REPUBLIC OF TURKEY

CONSTITUTIONAL COURT

FIRST SECTION

JUDGMENT

E.T.Y.İ. A.Ş.

(Application no. 2013/596)

FIRST SECTION

JUDGMENT

I.               SUBJECT-MATTER OF THE APPLICATION

1.         The applicant alleging that the action for annulment it filed regarding the value added tax (VAT) levied and the tax loss fine was dismissed, therefore their rights defined in Articles 10, 36 and 73 of the Constitution were violated. The applicant requested that the violation be determined and that a decision be issued on the compensation of the pecuniary damages which they incurred due to the VAT levied with the tax loss fine.

II.               APPLICATION PROCESS

2.         The application was directly lodged with the Constitutional Court on 18/1/2013. As a result of the preliminary examination that was carried out in terms of administrative aspects, it was determined that there was no situation which prevented the submission of the applications to the Commission.

3.         It was decided by the Second Commission of the First Section on 17/6/2013 that the file be sent to the Section in order for the examination of admissibility to be conducted by the Section.

4.         It was decided by the Section during the meeting held on 10/10/2013 that the examinations for admissibility and merits be conducted together and a copy be sent to the Ministry of Justice for its opinion.

5.         The facts and cases, which are the subject matter of the application, and a copy of the application were sent to the Ministry of Justice for its opinion. The opinion letter of the Ministry of Justice on 18/11/2013 was notified to the counsel of the applicant and the counsel of the applicant made its counter-opinions through the letter dated 4/12/2013.

III.               THE FACTS

A.               The Circumstances of the Case

6.         As expressed in the application form and the annexes thereof, the facts are summarized as follows:

7.         In accordance with the tax examination report dated ... and numbered ... arranged as a result of the examination of the accounts of the applicant for the years 2002, 2003, 2004 and 2005, on the ground that it did not calculate VAT over the invoice amounts that it paid with regard to the advertisement and publicity services abroad which it commissioned to the company named ... with whom it concluded a management agreement with regard to the golf course, hotel and holiday resort that it operated and did not submit the VAT statements numbered 2 in its capacity as the responsible party, a VAT of ... TRY and a tax loss fine of ... TRY were levied by transfer over this amount.

8.         The action which was filed by the applicant with the request for the VAT and tax fine levied on was dismissed with the decision of the ... Tax Court dated 22/10/2008 and numbered... . The decision was issued with the majority of votes and the justification of the decision is as follows:

“From the evaluation of the aforementioned legal provisions together with the incident; it is clear that the advertisement and publicity services which the plaintiff institution procured abroad are directly related to the continuity and profitability of its commercial activities in Turkey, that this relation is ensured by increasing the number of clients benefiting from hotel management services which are the subject of activity and that consequently, the service has been utilized and it is concluded that the fact that these advertisement and publicity activities are carried out for potential clients abroad will not change the fact that the service provided is utilized in Turkey as mentioned.

In this case, as it is necessary to accept that the advertisement and marketing services which the plaintiff firm procured abroad are utilized in Turkey, there is no inappropriateness as regards the levies of fined value added tax made by transfer by the defendant administration on behalf of the plaintiff company which did not calculate value added tax and did not submit any statement to the tax office under which it was affiliated through the statement numbered 2 over the invoice amounts regarding these services in the capacity of the responsible party.”

9.         The decision was appealed by the applicant and the request for appeal was dismissed and the decision was approved through the decision of the ... Chamber of the Council of State dated 6/10/2011 and numbered... .

10.     The request for correction filed against this decision was also dismissed with the decision of the same Chamber dated 26/11/2012 and numbered ... .

11.     The decision was notified to the applicant on 4/1/2013.

B.               Relevant Law

12.     Article 30 of the Law of Civil Procedure No.6100 of 12/1/2011 with the side heading ''Principle of economy in procedure'' is as follows:

       "The judge is liable to ensure that the trial is carried out in a reasonable amount of time and in an orderly fashion and unnecessary expenditures are not made."

13.     Article 29 of the Law on Tax Procedure No.213l of 4/1/1961 with the side heading ''Tax levy by transfer'' is as follows:

“Tax levy by transfer is the levy of the tax that will be taken on grounds of a basis or a difference in the basis the amount of which is determined based on books, records and documents which are related to the tax and which have emerged after a tax is levied in any which way, or on legal criteria.

 Provisions that are in their special laws concerning levy by transfer shall be reserved.”

14.     Article 341 of the same Law with the side heading "Tax loss" is as follows:

“Tax loss shall mean the failure to accrue the tax on time or accrual thereof deficiently as a result of the failure of the tax payer or the liable in timely performance of their duties in relation to taxation or their performance of such duties deficiently.

Causing a short come of accrual of the tax or unrightfully return thereof for personal, civil circumstances or with unrealistic declarations about the family status or in similar ways shall also have the consequence of tax loss.

Accrual of the tax later in cases written in the above clauses, or the completion thereof or the taking back of the unrightfully return shall not constitute an impediment against the application of penalty.”

15.     Article 6 of the Law No.3065 of 25/10/1984 with the side heading ''Performing actions in Turkey'' is as follows:

“Performing actions in Turkey shall mean:

 a) The presence of goods in Turkey at the time of delivery,

 b) (Amended: 27/1/2000 - 4503/3 art.) The performance of the service in Turkey or the utilization of the service in Turkey.

16.     Article 9(1) of the same Law with the side heading ''Tax responsible" is as follows:

“In cases where the taxpayer does not have any residence, office, legal headquarters and business headquarters in Turkey and in other cases where deemed necessary, the Ministry of Finance can hold responsible those who are party to the actions that are subject to tax for the payment of tax in order to keep the tax receivable secure.”

IV.               EXAMINATION AND GROUNDS

17.     The individual application of the applicant (App No: 2013/596 on 18/1/2013) was examined during the session held by the court on  8/5/2014 and the following were ordered and adjudged:

A.               The Applicants' Allegations

18.     By stating that it concluded a management agreement with the company named ... with regard to the golf course, hotel and holiday resort which it operated and that it left the management of the enterprise to this company under certain conditions, that the publicity and marketing activities of the specified facilities abroad were also made by this company, that a total expense of ... TRY was made for publicity and marketing abroad in the period from June 2002 to December 2005, that in the tax examination report arranged on the applicant company, ... TRY for VAT and ... TRY for tax loss fine over this amount were levied on the ground that the service charge which was stated have been paid to the company named ... fell under the subject of VAT and the VAT statements numbered 2 were not submitted by the applicant in its capacity as the responsible party, the action filed with request for the cancellation of VAT and the tax fine levied on it was dismissed through the decision of the ... Tax Court and the decision became final by passing through legal remedies, that although there were circulars, administrative decisions and the Court case-law showing that the service which was the subject of the action was not subject to VAT, VAT and tax fine were levied on it, that even if it was accepted that the levied VAT was correct, the tax paid because of this service would be made the subject of reduction in the VAT statement numbered 1 and that the VAT amount paid in this way would not change, that for this reason, the imposed tax fine was not appropriate, that however, VAT and tax loss fine were levied and also that the action filed for the cancellation of the mentioned acts was dismissed by ignoring all these mentioned matters were contrary to the principle of equality and the right to a fair trial, that tax fine was created mutatis mutandis and that the conducted trial exceeded reasonable period, the applicant company claimed that its rights defined in Articles 10, 36 and 73 were violated and requested that a decision be issued for the compensation of the VAT and tax loss fine which were unrightfully levied together with its interest from the collection thereof.     

B.               The Constitutional Court’s Assessment

19.     The Constitutional Court is not bound by the legal qualification of the facts made by the applicant. It is seen that the applicant is complaining about the result of the decision issued in the action that it filed and about the failure to conclude the trial within a reasonable time. For this reason, the claim of the applicant to the effect that the trial period is not reasonable as well as the claims that it has asserted by establishing a connection with the rights defined in Articles 10 and 73 of the Constitution have been evaluated within the scope of its claim in relation to the violation of the right to a fair trial.

          1. Admissibility

a. Competence ratione materiae

20.     The applicant asserted that its right defined under Article 36 of the Constitution was violated by stating that the case which it filed with the request for the cancellation of the act of levying the principle tax and tax fine together was not concluded within a reasonable time and that the decision of the court was not fair.

21.     According to Article 148(3) of the Constitution and Article 45(1) of the Law No.6216, in order for the merits of an individual application made to the Constitutional Court to be examined, the right, which is claimed to have been intervened in by public power, must fall within the scope of the European Convention on Human Rights (Convention) and the additional protocols to which Turkey is a party of, in addition to it being guaranteed in the Constitution. In other words, it is not possible to decide on the admissibility of an application which contains a claim of violation of a right that is outside the common field of protection of the Constitution and the Convention (App. No: 2012/1049, 26/3/2013, § 18).

22.      Article 36(1) of the Constitution with the side heading "Freedom to claim rights" is as follows:

      "Everyone has the right of litigation either as plaintiff or defendant and the right to a fair trial before the courts through legitimate means and procedures.-"

23.     Article 6(1) of the Convention with the side heading “Right to a fair trial”is as follows:

       "In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law." Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.”

24.      In Article 36(1) of the Constitution, it is stated that everyone has the right to make claims and defend themselves either as plaintiff or defendant and the right to a fair trial before judicial bodies through the use of legitimate ways and means. The phrase “fair trial” contained in the Article was added to the Constitution through the Law on the Amendment of Some Articles of the Constitution of the Republic of Turkey No.4709 of 3/10/2001. Since the scope of the right to a fair trial is not regulated within the Constitution, the scope and content of this right needs to be determined within the framework of Article 6 of the Convention with the side heading “Right to a fair trial”.

25.     It is indicated under Article 6 of the ECHR which regulates the right to a fair trial that the rights and principles with regard to a fair trial are applicable during the conclusion on the merits of ''disputes pertaining to civil rights and obligations'' and ''a criminal charge'', the scope of the right is thus restricted to these subjects. It is understood that in order to be able to lodge an individual application with the justification that the right to claim rights has been violated, either the applicant needs to be the party of a dispute pertaining to his/her civil rights and obligations or a decision needs to have been delivered regarding a criminal charge pertaining to the applicant. Therefore, applications based on the claim that the right to a fair trial has been violated that are outside the circumstances that have been referred to cannot be the subject of an individual application as they would be outside the scope of the Constitution and the ECHR (App. No: 2012/917, 16/4/2013, § 21).

26.     In this direction, given the case-law of the European Court of Human Rights (ECtHR) specifying the jurisdiction thereof in terms of subject within the context of Article 6 of the Convention, by considering the fact that tax matters form part of the hard core of public prerogatives as the relation between the taxpayer and the predominant society has a public nature, the Court accepts that tax disputes remain outside the scope of “civil rights and obligations” even if they necessarily create pecuniary effects for taxpayers (Ferrazzini v. Italy [BD], App. No: 44759/98, 12/6/2001, §29). However, the ECtHR, in its Bendenoun v. France decision, by considering that the law which regulates tax fines covered not a certain group with a special status, but all citizens who are taxpayers, that additional tax obligations did not serve the purpose of a monetary compensation in return for a damage, but served the purpose of being a sanction which deterred committing crimes again, that these were imposed according to a general rule which had the purpose of both deterrence and punishment, that the amount was a highly significant amount both for the applicant himself and for his company and that in the event that the applicant did not pay the prescribed amount, he could have been sentenced to imprisonment by criminal courts, considered this dispute within the scope of “criminal charge” and referred to the fact that Article 6 of the Convention could be applicable to this dispute (Bendenoun v. France, App. No: 12547/86, 24/2/1994, §47). On the other hand, the ECtHR, in its Jussila v. Finland decision, accepted that the criminal nature of the offense was sufficient to render Article 6 applicable even if the amount of the tax fine was low (Jussila v. Finland [BD], App. No:73053/01, 23/11/2006, §38).  In its Mieg de Boofzheim v. France decision, it was determined that purely "the interest for late payment" which required the taxpayer to act in good faith did not constitute "a criminal charge" within the scope of Article 6, that for this reason, Article 6 was not applicable (Mieg de Boofzheim v. France, App. No: 52938/99, 3/12/2002, (s.d.)). On the other hand, in its Georgiou v. the United Kingdom decision, the ECtHR which examined the claim as to the effect that the right to a fair trial of the applicant was violated in the case filed together against the principal VAT and the relevant tax evasion fine decided that the evasion fine consisted of the criminal charge, that given the quality of the incident, it was difficult to separate the parts related to the criminal charge from the parts related to the principal tax for which no criminal charge was present and that for this reason, it was compulsory that the evaluation to be made on the application would be in a way to cover the tax levy (Georgiou v. the United Kingdom, App. No: 40042/98, 16/5/2000). Through this decision, the ECtHR states that the right to a fair trial needs to apply to the entire case in the event that a case is filed together against principal tax and tax fines.

27.     As a result of the determinations specified above, it was stated by the Constitutional Court that rights and principles with regard to the right to a fair trial stipulated in Article 6 of the Convention were applicable during the conclusion on the merits of ''disputes pertaining to civil rights and obligations'' and ''a criminal charge'' and the scope of the right was restricted to these subjects. In the decisions of the Constitutional Court, as the common field of protection of the Constitution and the Convention was taken as the basis for determining whether or not a claim of violation fell within the jurisdiction of the Constitutional Court in terms of subject, it was accepted that the applications based on the claim of violation of the right to a fair trial would remain outside the scope of the common field of protection of the Constitution and the Convention and that therefore, it would not be made the subject of an individual application except for the cases where the applicant was a party to a dispute relevant to civil rights and obligations or where a decision was issued on a criminal charge towards the applicant. In the case-law of the ECtHR, it is understood that the fact that the disputes which are made the subject of the application in terms of principal tax are disputes whose public nature is predominant between the taxpayer and the state party which is the tax creditor and that it is accepted that they are included within the hard core of the public authority of state parties play a role in reaching the conclusion that the tax disputes which do not have any criminal nature will remain outside the scope of guarantee of Article 6. 

28.     However, tax disputes in our legal system are settled within the administrative judiciary branch, not within a separate judiciary branch and, on the condition that provisions in special laws are reserved, within the framework of a trial procedure which is subject to the same trial procedure with other administrative disputes, in general, in accordance with the Law of Civil Procedure No.2577 of 6/1/1982.  Moreover, in the event that a behavior which is contrary to the liability of taxation is determined, the tax levied and the tax fine prescribed by the relevant administration are notified to the taxpayer within the scope of the same notice, the tax levied and the tax fines imposed are made the subject of a case within the same trial procedure, this organic link between principal tax and tax fine sustains its existence also in the phase of the collection of tax claim except for anomalous situations such as irregularity fines. In addition to this, in the event that a case filed against the actions of levy carried out ex officio or by transfer is partly or completely dismissed, in accordance with the relevant legislation, it is prescribed that the default interest to be calculated increases in direct proportion to the period of the case (see Article 112(3) of the Law No.213, Article 28(5) of the Law No.2577), it is understood that with this aspect, the right to trial within a reasonable time which is stipulated among the guaranteed provisions included within the right to a fair trial can play a functional role also in terms of the disputes which are related to principal tax and that with this aspect, purely tax disputes which are accepted as a relation whose public nature is mainly predominant is a relation which has important implications in the field of civil rights and obligations including in particular property right and within the specified determinations, it is concluded that tax disputes need to be evaluated within the scope of guarantee with regard to the right to a fair trial. In this case, claims of violation pertaining to the dispute that is the subject of the application, fall within the jurisdiction of the Constitutional Court in terms of subject.

29.     Due to the fact that the other matters that have been made the subject of complaint in the application bear different qualities in terms of the other admissibility criteria, the examination pertaining to each complaint needs to be conducted separately.

b. The Claim that the Trial is Not Fair

30.     The applicant claimed that the right to a fair trial was violated by stating that although there were circulars, administrative decisions and the court case-law showing that the service which was the subject of the action was not subject to VAT, that VAT and tax fine were levied on it, that even if it was accepted that the levied VAT was correct, the tax paid because of this service would be made the subject of reduction in the VAT statement numbered 1 and that the VAT amount paid in this way would not change, that for this reason, the imposed tax fine was not appropriate, that however, VAT and tax loss fine were levied and also that the action filed for the cancellation of the mentioned acts was dismissed by ignoring all these mentioned matters.

31.     In its opinion, the Ministry of Justice stated that as a rule, the material and legal mistakes which were made by local courts could only be made the subject of an individual application to the extent that the violation of the rights and freedoms which were guaranteed by the ECHR and the Constitution was in question, that even if Article 6 of the ECHR and Article 36 of the Constitution guaranteed the right to a fair trial, subjects such as the admissibility of information-documents or the evaluation of the legislation were primarily relevant to local courts, that the proving of the incidents in the action which was the subject matter of an individual application, the interpretation and application of legal rules, the admissibility and evaluation of evidence during trial and whether or not the remedy proposed by the courts of instance for a personal dispute was fair in terms of merits would not be subjected to evaluation in the examination of an individual application, that the tax imposed on the applicant was VAT and that the court of first instance decided as to the effect that the imposed tax was compliant with the legislation by exercising its discretion in the implementation of the relevant legal provisions, that the aforementioned matters needed to be taken into consideration in the examination of the complaints of the applicant in terms of admissibility and merits.

32.     In its petition of answer, the applicant stated that its rightful application needed to be admitted.

33.     Article 48(2) of the Law on the Establishment and Trial Procedures of the Constitutional Court No.6216 of 30/3/2011 with the side heading ''The conditions and evaluation of admissibility of individual applications'' is as follows:

      “The Court can decide that applications which bear no importance as to the application and interpretation of the Constitution or regarding the definition of the borders of basic rights and freedoms and whereby the applicant has incurred no significant damages and the applications that are expressly bereft of any grounds are inadmissible.”

34.     Article 49(6) of the Law No.6216 with the side heading ''Examination as regards the merits" is as follows:

"Examination of the sections of individual applications regarding a court decision shall be limited to whether or not a basic right has been violated and the determination of how such violation can be remedied. Examination on issues that have to be observed in legal remedies shall not be performed.

35.     In accordance with the mentioned rules, proving the incidents that are contained within the case that is the subject of the individual application, interpretation and application of the rules of law, the admissibility and evaluation of evidence during the trial and whether or not a solution brought by courts of instance to an personal dispute is fair from a merits point of view shall not be subjected to assessment during the individual application examination. As long as the rights and freedoms stipulated in the Constitution are not violated and unless they contain any obvious arbitrariness, material and legal mistakes in decisions of courts of instance cannot be handled in the examination of an individual application either. In this framework, unless an evident discretionary mistake or an obvious arbitrariness is present in the appreciation of the evidence by the courts of instance, the Constitutional Court cannot intervene in this appreciation (App. No: 2012/1027, 12/2/2013, § 26).

36.     In the incident which is the subject matter of the application, it is understood that it was asserted that in the tax examination report drawn up as a result of the examination of the accounts of the applicant company for the years 2002, 2003, 2004 and 2005, although the advertisement and marketing services which were procured abroad to ... company which was one of the partners of the applicant were utilized in Turkey, value added taxes with a tax loss fine were imposed by transfer on the ground that VAT was not calculated over the invoice amounts in relation to the services in question and was not declared through the statement numbered 2 in the capacity as the responsible party, that in the action filed by the applicant company; it was not allowed to make use of conciliation before assessment, that the advertisement and publicity services in question were utilized abroad, that therefore, they were not subject to tax in accordance with subparagraph (b) of Article 6 Law No.3065, that moreover, the fined taxes imposed upon evaluations made by the examination personnel to the contrary although there were various advanced rulings published in this direction and it was requested that it be lifted.

37.     ... the Tax Court, in its decision approved by the Council of State, dismissed the action on the ground that by considering together Articles 1, 8 and 9 of the Law No.3065, the advertisement and marketing services which were procured abroad were directly related to the continuity and profitability of commercial activities in Turkey, that this relation was ensured by increasing the number of clients benefiting from hotel management services which were the subject of activity and that consequently, the service was utilized in Turkey, that there was no inexactness in the fined VAT levies performed by transfer due to the fact that the applicant company did not calculate VAT over the invoice amounts in relation to these services and did not make any declaration to the tax office under which it was affiliated through the statement numbered 2.

38.     It is understood that the claims of the applicant company are in relation to the interpretation of legislation and the result of the trial in terms of merits.

39.      The right to a fair trial provides the individuals with the opportunity to review whether or not the trial process and procedure are fair, rather than the decisions delivered at the end of the case. For this reason, in order for the complaints as regards a fair trial to be examined in an individual application, the applicant needs to submit information or a document with regard to a deficiency, negligence or evident discretionary mistake or obvious arbitrariness which is not evaluated as for the elements that result in the creation of the court decision such as the fact that the rights of the applicant are not respected during the trial, that in this context, s/he is not informed about the evidence and opinions which the opposite party presents during the trial or could not find the opportunity to object against them in an effective manner, that s/he could not present his/her own evidence and claims or that his/her claims as regards the settlement of the dispute have not been heard by the court of instance or that the decision does not have any justification. In the present incident, it is understood that the applicant company did not submit any information or document as to the effect that the trial process was contrary to fairness, which on the contrary, it mentioned the complaint as to the effect that the content of the decision issued as a result of the trial was not fair.

40.     Due to the reasons explained, as it is understood that the claims asserted by the applicant have the quality of being a legal remedy complaint, that the decisions of the court of instance did not include any evident discretionary mistake or obvious arbitrariness, it needs to be decided that this part of the application is inadmissible as it is "manifestly ill-founded".

            c. The Claim that the Trial Period is not Reasonable

41.     The action which is the subject matter of the application was filed prior to the date of 23/9/2012 which is the date of initiation of the venue of the Constitutional Court in terms of time and as it is understood that it is pending as of the date of application, examination of the application is within the venue of the Constitutional Court in terms of time. Moreover, although all of the administrative and judicial application remedies prescribed in the law for the act, action or negligence which is the basis of the claim of violation needs to be exhausted before lodging an individual application, as it is understood that there is no administrative or judicial application remedy which has a preventive effect against the prolongation of the trial or which has a quality of determining and compensating the damages which occur as a result of the failure to conclude the trial in a reasonable period, the application has a quality of admissibility in terms of the exhaustion of legal remedies   (App. No: 2012/13, 2/7/2013, § 21-30).

42.     Due to the reasons explained, it should be decided that the application which is not manifestly ill-founded and where no other reason is deemed to exist to require a decision on its inadmissibility is admissible.

2. Merits

43.     The applicant claimed that the right to trial within a reasonable time was violated by stating that the administrative action that it had filed was concluded after a period which was longer than five years.

44.     Article 141(4) of the Constitution with the side heading ''Publicity of hearings and the need for verdicts to be justified'' is as follows:

      "It is the duty of the judiciary to conclude cases with minimum cost and as soon as possible."

45.     The sub-principles and rights, which stem from the text of the Convention and the judgments of the ECtHR and are concrete manifestations of the right to a fair trial, are also, in principle, elements of the right to a fair trial stipulated under Article 36 of the Constitution. In many decisions where it carried out the examination as per Article 36 of the Constitution, the Constitutional Court refers, within the scope of Article 36 of the Constitution, to the principles and rights that are either contained within the wording of the Convention or incorporated in the right to a fair trial through the case law of the ECtHR by interpreting the relevant provision in the light of Article 6 of the Convention and the case law of the ECtHR (App. No: 2012/13, 2/7/2013, § 38).

46.     The right to trial within a reasonable time which constitutes the basis of the present application also falls into the scope of the right to a fair trial in accordance with the aforementioned principles and moreover, Article 141 of the Constitution which stipulates that the conclusion of cases with minimum expense and as soon as possible is the duty of the judiciary should also be taken into account in the evaluation of the right to trial within a reasonable time as per the principle of holism of the Constitution (App. No: 2012/13, 2/7/2013, § 39).

47.     As the aim of the right to trial within a reasonable time is the protection of the parties against physical and moral pressures and distresses to which they will be exposed to due to the long-lasting trial and the provision of justice as necessary and the maintenance of confidence in law and the requirement of showing due diligence in the settlement of a legal dispute cannot be ignored in the trial activity, it is necessary to evaluate whether the trial period is reasonable or not individually for each application (App. No: 2012/13, 2/7/2013, § 40).

48.     Matters such as the complexity of a case, how many levels the trial has, the attitude of the parties and the relevant authorities during the trial and the quality of the interest of the applicant in the speedy conclusion of the case are the criteria to be taken into account for the determination of whether the period of a case is reasonable or not (App. No: 2012/13, 2/7/2013, §§ 41-45).

49.     However, none of the specified criteria is conclusive by itself in the evaluation of a reasonable period. By evaluating the total impact of these criteria through the determination of all delay periods in the trial process individually, which element is more effective in the delay of trial should be determined (App. No: 2012/13, 2/7/2013, § 46).

50.     In order to determine whether the trial activity is conducted within a reasonable time or not, it is primarily necessary to determine the dates of beginning and completion which may vary depending on the type of dispute.

51.     In accordance with Article 36 of the Constitution and Article 6 of the Convention, it is necessary to conclude within a reasonable time the disputes which are related to civil rights and obligations and which are about a criminal charge in criminal domain. The cases which are included in the field of "public law" as per the provisions of the legislation included in the legal system, but which are about disputes that are decisive on the rights and obligations of a special character also fall into the scope of the protection of Article 36 of the Constitution and Article 6 of the Convention. In this respect, the guarantees included in the specified regulations will also apply to the cases which are filed for the request for the cancellation of an administrative decision which is claimed to have damaged the rights of the applicant (for a decision of the ECtHR in the same vein, see De Geouffre de la Pradelle v. France, App. No: 12964/87, 16/12/1992). In this context, it is understood that in the incident it is the subject matter of the application, the claims of violation as regards the action filed against the tax fine which contains the criminal charge together with the principal tax.

52.     In the evaluation of reasonable period, while the beginning of the period is as a rule the date on which the trial process that will conclude the dispute is commenced to run, but in some special cases, by taking into account the quality of attempt, a previous date on which the dispute occurs can be accepted as the date of beginning (For the decisions of the ECtHR in the same vein, see König v. Germany, App. No: 51963/99, 23/5/2007, § 24; Poiss v. Austria, App. No: 8163/07, 2/4/2013, § 21). There is a similar situation in terms of the present application and the date of beginning of the time frame to be taken into consideration for the evaluation of a reasonable period is the date of 9/11/2007 on which the notices in relation to the VAT levies with tax loss fine were notified to the applicant.

53.     As in the current application, in the event that the date on which the dispute commences is different from the date of commencement of the venue of the Constitutional Court regarding the examination of individual applications, the duration that shall be taken into consideration for the evaluation of a reasonable period is not the time that elapsed after the date of 23/9/2012, but the time that has elapsed since the date on which the dispute commenced (App. No: 2012/13, 2/7/2013, § 51).

54.     In so far as it is understood from the examination of the trial process which is the subject matter of the application, VAT levies with a tax loss fine were made by the relevant directorate of tax office on the applicant based on the tax examination report dated 2/11/2007 and the relevant notices were notified to the applicant on 9/11/2007. Through the petition dated 6/12/2007, it was requested by the applicant from the ... Tax Court that the VAT levies with tax loss fine made based on the tax examination report be lifted. After the first examination minute drawn up on 7/12/2007, necessary notification actions were carried out; within the scope of the file which was understood to have been consummated as of 15/4/2008 upon the parties submitting their answers and secondary answers to the Court, it was decided that the action of the applicant be dismissed through the decision dated 22/10/2008. Upon the appeal of the decision with a request for the stay of execution on 17/12/2008, the ... Chamber of the Council of State, on 22/1/2009, decided that the request for the stay of execution be examined after the defense of the defendant administration was taken, approved the decision of the Court by dismissing the request for the stay of execution on 10/6/2009 and the request for appeal through its decision dated 6/10/2011 and numbered... .  The decision of the ... Chamber of the Council of State was notified to the applicant on 28/11/2011; upon the applicant's request for correction of judgment on 8/12/2011, the case file was sent to the ... Chamber of the Council of State again and the request for correction was dismissed through the decisions of the Chamber dated ... and numbered ... and this decision was notified to the applicant on 4/1/2013. It is seen that the decision was issued by the Court of first instance within 11 months and 13 days from the date of 9/11/2007 on which the dispute commenced and that the requests for appeal and correction were concluded by the appeal authority within 4 years, 1 month and 4 days from the date on which the decision was issued.

55.     As the delays which can be attributed to competent authorities in the prolongation of the trial process can result from the failure to show due diligence for the speedy conclusion of the trial, so can they also arise out of structural problems and lack of organization. As a matter of fact, Article 36 of the Constitution and Article 6 of the Convention impose on the state the responsibility of regulating the legal system in a way which can fulfill the conditions of a fair trial including the liability of courts to conclude cases within a reasonable time (App. No: 2012/13, 2/7/2013, § 44).

56.     Within this scope, in the event that a reasonable period is exceeded in trial due to reasons such as the structure of the judicial system, disruptions during routine duties at the office of the clerk of the court, delays in the writing of a judgment, in the sending of a file or document from one court to another and in the appointment of a rapporteur, insufficiency in the number of judges and personnel and the severity of the workload, the responsibility of competent authorities comes to the force.

57.     When the trial process which is the subject matter of the application is evaluated, although it was determined that the case file which was consummated by the Court of first instance on 15/4/2008 was concluded on 22/10/2008, that the file was kept without carrying out a procedural act for the settlement of the dispute within this period which elapsed in-between, that on the other hand, the instance at which the evaluation of the failure to conclude the trial within a reasonable time was the period which elapsed during the evaluation of the legal remedy, that as a matter of fact, although a decision was issued on the stay of execution twice in this phase of examination, that the conclusion of the request for appeal in terms of merits lasted for more than 4 years and that within this period, no procedural act was carried out by the relevant Chamber except for the decisions on the stay of execution and in the evidence of the aforementioned determination, it is understood that the workload and the lack of organization which arise from the structure of the judicial system, in particular, has a dominant effect on the prolongation of the trial period with regard to the present application. As Article 36 of the Constitution and Article 6 of the Convention makes it obligatory for the trial system to be regulated in a way to fulfill the conditions of fair trial including the liability of courts to conclude cases within a reasonable time, the structural and organizational deficiencies which are present in the legal system shall not be considered as an excuse for the failure to conclude the trial activity within a reasonable time.

58.     It could not be determined that the attitude of the applicant had a special effect on the prolongation of the trial.

59.     As a result of the evaluation of the application, although the dispute which is the subject matter of the application is relevant to whether or not the advertisement and marketing services which were procured abroad were utilized in Turkey and to whether or not this situation created a responsibility for submitting a VAT statement and in the settlement of the dispute, no research was conducted by the trial authorities except for the petitions of the applicant and the defenses of the defendant administration, the fact that the examination before the courts of instance lasted for a total period of 5 years and 17 days and that 4 years, 1 month and 4 days of this period elapsed in the legal remedy puts forth the fact that there is an unreasonable delay in the trial which is the subject of the complaint. 

60.     Due to the reasons explained, it should be decided that the applicant's right to trial within a reasonable time guaranteed by Article 36 of the Constitution was violated.

3.  Article50 of the Law No.6216

61.     The applicant requested that a decision be issued on the compensation of the VAT and tax loss fine which were unrightfully levied as of the date of collection together with its interest, but it did not file any request for compensation due to the fact that the trial was not concluded within a reasonable time.

62.     Article 50(2) of the Law No.6216 with the side heading ''Decisions" is as follows:

       "If the determined violation arises out of a court decision, the file shall be sent to the relevant court for holding the retrial in order for the violation and the consequences thereof to be removed. In cases where there is no legal interest in holding the retrial, the compensation may be adjudged in favor of the applicant or the remedy of filing a case before the general courts may be shown. The court, which is responsible for holding the retrial, shall deliver a decision over the file, if possible, in a way that will remove the violation and the consequences thereof that the Constitutional Court has explained in its decision of violation."

63.     Although it has been determined in the application that Article 36 of the Constitution was violated, as it is understood that there is no causal relation between the request for compensation claimed by the applicant and the determined violation, it should be decided that the request of the applicant for pecuniary damages be dismissed.

64.     It should be decided that the trial expenses of TRY 1,698.35 composed of the fee of TRY 198.35 and the counsel's fee of TRY 1,500.00 which were made by the applicant and determined in accordance with the documents in the file be paid to the applicant.

V.               JUDGMENT

In the light of the reasons explained, it is UNANIMOUSLY held on 8/5/2014;

A.       That the applicant's

            1. Claim as to the effect that the right to a fair trial within the scope of Article 36 of the Constitution be INADMISSIBLE as it is "manifestly ill-founded",

            2. Claim as to the effect that the right to trial within reasonable time which is guaranteed by Article 36 of the Constitution be ADMISSIBLE,

3. Right to trial within a reasonable time enshrined in Article 36 of the Constitution WAS VIOLATED,

B.       Request for pecuniary damages that he alleged to have incurred due to the levied VAT and tax loss fine be DISMISSED,

C.       That the trial expenses of TRY 1,698.35 in total, composed of the fee of TRY 198.35 and the counsel's fee of TRY 1,500.00 , which were made by the applicant be PAID TO THE APPLICANT,

D.       That the payments be made within four months as of the date of application by the applicant to the Ministry of Finance following the notification of the decision; that in the event that a delay occurs as regards the payment, the legal interest be charged for the period that elapses from the date, on which this period comes to an end, to the date of payment.