The court declared the supply agreement invalid as it contradicts the interests of the state and society

The appellate court upheld the position of the supervisory authority to invalidate the supply agreement, as this transaction contradicts the interests of the state and society in matters of business and taxation.

The court of first instance found that by drawing up primary accounting documents that did not confirm the movement of goods, the defendants acted in concert, pursuing the following goals: creating formal grounds for the defendant-2's right to a VAT tax credit, as evidenced by the defendant-1's issuance of three tax invoices; the defendant-1's unaccounted for balances of tobacco products that fell out of control of the circulation of excisable goods. The payment by Defendant-2 to Defendant-1 under 5 bank payment orders created an external appearance of the reality of the business transaction.

Also, the court of first instance concluded that it was impossible to fit the number of packs of cigarettes specified in each consignment note into the specified vehicle at one time (one transportation), and therefore the consignment notes do not confirm the transportation of tobacco products beyond reasonable doubt, with which the panel of judges agrees.

Taking into account the above circumstances in their totality, the panel of judges agrees with the conclusion of the court of first instance that there was no transfer of goods from Defendant 1 to Defendant 2 under the business transactions for the supply of tobacco products.

The Court of Appeal emphasized that the defendants acted jointly and in concert, realizing that their actions were deliberately contrary to the interests of the state and society.

Therefore, the Third Administrative Court of Appeal of 28.11.2023 in case No. 340/3267/20 dismissed the appeal of Defendant 1; the decision of the Kirovohrad District Administrative Court of 05.06.2023 was upheld.