Tax Administration of Prulyki v. VAT "Priluki"
The Tax Administration of Prulyki audited a tobacco company and discovered that the company had violated Ukraine's law on advertising by not devoting five percent of its advertising budget to producing and distributing information on the harms of consuming alcohol and tobacco. The Tax Administration therefore sought recovery of the required public health advertising funds. The company argued that the money spent on advertising was paid on a voluntary basis, and therefore, was not subject to court penalties. The Chernihiv Regional Administrative Court denied the request, finding that the payments were voluntary and not recoverable. On appeal, the Tax Administration claimed that the Regional Administrative Court had violated both procedural and substantive law by not providing a lawful and reasonable decision based on a comprehensive examination of the circumstances. The Kiev Administrative Appeal Court overturned the lower court's decision and ordered the tobacco company to pay the Tax Administration for the disputed amount.