Right to a fair trial (Article 6 of the Convention)
II. RELEVANT DOMESTIC LAW 33. Chapter II of the General Tax Code is entitled "Penalties". Section I of it ("Common Provisions") deals with "tax penalties" and "criminal penalties". A. Tax penalties 1. The system applicable at the material time 34. The system of tax penalties established in the Law of 27 December 1963, which was applied in the instant case, contained a large number of rates, which varied according to the tax concerned, the nature and seriousness of the offence and the procedure adopted for revising the initial assessment. Only three provisions of the General Tax Code need be cited here: Article 1728 "Where a natural or legal person or an association under an obligation to make a tax return or sign some other document indicating the amounts or other information needed for the calculation of the base or for the assessment or payment of one of the taxes, duties, charges, dues or other sums established or collected by the Department of Revenue declares or causes to appear a taxable amount or tax information that is insufficient, inaccurate or incomplete or makes insufficient payment, the amount of tax evaded shall be increased either by the compensation for late payment provided for in Article 1727, in the case of the payments, taxes or charges listed in that Article, or by interest for late payment calculated in the manner laid down in Article 1734. ..." Article 1729 para. 1 "... where it cannot be accepted that the tax debtor acted in good faith, the taxes corresponding to the offences defined in Article 1728 shall be increased by: 30% if the amount of tax evaded does not exceed half the amount of tax actually payable; 50% if the amount of tax evaded is greater than half the tax actually payable; and 100%, irrespective of the amount of the tax evaded, if the tax debtor has been guilty of deception." Article 1731 "As regards turnover and similar taxes, registration fees, stamp duty, land registry fees and taxes similar to those fees and that duty, wages tax, apprenticeship tax, employers ’ contributions to the financing of in-service vocational training and income-tax deductions, the shortcomings, inaccuracies or omissions referred to in Article 1728 shall entail, where it cannot be accepted that the tax debtor acted in good faith, a tax fine equal to double the amount of the surcharges provided for in Article 1729 and, like those surcharges, determined according to the amount of tax evaded. The amount of that tax shall be assessed, where turnover and similar taxes are concerned, by treating separately each of the periods taken into account for the basis of income-tax assessment and, where appropriate, the inspected part of the current financial year." 35. Imprisonment may be ordered in the event of non-payment. Article 1845 bis of the General Tax Code - which became Article L 271 of the Code of Tax Procedure on 1 January 1982 - provides: "Failure to pay the taxes referred to in Article 1844 bis may, notwithstanding any legal challenges or non-contentious applications for remission or reduction, entail imprisonment for default as laid down in Part VI of Book V of the Code of Criminal Procedure. The President of the tribunal de grande instance shall decide, where necessary, to order such imprisonment and shall determine its length. Imprisonment for default shall be enforceable immediately. ..." 2. The current system 36. Law no. 87-502 of 8 July 1987, of later date than the facts of the case, set up a new system which applies to offences common to all taxes and combines two features: interest for late payment at the single rate of 0.75% per month, payable irrespective of any penalty; and specific increases designed to punish the main offences relating to the tax base or the collection of tax. Article 1729 para. 1 of the General Tax Code now reads as follows: "Where the tax return or other document shows a tax base or information used for the assessment of tax that is insufficient, inaccurate or incomplete, the amount of tax due from the taxpayer shall be increased by the interest for late payment ... and by 40% if the taxpayer ’ s bad faith has been established or by 80% if he has been guilty of deception or abuse of process ..." Article 1731 now provides: "1. Any delay in the payment of taxes, duties, charges, dues or any other sums payable to the Department of Revenue or late payment to the Treasury (comptables directs du Trésor) of sums due in respect of the wages tax referred to in Article 1679 or in respect of the deduction at source referred to in Article 1671 B shall entail payment of the interest provided for in Article 1727 and a surcharge of 5% of the amount whose payment has been delayed. 2. Such interest shall be reckoned from the first day of the month following the filing of the return or of the document in which the taxpayer acknowledged his debt or, failing those, receipt of the tax demand issued by the accounting officer. 3. The surcharge provided for in paragraph 1 above shall not apply where the return or other document referred to in Article 1728 that is filed late is accompanied by payment of the sums due. 4. For all sums payable without any prior return being made, interest shall be reckoned from the first day of the month following the one in which the sum should have been paid until the last day of the month of payment." B. Criminal penalties 1. The system applicable at the material time 37. The applicant was prosecuted under two provisions of the General Tax Code, as worded before 1 July 1978: Article 1741 "... anyone who fraudulently evades assessment or payment in whole or in part of the taxes with which this Code is concerned, or attempts to do so, whether by deliberately omitting to make his return within the prescribed time, or by deliberately concealing part of the sums liable to tax, or by arranging his insolvency or obstructing the collection of tax by other subterfuges, or by acting in any other fraudulent manner, shall be liable, independently of the applicable tax penalties, to a fine of between FRF 5,000 and FRF 30,000 and to imprisonment for a term of between one and five years or to only one of those two penalties ... ..." Article 1743 "The penalties provided for in Article 1741 shall also apply to: 1. Anyone who knowingly fails to make entries or cause entries to be made or who makes inaccurate or false entries or causes such entries to be made in the daybook and the balance-sheet book, ... or in the documents which take their place. ..." 2. The current system 38. Article 1741 has been amended only in that the maximum amount of the fine has been raised to FRF 500,000. Article 1743 remains unchanged. PROCEEDINGS BEFORE THE COMMISSION 39. Mr Bendenoun applied to the Commission on 9 September 1986. Relying on his right to a fair trial (Article 6 para. 1 of the Convention) (art. 6-1) in the criminal and administrative courts, he complained that he had not had access to the whole of the customs file, whereas the Revenue had sent to the administrative courts certain evidence against him. He alleged also that there had been a breach of his right to the peaceful enjoyment of his possessions (Article 1 of Protocol No. 1) (P1-1) in that, as a result of the various national decisions, he had had to pay substantial sums to the French State. 40. On 6 July 1990 the Commission declared the complaint relating to the proceedings in the criminal courts inadmissible and the remainder of the application (no. 12547/86) admissible. In its report of 10 December 1992 (made under Article 31) (art. 31), it expressed the opinion by ten votes to two that there had been a breach of Article 6 para. 1 (art. 6-1) and, unanimously, that it was unnecessary to consider the case also under Article 1 of Protocol No. 1 (P1-1). The full text of the Commission ’ s opinion and of the partly dissenting opinion contained in the report is reproduced as an annex to this judgment [*]. FINAL SUBMISSIONS TO THE COURT 41. In their memorial the Government requested the Court to hold "that the provisions of Article 6 (art. 6) of the European Convention ... do not apply to this case; in the alternative, that France has not infringed the principle of equality of arms on account of the facts which gave rise to Mr Bendenoun ’ s application". 42. Counsel for the applicant asked the Court to "(a) hold that there has been a violation of Article 6 para. 1 (art. 6-1) of the Convention in the instant case; (b) hold that the applicant did not have a fair trial; (c) hold, under Article 50 (art. 50) of the Convention and by way of just satisfaction, that the French Government should not seek to recover the tax (tax due and penalties) set out in the Revenue ’ s letter of 23 October 1984 ... and hold that the French Government should repay to the applicant all the sums that he has paid, directly or indirectly, to the French Treasury on the basis of the aforementioned assessments; and (d) hold that, by way of just satisfaction under the head of non-pecuniary damage, the French Government should pay the applicant a sum of FRF 100,000 and, in costs and expenses, a sum of FRF 141,500". AS TO THE LAW I. ALLEGED VIOLATION OF ARTICLE 6 PARA. 1 (art. 6-1) OF THE CONVENTION 43. Mr Bendenoun complained that he had not had a fair trial in the administrative courts in respect of the tax surcharges that had been imposed on him. He relied on Article 6 para. 1 (art. 6-1) of the Convention, which provides: "In the determination of ... any criminal charge against him, everyone is entitled to a fair ... hearing ... by [a] ... tribunal ..." A. Applicability of Article 6 para. 1 (art. 6-1) 44. The applicant and the Commission were agreed in considering that Article 6 para. 1 (art. 6-1) was applicable in the instant case. 45. The Government maintained the opposite. In their submission, the proceedings in issue did not relate to a "criminal charge" as the tax surcharges imposed on Mr Bendenoun bore all the hallmarks of an administrative penalty within the meaning of the Court ’ s case-law (see the Engel and Others v. the Netherlands judgment of 8 June 1976 and the Öztürk v. Germany judgment of 21 February 1984, Series A nos. 22 and 73). This observation applied, firstly, to the classification in French law. The General Tax Code classed the increases in question with the "tax penalties" and not with the "criminal penalties" (see paragraphs 33 and 34 above). The same was true of the nature of the offence. The conduct of which the applicant stood accused was defined as "deception" ("manoeuvres frauduleuses") and not as "evasion" ("soustraction frauduleuse"); the Conseil d ’ État regarded the former offence as a tax offence and the latter as a criminal offence. The nature and degree of severity of the penalty were not such as to suggest a different conclusion. The surcharges were imposed by the Revenue, under the supervision of the administrative courts, and not by a criminal court; they were calculated on the basis of the supplementary tax assessment and were therefore directly proportional to the tax originally evaded; they were not an alternative to a custodial penalty and never entailed any loss of rights; they remained payable by the heirs in the event of the taxpayer ’ s death; and they were not covered by the rules on reoffending, aiding and abetting, consecutive and concurrent sentences or the making of entries in the criminal records. 46. As regards the general aspects of the French system of tax surcharges where the taxpayer has not acted in good faith, the Court considers that, having regard to the large number of offences of the kind referred to in Article 1729 para. 1 of the General Tax Code (see paragraph 34 above), Contracting States must be free to empower the Revenue to prosecute and punish them, even if the surcharges imposed as a penalty are large ones. Such a system is not incompatible with Article 6 (art. 6) of the Convention so long as the taxpayer can bring any such decision affecting him before a court that affords the safeguards of that provision. 47. In the instant case the Court does not underestimate the importance of several of the points raised by the Government. In the light of its case-law, and in particular of the previously cited Öztürk judgment, it notes, however, that four factors point in the opposite direction. In the first place, the offences with which Mr Bendenoun was charged came under Article 1729 para. 1 of the General Tax Code (see paragraph 34 above). That provision covers all citizens in their capacity as taxpayers, and not a given group with a particular status. It lays down certain requirements, to which it attaches penalties in the event of non-compliance. Secondly, the tax surcharges are intended not as pecuniary compensation for damage but essentially as a punishment to deter reoffending. Thirdly, they are imposed under a general rule, whose purpose is both deterrent and punitive. Lastly, in the instant case the surcharges were very substantial, amounting to FRF 422,534 in respect of Mr Bendenoun personally and FRF 570,398 in respect of his company (see paragraph 13 above); and if he failed to pay, he was liable to be committed to prison by the criminal courts (see paragraph 35 above). Having weighed the various aspects of the case, the Court notes the predominance of those which have a criminal connotation. None of them is decisive on its own, but taken together and cumulatively they made the "charge" in issue a "criminal" one within the meaning of Article 6 para. 1 (art. 6-1), which was therefore applicable. 48. This conclusion makes it unnecessary for the Court to have regard to the supplementary tax assessments (see paragraphs 13 and 34 above), on which moreover those who appeared before the Court placed very little emphasis. B. Compliance with Article 6 para. 1 (art. 6-1) 49. The applicant complained of an infringement of the adversarial principle. While the Revenue had carefully chosen, unilaterally, the incriminating documents and produced them to the administrative courts, he himself had not had access to the whole of the file compiled by the customs, which included not only the reports but also the information on which they were based. The failure to hand over a copy, which had repeatedly been sought from the Revenue and the Strasbourg Administrative Court (see paragraphs 18-20 above), had prevented him from identifying exculpating facts and, in particular, from having the anonymous informer who had given rise to the proceedings called as a witness and examined. 50. The Commission reached the same conclusion. Admittedly, it did not ascertain whether the documents in the customs file were such as to prove or disprove Mr Bendenoun ’ s "guilt" and declined to speculate as to what might have been the outcome of the proceedings complained of if the whole of that file had been available to the applicant. It nevertheless made one finding, namely that the applicant could plausibly argue that the documents in question contained information to support his case and, in particular, to contradict the statements made in the reports produced by the Revenue. It also noted that the President of the Administrative Court twice made an unsuccessful request to the Strasbourg public prosecutor to produce the customs file (see paragraphs 18 and 20 above). 51. The Government submitted that, on the contrary, neither at first instance nor on appeal did Mr Bendenoun find himself at a disadvantage vis-à-vis the Revenue. The Strasbourg Administrative Court had ruled on the merits of the case in the light of the parties ’ observations and of the documents in its possession. Being of the view that sufficient information was available to it, it had not made any interlocutory order that the customs file should be produced. The President ’ s approaches to the public prosecutor ’ s office could not take the place of such an order, especially as they did not issue from the trial bench and ultimately amounted to forwarding the requests of counsel for the applicant. The Revenue had annexed to its pleadings in the Administrative Court proceedings four reports of interviews by customs officers - two with Mr Bendenoun and two with former employees of ARTSBY 1881 responsible for invoicing - and the applicant had been able to challenge them. On the other hand, the Revenue had refrained from adducing ten reports containing incriminating evidence, not to mention seven others which provided no useful information on tax matters. The Revenue could not, therefore, be accused of having made a selection to the prejudice of the applicant and of the rights of the defence. As to the concealed invoices that had been seized at his home, Mr Bendenoun had made them out himself and was therefore apprised of their existence and content; furthermore, he had had access to them in the criminal proceedings and had acknowledged that they corresponded to the Revenue ’ s description of them as relating to sales of coins. The Conseil d ’ État had held the proceedings at first instance to have been lawful, and it too had considered it unnecessary to order production of the customs file. It had found the available information to be sufficient, corroborated as it was by the findings of fact made in the criminal proceedings by the Colmar Court of Appeal in its judgments of 13 May 1981 (see paragraph 30 above) - findings that were binding erga omnes. 52. The Court points out, firstly, that the applicant ’ s allegations are relevant only in so far as the proceedings in the administrative courts related to the merits of the accusation of tax evasion which gave rise to the tax surcharges. The Court ’ s task is therefore limited to ascertaining whether there was a failure to respect equality of arms or, more generally, the rights of the defence in so far as the determination of Mr Bendenoun ’ s guilt was concerned. It must be noted further that the documents whose production the applicant complained he had sought in vain were not among those relied on by the tax authorities. In order to establish Mr Bendenoun ’ s guilt, they made use only of four reports (see paragraph 17 above) - mentioned by the Government - in which the applicant acknowledged his customs offences. The complaint therefore relates to documents that were not in the file produced to the administrative courts and were not ones on which the applicant ’ s adversary relied (see, mutatis mutandis, the Schuler-Zgraggen v. Switzerland judgment of 24 June 1993, Series A no. 263, p. 18, para. 52). The Court does not rule out that in such circumstances the concept of a fair trial may nevertheless entail an obligation on the Revenue to agree to supply the litigant with certain documents from the file on him or even with the file in its entirety. However, it is necessary, at the very least, that the person concerned should have given, even if only briefly, specific reasons for his request. Mr Bendenoun sought production in full of a fairly bulky file. The evidence before the Court does not show that he ever put forward any precise argument to support his contention that, notwithstanding his admission of the customs offences and his admissions during the criminal investigation, he could not counter the charge of tax evasion without having a copy of that file. This omission is all the more detrimental to his case as he was aware of the existence and content of most of the documents and he and his counsel had had access to the complete file, at any rate during the criminal investigation (see paragraph 26 above). 53. In conclusion, it does not appear from the information available to the Court that the failure to produce documents infringed the rights of the defence or the principle of equality of arms. There has therefore not been a breach of Article 6 para. 1 (art. 6-1). II. ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL No. 1 (P1-1) 54. In the proceedings before the Commission the applicant also relied on Article 1 of Protocol No. 1 (P1-1). He made no further reference to this in the proceedings before the Court, which does not consider that it must deal with the issue of its own motion.
The Court considered that Article 6 § 1 (right to a fair trial) of the Convention was applicable in the present case. In the first place, the offences with which the applicant was charged came under Article 1729 § 1 of the General Tax Code. That provision covered all citizens in their capacity as taxpayers, and not a given group with a particular status. It laid down certain requirements, to which it attached penalties in the event of non-compliance. Secondly, the tax surcharges were intended not as pecuniary compensation for damage but essentially as a punishment to deter reoffending. Thirdly, they were imposed under a general rule, whose purpose was both deterrent and punitive. Lastly, in the instant case the surcharges were very substantial, amounting to 422,534 French francs in respect of the applicant personally and 570,398 francs in respect of his company; and if he failed to pay, he was liable to be committed to prison by the criminal courts. Having weighed the various aspects of the case, the Court noted the predominance of those which had a criminal connotation. None of them was decisive on its own, but taken together and cumulatively they made the charge in issue a criminal one within the meaning of Article 6 § 1. In this case, it did not appear from the information available to the Court that the failure to produce documents infringed the rights of the defence or the principle of equality of arms. The Court therefore held that there had been no violation of Article 6 § 1 of the Convention