Tabacalera Nacional SA v Administration of Customs
| Jurisdicción | Guatemala |
| Fecha | 31 Mayo 1955 |
| Emisor | Corte Suprema (Guatemala) |
Treaties — Operation and Enforcement of — Relation to Municipal Law — Primacy of Treaty — Commercial Treaty — Invalidation of Taxes Imposed Subsequent to Signature of Treaty — The Law of Guatemala.
The Facts.—This was an appeal from a decision dated November 13, 1954, of the Tribunal for Administrative Disputes, reversing decisions of the Director-General of Customs and of the Treasury, respectively.
On March 11, 1954, the appellant Company lodged a complaint with the Director-General of Customs against the charging of duty under Decree No. 931 (import duties) on 95 packages of leaf tobacco imported from the United States of America. It was said that the duty ought not to have been charged because under the terms of the Treaty of Commerce between Guatemala and the United States signed on April 24, 1936, and ratified on May 9 and 16, 1936, respectively, the taxes on a number of articles mentioned in the Treaty, including leaf tobacco, had been “stabilized”. Decree No. 931 therefore conflicted with the Treaty as regards leaf tobacco, on which the duty had thus been improperly charged. The Director-General of Customs, in his decision of February 20, 1954, ruled, however, that the imposition of duties under Decree No. 931 was in order seeing that the levying of a tax was an internal activity of the State, performed in the exercise of its sovereignty with respect to the national finances, which were “not subject to the provisions of a Treaty of Commerce concluded between this country and the United States of America.” In any event, the purpose of a treaty of that kind was to stabilize existing taxes and not to prevent the creation of new ones.
The Company's appeal from this decision to the Treasury was dismissed, on May 5, 1954, on the ground that the tax was a personal tax on the importers and not, as alleged, a charge on merchandise produced or manufactured in the United States of America. A further appeal to the Tribunal for Administrative Disputes was, however, allowed, the Tribunal holding that “the import duties referred to were entirely without legality and were violative of the Commercial Treaty between the United States and Guatemala, since this Convention in precise and clear language fixes an effective fiscal stabilization, to the mutual interest of the States parties thereto, on articles produced or cultivated in either country, as enumerated on the respective lists; that these, for purposes of importation, are protected by the privileges granted therein, and this being so, to apply the tax created by Decree 931 of Congress is illegal, for a treaty is a law in full force; and also that the decision of the Treasury, that this duty should be treated as an internal tax, cannot be accepted; an administrative decision must not be allowed to affect the operation of a commercial treaty which is part of the law of the Republic.”
The Treasury now appealed against the decision of the Tribunal, contending that “said Treaty cannot prevent the State of Guatemala from decreeing other taxes than those contemplated by said Convention”, and that “this Treaty refers to taxes in existence on the date of its conclusion, but not to taxes of an internal character subsequently imposed”.
Held: that the appeal must be dismissed. The Convention of 1936 applied not only to duties in existence when it was signed but also to duties subsequently imposed.
The Court said: “It is true, without doubt, that a commercial treaty or convention concluded between two States cannot limit or prevent one of them from imposing taxes, charges, contributions, etc., other than those contemplated in the said convention, but in the Convention between Guatemala and the United States of America it is agreed that the articles which are the object of the agreement shall be exempted, upon importation into the contracting State, from ordinary customs fees which exceed those already established and also from any other fees, taxes, contributions, or any other charges higher than those in force at the time of the signature of the Convention on or with respect to the importation or whose subsequent imposition is required by laws in force in the Republic on the day of signing. It should be understood from this that the articles protected thereby are exempt from any taxes not in existence on the day of the signature of the Treaty, such as the duties created by Decree 931 of Congress, for which reason the Tribunal did not err in applying the terms of the Convention …”
