Israeli Supreme Court Denies Tax Payment Delay Request
Translated & summarized from Bizportal by baba
The Israeli Supreme Court denied a request by S. Me'asolim Acre to delay a 2.9 million shekel tax payment. Justice Chaled Kabub ruled that the company failed to prove the payment would cause irreparable harm, despite acknowledging the appeal was not baseless. The company was ordered to pay legal costs.
The story in 5 lines · by baba
- Supreme Court denied company's request to delay tax payment.
- Company failed to prove payment would cause irreparable harm.
- Tax assessment was based on potential for additional apartments.
- Lower courts had previously ruled against the company.
- Company ordered to pay 4,000 shekels in legal costs.
Supreme Court Justice Chaled Kabub has rejected an appeal by the company S. Me'asolim Acre to delay a payment of 2.9 million shekels to the Tax Authority. The company had argued that the payment would cause irreparable harm, but Justice Kabub stated that this claim was not sufficiently proven. The case stems from a 2022 land sale in Acre, where S. Me'asolim Acre sold land for the construction of 130 apartments to Shagrawi Initiative and Construction for 39 million shekels. An addendum to the agreement stipulated additional payments if the number of apartments increased. S. Me'asolim Acre had requested approval for 62 additional apartments shortly before the sale, and committed to pursuing this approval within 30 months. The Haifa District Tax Assessor determined the transaction's value to be 51 million shekels, factoring in the potential for additional apartments. The District Planning Committee later approved the construction of 208 apartments.
S. Me'asolim Acre appealed the assessment to the Haifa District Court, which dismissed their appeal. The company then appealed to the Supreme Court, arguing that the lower court erred by basing the transaction's scope on events that occurred after its signing. They also sought to delay the payment, claiming a high likelihood of success on appeal and that the delay would not harm the state, while payment would cause significant and irreversible damage to the company. Justice Kabub noted the legal precedent that stays of monetary judgments are granted only in exceptional circumstances, as monetary payments are generally reversible. Such stays are typically considered if the payment would prevent the appellant from recovering funds if the appeal succeeds, or if it would lead to economic collapse or irreparable harm.
Kabub acknowledged that S. Me'asolim Acre's appeal was not without merit, but focused on the balance of convenience. He stated that if the appeal were successful, the company could be reimbursed by the state. The company's primary argument was that the payment would impede its ability to meet ongoing obligations, and they promised to provide supporting financial data. However, Kabub found this claim unsubstantiated, noting the absence of supporting financial documents in the affidavit, unclear roles of company representatives, and no affidavit from a certified accountant or other qualified individual regarding the company's financial status. He pointed out these deficiencies in mid-August, but the company failed to rectify them. While acknowledging the sum is substantial, Kabub concluded that the company had not established its claim of significant damage or even a fear of economic collapse, which could have justified a stay under certain conditions. S. Me'asolim Acre was ordered to pay 4,000 shekels in legal costs.
Mentioned
