Supreme Court says tax office can re-investigate KPC

The Jakarta Post, Jakarta | Mon, 05/31/2010 8:18 PM

The Supreme Court said Monday that the Finance Ministry's tax office still had a chance to re-investigate alleged tax evasion involving East Kalimantan based coal-mining company PT Kaltim Prima Coal (KPC).

Supreme Court spokesman Hatta Ali urged the office to adhere to legal procedures so that the company would have no grounds to complain about the investigation.

In March 2009, KPC filed a complaint with the Jakarta tax tribunal after it received a letter from the tax office saying the company was under investigation. KPC complained that the investigation was not in line with legal procedures.

Hatta said that according to the General Rules on Taxation Law, if the tax office intended to start investigating alleged tax evasion, the office should issue a letter to stop any investigation of suspicious tax reports first.

“We found that the office had issued the warrant to investigate initial evidence of the alleged tax evasion involving KPC before the letter to stop the investigation was issued,” he told reporters at the Supreme Court office in Jakarta.

He said that the warrant was issued on March 4 last year, while the letter to stop investigation of suspicious tax reports was not issued until March 5.

The tax tribunal then ruled in favor of KPC and ordered the tax office to stop investigating the company.

KPC also filed a pretrial suit with the South Jakarta District Court to affirm the tax tribunal ruling.

In response to the company's legal actions, the tax office filed a case review request with the Supreme Court in February this year.

On May 24, the Supreme Court's panel of three justices, Imam Soebechi, Supandi and Paulus E. Lotulung, decided to reject the case review, saying that the tax tribunal ruling had complied with existing laws and the constitution.

“What happened was just procedural error ... The tax office could still investigate the alleged tax evasion,” said Hatta. (rdf)

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