Source: Etco | Legal Consultant | News, May 11, 2010

The new CPC rules in relation to appeals will “correct an injustice” that happens to the taxpayer, preventing the tax matter from being rejected without analysis by the Superior Court of Justice and the Supreme Federal Court. The statement was made by Minister Luiz Fux, of the Superior Court of Justice, who chairs the committee of jurists that prepares the preliminary draft of the new Code of Civil Procedure. He participated in the Seminar on Competitive Tax Imbalance and the Brazilian Constitution, promoted by the Etco Institute, in Brasília, on Monday (10/5).

Fux understands that the Federal Constitution invaded Tax Law. Half of the National Tax Code is found in the Constitution, which generates the necessary duplication of resources, the special for the STJ and the extraordinary for the STF. For the minister, “many times this is highly harmful, because the STJ understands that the matter is constitutional and that it should not analyze the appeal, while the STF understands that it is infraconstitutional matter and does not know about the appeal. And the party does not have the encouragement to receive an answer on the last door she has to knock on, which is Justice ”.

“The new Civil Procedure Code seeks to redress this injustice. The CPC rule is that if the STJ understands that the appeal concerns constitutional matters, the court must send the case to the STF. And if the Supreme Court understands that the appeal deals with an infraconstitutional matter, it must refer to the STJ so as not to render this last effort on the part useless, which is the extraordinary appeal ”, explained the minister.

Considering that the Constitution is extensive in tax matters, Luiz Fux believes that the most important principle for the sector is the maximum effectiveness of constitutional rules. However, he says that he always had “a lot of difficulty understanding how a decree (from the Federal Revenue Service) comes into force the next day, a circular letter from the INSS with retroactive date, whereas even today the Federal Constitution has difficulty imposing itself”. Article 146-A of the Federal Constitution, instituted by EC 42/03, provides for a complementary law to combat competitive imbalances, but this has not yet happened.

The minister recalled that Brazil is a democratic state of law and one of the foundations of the Federative Republic is free enterprise, established by the Federal Constitution itself (article 1). For him, free enterprise comes from the will that entrepreneurs have to compete, but it cannot happen without obedience to legality. For him, this is an activity that needs to be regulated. "State interference in the economic domain is necessary," said Fux, explaining that this occurs through a different legal regime for different legal entities. The principle of equality is that it makes it possible for some to be immune and others to be taxed, while the principle of isonomy ensures that people in the same tax situation are not treated differently.

Based on these principles, the minister said that the state must act not only repressively, but preventively, to institute taxes in order to avoid unfair competition. Fux does not believe that ordinary laws may emerge that contradict the complementary law provided for in Article 146-A, as some tax experts and businessmen fear. However, he affirms that "only those articles that gravitate in the Constitution are not enough for us, judges, through judicial decisions, to be able to decide if there is an imbalance of competition in a cause". The minister recalled that to judge a certain cause, he determined Cade's intervention as amicus curiae, so that he could offer more elements on the issue. "We are creating (at CPC) the figure of amicus curiae, which can assist the magistrate in his task of resolving conflicts with this complexity", he announced.