VARUL’s tax team, led by partner Helmut Pikmets, successfully represented a fuel retailer OÜ Kõrveküla Tankla at the Constitutional Review Chamber of the Supreme Court of Estonia in a dispute against the Estonian Tax and Customs Board.

In its judgment on 31 January 2012 the Supreme Court declared unconstitutional the provisions of the Liquid Fuel Act (LFA) which obligated the fuel companies to deposit 100 000 EUR as collateral with the Estonian Tax and Customs Board in order to operate in the fuel business.

The Supreme Court’s judgment explained that although the doctrine of legitimate expectation does not mean the legislation in force has to be carved in stone, the law must, nevertheless, not be perfidious towards the subjects of the law. The Supreme Court found that the amendment in dispute has an extremely wide scope, it was unexpected and it invaded the legitimate expectation of the fuel companies in a disproportionate manner even though the amendment itself served a just purpose. The Supreme Court noted that the interference with the concept of free enterprise was especially severe because the amendment would have forced many companies out of business.

The Supreme Court’s judgement can be found here (in Estonian).

Related articles in international media:

Bloomberg: "Estonia’s Supreme Court Partially Annuls Fuel-Trading Rules"

Related articles in Estonian media (in Estonian):

ERR “Supreme Court: Fuel retailers’ deposit requirement for is unconstitutional”
Äripäev ERR “Supreme Court: Fuel retailers’ deposit requirement for is unconstitutional”
Äripäev "State gains 50 million euros by violating the constitution”
Äripäev "Hääl: consequently the tax collection is unconstitutional”
Postimees “Supreme Court declares fuel retailers’ deposit requirement unconstitutional”
Postimees “Tax Board lost the deposit dispute”
Delfi “Supreme Court: Fuel retailers’ deposit requirement for is unconstitutional”