Summary of ECJ C-97/21 – EU law prohibits national legislation that imposes both financial penalties and sealing of business premises on a taxpayer for the same tax offence

Background

Bulgarian company MV-98 was found to have failed to record the sale of a packet of cigarettes worth BGN 5.20 and to issue the fiscal cash register during an inspection by Bulgarian tax authorities.
As a result, the authorities imposed a financial penalty and sealed the company’s premises for 14 days.
MV-98 brought an action against the sealing measure, claiming it was disproportionate given the minimal value of the sale and that it was their first offence.
The referring court is uncertain whether the scheme established by Articles 185 and 186 of the Law on VAT is consistent with Article 50 of the Charter, as both the financial penalty and sealing are considered criminal in nature.
The court also questions whether the judicial review process satisfies the requirements of Article 47 of the Charter.
The court notes that there is no coordination mechanism to ensure proportionality in relation to the seriousness of the offence committed.

Questions

Can national legislation allow for administrative proceedings and financial penalties to be imposed on a person who has not registered the sale of goods or issued a document evidencing the sale?
If so, does this legislation violate the principles of proportionality and the Charter of Fundamental Rights of the European Union?
Can a national provision allow for the sealing of business premises for up to 30 days in addition to a financial penalty for the same offence?
Can measures be introduced to safeguard the public interest under Article 273 of the VAT Directive, even if judicial protection against these measures is limited?

Decision

EU law prohibits national legislation that imposes both financial penalties and sealing of business premises on a taxpayer for the same tax offence,
if the procedures for challenging these measures are separate and autonomous, and
if the legislation does not coordinate the procedures to reduce the cumulative disadvantage and
ensure that the severity of penalties is proportional to the offence.
This is stated in Article 273 of Council Directive 2006/112/EC and Article 50 of the Charter of Fundamental Rights of the European Union.