Company Loses Appeal Over VAT Bill After Failing to Collect Registered Mail
Translated & summarized from Bizportal by baba
A wood importer, Si Rafael Import and Marketing, was denied an appeal extension by the Beersheba District Court and ordered to pay NIS 380,000 in VAT. The company failed to collect a registered letter containing the decision on its appeal, which was legally deemed delivered. The court ruled the appeal was filed months late, rejecting claims of fraud and insufficient evidence of due diligence. The company must also pay NIS 5,000 in legal costs.
The story in 6 lines · by baba
- Si Rafael Import and Marketing was denied an appeal extension and ordered to pay NIS 380,000 in VAT.
- The company failed to collect a registered letter containing the decision on its appeal.
- The court deemed the decision legally delivered via registered mail, despite it being uncollected.
- The appeal was filed nearly five months after the deadline, which was legally considered to have passed.
- The company's claims of fraud and a unilateral director action were not sufficiently substantiated.
- The company was ordered to pay NIS 5,000 in legal costs for the failed appeal.
A wood importer, Si Rafael Import and Marketing, has been ordered to pay NIS 380,000 in Value Added Tax (VAT) after the Beersheba District Court rejected its request to extend the deadline for an appeal. The company had issued credit invoices to cancel previous tax invoices, but the Ashdod VAT director ruled these were issued unlawfully, assessing the company with the significant tax liability.
The company filed an appeal, and the decision to deny it was sent via registered mail on November 17, 2025. According to the Tax Authority, the letter was available for pickup two days later but was never collected and was returned marked "not required." The company claims it only learned of the final assessment when collection proceedings began.
Judge Yael Yitav ruled that the decision was legally considered delivered on November 24, 2025, based on a legal presumption of delivery for mail. The 60-day window for appeal, which ended in late January, was missed. The company's request for an extension was filed on June 23, 2026, nearly five months after the assessment became final.
The company argued it received the decision via email and alternatively requested an extension, claiming the director acted unilaterally and that its appeal had strong chances of success. It alleged a scheme by a project manager who defrauded them, causing them to issue invoices for non-existent transactions. However, the judge found no sufficient evidence of fraud or due diligence by the company, noting that the company failed to provide proof of its dealings with the project manager or explain its failure to collect the registered mail or respond to payment demands.
The court cited legal precedent emphasizing the importance of appeal deadlines for tax finality and fairness, and noted that courts are now more restrictive with extension requests. The judge upheld the Tax Authority's stance on the presumption of delivery, stating that failing to collect registered mail, especially when expecting a decision, constitutes "closing one's eyes." The company was ordered to pay NIS 5,000 in legal costs.
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