II.

      In 1987 the Zürich tax authorities instituted proceedings against

the applicants for backpayment of taxes.  The applicants were informed

that criminal proceedings on account of tax evasion might be instituted

against them;  they were given the opportunity to comment thereupon,

various witnesses were heard, and the tax authorities consulted the case-

file at the District Attorney's Office (see above, I.).

      On 26 September 1989 the Finance Department (Finanzdirektion) of the

Canton of Zürich imposed on the first applicant backpayments of taxes of

51,525.60 SFr and a fine of the same amount;  and on the second applicant

taxes of 37,255.60 Sfr and a fine of 74,511.20 SFr. The Department relied

inter alia on the auditor's report (above I.).

      The applicants filed an appeal (Rekurs) against these decisions

which the Administrative Court (Verwaltungsgericht) of the Canton of

Zürich dismissed on 7 December 1989.

      The applicants each filed a public law appeal (staatsrechtliche

Beschwerde) with the Federal Court (Bundesgericht), complaining inter

alia of the unfairness of the proceedings before the Zürich

Administrative Court.  The appeals were dismissed in two decisions of

6 February 1991, served on 1 May 1991.

      The Court first dealt with the applicants' complaints under Article

6 of the Convention that they had not had an oral hearing; that neither

the first applicant nor organs of the second applicant had been heard;

that they had not been able to participate in the evidence proceedings;

and that they had not been informed of the charges brought against them.

With reference to Section 108 para. 1 (c) of the Zürich Tax Act

(Steuergesetz; see below, Relevant domestic law) and to its own

previously published case-law the Court confirmed that a request for

reopening the proceedings according to this provision constituted an

effective remedy to complain about their unfairness.  As the applicants

had failed to employ this remedy, the Court declared these complaints

inadmissible for non-exhaustion of cantonal remedies.

      The Federal Court then dealt with both applicants' complaints under

Article 6 para. 2 of a breach of their presumption of innocence.

      The Court found that it fell to the tax authorities to prove that

the applicants' turnover had not been declared to the tax office;

however, it did not fall to the tax authorities further to prove that

there had been circumstances leading to a reduction of taxes for the

first applicant (dass kein steuermindernder oder aufhebender Tatbestand

vorliegt); such proof was not only extremely difficult, it also

discriminated between tax delinquents and honest tax payers.  In the

present case, the Court found that the first applicant had failed to show

that he had transferred certain amounts to W.;  thus, it did not breach

the presumption of innocence if it was assumed that the moneys had in

fact stayed with him.

      In respect of the second applicant the Federal Court found that it

did not breach the presumption of innocence within the meaning of Article

6 para. 2 of the Convention if, in order to establish culpability of a

company, at least one of its agents had acted culpably.  In the present

case it sufficed if the first applicant, as agent of the second

applicant, had committed tax evasion.

      On the other hand, the Federal Court declared inadmissible the

second applicant's complaints that contrary to Article 6 para. 2 of the

Convention, that applicant had as a company been charged with a criminal

offence, and that it breached the principle "ne bis in idem" to punish

both applicants for the same offence.  The Court found, inter alia, that

these complaints had not previously been raised before the Administrative

Court.

Relevant domestic law

      Section 108 para. 1 (c) of the Zürich Tax Act (Steuergesetz)

envisages the reopening of proceedings if "the competent authority

disregarded relevant facts or evidence of which it knew or should have

known, or otherwise breached important procedural principles" ("wenn die

entscheidende Behörde erhebliche Tatsachen oder Beweismittel, die ihr

bekannt waren oder hätten bekannt sein müssen, ausser acht gelassen oder

in anderer Weise wesentliche Verfahrensgrundsätze verletzt hat").

COMPLAINTS

1.    The applicants complain that in the proceedings before the Zürich

Administrative Court they did not have an oral hearing.  Moreover, they

were not given the opportunity to question the book-keeper W., and the

first applicant himself should have been questioned.  The applicants

further complain that they were not able to put forward certain evidence

and were not properly informed of the charges brought against them.

      In respect of these complaints the applicants rely on Article 6

para. 1 and subparas. 3 (a), (b) and (d) of the Convention.

2.    Under Article 6 para. 2 of the Convention the second applicant

complains of a breach of the presumption of innocence in that it had been

charged as a company with a criminal offence.  Moreover, it had fallen

to the first applicant to prove that he had not used certain moneys for

private purposes.

3.    Apparently under Article 4 of Protocol No. 7 the second applicant

complains of a breach of the principle "ne bis in idem" in that both the

first and the second applicant were punished for the same offence.

4.    The applicants further complain that the Federal Court declared

various complaints inadmissible.  In particular, they contest the Federal

Court's conclusion that in respect of certain complaints they should have

requested the reopening of the proceedings;  reference is made to the

Commission's case-law according to which such requests do not constitute

an effective remedy within the meaning of Article 26 of the Convention.

THE LAW

1.    The applicants complain under Article 6 para. 1 and subparas. 3 (a),

(b), and (d) (Art. 6-1, 6-3-a, 6-3-b, 6-3-d) of the Convention of the

proceedings before the Administrative Court.  Thus, they did not have an

oral hearing; they could not question W.; the first applicant was not

questioned; the applicants were not able to put forward evidence; and

they were not properly informed of the charges brought against them.

      The second applicant further complains under Article 6 para. 2

(Art. 6-2) of the Convention that it had been charged as a company with

a criminal offence; and under Article 4 of Protocol No. 7 (P7-4) of a

breach of the principle "ne bis in idem".

      Under Article 26 (Art. 26) of the Convention the Commission may only

deal with a matter after all domestic remedies have been exhausted

according to the generally recognised rules of international law.

      The Commission notes that the Federal Court in its decisions of

6 February 1991 declared these complaints inadmissible as the applicants

had not complied with the requirement of the exhaustion of cantonal

remedies.  On the one hand, the second applicant had failed to raise

these complaints under Article 6 para. 2 (Art. 6-2) of the Convention and

Article 4 of Protocol No. 7 (P7-4) in the proceedings before the Zürich

Administrative Court.  On the other hand, both applicants had failed to

raise the complaints concerning the unfairness of the proceedings before

the Administrative Court in a request for the reopening of the

proceedings according to Section 108 para. 1 (c) of the Zürich Tax Act.

      According to Article 26 (Art. 26) of the Convention, there is no

exhaustion where a domestic appeal is not admitted because of a

procedural mistake (see No. 6878/75, dec. 6.10.76, D.R. 6 p. 79).

      The applicants have referred to the Commission's case-law according

to which requests for the reopening of proceedings do not as a rule

constitute an effective remedy within the meaning of Article 26 (Art. 26)

of the Convention (see No. 8850/80, dec. 7.10.80, D.R. 22 p. 232).

      In the Commission's opinion, the situation is different if it is

established under domestic law that a request for the reopening of

proceedings in fact constitutes an effective remedy.  In the present

case, the Federal Court indeed found that such a request according to

Section 108 para. 1 (c) of the Zürich Tax Act constituted an effective

remedy to complain about the unfairness of proceedings.  The Court

thereby referred to its published case-law on the matter.  The applicants

have not demonstrated that, contrary to the Federal Court's conclusions,

the remedy at issue was not in fact effective.

      It follows that the applicants have not complied with the condition

as to the exhaustion of domestic remedies, and their application must in

this respect be rejected under Article 27 para. 3 (Art. 27-3) of the

Convention.

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

applicant complains of a breach of the presumption of innocence in that

he had to prove that he had not used certain moneys for private purposes.

      According to the Convention organs' case-law, Article 6 para. 2

(Art. 6-2) of the Convention does not prohibit presumptions of fact or

of law in principle.  Rather, it requires States to confine presumptions

within reasonable limits which take into account the importance of what

is at stake and maintain the rights of the defence (see Eur. Court H.R.,

Salabiaku judgment of 7 October 1988, Series A no. 141, p. 16 para. 29).

      In the present case, the Federal Court found in its decisions of

6 February 1991 that it fell to the tax authorities to prove that the

applicants' income had not been declared to the tax office.  However, it

did not fall to the tax authorities further to prove that there had been

no circumstances leading to a reduction of taxes for the first applicant.

The Court noted that such proof was difficult and also discriminated

between tax delinquents and honest tax payers.  The Federal Court

concluded that the first applicant had failed to show that he had

transferred certain amounts to the book-keeper;  it did not breach the

presumption of innocence if it was assumed that he had actually kept the

amounts at issue.

      Thus, the Federal Court in fact found that it fell to the tax

authorities to establish the applicants' guilt.  However, the Federal

Court also considered that it was up to the applicant, who wished to

claim a reduction of taxes, to demonstrate that he had not used certain

moneys for personal purposes.  In the Commission's opinion, the Federal

Court thus duly took into account the presumption of innocence in

criminal proceedings, while fully maintaining the applicants' rights of

defence.

      This part of the application is therefore manifestly ill-founded

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

3.    The applicants complain inter alia that the Federal Court, which

declared various complaints of their public law appeals inadmissible,

deprived them of their right under Article 6 para. 1 (Art. 6-1) of the

Convention of access to court.  The Commission has examined the remainder

of the applicants' complaints as they have been submitted by them.

However, after considering the case as a whole, the Commission finds that

it does not generally disclose any appearance of a violation of the

rights and freedoms set out in the Convention.  It follows that the

remainder of the application is also manifestly ill-founded within the

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

      For these reasons, the Commission unanimously

      DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the First Chamber        President of the First Chamber

      (M.F. BUQUICCHIO)                        (A. WEITZEL)