DISSENTING OPINION OF JUDGE PASTOR VILANOVA

(Translation)

1. I voted against the finding that there has been no violation of Article 1 of Protocol No. 1 in this case. Unlike the majority, I consider that the national authorities have severely breached the principle of respect for the applicant company’s property and have upset the fair balance to be struck between the protection of the right of property and the requirements of the general interest.

2. I agree with the majority, however, that the interference with the applicant company’s right to the peaceful enjoyment of its possessions was indisputable, was provided for by law and could be regarded as pursuing an aim that was in the general interest, namely, preventing tax evasion.

3. In contrast, I consider that the domestic courts did not carry out the review required by our Court’s case-law; in other words, they are expected, in the first place, to verify that there exists a reasonable relationship of proportionality between the means employed and the aim pursued by the legislation.

4. The facts of the case are objective and do not lend themselves to discussion. The applicant company owns a food store. The tax authorities stated that, during an inspection carried out on 26 March 2013, they found that sales receipts had not been issued for an approximate total amount of 40 euros (EUR) (179 Romanian lei (RON)). It is not disputed by the parties that this omission would have resulted in a tax shortfall that was equivalent to EUR 0.60 (RON 3). It should be emphasised that this is a simple administrative offence, and that neither the applicant company nor its owner have ever been the subject of criminal prosecution. On account of this offence, the applicant company was ultimately ordered: (a) to pay a fine of EUR 1,900 (RON 8,000); (b) to hand over to the State the full amount in respect of which no sales receipt had been issued (40 euros); and (c) to suspend all commercial activity for three months.

5. Thus, on account of fraud amounting to EUR 0.60, the applicant company was required to pay a fine equivalent to EUR 1,940 (that is, more than 3,200 times the amount defrauded) and, in addition, it was obliged to close its store, containing perishable goods, for three months.

6. In my opinion, the cumulative nature of these clearly punitive penalties undoubtedly represented a disproportionate burden, especially since this had been a single and one-off offence. It is not disputed that the applicant company had been inspected 36 times since 2009, and that the tax authorities had never found a single irregularity. Indeed, one wonders what objective reasons could justify this administrative “zeal”, given the economic nature of the applicant company’s business and its legal status (a private limited liability company).

7. It appears that the applicant company did indeed complain before the domestic courts about the excessive nature of the penalties imposed. The first-instance court (the Constanţa District Court) merely responded that the fine imposed corresponded to the minimum amount set out in the relevant provisions (RON 8,000, or EUR 1,900) and noted that the applicant company had consistently denied that it had committed the offence. The court of appeal (the Constanţa Court of Appeal) emphasised the “educational” and “preventive” nature of the sanctions, the interest protected by the law and the “particularities of the situation”, without giving further details.

8. In my humble view, it should be noted that the domestic courts did nothing other than confirm the sanctions imposed by the tax authorities, through a mechanical application of the law. They never considered imposing more lenient penalties, although this possibility was permitted by the law and the applicant company made requests to that effect (see paragraphs 19, 20, 23 and 24). This inflexibility was confirmed by laconic reasoning which had no regard whatsoever to the proportionality assessment required by the Court. No account was ever taken of the numerous previous favourable inspections, the small amount of the unpaid tax, the nature of the commercial activity affected by the suspension measure, the applicant company’s capacity to recover, the intentional or non-intentional nature of the offence, the fact that the store was the tool of the applicant company’s trade, and so on. Accordingly, I consider that the review carried out by the domestic courts was too narrow to satisfy the requirement of striking a “fair balance”, inherent in the second paragraph of Article 1 of Protocol No. 1 (see Krayeva v. Ukraine , no. 72858/13, § 30, 13 January 2022; Sadocha v. Ukraine , no. 77508/11, § 33, 11 July 2019; Gyrlyan v. Russia , no. 35943/15, § 30, 9 October 2018; and Paulet v. the United Kingdom , no. 6219/08, § 68, 13 May 2014).

9. Over and above this “procedural approach”, totally absent from the domestic courts’ reasoning, I also consider that the accrual of imposed penalties was disproportionate in view of the gravity of the offence and/or the minimal harm caused to the tax authorities (see Grifhorst v. France , no. 28336/02, § 105, 26 February 2009; Ismayilov v. Russia , no. 30352/03, § 38, 6 November 2008; and Mamidakis v. Greece , no. 35533/04, §§ 47 ‑ 48, 11 January 2007). In Mamidakis v. Greece , for example, a fine corresponding to “ten times the taxes imposed on the subject-matter of the offence” (§ 47) was found to be disproportionate by the Court. In the present case, the multiplication factor was more than 3,200. Furthermore, I am not aware of a comparative-law situation where an administrative offence such as that in issue in the present case can give rise to suspension of economic activity for such a long period.

10. I note in passing that the Romanian legislation was amended in 2015 and that suspension of the offender’s economic activities is now possible only in the event of a repeat offence. This proves, if proof were needed, the excessive nature of the previous legislation.

11. For their part, the majority argue that the domestic courts did not exceed their margin of appreciation and that the penalties imposed on the applicant company were proportionate and temporary in nature, especially as it was not required to file for bankruptcy (see § 53 of the judgment). The fact remains, however, that the applicant company has explained that it received a loan from its sole shareholder in order to survive. This statement has not been contested by the respondent Government and, in consequence, must be considered truthful. With all due respect, the majority’s argument thus seems moot, since the applicant company’s survival does not detract from the excessive nature of the penalties imposed. Furthermore, I consider that to link a finding of a violation of Article 1 of Protocol No. 1 to a company’s bankruptcy is not only extreme, but also unprecedented in the Court’s case ‑ law. Lastly, the majority rely on the case of DELTA PEKÁRNY a.s. v. the Czech Republic (no. 97/11, 2 October 2014) to justify the proportionality of the interference (see § 54 of the judgment). In my view, however, that judgment is not relevant, given that the company Delta Pekárny a.s. was never obliged to close its offices and that the circumstances of that case (partial obstruction of an inspection of the company’s premises by the Czech Competition Authority) were completely different to those of the present case.

12. To conclude, I consider that this case raises a new issue for the Court, namely whether it is reasonable for the tax authorities to be entitled to suspend a company’s economic activity for having committed a minor administrative offence. Moreover, it also raises a methodological question. In practice, there appear to be two lines of case-law in this type of dispute: a procedural approach (see paragraph 8 above) and a substantive approach (see paragraph 9 above). Should one be given priority over the other? If so, in what circumstances? Can the two approaches be combined? It seems to me that clarification of the current case-law is needed.