TAIWAN:Tai Ji Men case: A disappointing decision of the Taichung High Administrative Court
by Gau Ding-Yi
About Article 28 of Taiwan’s Tax Collection Act amended in 2021 to make it less favorable to taxpayers but the August 2, 2024 Taichung High Administrative Court applied the amendment retroactively to unjustly hit Tai Ji Men.
Bitter Winter (26.08.2024) – The Taichung High Administrative Court verdict of August 2, 2024, is the latest chapter in the case in which Taiwan’s National Taxation Bureau (NTB) of the Central Area erroneously imposed against Tai Ji Men a tax bill for the year 1992. Tai Ji Men had asked for a tax refund in accordance with Article 28 of the Tax Collection Act, but its demand was rejected.
We all know that in the Tai Ji Men case Prosecutor Hou Kuan-Jen violated the law and abused his power, and then he forged false evidence and fake tax bills. He also asked the NTB to cooperate with the investigation to issue wrong tax bills. The NTB of the Central Area issued a total of five tax bills for the years 1991, 1992, 1993, 1994, and 1995 (a tax bill for 1996 was issued by a different branch of the NTB). The Supreme Administrative Court in 2006 made a wrong decision about the 1992 tax bill, before the criminal case was decided by the Supreme Court in 2007 by clarifying that Tai Ji Men had never been guilty of tax evasion, and before the facts were determined.
For the years other than 1992, Tai Ji Men won the cases all the way or went back and forth several times. Finally, in the Supreme Administrative Court’s Judgment No. 422 in 2018, it was clearly determined that Tai Ji Men is a menpai of Qigong, martial arts, and self-cultivation, not a “cram school” to which pupils pay tuition fees, as the NTB had argued to impose its tax bills. The case was thus sent back to Taichung High Administrative Court and was judged by Judge Lin Jing-Wen.
When Judge Lin Jing-Wen was in court, she clearly told the NTB that she must be bound by the opinions of the judges of the Supreme Administrative Court. It was impossible for her to reconstruct facts in a way that would go against the essential findings of the Supreme Court’s Judgment No. 422 in 2018, she said. The NTB knew the judge’s position, so after they went back to discuss it, they were finally willing to admit that Tai Ji Men was not a cram school. They examined other menpai of qigong, martial arts, and self-cultivation like Tai Ji Men to ascertain whether there were any similar situations or tax issues. It turned out that there was no tax issue at all, so they agreed to correct the tax bills for the years other than 1992 to zero.
For the year 1992, however, the NTB maintained that the 2006 decision was final, and no different disposition was possible.
In the case decided on August 2, Tai Ji Men relied on Article 28 of the Tax Collection Act. What is this article all about? It states that when a tax agency makes a mistake in applying the law or in determining facts, it must refund the overpaid taxes at the request of the taxpayers.
In fact, this article has been revised several times. Before the article was revised in 2021, there was no time limit for the taxpayers’ right to claim tax refunds due to government errors. In 2021, the Ministry of Finance took advantage of the numerical majority of the ruling party’s legislators, and forcibly pushed through an amendment to Article 28 of the Tax Collection Act, shortening the taxpayers’ right to claim a refund to 15 years. And then they added an unprecedented and unconstitutional clause. That is, after the tax cases have been judged and determined by a court, taxpayers can no longer invoke Article 28 of the Tax Collection Act to request a tax refund.
This is very unreasonable. Why? In the provisions of our country’s Administrative Litigation Act, there is a 5-year limit on retrials. That is to say, if new facts and new evidence are discovered after the judgment is finalized, you will have no way to request the court for a retrial after five years have passed. However, this restriction only exists in administrative litigation. There is no such restriction in criminal matters.
If we take the Tai Ji Men case as an example, it has lasted for more than twenty years, and tax bills were also issued more than fifteen years ago. A lot of evidence has emerged later. The NTB itself has admitted that Tai Ji Men is not a cram school, at least it was not so in years other than 1992, but such new facts and new evidence cannot reopen this administrative lawsuit due to the five-year limitation for retrial. However, Article 28 of the Tax Collection Act did not have such a restriction prior to the amendment.
When the NTB first rejected Tai Ji Men’s request for a reconsideration of the case, item 3 of the amendment to Article 28 of the Tax Collection Act had not yet been added. So, the limitation introduced by the amendment, which we regard as unreasonable, was at any rate not yet in force.
Let us come back to the August 2, 2024, decision. It is a pity that the court obviously used the most restrictive interpretation and stated that in cases that had been determined by court decisions even before the 2021 amendment, taxpayers cannot invoke Article 28 of the Tax Collection Act to ask for a refund. I believe this has clearly violated the original intention of the legislators and has also caused great damage to the taxpayers’ rights and interests.
What is more, the presiding judge of the August 2, 2024, case was the same judge who had made the No. 228 judgment in 2005 against Tai Ji Men, Later, the Supreme Administrative Court reversed his judgment. It was clear that the judge knew that his wrong judgment had been rejected by the Supreme Administrative Court. How could he make this ill-founded judgment again?
I believe that history serves as a mirror. I trust that the judge who dared to make such a ruling should receive himself the appropriate evaluation or judgment. We hope that the Supreme Administrative Court can take the people’s perspective into account regarding this internationally noted case and render a judgment that will be just and respects taxpayers’ rights, thereby restoring the innocence of Tai Ji Men’s Shifu (Grand Master) and dizi (disciples).
Tai Ji Men dizi (disciples) demonstrating outside Taichung High Administrative Court on August 2, 2024.