STJ restricts discussion on compensation in Motion to Stay Tax Foreclosure

The 1st Panel of the Superior Court of Justice unanimously denied the Motion for Clarification in Special Appeal No. 1.795.347/RJ, going on to uphold the ruling that rejected the taxpayer’s claim to question, in the context of a Motion to Stay Tax Foreclosure, the tax compensation that had not been approved administratively. To further understand the decision, access the bulleting produced by our Tax Law team.

Recently, in a session on 10.27.2021, the 1st Panel of the Superior Court of Justice unanimously imposed another defeat upon the taxpayer by denying the Motion for Clarification in Special Appeal No. 1.795.347/RJ, going on to uphold the ruling that rejected the taxpayer’s claim to question, in the context of a Motion to Stay Tax Foreclosure, the tax compensation that had not been approved administratively.

This understanding is aligned throughout the Public Law Panels of the STJ, adopting a literal interpretation of art. 16, paragraph 3, of Law No. 6830, of 09.22.1980 (Tax Foreclosure Law – LEF). In the Justices’ opinions, the taxpayer could only file a Motion to Stay Tax Foreclosure arguing for a compensation that had already been recognized administratively or judicially before the filing of the Tax Foreclosure suit. On the other hand, tax lawyers from all over the country state, from a historical and systematic analysis of the legislation, that art. 16, § 3 of the LEF prohibits that the taxpayer, at that time, opposes a credit of his against the foreclosed debt, but it does not have any relationship with the compensation rejected at the administrative level, an act that is fully withing the power of the Courts in any kind of lawsuit.

As if that were not enough, taxpayers also face the risk of losing definitively the right to use the credit to which they believe they are entitled. At the same time, the STJ built the thesis published in Precedent No. 625 in the sense that “The administrative request for compensation or restitution does not interrupt the statute of limitations for the repetition of undue tax payment referred to in art. 168 of the national tax code or the execution of an enforceable title against the Public Treasury”.  

In the current scenario, therefore, there is only one strategy to judicially challenge the administrative decision that rejects the compensation: the taxpayer must make file an Action for Annulment, whose statute of limitations is of two (2) years (art. 169 of the National Tax Code) and which subject the parties to be sentenced to pay loss of suit fees (art. 85, § 3 of CPC/2015). And, to prevent the filing of a Tax Foreclosure, it will be necessary to make a full judicial deposit of the debt amount of the debt or get an injunction relief.

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