2008/01/31 - Pl. ÚS 24/07: Stabilization of Public Budget - Tax Amendments

31 January 2008

HEADNOTES

1)

Substantial revisions of the legal order in the field of both public

and private law are an inevitable part of societal development, and it

is in the hands of the democratic legislature to determine the structure

of law and to delimit the subject of legal regulation in individual

statutes – within that framework also to weigh the degree to which

substantial revisions of certain segments of the legal order can be

effectuated in part by putting through amendments to statutes currently

in force and in part by the adoption of original statutory norms. Reform

in the sense of a fundamental revision of a certain segment of private

or public law in a single statute is not the equivalent of codification,

as it can be carried out even through other technical legislative

methods.
If the maxim of a statute’s substantive consistency, as

declared in Judgment No. Pl. ÚS 77/06 („[i]n a substantive law-based

state, a statute in the formal sense cannot be understood as a mere

repository of a wide variety of changes made throughout the legal

order“), should be conceived of in the sense of being a derogational

ground, then it would be so only in an extreme situation, such as, for

ex., the case posed by the petitioner in which the Government would

concentrate „once annually all of its legislative program into a single

act ‘on the Regulation of Legal Relations in the Czech Republic‘ or even

into an act ‘on the Improvement of the Fate of Citizens of the Czech

Republic‘“.

2)

The bi-cameral structure of the Parliament of the Czech Republic is

also an expression of the principle of the separation of powers within

the legislative power. With the purpose of ensuring that the separation

of powers genuinely functions, differing electoral systems were

enshrined in Art. 18 paras. 1, 2 of the Constitution, with the objective

of thereby bringing about dissimilar political structures in the two

chambers, that is, the state of affairs in which the Senate did not

become merely a political copy of the Assembly of Deputies, and thus is

able genuinely to fulfill the function of a check and a counterweight

within the legislative power. In a constitutional model conceived in

this way, the abuse of the institute of not dealing with a bill when it

is considered before the Senate does not at present appear to be a real

contingency. A different situation would arise, however, in the case

that the Constituent Assembly’s original intention is not realized and,

in terms of its political structure, the Senate becomes a mere copy of

the Assembly of Deputies. However much this observation appears rather

as a contemplation de constitutione ferenda, in extreme cases (that is,

in cases of the repetition and abuse of this manner of proceeding,

directed in its effects at excluding Parliament’s second chamber from

genuine participation in the adoption of statutes), it could even become

the basis for interpreting the relevant provisions of the Constitution

and give rise to derogational grounds for the violation of the

constitutional standards for the adoption of statutes.

3)

Should the legislature, in its statutory arrangement, depart from the

traditional conceptual framework for income tax, that would be in

conflict with the constitutional order solely in the case that such

construction should have a confiscatory impact, if it should be

exceedingly disproportionate, alternatively if it were indefinite to

such a degree as to exlude the determination of its content by the usual

interpretive methods.


 

CZECH REPUBLIC

CONSTITUTIONAL COURT
JUDGMENT


IN THE NAME OF THE CZECH REPUBLIC


On

31 January 2008, the Constitutional Court, in its Plenum composed of

its Justices Stanislav Balík, František Duchoň, Vlasta Formánková, Vojen

Güttler, Pavel Holländer, Ivana Janů, Vladimír Kůrka, Dagmar

Lastovecká, Jiří Mucha, Jan Musil, Jiří Nykodým, Pavel Rychetský,

Miloslav Výborný, Eliška Wagnerová and Michaela Židlická, on the

petitions: 1) of a group of 67 Deputies of the Parliament of the Czech

Republic, represented by Deputy Mgr. Michal Hašek; 2) of a group of 43

Deputies of the Parliament of the Czech Republic, represented by Deputy

JUDr. Vojtěch Filip; and 3) of a group of 19 Senators of the Parliament

of the Czech Republic, represented by JUDr. Kateřina Šimáčková, an

attorney with her office at Mojžíšova 17, 612 00 Brno, proposing the

annulment of Part One, Part Two, Part Three, Part Four, Part Five, Part

Six, Part Seven, Part Eight, Part Nine, Point 1 in Art. XVII of Part

Ten, Part Eleven, Part Twelve, Part Thirteen, Part Fourteen, Part

Forty-Five, Part Forty-Six, Part Forty-Seven, Part Fifty, Part

Fifty-One, and Part Fifty-Two of Act No. 261/2007 Sb., on the

Stabilization of Public Budgets, and proposing the annulment of § 6

para. 4, first sentence, § 6 paras. 13 and 14, § 7 para. 8, first

sentence, § 16, § 21 para. 1, and § 38h para. 1, lit. b) of Act No.

586/1992 Sb., on Income Tax, as amended, with the participation of: A)

the Assembly of Deputies of the Parliament of the Czech Republic and B)

the Senate of the Parliament of the Czech Republic, and of, as secondary

parties to the proceeding, C) the group of 43 Deputies of the

Parliament of the Czech Republic, represented by Deputy Vojtěch Filip;

and D) the group of 19 Senators of the Parliament of the Czech Republic,

represented by JUDr. Kateřina Šimáčková, an attorney, decided as

follows:


The petition is rejected on the merits.
 


REASONING


I.
The Subject of the Proceeding in the Matter
 

By

its petition, submitted to the Constitutional Court on 22 October 2007,

a group of 67 Deputies of the Assembly of Deputies of the Parliament of

the Czech Republic, represented by Deputy Mgr. Michal Hašek, seeks,

pursuant to Article 87 para. 1, lit. a) of the Constitution of the Czech

Republic (hereinafter „Constitution“) and pursuant to § 64 para. 1,

lit. b) of Act No. 182/1993 Sb., on the Constitutional Court, the

annulment of Act No. 261/2007 Sb., on the Stabilization of Public

Budgets, in its entirety, alternatively the annulment of the particular

provisions thereof designated in more detail in the petition.
 

Apart

from that, by the same petition this group of 67 petitioners sought the

annulment of certain provisions, more specifically designated in the

petition, of acts amended by Act No. 261/2007 Sb.:
-    Act No.

48/1997 Sb., on Public Health Insurance and on Amendments and

Supplements to Certain Related Acts, as subsequently amended;
-    Act No. 551/1991 Sb., on the Universal Health Insurance of the Czech Republic, as subsequently amended;
-  

 Czech National Council Act No. 280/1992 Sb., on Departmental, Trade

Union, Entrepreneurial and further Health Insurance Companies, as

subsequently amended;
-    Act No. 586/1992 Sb., on Income Tax, as subsequently amended.
 

By

its 8 January 2008 ruling, No. Pl. ÚS 24/07-147, the Constitutional

Court Plenum placed into separate proceedings those portions of the

petitions proposing the annulment of those parts of Act No. 261/2007

Sb., and therewith any prospective related petitions, which concern the

substantively distinct problems of the financing of health care from

public health insurance and those portions of the petitions proposing

the annulment of those parts of Act No. 261/2007 Sb. which concern the

substantively distinct problem of social security. Separate proceedings

on those excluded portions of the petitions were designated as Nos. Pl.

ÚS 1/08 and Pl. ÚS 2/08
 

The

proceeding designated as Pl. ÚS 24/07 concerns the remaining portions of

the petitions, that is, those proposing the annulment of Part One (the

amendment to the Act on Income Tax), Part Two (the amendment to the Act

on the Amendment to Acts relating to the Adoption of the Act on

Insurance for Employee Injuries), Part Three (the amendment to the Act

on Reserves for the Determination of the Income Tax Base), Part Four

(the amendment to the Act on Value-Added Tax), Part Five (the amendment

to the Act on Property Tax), Part Six (the amendment to the Act on

Inheritance Tax, Gift Tax, and Tax from the Transfer of Property), Part

Seven (the amendment to the Act on Cash Offices which are Subject to

Registration), Part Eight (the amendment to the Act on the

Administration of Taxes and Fees), Part Nine (the amendment to Act No.

545/2005 Sb.), Point 1 in Art. XVII of Part Ten (the amendment to the

Act on Administrative Fees), Part Eleven (the amendment to the Act on

Sales Taxes), Part Twelve (the amendment to the Act on the Living and

Subsistence Minimum), Part Thirteen (the amendment to the Act on

Appreciation of the Participants in the Struggle for the Creation and

Liberation of Czechoslovakia and Certain of their Survivors, on Special

Contributions to the Pension of Certain Persons, and on a Lump-Sum

Monetary Payment to Certain Participants in the National Struggle for

Liberation in the Years 1939 to 1945 and on the Amendment to Certain

Acts), Part Fourteen (the amendment to the Act on Registered Partnership

and on Amendments to Certain Related Acts), Part Forty-Five (Tax on

Natural Gas and other Types of Gases), Part Forty-Six (Tax on Solid

Fuels), Part Forty-Seven (Tax on Electricity), Part Fifty (the amendment

to the Act on Accounting), Part Fifty-One (repealing provisions), and

Part Fifty-Two (the entry into effect) of Act No. 261/2007 Sb., on the

Stabilization of Public Budgets, and on the petition proposing the

annulment of § 6 para. 4, first sentence, § 6 paras. 13 and 14, § 7

para. 8, first sentence, § 16, § 21 para. 1, and § 38h para. 1, lit. b)

of Act No. 586/1992 Sb., on Income Tax, as amended.
 


II.
Parties and Secondary Parties
 

The

party – petitioner in this proceeding is a group of 67 Deputies of the

Assembly of Deputies of the Parliament of the Czech Republic,

represented by Deputy Mgr. Michal Hašek. The Constitutional Court found

that the submitted petition meets all statutory procedural requirements

and prerequisites, so that nothing hinders consideration and decision on

the merits of the matter. In the sense of § 69 para. 1 of the Act on

the Constitutional Court, the other parties to this proceeding are 1.

the Assembly of Deputies and 2. the Senate of the Parliament of the

Czech Republic.
 

In a

petition, delivered to the Constitutional Court on 19 November 2007, a

group of 43 Deputies, represented by Deputy JUDr. Vojtěch Filip,

likewise sought the annulment of Act No. 261/2007 Sb., alternatively of

individual provisions thereof specified in more detail in the petition.

In accordance with § 43 para. 2, lit. b), in conjunction with § 43 para.

1, lit. e), of the Act on the Constitutional Court, in its 23 November

2007 ruling, No. Pl. ÚS 28/07, the Constitutional Court rejected the

petition on the grounds of lis pendens. The Constitutional Court granted

this group of 43 Deputies, in the sense of § 35 para. 2 of the Act on

the Constitutional Court, status as a secondary party to the previously

instituted proceeding on the petition of the group of 67 Deputies.

Secondary parties have the same rights and duties in a proceeding as do

parties (§ 28 para. 2 of the Act on the Constitutional Court).
 

In

a petition, delivered to the Constitutional Court on 7 December 2007, a

group of 19 Senators of the Parliament of the Czech Republic,

represented by an attorney, JUDr. Kateřina Šimáčková, likewise sought

the annulment of portions of Act No. 261/2007 Sb., specified in more

detail in the petition. In accordance with § 43 para. 2, lit. b), in

conjunction with § 43 para. 1, lit. e), of the Act on the Constitutional

Court, in its 12 December 2007 ruling, No. Pl. ÚS 29/07, the

Constitutional Court rejected this petition on the grounds of lis

pendens. The Constitutional Court granted this group of 19 Senators, in

the sense of § 35 para. 2 of the Act on the Constitutional Court, status

as a secondary party to the previously instituted proceeding on the

petition of the group of 67 Deputies. Secondary parties have the same

rights and duties in a proceeding as do parties (§ 28 para. 2 of the Act

on the Constitutional Court).
 

In

its submission made on 21 November 2007, designated as „An Announcement

of the Municipal Court in Brno concerning its Entry as a Secondary

Party into an already Instituted Proceeding“, the Municipal Court in

Brno sought to be treated, pursuant to § 35 para. 2 of the Act on the

Constitutional Court, as a secondary party, because its preceding

petition of 12 November 2007 had been rejected by the Constitutional

Court, in its 21 November 2007 ruling, No. Pl. ÚS 27/07, on the grounds

of the obstacle of lis pendens.
 

However,

the Municipal Court in Brno could not be dealt with as a secondary

party in this proceeding, for the following reasons. Status as a

secondary party arises in the case that the Constitutional Court has

already acted in the same matter, but where an authorized petitioner

subsequently submits a petition. Courts can also, as a general matter,

be such an authorized petitioner, namely on the basis of Art. 95 para. 2

of the Constitution. That article provides as follows: Should a court

come to the conclusion that a statute which should be applied in the

resolution of a matter is in conflict with the constitutional order, it

shall submit the matter to the Constitutional Court. In the case under

adjudication, the pivotal issue is how to view the condition that a

submission must concern a statute “which should be applied in the

resolution of a matter”. There is no dispute concerning the fact that

this condition is always met where a submission concerns a statute,

alternatively individual provisions thereof, whose application should be

proximate, thus if such provision should be applied in the decision on

the merits. In its jurisprudence, the Constitutional Court has deduced

that in order for a court to be able to call into question the

constitutionality of a legal enactment, its unavoidable application in

the matter in question is essential, not its merely hypothetical

application, or some other broader connections [compare Ruling No. Pl.

ÚS 39/2000, The Collection of Judgments and Rulings of the

Constitutional Court (hereinafter „Collection of Decisions“), Volume 20,

Ruling No. 39, p. 353; Ruling No. Pl. ÚS 20/02, Collection of

Decisions, Volume 28, ruling No. 42, p. 477].
 

In

the matter of the Municipal Court in Brno, No. 50 C 259/2007, from

which the Municipal Court‘s above-mentioned petition arose, on 5

November 2007 JUDr. M. V., judge of the Municipal Court in Brno,

submitted a suit which sought from the Czech Republic – Municipal Court

in Brno a payment of 2600 Czech Crowns, the amount by which his salary

for the month of January, 2008 had been reduced, as well as a lump-sum

expense allowance to which he had a claim, had his pay not been frozen

by Art. XLVIII, Part Thirty of Act No. 261/267 Sb.
According to

settled judicial practice and doctrine, one can assert his rights before

a court as of the moment when a claim arises, stated otherwise actio

nata. A claim arises only after a debtor should have fulfilled his

obligation. In the case under adjudication, however, this is an

unmatured claim, as it is not at all certain whether the claimant will

in fact be damaged, nor in what amount. Thus, the Municipal Court should

not have even reached consideration of the possible unconstitutionality

of Act No. 261/2007 Sb., because it should have rejected the suit as

unripe. As follows from 95 para. 2 of the Constitution, ordinary courts

have both the right and the obligation to submit matters to the

Constitutional Court only if a genuine dispute exists, and not for the

purpose of ascertaining the Constitutional Court’s opinion on certain

legal questions. On the basis of what has been mentioned, the

Constitutional Court came to the conclusion that the Municipal Court in

Brno was not an authorized petitioner in the sense of § 35 para. 2 of

the Act on the Constitutional Court. By its 15 January 2008 ruling, No.

Pl. ÚS 24/07-158, the Constitutional Court decided that the Municipal

Court in Brno is not a secondary party to the proceeding.
[Parts III through VI omitted]
 


VII.
Evidentiary Material Obtained by the Constitutional Court from Public Sources
 

As

the basis for its decision, the Constitutional Court obtained

stenographic recordings from the debates before the Assembly of

Deputies, the Senate, and their committees, as well as their resolutions

and Assembly prints freely accessible in the digital libraries on the

web sites of the Assembly of Deputies and the Senate of the Parliament

of the Czech Republic, at www.psp.cz and www.senat.cz.
 


VIII.
Description of the Legislative Proceedings for the Adoption of Act No. 261/2007 Sb.
 

The

Constitutional Court has ascertained the following from the statements

of both chambers of the Parliament of the Czech Republic, from

appendices attached thereto, and from documents accessible by electronic

means in the digital libraries:

on 24 May 2007 the Government

submitted to the Assembly of Deputies a governmental bill (Print No.

222/0). On 25 May 2007 the bill was distributed to the Deputies. On 24

May 2007, the Organizational Committee of the Assembly of Deputies

recommended the consideration of the bill. It designated Mgr. Bohuslav

Sobotka as the bill’s rapporteur and proposed that the bill be assigned

for hearing in three committees: 1. the Committee on Health Care, 2. the

Committee on Social Policy, and 3. the Committee on the Budget;
-  

 the first reading took place on the 6th and 7th of June 2007 at the

Assembly’s 15th Session. The bill was assigned for hearing by the

above-mentioned committees (Resolution No. 335);
-    the Assembly’s

Committee on Health Care considered the bill on 20 June 2007, but did

not adopt any resolutions. The Committee on Social Policy considered the

bill on 2 July 2007 and in its resolution recommended that the bill be

defeated. The Committee on the Budget considered the bill on 8 August

2007 and in its resolution recommended that the bill be defeated;
-  

 in its second reading in the Assembly, on the 14th and 15th of August

at the 18th Session, the bill was the subject of general and detailed

debate; submitted proposed amendments were prepared as Print No. 222/3,

which was distributed on 16 August 2007;
-    the third reading in

the Assembly took place on 21 August 2007 at the 18th Session; the bill

was adopted: of the 200 Deputies present, 101 Deputies voted in favor of

the bill and 99 voted against it;
-    on 31 August 2007 the

Assembly of Deputies transmitted the bill to the Senate as Print No.

106/0; the Senate placed the bill on the agenda for its 8th Session and

debated it on 19 September 2007; in its resolution No. 192, the Senate

expressed its intention not to deal with the bill;
-    on 25

September 2007, the Act was delivered to the President of the Republic

for his signature, and the President signed it on 5 October 2007;
-    the Act was promulgated on 16 October 2007 in the Collection of Laws, Part 85, as number 261/2007 Sb.
 


IX.
The Public Hearing before the Constitutional Court
 

At

the oral hearing of the Constitutional Court Plenum, held on 31 January

2008, the parties and secondary parties to the proceeding repeated the

arguments contained in their petitions, or statements furnished the

Constitutional Court, and adhered to their positions, as well as their

proposals for decision by the Constitutional Court in the matter at

hand. In addition, JUDr. Vojtěch Filip, in his capacity as a person

authorized to act on behalf of a secondary party - the group of 43

Deputies of the Assembly of Deputies of the Parliament of the Czech

Republic, asserted a substantive objection in relation to the

introduction of a new subject of value-added tax - the group of persons

registered as taxpayers by means of group registration. The crux of the

objection was the fact that the given subject does not possess legal

personality.
 

Further JUDr.

Vojtěch Filip submitted a proposal to supplement evidence taking by

including the analytic material prepared for the Bill on the

Stabilization of Public Budgets by the Legislative Committee of the

Office of the Senate of the Parliament of the Czech Republic.
 

Pursuant

to § 48 para. 1 of Act No. 182/1993 Sb., the Constitutional Court

rejected the mentioned proposal, as it followed from the nature of the

matter that the analytical material in question related to legal, and

not factual, circumstances.
 


X.
Constitutional Conformity of the Competence and of the Legislative Process
 

According

to § 68 para. 2 of Act No. 182/1993 Sb., as subsequently amended,

within the framework of a norm control proceeding, the Constitutional

Court reviews three components, which, in their totality, comprise the

issue of a statute‘s conformity with the constitutional order,

alternatively, in the case of another legal enactment, that is, its

conformity with statutes. These components are the competence of the

body which issued the contested legal enactment, the procedure by which

the contested legal enactment was issued, and its content. The sequence

of the review is determined by a precise algorithm: from the nature of

the matter, the Constitutional Court deals first of all with the

competence of the relevant organ of public power to issue the legal

enactment contested in the petition, then, assuming a positive finding

on the existence of such competence, the observance of the

constitutionally-prescribed manner for the issuance of the contested

legal enactment, and finally, in the instance that the observance of

procedure is ascertained, an adjudication of the contested enactment’s

substantive conformity with the constitutional order, alternatively with

statutes.
 

In adjudging the

constitutionality of the contested Act, the Constitutional Court has

accepted the petitioner‘s procedural objection to the effect that the

chairpersons of chambers of the Parliament are not authorized

independently to fashion the chamber‘s will on behalf of their

respective chamber. In the chambers‘ statements, submitted in their

capacity as parties to a proceeding, the chairpersons are entitled, on

behalf of their respective chamber, solely to inform the Constitutional

Court of the factual and non-contentious circumstances of the debate on

the bill. Beyond those limits, the assessment of a contested statute and

disagreements with the petition proposing annulment by the

Constitutional Court no longer form a part of the chamber‘s statement,

rather are merely the personal opinion of its chairperson.
 

The

subject of review in the matter under consideration is the

constitutionality of the precisely-designated parts of the Act on the

Stabilization of Public Budgets and the Act on Income Tax. The

competence of the Parliament of the Czech Republic, which adopted these

statutes, follows from Art. 15 para. 1 of the Constitution.
 

The

first group of objections of both the petitioner and the secondary

parties concerns the constitutionality of the procedure employed for Act

No. 261/2007 Sb.
 

The

petition proposing the annulment of the cited parts of Act No. 261/2007

Sb. rests, in the first place, on the asserted constitutional violation

in the adoption of the contested Act as a whole. One objection alleges

that the Act is inconsistent, and the objection of the second secondary

party (the group of Senators) asserts the unconstitutionality of the

Senate‘s decision not to deal with the Bill on the Stabilization of

Public Budgets.
From the perspective of procedural objections

conceived in this way, one must recall the maxim which in this

connection flows for the requested relief [petit] of a decided matter

(Judgment of the Constitutional Court No. Pl. ÚS 7/03, Collection of

Decisions, Volume 34, Judgment č. 113, published as No. 512/2004 Sb.):

„If, in a norm control proceeding, the petitioner alleges a violation of

the legislative competence and the legislative process as defined in

the constitutional order (§ 68 para. 2 of Act No. 182/1993 Sb.), then

the requested relief [petit] is directed at all provisions forming the

legal enactment upon which the criticized constitutional defect falls.
 

The

petitioner and the secondary parties have then spotted procedural

errors relating to the individual parts, or provisions, of the Act on

the Stabilization of Public Budgets in the absence of a close relation

linking the proposed amendments to the subject of the bill, in the

violation of the statutory framework for the submission of technical

legislative proposals during the third reading of a bill, and in the

violation of the Government’s Legislative Rules in relation to those

parts of the Act at issue which represent an original, new

(non-amending) legal enactment.
 


X/a
On the Objection that the Act is Inconsistent
 

According

to the petitioner, the lack of consistency, of internal harmony, and of

transparency of Act No. 261/2007 Sb. is, on the one hand, in conflict

with the principle of the law-based state and, on the other, in conflict

with the principle of parliamentary democracy and with the separation

of powers between the executive and legislative powers, due to the fact

that it results in the limitation of the genuine possibility for

Parliament to consider such a statute.
 

From

the technical legislative perspective, Act No. 261/2007 Sb. is a mixed

statute. It contains in part the amendment of precisely designated

statutes (Parts 1 to 36, 38 to 44, and 48 to 50), then original

statutory provisions (Parts 37, 45, 46, and 47), and finally a repealing

provision (Part 51), as well as a provision on entry into effect (Part

52). In other words, it is a statute which is partly a „collective

amending act“ and partly new statutory regulation.
 

The

Constitutional Court already expressed its opinion on the

constitutionality of „collective amending acts“ in its Judgment No. Pl.

ÚS 21/01 (Collection of Decisions, Volume 25, Judgment No. 14, published

as No. 95/2002 Sb.), in which it asserted the following: „[T]he

practice by which several diverse statutes are simultaneously amended by

the adoption of a single statute is a relatively common one in

legislative practice. . . this practice is in principle constitutionally

conforming, but only in the case that the amended statutes bear mutual

substantive connection to each other. On the other hand, the situation

where several statutes bearing no direct substantive connection to each

other are amended by a single act, must be designated as an undesirable

phenomena, and one not corresponding to the purpose and principles of

the legislative process. Such a situation comes about, for example, due

to the speeding up of the legislative process, in part by means of

submitted proposed amendments. . . Such a manner of proceeding, thus,

does not correspond to the basic principles of a law-based State, among

which belong the principle that laws should be foreseeable and

comprehensible, and the principle that they should be internally

consistent. If then the substantive content regulated in several

statutes is affected by a single statute (in the formal sense), and

these affected statutes do not, either by content or systemic

considerations, have any connection with each other, then a quite murky

legal situation often emerges which does not respect the principles of

foreseeability, comprehensibility or internal consistency.“ The

Constitutional Court would admonish that it decided the given matter by

rejecting the petition on the merits, thus the requirement of internal

substantive consistency of „collective amending acts“ contained in that

Judgment cannot be evaluated in the sense of an argument directed at

derogation.
 

The

Constitutional Court of the Austrian Republic expressed a similar

opinion on the practice of „collective amending acts“ in it Judgment of

16 March 2001 (G 150/00-12). On the issue of the „common legislative

practice of adopting collective amending acts“, it declared that it is

“detrimental to the utmost in terms of the law being cognizable“.

Nonetheless, even in that case, this reproach did not constitute a

derogational ground, rather it was mere obiter dictum.
 

In

its existing jurisprudence, the Constitutional Court has annulled, on

the grounds of indefiniteness, incomprehensibility, or lack of clarity,

only individual statutory provisions, but not a statute in its entirety.

This fact results as well from the very conception of the

indefiniteness of a statute, which was defined as the absence of the

possibility to establish its normative content with the aid of customary

interpretive approaches. Thus, this test can be applied transparently

and persuasively only in relation to the concrete test of definiteness

of a detailed statutory provision. In this connection, the

Constitutional Court explicitly declared, in its Judgment No. Pl. ÚS

10/06 (published as No. 163/2007 Sb.): „It can generally be asserted

that the indefiniteness of certain provisions of a legal enactment must

be considered as in conflict with the requirements of legal certainty,

thus even of the law-based state (Art. 1 para. 1 of the Constitution),

only in the case that the intensity of that indefiniteness excludes the

possibility of their normative content being established with the aid of

customary interpretive approaches.“ [Judgments No. Pl. ÚS 4/95

(Collection of Decisions, Volume 3, Judgment No. 29, published as No.

168/1995 Sb.), No. Pl. ÚS 9/95 (Collection of Decisions, Volume 5,

Judgment No. 16, published as No. 107/1996 Sb.), No. Pl. ÚS 2/97

(Collection of Decisions, Volume 8, Judgment No. 91, published as No.

186/1997 Sb.), No. Pl. ÚS 23/02 (Collection of Decisions, Volume 33,

Judgment No. 89, published as No. 476/2004 Sb.), No. Pl. ÚS 40/02

(Collection of Decisions, Volume 30, Judgment No. 88, published as No.

199/2003 Sb.), No. Pl. ÚS 44/02 (Collection of Decisions, Volume 30,

Judgment No. 98, published as No. 210/2003 Sb.), No. Pl. ÚS 25/06

(published as No. 487/2006 Sb.)].
 

In

its existing jurisprudence, the Constitutional Court has founded the

annulment of a statute in its entirety, alternatively a discrete part

thereof, on the grounds of the dissimilitude of the constitutional and

statutory procedures for the adoption of an act, a dissimilitude which

has impact on its individual structural parts. In Judgment No. Pl. ÚS

21/01 (Collection of Decisions, Volume 25, Judgment No. 14, published as

No. 95/2002 Sb.) the Court declared on this point the following thesis

in connection with the adoption of a state budget act: „Since in

relation to acts on the state budget, the Constitution does not empower

the Senate to intervene into the legislative process and such an act, on

the proposal of the government, can be debated and adopted only by the

Chamber of Deputies, it is evident that the sole possible

constitutionally conforming means of proceeding is that in which such an

act is debated and adopted entirely separately. For this reason also §

101 para. 3 of the Standing Orders of the Chamber of Deputies (Act No.

90/1995 Sb., on the Standing Orders of the Chamber of Deputies)

explicitly provides that ‘Provisions amending, supplementing, or

repealing provisions of other acts may not form a part of an act on the

State budget.’ (Note bene: Of course, Act No. 10/1993 Sb was adopted

before the cited act, No. 90/1995 Coll. came into effect). In the

Constitutional Court’s view, it can be deduced from the wording of this

statute that neither can provisions amending, supplementing, or

repealing provisions of an act on the state budget form a part of an

‘ordinary’ statute. The situation where, together with an act on the

state budget, other acts are also proposed, or when an act on the state

budget as well as further acts are amended by means of a single act, is

thus a situation which, as was already stated, is not in conformity

either with the Constitution or with the law (see cited Act No. 90/1995

Sb.). “
 

If the petitioner

argues in terms of the inconsistency of Act No. 261/2007 Sb.,

establishing the grounds of its unconstitutionality, that is an argument

differing from the present line of argument on the indefiniteness of

statutory provisions, or the violation of the procedure for the adoption

of statutes, in view of their differences in relation to its particular

parts.
 

It has already been

stated that, in terms of legislative technique, Act No. 261/2007 Sb. is a

mixed statute, that is, it contains not only amendments to specifically

designated acts (Parts 1 to 36, 38 to 44, and 48 to 50), but also

further original statutory arrangements (Parts 37, 45, 46, and 47), and

finally repealing provisions (Part 51) and the provision on entry into

effect (Part. 52); thus, it is an act which is in part a „collective

amending act“ and in part a set of new statutory rules.
 

If

the Act at issue had been adopted as 50 separate statutes, 46 of them

amending statutes and 4 original statutes, the argument of inconsistency

would lose its foundation. Thus the jist of the objection is neither

that it is impossible to reconstruct the normative content of the

statutory provisions with the aid of customary interpretive approaches,

nor the objection that divergent procedures were not observed in view of

the individual parts of the adopted Act. Let us recall that in the case

of „collective amending act“ the amending provisions become a part of

the „comprehensive version“ of the individual amended acts and are thus

accessible to the addressees in computerized legal information systems;

the original, non-amending provisions, are accessible to the addressees

in the same way as is the case for other statutory rules.
 

The

list of the objection of unconstitutionality is thus the „lack of

transparency“ and „indefiniteness“ which is established by the „mass“ of

newly adopted law, both for the addressees of the act and in terms of

the genuine capability of Parliament to consider such a „mass“ of law

within the framework of the adoption of a single statute, that is, in

terms of the principle of parliamentary democracy and the separation of

powers. The jist of the stated objection of „inconsistency“ is, among

other things, expressed by the following assertion by the petitioner:

„In an absurb extreme case, the Government might concentrate once

annually all of its legislative program into a single act ‘on the

Regulation of Legal Relations in the Czech Republic‘ or even into an act

‘on the Improvement of the Fate of Citizens of the Czech Republic‘ and

through political pressure compel the governing majority to adopt just

such a version of the bill. Deputies‘ actual influence on the content of

statutes would be entirely marginalized thereby . . Such a Parliament

would be a mere facade entirely contradicting the principle of its

democratic character and the separation of powers.“
 

The

second component of the petitioner’s asserted objection of

inconsistency is the reference to the constitutional limits operative

for the legislature when forming a system of law by its framing of the

structure and content of adopted statutes.
 

In terms of constitutionalism, it is necessary in this connection to protect two values guaranteed by the constitional order:
 

The

first is the value of parliamentarianism and of the separation of

powers, reflected in the procedure, which must, even in such cases,

allow for the genuine assessment and consideration of a bill by the

Parliament (especially by the parliamentary opposition).
 

The

second is then the value of the substantive law-based state, reflected

in the maxim, formulated in Constitutional Court Judgment No. Pl. ÚS

77/06: „In a substantive law-based state, a statute in the formal sense

cannot be understood as a mere repository of a wide variety of changes

made throughout the legal order. On the contrary, the substantive

conception of the law-based state requires that a statute be, both in

terms of form and substance, a predictable, consistent source of law.“
 

As

to a): The Government Bill on the Stabilization of Public Budgets was

adopted by the Assembly of Deputies at its 18th Session held on 21

August 2007 in voting under Serial No. 23, in which, of the 200 Deputies

present, 101 voted for the Bill, and 99 against (see the Stenographic

Record of the Proceedings before the Assembly of Deputies, the digital

archive of the Assembly of Deputies, www.psp.cz). On 19 September 2007

the Bill was considered by the Senate at its 8th Session, which

expressed its intent not to deal with the Bill by adopting its

Resolution No. 192 – of the 80 Senators present, 49 Senators voted in

favor of that Resolution, 27 voted against it, and four abstained (see

the Record of Voting in the Senate, www.senat.cz). After it was signed

by the competent constitutional officials, the Act was promulgated on 16

October 2007 in Part 85 of the Collection of Laws, as No. 261/2007 Sb.
 

In

terms of the protection of the values of parliamentarianism and the

separation of powers reflected in the legislative procedure, it is

necessary to review the opportunity for genuine examination and

consideration of a bill by Parliament (especially by the parliamentary

opposition).
The Standing Orders of the Assembly of Deputies

establish a time limit for individual readings of a bill, the purpose of

which is to create a sufficient amount of time for parliamentary

consideration of a bill (§ 89, § 91 para. 2, and § 95 para. 1 of Act No.

90/1995 Sb.). One of these time limits is the 60-day limit for the

consideration of a bill in committee, which is part of the first reading

of a bill, and which the Assembly of Deputies can, pursuant to § 91

para. 3 of the Act on the Standing Orders of the Assembly of Deputies,

extend by up to 20 days. This is a statutory instrument serving to

create a greater time frame for the consideration of more extensive

bills.
 

In the course of the

first reading of the Bill on the Stabilization of Public Budgets on 6

and 7 June 2007 (see the stenographic record of the 15th Session of the

Assembly of Deputies, held on 6 and 7 June 2007, www.psp.cz) Deputies

Bohuslav Sobotka, Stanislav Křeček, Václav Votava, Zdeněk Jičínský and

Jeroným Tejc referred to the scope and internal disunity of the schema

under consideration. In this connection, Bohuslav Sobotka brought a

motion to assign the consideration of individual parts of the Bill at

issue to separate committees. Kosta Dimitrov moved to reject the

Government Bill on the Stabilization of Public Budgets, and in the case

that this motion was not carried, he moved „the extension by 30 days of

the time period for the consideration in committee“. Jeroným Tejc then

tabled a procedural motion to extend by 20 days the time period for the

consideration of the Bill due to its scope.
 

On

7 June 2007 in response to Deputy Bohuslav Sobotka’s motion, the

Minister of Finance, Miroslav Kalousek, tabled a motion before the

Assembly of Deputies for „the entire Print 222 to be assigned to the

committees on the budget, on social policy, and on health care. Not in

parts, but so that the entire print would be assigned to these three

committees.“ In the vote (serial No. 60), of the 197 Deputies present,

113 voted in favor of the motion by the Minister of Finance, and 8 voted

against. It follows therefrom that even the opposition Deputies voted

in favor, or did not vote against.
 

The

motions of Deputies Dimitrov and Tejc were rejected (of the 198

Deputies present, 97 voted to reject the motions, 94 voted in favor of

them), without any of the members of the Government, or the Deputies in

the governing coalition, even making substantive responses to the

arguments.
In terms of compliance with the temporal and procedural

framework for the consideration of statutes as delimited in the Act on

the Standing Orders of the Assembly of Deputies, which reflects the

protection of the constitutional guarantee of the genuine functioning of

parliamentariansim, all time limits and procedural steps within the

framework of the consideration of the Government Bill on the

Stabilization of

Public Budgets were complied with, also the time limit under § 95 para. 1 of Act No. 90/1995 Sb.
 

If

the time for consideration of the Bill in committee was not extended,

that did not result in a violation of the standards of parliamentary

procedure. In this connection, however, a phenomenon occurred which,

although it affects „solely“ the area of political culture, cannot be

overlooked in the adjudication of the course of the consideration of the

Bill on the Stabilization of Public Budgets. The principle of democracy

is not limited solely to majority rule, rather its content is found in

the democratic competition of view, in a democratic discussion. In view

of the extent and complexity of this statutory proposal, one can hardly

imagine another one for which a motion to extend the period for its

consideration would be better founded. If this motion by the opposition

were rejected, nota bene without any sort of substantive argumentation,

then this fact cannot be evaluated as other than a deficit in the

democratic political culture on the part of the governing majority. The

same reproof applies also to the circumstances surrounding the Prime

Minister’s introduction of the proposed amendment to the Act on 15

August 2007, an amendment numbering 37 pages of text – although the time

limit of 72 hours between the second and third reading of the Bill was

observed (§ 95 para. 1 of Act No. 90/1995 Sb.), the governing majority

made no attempts to make available to the parliamentary opposition a

more adequate time frame for the assessment of such an extensive and

significant set of proposed amendments.
 

As

to b): It is possible to join into one theme the search for answers to

the two above-mentioned components of the objection of inconsistency,

that is the violation of the principle of parliamentarianism along with

the separation of powers and the non-transparency of the structure for

the adoption of statutes, and therewith the system of law. That theme

could be formulated as follows: whether or not the „reform“ program of

the parliamentary majority can be carried out alone by the method that

is harmonious with the traditional conceptions of the system of law and

legislative techniques, as they have developed since the end of the 19th

Century? Thus, if it is acceptable, in terms of the principles of

parliamentarianism and the separation of powers, to reform the private

law by the adoption of a new Civil Code, running to over 2700 section,

on what grounds is it then not acceptable to reform public finance in

the form of an extensive statute encompassing in part „a collective

amending act“ and in part original statutory provisions. After all,

certain categories become a natural component of legal thought only with

the passage of time, and their original controversial nature is already

long forgotten. Among the most famous legal disputes in European legal

history belongs the dispute between Friedrich Carl von Savigny and Anton

Friedrich Justus Thibaut at the start of the 19th Century on the

necessity, or contrariwise the lack thereof, to codify the civil law in

Germany (see Thibaut und Savigny. Ein programmatischer Rechtsstreit auf

Grund ihrer Schriften, publ. J. Stern, Darmstadt 1959) – one cannot fail

to observe that it was Savigny’s view, directed against the

codification efforts in the field of private law which prevailed in

Germany at the time thus putting off, in comparison with France and

Austria, the adoption of the Civil Code by one hundred years.
 

Substantial

revisions of the legal order in the field of both public and private

law are an inevitable part of societal development, and it is in the

hands of the democratic legislature to determine the structure of law

and to delimit the subject of legal regulation in individual statutes –

within that framework also to weigh the degree to which substantial

revisions of certain segments of the legal order can be effectuated in

part by putting through amendments to statutes currently in force and in

part by the adoption of original statutory norms. Reform in the sense

of a fundamental revision of a certain segment of private or public law

in a single statute is not the equivalent of codification, as it can be

carried out even through other technical legislative methods. At this

juncture it is appropriate to make an empirical excursus with reference

to the shift in the modalities of law formation. Quantitative research

on the Czech legal order demonstrates that, in the case of statutes and

regulations, „the production of revisions since 1990 is unprecedented in

the history of the Czech legal order . . . [whereas] in principle it

applies that the revisions focus primarily on legal enactments adopted

in the previous electoral term and legal enactments from the then

current electoral term. Reaching back into the distant past is on the

whole exceptional. It seems that at the present time, with a certain

degree of hyperbole, the Parliament‘s focus is on the revision of its

own amending acts.“ (F. Cvrček, The Basic Quantitative Parameters of the

Czech Legal Order, Lawyer [Právník], No. 4, 2006, pp. 442 – 443).
 

The

Constitutional Court‘s reasoning here is not a philippic in favor of

the adoption of „collective amending acts“. It is merely a reference to

the variable form of the legal system and to the dissimilarity of the

legislative objectives of the presents and past periods. It is the

expression of a self-restrained assessment, but by no means an

unconditional acceptance.
 

If

the maxim of a statute’s substantive consistency, as declared in

Judgment No. Pl. ÚS 77/06 („[i]n a substantive law-based state, a

statute in the formal sense cannot be understood as a mere repository of

a wide variety of changes made throughout the legal order“), should be

conceived of in the sense of being a derogational ground, then it would

be so only in an extreme situation, such as, for ex., the case posed by

the petitioner in which the Government would concentrate „once annually

all of its legislative program into a single act ‘on the Regulation of

Legal Relations in the Czech Republic‘ or even into an act ‘on the

Improvement of the Fate of Citizens of the Czech Republic‘“. In spite of

all possible doctrinal doubts concerning the acceptability and

suitability of a voluminous combination of collective amending acts and

original statutory rules, the matter under adjudication is not such a

case.
 

According to the

Explanatory Report to the Bill on the Stabilization of Public Budgets

„the submitted set of legal arrangements relates to the field of tax,

including ecological tax, of almost all social systems (primarily they

are changes in the system of state social support, living and

subsistence minimums, the system of sickness insurance, the field of pay

and the field of employment) and in the field of health care of public

health insurance, insurance premiums for this type of insurance and the

activities of health insurance companies. Its objective is to strengthen

the protection of the environment through the optimalization of the

revenue of the state budget to support economic growth and the

regulation of ecological taxes; on the side of expenditures, the

proposed measures pursue a halt in the increase in finances expended in

the mentioned systems which, in view of the increasing share of these

expenditures on the emergence of deficits in public budgets, is

untenable.“ In in his 6 June 2007 speech before the Assembly of Deputies

at its 15th Session during the first reading of the Bill on the

Stabilization of Public Budgets, Prime Minister, Mirek Topolánek,

described the objective of that Bill in other words, or by a different

„nomenclature“, where he said the following: „We are striving to apply

the emergency brake in several fields. And here in relation to those

opponents who assert that it is unconstitutional, I want to say that

this constitutional analysis exists. This is not a limpet; it is called

the stabilization of public budgets and all its norms relate to the

stabilization of the public budgets. There is no limpet there.“ Let us

recall that the Prime Minister was not employing the term, “limpet“, in

the sense it was used by the Constitutional Court in its Judgment No.

Pl. ÚS 77/06, that is, for amendments proposed during the second reading

when they lack a close relation to the subject-matter of the bill under

consideration, rather with a distinct signification, in the

signification of its substantive inconsistency with parts of the

original bill.
 

Act No.

261/2007 Sb. is composed of three crucial parts – the legal framework

for tax, the social system and public health insurance – which have

substantive connections to the field of public budgets. One cannot reach

the conclusion in the case of this Act that there has been extreme

systemic arbitrariness such as to give rise, in relation to it as a

whole, to a derogational ground due to the violation of the principles

of the substantive law-based state or of parliamentary democracy.
 


X./b
 

On the Objection that the Senate‘s Decision not to Deal with the Bill is Unconstitutional
Next

to the objection that the Act is inconsistent, the second general

objection directed at Act No. 261/2007 Sb. as a whole is that the

Senate‘s decision not to deal with the Bill on the Stabilization of

Public Budgets is unconstitutional.
According to Art. 46 para. 2 of

the Constitution, one form of the consideration of a bill is to declare

the intention not to deal with it. A more detailed treatment of this

constitutional provision is found in § 107 of Act No. 107/1999 Sb., on

the Standing Orders of the Senate, which reads as follows: “After the

Rapporteur’s speech, and if the Committee’s recommendation does not

contain a motion that the Senate express its intention not to deal with

the Bill, the Presiding Senator shall call upon Senators to indicate

whether or not they wish to so move. If such a motion is contained in

the Committee’s recommendation or put forward by Senators, the motion

shall be put to a vote without debate. If the motion is passed, the

Senate shall conclude its consideration of the Bill.” If the Senate

declares its intention not to deal with a bill, then pursuant to Art. 48

of the Constitution the bill is adopted as a result of that resolution.
 

In

the given matter the Assembly of Deputies transmitted the bill to the

Senate on 30 August 2007. On the following day the Organizational

Committee assigned the senate print for consideration by committees,

namely to the guarantee committee, which was the Committee on National

Economy, Agriculture and Transport, which considered the Bill on 13

September 2007, also to the Committee on Health and Social Policy, which

considered the Bill on 12 September 2007, and finally to the Committee

on Public Administration, Regional Development and the Environment,

which considered the bill on the same day, that is, on 12 September

2007. Consideration in the Senate Plenary Session of the Bill on the

Stabilization of Public Budgets was begun on 19 September 2007 with the

extensive introductory speeches of the Prime Minister, as well as of the

ministers of finance, labor and social affairs, and health care. As was

already mentioned above, at its 8th Session, held on 19 September 2007,

the Senate expressed its intention not to deal with the Bill, 49 of the

80 Senators present (thus with a quorum of 41) voting for, and 27

against (see www.senat.cz), this motion, which had been introduced by

Senator Jiří Oberfalzer.
 

Senator

Jiří Oberfalzer substantiated his motion not to deal with the Bill on

the Stabilization of Public Budgets, as follows: „In treating this Bill

here it has already come to pass that it was approved, in its current

version, in the Assembly of Deputies by a narrow and fragile political

majority. In other words, there is no political lattitude for improving

it by adding proposed amendments and returning this Bill to the

Assembly. Nor is there even physical time for the improvement of this

Bill and its return to the Assembly of Deputies. The validity of this

set of statutes is a condition for the stabilized form of the budget, or

an acceptable level of deficit. Moreover, such a form of budget is

necessary for the Czech Republic to observe the convergence program. And

the observance of the convergence program is an indispensable condition

for drawing upon the European funds. I think that, in and of

themselves, these are sufficiently weighty reasons for us to make it as

easy as possible for this Bill to pass the Senate. This Bill was

considered by three Senate committees, and each concluded their

proceedings with the same motion - they recommended that the Plenary

Session approve this Bill. “
 

In

reaction to this motion, the chairpersons of the Senate caucuses, or in

some instances the deputy chairpersons of the Senate, took the floor.
Some

of them subjected the Bill to criticism in terms of its limitation on

the principle of parliamentary democracy. Senator Alena Gajdůšková had

the following to say: „This Bill has really taken us very much by

surprise because I consider it as heading in the direction of

authoritarian processes, regimes. Therefore, if it is not possible to

have a discussion on it, then we really are not in a democratic and a

law-based state. . .  I genuinely consider this situation – in a

democracy – as very irregular. Prime Minister Topolánek has stated that

the Act, upon which we are at this moment acting, is fundamental, which

merits a more general debate in the Senate. In direct conflict with his

statement is the motion from ODS to vote that we not deal with this Act.

If I recall correctly, during the five years that I have been in the

Senate, we have only ever made use of this institute wholly

exceptionally and only in situations concerning a technical matter: in

relation to those norms which the Senate did not consider as, so to

speak, worthy of its interest. If then ODS in the Senate does not

consider this norm as worthy of its interest, then I frankly do not

understand the astronomical clock at the start of our consideration of

this point, beginning with the Prime Minister and continuing with a

further three ministers, moreover in conflict with the Senate’s Standing

Orders. Should the Senate in fact carry the motion not to deal with the

Bill, thus precluding a general, alternatively an extended, debate,

then that will betoken that the Czech Republic has once again grown into

the rule of one party. Then everyone in this land who is in earnest

about democracy and human rights, should promptly, earnestly and in

great detail grapple with the current level of Czech democracy.“ Senator

Josef Novotný state the following: „It is necessary to recall the words

of the Senate Chairperson, who at the end of August rejected the

efforts to have this norm considered in accelerated proceedings and

promised that the Senate will deal with this norm seriously and examine

it responsibly. The institute of not dealing with a bill entirely

negates the promise given by the Senate Chairperson . . . I would just

like to remark that if we carry the motion not to deal with the bill,

then at the conclusion of our business, we should just switch off the

lights here.“ Deputy Chairperson of the Senate, Jan Rakušan, drew

attention to the following: „. . . in his introduction the Prime

Minister said that this Act merits sufficient discussion and debate in

the Senate. Unfortunately, he is no longer here, but I understood him

such that the other side should be heard as well. A month ago I read

that our Senate Chairperson, Doctor Sobotka, whom I very much esteem,

said that the Senate is not a voting conveyor belt and that we need at

least a month for due consideration. Thus I understood him to mean that

we would be dealing with it in some manner. Just as I understand § 107,

that is not to deal with a statute, and perhaps I am mistaken, but I

regarded it as an accelerated yes; I regarded that as an effective

method for marginal statutes, so as to leave us sufficient time for

statutes which are very important. It is possible that you have not

given any thought at all to the point that, if we carry the motion not

to consider the Bill, then we return to the time before 1989, when the

regime and the government feared words, sentences and expressed

opinions. In this case, not to deal with means the end of freedom of

speech.“
 

On the other hand,

Senator Adolf Jílek stated „we should be done with this Act today. If

somebody asserts that there is no room for discussion here, then they

are only those who want this room due to the fact that there are cameras

here and that our deliberations will be aired in the night by Czech

Televions on its second channel sometime between three and six in the

morning and some of them are glad to see themselves there. Therefore,

they want to have the opportunity to appear here. I would like to point

out that this Act, which was considered in the Assembly of Deputies, has

been followed from the very beginning by all rapporteurs both of

committes and of caucuses. The Senate held a seminar on this topic; the

Minister was before the committee, was in the caucuses, which requested

him to do so. Thus, I think that these discussions have already gone on

for quite some time, and I do not see a light at the end of the tunnel.“
 

The

caucus chairpersons made use of their speeches not only to express

their positions on Senator Jiří Oberfalzer‘s motion not to deal with the

Bill on the Stabilization of Public Budgets, but they also put forth

their positions on the merits, that is, on the Bill on the Stabilization

of Public Budgets itself, while the Minister of Finance, M. Kalousek,

and the Minister of Health, T. Julínek, made substantive responses to

their speeches (see the stenographic record from the 8th Session of the

Senate of the Parliament of the Czech Republic, held on 19 September

2007, www.senat.cz).
 

The

relation between the two chambers of the Parliament of the Czech

Republic is asymmetrical. Apart from the exceptions laid down in the

Constitution for the adoption of constitutional acts and of precisely

designated types of statutes, as a rule the adoption of statutes by both

assemblies (Art. 39 para. 4 and Art. 40 of the Constitution) is a

process in which the Assembly of Deputies enjoys a stronger position,

enabling it to overturn the Senate‘s refusal to consent to a bill (Art.

47 para. 3 of the Constitution). The relation between the two chambers

constitutionally-delimited in this manner is the necessary starting

point also for the interpretation of Art. 46 para. 2 of the

Constitution. Art. 46 of the Constitution enshrines two means of

proceeding which result in a bill being adopted without it even having

been considered in the Senate. First, there is the alternative for the

Senate to remain passive (Art. 46 para. 3 of the Constitution), then the

alternative for the Senate explicitly to express its intent not to deal

with a bill. The Constituent Assembly‘s original intention in this

connection is bound up with its conception of the selection of bills

with which the Senate will deal in the legislative process [see J.

Syllová, Constitutional Characteristics of the Parliament of the Czech

Republic and their Evolution, in J. Kysela (ed.), Ten Years of the

Constitution of the Czech Republic: Starting Points, Current Situation,

Perspectives, Prague 2003, p. 263 and foll.]. However, J. Kysela has the

following view: “One cannot discern a clear conception in the usage of

the institute ‘not to deal with a bill’, since, apart from a perfectly

proper ground, consisting in the absence of objections (sped up

approval), other grounds (a statute that is bad but necessary) are

commonly expressed in the debate, alternatively it is possible to

speculate on unexpressed reasons (kill a debate that is capable of

influencing the undecided, prevent the minority from criticizing the

probable voting coalition, speeding up the course of the session in its

concluding stages, etc.). In certain cases, then, bills ‘approved’ by

this route are free of substantive and technical legislative defects, at

other times, however, not entirely perfect yet highly ‘technical’

amendments to acts. One cannot speak, however, of a distinct

crystallization of the Senate’s interests in certain types of statutes -

for which it would shun a resolution “not to deal with” (J. Kysela,

Bi-Cameral Systems: Theory, History and Comparison of Bi-Cameral

Parliaments, Prague 2004, pp. 552 – 53). In other words, in terms of

existing legislative practice, one cannot frame a clear constitutional

custom from the manner in which the Senate has proceeded in accordance

with Art. 46 para. 2 of the Constitution and § 107 of Act No. 107/1999

Sb., on the Standing Orders of the Senate. In addition, it must be

noted, in relation to the interpretation of Art. 46 of the Constitution,

that in the situation where the Constituent Assembly declined to limit

the types of statutes which the Senate may decline to deal with, the

interpretation of these types results from a procedure, that is, the

Senate‘s voting in individual cases. If, however, the type of statutes

included in this group were to be determined subsequently (ex post) by

means of Constitutional Court jurisprudence in norm control proceedings,

that would entail for the legislative process a considerable degree of

uncertainty as to whether adopted statutes are valid.
 

The

difference in the means by which the Senate proceeds when adopting a

bill and by which it expresses its intention not to deal with one, is

reflected in the fact that the second alternative does not provide the

opportunity for plenary debate, and with it the opposition’s opportunity

to make a critical assessment of a bill. At this juncture it is

necessary to answer the basic question of whether it is or is not in

harmony with the principle of parliamentarianism to have a situation in

which the majority in the second assembly of Parliament can, by their

decision, block the public consideration of a bill, and thereby preclude

the free parliamentary expression of the minority. In the case under

adjudication, the principles of the mutual relations of the two chambers

in the constitutional design of the Parliament of the Czech Republic

stands in collision with the characteristics of the democratic

functioning of Parliament couched in this manner, that is, with the

right of the parliamentary minority freely to express its views on the

content of statutes within the context of the consideration of them.
 

At

this juncture, we cannot fail to point out that the bi-cameral

structure of the Parliament of the Czech Republic is also an expression

of the principle of the separation of powers within the legislative

power. With the purpose of ensuring that the separation of powers

genuinely functions, differing electoral systems were enshrined in Art.

18 paras. 1 and 2 of the Constitution, with the objective of thereby

bringing about dissimilar political structures in the two chambers, that

is, the state of affairs in which the Senate did not become merely a

political copy of the Assembly of Deputies, and thus is able genuinely

to fulfill the function of a check and a counterweight within the

legislative power. In a constitutional model conceived in this way, the

abuse of the institute of not dealing with a bill when it is considered

before the Senate does not at present appear to be a real contingency. A

different situation would arise, however, in the case that the

Constituent Assembly’s original intention is not realized and, in terms

of its political structure, the Senate becomes a mere copy of the

Assembly of Deputies. However much this observation appears rather as a

contemplation de constitutione ferenda, in extreme cases (that is, in

cases of the repetition and abuse of this manner of proceeding, directed

in its effects at excluding Parliament’s second chamber from genuine

participation in the adoption of statutes), it could even become the

basis for interpreting the relevant provisions of the Constitution and

give rise to derogational grounds for the violation of the

constitutional standards for the adoption of statutes.
 

In

a system in which the Assembly of Deputies enjoys a dominant position

in the legislative process, while the constitutional and statutory

standards for the consideration of bills excludes the possibility to

restrict parliamentary discussion in the Assembly of Deputies; further

in a situation where, in the given matter, the Bill was considered by

three committees of the Senate and the actual content of the debate on

the motion not to deal with the Act on the Stabilization of Public

Budgets, on the part of the caucus chairpersons, was for the most part

the content of the Bill itself; and finally, in a situation in which

there has as yet not been a repeated process signalling the effort by

the parliamentary majority to exclude the Parliament’s second chamber

from genuine participation in the adoption of statutes, in the matter at

issue one cannot spot in the manner in which the Senate proceeded

pursuant to Art. 46 para. 2 of the Constitution and § 107 of Act No.

107/1999 Sb., on the Standing Orders of the Senate, a violation of the

principle of parliamentary democracy. One can spot therein rather a

manifestation falling within a field which is already removed from the

field of constitutional review, that of the level of democratic

political culture of the Senate majority.
 


X./c
 

On

the Objections that the Proposed Amendments Lacked a Close Relation to

the Subject-Matter of the Act and that the Statutory Framework for the

Submission of Technical Legislative Proposals during the Third Reading

of a Bill Has Been Exceeded
In relation to the following provisions

of Act No. 261/2007 Sb., the petitioner objects that, as regards the

following provisions, the proposed amendments lack a close relation to

the subject-matter of the Act itself:
- in Part Four (the Amendment to the Act on Value-Added Tax) in Art. VIII, in relation to points 1, 3, 4, 5 and 15 to 21,
 - in Part Five (the Amendment to the Act on Accounting) in relation to Arts. LXXVIII and LXXIX.
In

the first instance, in support of this line of argument, the petitioner

draws our attention to the fact that the proposed amendment introduced

during the second reading of the Bill by Prime Minister, M. Topolánek,

contains the addition of a new subject of value-added tax – a group of

persons registered as taxpayers by means of group registration (points

4, 5, 15 to 21 of Art. VIII of Act No. 261/2007 Sb., which amended and

supplemented Act No. 235/2004 Sb., on Value-Added Tax, as subsequently

amended, namely in § 5a to 5c, § 28 para. 11, § 93a, § 95a, § 99 para.

11, § 100 para. 5, § 105 para. 2, § 106a, and § 107 para. 3). In the

second instance, the second secondary party adds as an objection its

conviction that the Act on Accounting is not a legal enactment which

could in any manner relate to the reform of public finance, rather it is

a statute which governs, in particular, the techniques of accounting,

not a statute intruding into the system of taxes or influencing the

expenditures in the state budget.
 

In

its Judgment No. Pl. ÚS 77/06, the Constitutional Court formulated

standards for the constitutionally-conforming interpretation of § 63

paras. 1 to 5 of Act No. 90/1995 Sb., on the Standing Orders of the

Assembly of Deputies, which governs the right to submit proposed

amendments to a bill under consideration. In this connnection, the Court

emphasized the condition of a close relation between the subject-matter

of a bill which is just then going through the legislative process and a

proposed amendment submitted in the second reading of the bill. In that

decided matter, the Assembly of Deputies considered the bill of

Deputies M. Hašek, M. Kraus and J. Dolejš for the issuance of an act

which amends Act No. 178/2005 Sb., on the Dissolution of the Fund of

National Property of the Czech Republic and on the Competence of the

Ministry of Finance in the Privatization of the Property of the Czech

Republic (Act on the Dissolution of the Fund of National Property)

(Assembly Print No. 1222/0). In the second reading of the Bill at issue,

a proposed amendment was put forward by Deputy M. Doktor and

incorporated into Print No. 1222/3, which added to the Bill‘s original

title the words, ” . . . and Act No. 319/2001 Sb., which Amended Act No.

21/1992 Sb., on Banks, as subsequently amended“, and which inserted

after Art. I of the Bill a new Part Two, which, including the heading,

read as follows: „PART TWO – The Amendment of Act No. 319/2001 Sb., on

Banks“, and which contained a provision amending and supplementing the

legislative scheme on the disbursement of supplementary compensation

from the Depositor Insurance Fund. The vote on this proposed amendment

was then held in the 3rd reading, on 23 May 2006 at the 56th Session, as

serial number 16, when 142 of the 167 Deputies present voted in favor

of its adoption, with three against.  Thereafter the amended bill was

approved by the Assembly of Deputies (Resolution No. 2470). This means

of proceeding resulted in the creation of a situation where the original

bill contained an amendment to § 5 para. 3, lit. j) of Act No. 178/2005

Sb., on the Dissolution of the Fund of National Property, according to

which property designated for privatization, the proceeds from the sale

of this property, and the profit from the state’s participation in

commercial companies could also be used to transfer 2 billion Czech

Crowns to the Ministry of Labor and Social Affairs in support of the

renovation of retirement homes; however, the proposed amendment

contained legal rules from an entirely different area, namely, rules on

the disbursement of supplementary compensation from the Depositor

Insurance Fund. In other words, the subject-matter of the bill was the

issue of the purposes for which money from the Fund of National Property

could be employed, and the subject-matter of the proposed amendment was

an entirely distinct issue, namely, the disbursement of compensation

from the Depositor Insurance Fund in banks.
 

The matter being decided is not a case of such a deviation from the subject-matter of the originally submitted bill.
If

the argument is made, as it is in the case of the first petitioner,

that the proposed amendment, introduced by the Prime Minister, M.

Topolánek, during the second reading of the Bill, introduced a new

subject of value-added tax - the group of persons registered as

taxpayers by means of group registration (points 4, 5, and 15 to 21 of

Art. VIII. of Act No. 261/2007 Sb., which Amended and Supplemented Act

No. 235/2004 Sb., on Value-Added Tax, as subsequently amended, in

particular in § 5a to 5c, § 28 para. 11, § 93a, § 95a, § 99 para. 11, §

100 para. 5, § 105 para. 2, § 106a, and § 107 para. 3), it was a case

that differed from the matter adjudicated in Judgment No. Pl. ÚS 77/06.

The proposed amendment did not depart from the framework of the original

bill under consideration, which was an amendment and supplement to the

Act on Income Tax.
 

An

analogous finding applies in relation to the objection of the second

secondary party, to the effect that the Act on Accounting, which

governs, in particular, the techniques of accounting and which neither

intrudes into the system of taxes nor influences the expenditures in the

state budget, is not a legal enactment which could in any manner relate

to the reform of public finance.
 

At

the joint session of the Assembly of People and the Assembly of Nations

of the Federal Assembly, held on 12 December 1991, the Deputy Prime

Minister and Minister of Finance of the CSFR, Václav Klaus, formulated

the purpose and significance of the Act on Accounting as follows: „The

Act on Accounting lays down the extent and manner for conducting

accounting and its cogency for all legal persons as well as for natural

persons who engage in entrepreneurial or other gainful activity in

accordance with separate legal enactments, if for tax purposes they

demonstrate, in addition to their income, also their expenditures based

on the attainment, securing, and maintenance of that income. Among the

natural persons who engage in entrepreneurial or other gainful activity,

the Act does not apply to those who are assessed income tax of

inhabitants by a lump sum or for whom tax is assessed by the deduction

of expenditures set as a percentage of their income in accordance with

the Tax Act. These persons are thus subject to the obligation imposed

upon them solely by tax organs in accordance with legal enactments on

tax.“ (See the digital archive of the Assembly of Deputies of the

Parliament of the Czech Republic).
 

The

purpose of the Act at issue is also analogously defined in the

jurisprudence: „Accounting by tax subjects duly conducted and submitted

within the framework of a tax proceeding to the tax administrator

constitutes a basic form of direct evidence for the assessment of income

tax. In the case the accounting is incomplete, then, the tax subject

must, as part of his evidentiary burden, produce such evidence as would

make up for that lack of completeness in his accounting and which would

incontestably corroborate all income and expenditures which the tax

subject declared in his tax return. Such is the case because the facts

relating to the amount of taxable income is demonstrated by the tax

subject through the accounting which he is obligated to keep, if for tax

purposes he asserts and demonstrates his expenditures based on the

attainment, securing, and maintenance of that income.“ (Decision of the

Regional Court in Hradec Králové, No. Ca 25/2005 of 31 October 2005.)
 

If

duly conducted accounting is a basic prerequisite for the fulfilment of

tax obligations, and if the amendment to the Act on Accounting under

review lays down a definitional characteristic of the legal definition

of the group of natural persons who are entrepreneurs and who are not

inscribed in the Commercial Register, then for the purposes of

conducting accounting in accordance with Act No. 563/1991 Sb., as

subsequently amended, one cannot fail to acknowledge the close relation,

in Act No. 261/2007 Sb., between the tax and the accounting rules.
 

The

petitioner also includes, among the procedural errors relating to

individual parts, alternatively provisions, of the Act on the

Stabilization of Public Budgets, a breach of the statutory framework for

the submission of technical legislative motions during the third

reading of a bill.
 

According

to § 95 para. 2 of Act No. 90/1995 Sb., in the third reading a debate

shall be held in which can be proposed solely corrections of technical

legislative errors, grammatical errors, or spelling or printing errors,

modifications which logically follow from the proposed amendments.
 

In

the third reading of the Government Bill for the adoption of the Act on

the Stabilization of Public Budgets (Print 222), held on 21 September

2007, Deputy Daniel Rovan submitted in relation to that part of the Act,

the constitutional review of which forms the subject of this proceeding

before the Constitutional Court, according to his own designation, „a

technical legislative proposed amendment“: „[It] concerns the

specification of point 7 of Part Six of Print 222. Point 7 should

correctly read – and I quote: In § 13a para. 2, lit. d), after the first

word, ‚tax‘, shall be added the words ‚if a municipality thus provides,

by means of a generally binding municipal ordinance under § 4 para. 1,

lit. v) or‘, which incoroporates the word, ‚first‘, into the existing

text, in view of the fact that the word, tax, appears in the text three

times in total.“ (see the stenographic record of the 18th Session of the

Assembly of Deputies of the Parliament of the Czech Republic, held on

21 September 2007, www.psp.cz).
In terms of its content, the cited

proposal can be assessed as the correction of legislative-technical

errors, and thus as a proposal which did not overstep the bounds laid

down in § 95 para. 2 of Act No. 90/1995 Sb.
 


X./d
On the Objection that the Government’s Legislative Rules Have Been Violated
 

The

petitioner further objects to a violation of the Government’s

legislative rules in those parts of the Act at issue which represent an

original, new (non-amending) legal enactment.
 

The

Constitutional Court formulated, in its Judgment No. Pl. ÚS 7/03

(Collection of Decisions, Volume 34, Judgment No. 113, published as No.

512/2004 Sb.), the test for assessing this type of procedural objections

in norm control proceedings. In that Judgment it declared that the

violation of legislative rules, without more, that is, without a

violation of the competence prescribed by the Constitution and by

statute, alternatively without a violation of the

constitutionally-prescribed manner for the adoption and issuance of a

statute, or other legal enactment, would not give rise to grounds for

derogation under § 68 para. 2 of Act No. 182/1993 Sb. due to a failure

to observe the constitutionally-prescribed manner for the adoption of

statutes or other legal enactments.
 

A

departure from the methodical rules for the classification of legal

enactments, pursuant to Art. 28 of the Government’s Legislative Rules,

adopted by the 19 March 1998 Government Resolution No. 188, would bring

about a conflict with the constitutional principle of the law-based

state only in the case that it would not allow for a legal enactment

(statute) to be precisely identified by the designation employed by the

legislature, distinguishing it from other legal enactments (statutes),

or other legal enactment (statute).
 

As

regards Parts Forty-Five to Forty-Seven (Arts. LXXII to LXXIV) of Act

No. 261/2007 Sb., however, this is not such a case. All of the statutory

provisions contained therein are designated in a manner that is

definite and identifiable without confusion within the system of the

legal order.
 


XI.
 

The Substantive Conformity of the Contested Statutory Provisions with the Constitutional Order
In

its constant jurisprudence the Constitutional Court has asserted that

the amendment of a legal enactment does not have separate normative

existence, rather it becomes a part of the amended legal enactment

[Judgment No. Pl. ÚS 5/96 (Collection of Decisions, Volume 6, Judgment

No. 98, published as No. 286/1996 Sb.), Ruling No. Pl. ÚS 25/2000

(Collection of Decisions, Volume 19, Ruling No. 27), Judgment No. Pl. ÚS

21/01 (see above), and Judgment No. Pl. ÚS 33/01 (Collection of

Decisions, Volume 25, Judgment No. 28, published as No. 145/2002 Sb.)],

and as such, its constitutionality is adjudged. If, in a norm control

proceeding, the grounds for derogation are either the lack of

norm-creation competence or the violation of the

constitutionally-prescribed manner of adopting the legal enactment, then

the constitutionality of the entire amending act is adjudged [see

Judgments No. Pl. ÚS 5/02, and No. Pl. ÚS 7/03 (see above)].
 

In

keeping with the cited constant jurisprudence, in the given matter

solely the following provisions form the subject of substantive review:
- Part Forty-Five (Tax on Natural Gas and other Types of Gases);
- Part Forty-Six (Tax on Solid Fuels);
- Part Forty-Seven (Tax on Electricity) of Act No. 261/2007 Sb.;
-

§ 6 para. 4, first sentence, § 6 paras. 13 and 14, § 7 para. 8, first

sentence, § 16, § 21 para. 1, and § 38h para. 1, lit. b) of Act No.

586/1992 Sb., on Income Tax, as amended by Act No. 261/2007 Sb.
Seeing

as the first secondary party introduced, at the oral proceeding, the

fact that, according to Act No. 261/2007 Sb., a new subject of

value-added tax – a group of persons registered as taxpayers by means of

group registration – does not possess legal personality, still the

petitioner did not expand the relief requested in the petition, which,

in agreement with the above-cited maxim, the line of argument would

explicitly convey.
 

However

much, the Constitutional Court has repeatedly emphasized that, in

assessing the conflict of a statute, or individual provisions thereof,

with the constitutional order, it is bound only by the requested relief

[the petit], but not by the reasoning given therefore [Judgment No. Pl.

ÚS 16/93 (Collection of Decisions, Volume 1, Judgment No. 25, published

as No. 131/1994 Sb.) and others], the conclusion does not follow

therefrom that the petitioner in a norm control proceeding, if it argues

on the basis of the substantive non-conformity of a statute with the

constitutional order, is not charged with the burden of assertion. In

other words, should a petitioner object to an act‘s substantive conflict

with the constitutional order, for the purposes of constitutional

review, the mere designation of the act (or individual provisions

thereof) proposed for annulment is not sufficient, rather it is also

indispensable on the petitioner’s part to state the grounds for

objecting to its constitutionality. Within the context of a norm control

proceeding then, the Constitutional Court then is not bound by these

grounds - it is bound solely by the requested relief [the petit], not

however by the breadth of review as would be set by the grounds

contained in the norm control petition. Should the petitioner in a norm

control proceeding fail to meet the burden of asserting

unconstitutionality, then there is no option other than to consider such

a petition as inconsistent with § 34 para. 1 of the Act on the

Constitutional Court, thus not eligible for consideration on the merits

(see Judgment No. Pl. ÚS 7/03).
 

The

implications of the mentioned maxim apply fully to those parts of the

requested relief in which the petitioners (secondary parties) seek the

annulment of Part Forty-Five, Part Forty Six, and Part Forty-Seven of

Act No. 261/2007 Sb. Thus, apart from procedural objections in relation

to these parts of the Act, they did not raise any substantive

criticisms.
 


XI./a
 

Proposed points in relation to the Act on Income Tax
In

contrast to Part Forty-Five, Part Forty Six, and Part Forty-Seven of

Act No. 261/2007 Sb., in relation to § 6 para. 4, first sentence, § 6

paras. 13 and 14, § 7 para. 8, first sentence, § 16, § 21 para. 1, and §

38h para. 1, lit. b) of Act No. 586/1992 Sb., on Income Tax, as amended

by Act No. 261/2007 Sb., the petitioner made specific objections as to

how their content conflicts with the constitutional order.
 

It

calls attention to the fact that up until now income tax has been

calculated from individual incomes after deducting social security

insurance premiums, which comprise insurance premiums for pension

insurance, insurance premiums for sickness insurance, and contributions

to the state employment policy (paid in accordance with Act No. 589/1992

Sb., on Social Security Premiums and Contributions to the State

Employment Policy, as subsequently amended), and insurance premiums for

public health insurance (paid in accordance with Act No. 592/1992 Sb.,

on Premiums for Universal Health Care, as subsequently amended); this

principle applied both for income from independent activities and job

perquisites (§ 6 of Act No. 586/1992 Sb.), and income from

entrepreneurial and other independent gainful activity (§ 7 of the cited

act). Thus only that income was taxed which individuals had at their

disposal after the deduction of insurance premiums manditorily levied

into the public systems of social and health insurance.
 

According

to the petitioner, up until Act No. 261/2007 Sb. was adopted, the

payment of these insurance premiums was regarded such that they were not

a component of the base for the calculation of income tax (§ 6 para.

13, § 7 paras. 6, 7 and 10 of the Act on Income Tax, in the version

valid until 31 December 2007), as they are not income of natural

persons, rather it concerns their participation in maintaining the

systems of public insurance, or the system of benefits guaranteed by the

state. According to the petitioner, the contested statutory arrangement

creates a fiction that insurance premiums payed out constitute income,

alternatively a part of the income of natural persons in the wider sense

of the word. Apart from conflict with Arts. 30 and 31 of the Charter

and with the Social Security (Minimum Standards) Convention (No. 102)

(Federal Ministry of Foreign Affairs Notice No. 461/1991 Sb.), with the

European Social Charter (Ministry of Foreign Affairs Notice No. 14/2000

Sb., Collection of International Agreements) and the European Code of

Social Security (Ministry of Foreign Affairs Notice No. 90/2001 Sb.,

Collection of International Agreements), in this connection the

petitioner objects also to the conflict with the principle that law be

comprehensible and cognizable, the fulfillment of which is one of the

basic presuppositions of the existence of the law-based state.
 

Apart

from the levy for insurance premiums paid from the income of natural

persons, especially in the case of income tax from independent

activities and job perquisites, the employers also pay further levies

into the public systems of social and health insurance. In describing

their legal nature, the petitioner emphasized that levies upon employers

do not constitute a component of employers‘ income and are only

indirectly related to employees‘ incomes. In the situation where since 1

January 2008 not only are obligatory levies into the system of health

and social security taxed, but so are payments which are imposed upon

employers [§ 6 paras. 13 and 14, § 38h para. 1, lit. b) of Act No.

586/1992 Sb.], thus, the new statutory rules count, for taxation

purposes, the levied insurance premiums, as well as payments imposed

upon employers, as part of natural persons‘ income. According to the

petitioner, levies imposed on employers have nothing in common with

employee income and are not a part of the employment contract, since

this is a public-law obligation imposed upon employers by law by means

of which employers share in the maintenance of the systems of public

insurance. The mentioned assertion rests also on the reference to § 2 of

Act No. 589/1992 Sb., on Insurance Premiums for Social Security and

Contributions to the State Employment Policy, in its current wording,

according to which insurance premiums are revenue to the state budget,

from which can be deduced that, in the case of levies upon employers,

this is the transfer of financial means directly to the state, moreover

from its own income, not from the income of employees, therefore in the

given case this is an act founded on bilateral public-law relations

between employers and the state, to which employees are not a party. The

mentioned legal construction which, according to the petitioner, gives

rise to unequal positions, in which a subject, who is in no manner

connected with the object of taxation, is compelled to pay a tax, is

regarded as in conflict with the principle of equality (Arts. 1 and 3 of

the Charter) and the principle of the minimum rationality and justice

of legal enactments, which is a further prerequisite of the existence of

the law-based state (Art. 1 of the Constitution).
 

According

to the petitioner, the taxation of insurance premiums paid by natural

persons and of levies paid by the employer cannot be regarded as

taxation of income which arises in the future, since no „direct

connection exists as to the mutual amounts and periods of levying“

(there is not even any guarantee that the specific insured person will

gain a claim to pensions payments at all, that is, whether he will

attain in the future the income for which he is being taxed in the

present) between the levying on insurance premiums and possible future

income in the form of certain of the pensions or health care, health

aides, or medicinal preparations. In this connection, it is objected

that the contested statutory construction is in conflict with the

fundamental principle of the taxation of income, according to which

taxation occurs at the moment income comes into being, and not prior

thereto. According to the petitioner, the statutory framework at issue

employs terminology which does not correspond to the current state of

affairs, it clouds the existing clarity of conceptual phrases, since in

places where, in the case of levies upon insurance premiums to the

system of health and social security, it speaks of taxable income, in

reality it is a tax on health and social insurance, which, according to

it, erases the fundamental difference between the systems of taxes and

fees, which have their constitutional foundation in Art. 11 para. 5 of

the Charter, and the systems of public social and health insurance,

which rest on Arts. 30 and 31 of the Charter.
 

The

petitioner further objects that § 16 and § 21 para. 1 of Act No.

586/1992 Sb., on Income Tax, as amended by Act No. 261/2007 Sb., are

unconstitutional on the grounds of their indefiniteness, giving rise to

conflict with the principle of the law-based state.
 

Points

49 and 50 of Art. I of Act No. 261/2007 Sb. amend the same provisions

of the Act on Income Tax (§ 16), while the otherwise identical text

contains a different tax rate – point 49, a rate of 15 % of the tax

base, and point 50, a rate of 12.5 % of the tax base. In the sense of

potential means of proceeding, the petitioner is contemplating the

possibility, when interpreting, to accord the mentioned point 50

priority, namely proceeding from the argument lex posterior derogat legi

priori.
 

According to point

64 of the same article, in § 21 para. 1 of the Act on Income Tax, the

number, „24“, is replaced by the number, „21“, in point 65 of the same

provision of the Act on Income Tax the number, „21“, is replaced by the

number, „20“, and in point 66, again of the same provision, the number,

„20“, is replaced by the number, „19“. Then according to Art. LXXXI

point 1, lit. c) of Act No. 261/2007 Sb., Art. I, point 65 of the

mentioned Act comes into effect on 1 January 2009, and according to Art.

LXXXI point 1, lit. e) of Act No. 261/2007 Sb., Art. I point 66 of the

mentioned Act comes into effect on 1 January 2010. The petitioner

asserts that these rules result in indefiniteness in determining at

which rate legal persons will be taxed after 1 January 2008, when the

Act contains no express provisions on the issue.
 


XI./b
The Wording of the Contested Provisions from the Act on Income Tax
 

It

was already mentioned that, in the relief requested in its petition

[petit], the petitioner seeks the annulment of § 6 para. 4, first

sentence, § 6 paras. 13 and 14, § 7 para. 8, first sentence, § 16, § 21

para. 1, and § 38h para. 1, lit. b) of Act No. 586/1992 Sb., on Income

Tax, as amended by Act No. 261/2007 Sb.
 

The

first sentence of § 6 para. 4 of Act No. 586/1992 Sb., on Income Tax,

as amended by Act No. 261/2007 Sb. provides: „Income billed or paid by

an employer with its headquarters or residence within the Czech Republic

and income from taxpayers as defined in § 38c are, after the increase

under paragraph 13, a separate tax base for the assessment of tax

collected by withholding at a tax rate under § 36 para. 2, if it is

income under paragraph 1, lit. a) and d) and under paragraph 10, the

aggregate amount of which, prior to the increase under paragraph 13,

does not exceed, in relation to the same employer, the amount of 5000

Czech Crowns per calendar month.“
 

Sec. 6 paras. 13 and 14 of Act No. 586/1992 Sb., on Income Tax, as amended by Act No. 261/2007 Sb., provide:
„(13)

The tax base (partial tax base) comprises incomes from independent

activities or job perquisites with the exceptions given in paragraphs 4

and 5, increased by an amount corresponding to the insurance premium for

social security and the contribution to the state employment policy,

the insurance premium for universal health insurance, which is from

among those incomes which the employer on his own is obligated to pay,

pursuant to separate legal enactments, and to which applies mandatory

foreign insurance of the same type, increased by an amount corresponding

to the employer’s contribution to the foreign insurance.

 

(14)

If it is income flowing from sources abroad, then, in the case of

taxpayers mentioned in § 2 para. 2, the tax base is their income from

independent activities performed in a state with which the Czech

Republic has not concluded a treaty limiting double taxation, increased

by an amount corresponding to the employer’s contributions to insurance

manditorily paid pursuant to paragraph 13 and decreased by the tax paid

abroad on this income. If the independent activity is performed in a

state with which the Czech Republic has concluded a treaty limiting

double taxation, the tax base is the income from independent activities

performed in that state increased by an amount corresponding to the

employer’s contributions to insurance manditorily paid pursuant to

paragraph 13 and decreased by the tax paid abroad on this income, but

only to the extent to which this tax was not, in the preceding tax

period, included in the inland tax obligation pursuant to § 38f. “

The

first sentence of § 7 para. 8 of Act No. 586/1992 Sb., on Income Tax,

as amended by Act No. 261/2007 Sb., provides: „If the taxpayer claims

expenditures under paragraph 7, it is presumed that the amount of the

expenditures includes all of the taxpayer’s expenditures incurred in

connection with earning income from entrepreneurial activity and from

other independent gainful activity.“
 

Sec.

16 of Act No. 586/1992 Sb., on Income Tax, as amended by Act No.

261/2007 Sb., which is another of the contested provisions of that Act,

provides: „Tax from the tax base reduced by the untaxable parts of the

tax base (§ 15) and by the amounts deductible from the tax base (§ 34)

rounded downward to the next whole hundred amount in Czech Crowns.“ Then

§ 21 para. 1 of the same act, provides: „The tax rate is 19 %, unless

provided otherwise in paragraphs 2 and 3. This tax rate relates to the

tax base reduced by the amounts in § 34 and § 20 paras. 7 and 8, rounded

down to the next whole thousand Crown amount.“
 

The

wording of the last of the contested provisions, § 38h para. 1, lit. b)

of Act No. 586/1992 Sb., on Income Tax, as amended by Act No. 261/2007

Sb., reads as follows: „The taxpayer shall calculate the amount to be

withheld from income of natural persons from independent activity and

job perquisites from the base for the calculation of withholding. The

base for the calculation of withholding is the aggregate of incomes from

independent activity and job perquisites billed or paid to the taxpayer

during a calendar month or during a tax period, with the exception of

taxable income by taxes collected by withholding at the tax rate under §

36 and income which does not form the object of tax, increased by an

amount corresponding to the insurance premium for social security and

contributions to the state employment policy and insurance premium for

universal health insurance (hereinafter „insurance premium“) which,

pursuant to separate legal enactments, the employer is obliged to pay on

his own from billed or paid income and, in the case of employees to

whom manditory foreign insurance of the same type applies, increased by

an amount corresponding to the employer’s contributions to this foreign

insurance.“
 


XI./c
 

The

Object of Tax and the Tax Base for Income Tax in Relation to the Maxim

of the Definiteness and Clarity of the Legal Order as a Component of the

Principle of the Substantive Law-Based State
 

The

first group of Constitutional Court decisions on the issue of the

constitutionality of the legal framework for taxes and fees comprises

its jurisprudence on the interpretation and application of Art. 11 para.

5 of the Charter in connection with the provisions of Art. 79 para. 3

and Art. 104 para. 3 of the Constitution in the matter of the limits of

sub-statutory legal provisions on taxes and fees [see especially

Judgments No. Pl. ÚS 3/95 (Collection of Decisions, Volume 4, Judgment

No. 59, published as No. 265/1995 Sb.), No. Pl. ÚS 63/04 (Collection of

Decisions, Volume 36, Judgment No. 61, published as No. 210/2005 Sb.),

No. Pl. ÚS 20/06 (published as No. 164/2007 Sb.)].
 

The

second group comprises those reviewing the constitutionality of the

legal framework for taxes, fees, or other analogous statutory provisions

on obligatory charges (statutorily-prescribed obligatory insurance is

also included within this framework), as well as for monetary sanctions.

The Constitutional Court has adumbrated the following standards

therefor [No. Pl. ÚS 3/02 (Collection of Decisions, Volume 27, Judgment

No. 105, p. 177, published as No. 405/2002 Sb.), No. Pl. ÚS 12/03

(Collection of Decisions, Volume 32, Judgment No. 37, p. 367, published

as No. 300/2004 Sb.), No. Pl. ÚS 7/03 (Collection of Decisions, Volume

34, Judgment No. 113, p. 184, published as No. 512/2004 Sb.)]: it

follows from the constitutional principle of the separation of powers

(Art. 2 para. 1 of the Constitution), as well as from the constitutional

delimitation of the legislative power (Art. 15 para. 1 of the

Constitution), that the legislature enjoys wide latitude to decide as to

the object, rate and extent of taxes, fees, and pecuniary sanctions.

The legislature bears the corresponding political responsibility for the

consequences of its decision-making. However much taxes, fees, or

pecuniary sanctions are obligatory public law pecuniary performances to

the state, and thus an intrusion into the property base, thus also of

the proprietary rights of the obligated subject, they do not, without

further conditions being met, represent an injury to the proprietary

position protected by the constitutional order (Art. 11 of the Charter,

Art. 1 of the Additional Protocol to the Convention). The constitutional

review of taxes, fees, and pecuniary sanctions encompasses an

assessment in terms of the observation of the standards flowing from the

constitutional principle of equality, both non-accessory (Art. 1 of the

Charter), that is flowing from the requirement excluding the arbitrary

distinguishing of subjects and rights, and accessory to the extent laid

down in Art. 3 para. 1 of the Charter (a hypothetical illustration of

the violation of the standards of accessory inequality would be a rule

distinguishing the level of tax in view of religious conviction, which

would be discriminatory in the sense of Art. 3 para. 1 of the Charter

and would at the same time intrude upon the fundamental right flowing

from Art. 15 para. 1). If the subject of constitutional review is the

accessory inequality vis-a-vis the prohibition of property

discrimination, alternatively solely the factual adjudication of whether

the taxes, fees, or pecuniary sanctions do not represent an injury to

proprietary rights (Art. 11 of the Charter, Art. 1 of the Additional

Protocol to the Convention), then such review is restricted to cases in

which the extent of public-law monentary performance by the individual

toward the state attains a strangling (throttling) effect on the

individual’s property base, in other words, if the taxes, fees, or

pecuniary sanctions under adjudication have a confiscatory impact in

relation to the individual’s assets.
 

Finally

the third group of decisions on the issue of the constitutionality of

the legal framework for taxes, fees, or other analogous statutorily

prescribed charges, is represented by the Judgment of the Constitutional

Court of the CSFR No. Pl. ÚS 22/92 (The Collection of Rulings and

Judgments of the Constitutional Court of the CSFR, No. 11, p. 37), which

lays down the test for review of tax equality, or tax proportionality.

The Court stated the following: „Not even the state’s sovereignty

entails for it the possibility to impose arbitrary taxes, even if such

were laid down in a statute . . .  In the field of tax, it is necessary

to require the legislative body to support its decision with objective

and rational criteria. One cannot in principle rule out that the

legislature lays down differential taxes according to the principle that

higher taxes will be levied on the more effective subjects. It is not

permissible to proceed in the contrary manner and place more burdens

upon the economically and socially weaker subjects. It is up to the

state, in the interest of its ensuring its own functioning, to decide

that certain groups will be accorded less benefits than others. Not even

in this respect, however, can it act arbitrarily.“ Then on the issue of

whether decisions of the Constitutional Court of the CSFR are binding

for its jurisprudence, the Constitutional Court of the Czech Republic,

in Judgment No. Pl. ÚS 9/01 (Collection of Decisions, Volume 24,

Judgment No. 192, published as No. 35/2002 Sb.), asserted the following:

“The ‘Constitutional Court of the CSFR’ cannot be considered to be the

‘Constitutional Court’ under § 35 para. 1. of the Act on the

Constitutional Court. A systematic interpretation of § 35 para. 1 of

this Act leads to the conclusion that this provision has in mind only

the Constitutional Court of the CR, as it is a component of that part of

the Constitution of the CR which establishes the Constitutional Court

of the CR. Thus, even though the judgments of the Constitutional Court

of the CSFR do not create for the Constitutional Court of the CR the

formal obstacle of an already decided matter, they represent for it a

real authority, based on the fact that the Constitutional Court of the

CSFR was the ‘judicial body for protection of constitutionalism’ with

jurisdiction in the Czech Republic, which this Court itself now is. The

postulate of continuity of the protection provided, which is

characteristic for the decision-making of a judicial body which steps

into the place of a body which has ceased to exist or been annulled, has

two aspects. On the one hand it permits the new court to diverge from

the legal opinion of the preceding court if there has been a change in

the circumstances under which that previous court made its decision, and

on the other hand it requires it not to cast doubt on the decisions of

the previous court if no such change in circumstances has occurred.”
None

of the proposed points objecting to the constitutionality of § 6 para.

4, the first sentence, § 6 paras. 13 and 14, § 7 para. 8, the first

sentence, and § 38h para. 1, lit. b) of Act No. 586/1992 Sb., on Income

Tax, as amended by Act No. 261/2007 Sb., can be brought within the

framework thus indicated for the constitutional review of the legal

framework for taxes, fees, or other analogous statutorily-prescribed

obligatory charges. It is thus necessary to respond to the question

whether certain of these proposed points do not give rise to further

derogational grounds in the matter of the constitutionality of the legal

framework for taxes, fees, or other analogous statutorily-prescribed

obligatory charges.
The categories of tax object and tax base are

defined by legal theory in the following manner: „The tax object is an

economic fact on the basis of which it is possible to lay a tax

obligation upon taxpayers. It can be a certain income, object,

transaction or property. The tax object also determines the name of the

tax (for ex., income tax, land tax, construction tax). The determination

of the tax object is the starting point for setting the tax base. The

tax base is in money, alternatively a tax object set in some other way,

from which the tax is measured. Whereas the tax object tells us the

purpose for which the tax obligation was set, the tax base determines

what the tax is measured from. The objective of the determination of the

tax base is to establish the overall amount of the taxable object.“ (M.

Bakeš et al., Financial Law, 4. Ed., Prague 2006, p. 194)
The Act on

Income Tax, as amended by Act No. 261/2007 Sb., defines by legal

definitions the basic components of the income tax structure. The

objects of income tax on natural persons are the incomes from

independent activities and job perquisites [§ 3 para. 1, lit. a) of the

mentioned act], and the tax base is comprised of incomes from

independent activities or job perquisites, increased by an amount

corresponding to the insurance premium on social security and the

contribution to the state employment policy and insurance premium for

universal health insurance which, in accordance with separate legal

enactments, the employer on its own is obliged to pay from these incomes

(§ 6 para. 13 of the given act).
 

The

base of assessment for sickness insurance, pension insurance, and the

levy for the state employment policy, both for employees and for

employers, is the aggregate of incomes which are the subject of income

tax on natural persons pursuant to the Act on Income Tax [§ 5 para. 1, §

5a lit. a) and b) of Act No. 589/1992 Sb., as subsequently amended];

the base of assessment for public health insurance is an analogous

aggregate of incomes from independent activities and job perquisites

which are the subject of income tax of natural persons pursuant to the

Act on Income Tax (§ 3 para. 1, § 5 para. 1 of Act No. 592/1992 Sb., as

subsequently amended; § 9 para. 2 of Act No. 48/1997 Sb., on Public

Health Insurance).
 

In other

words, sickness insurance, pension insurance, levies for the state

employment policy, as well as from public health insurance, are

calculated from the „gross“ salary; income tax, on the other hand, is

calculated from a different object, from the „super-gross“ salary,

encompassing, apart from the „gross“ salary, also the levies upon the

employer and the employee for sickness insurance, pension insurance, the

state employment policy and the public health insurance. The base for

the calculation of income tax is thus also an object other than the

statutorily-prescribed object of income tax; in terms of the actual

object, the tax regulated by Act No 592/1992 Sb., as subsequently

amended, is thus an income tax on independent activity and job

perquisites and on levies for sickness insurance, pension insurance, the

state employment policy and the public health insurance. In this

connection, one cannot accept the counterargument that the levies for

sickness insurance, pension insurance, the state employment policy and

the public health insurance represent potential future taxpayer income.

If such an interpretation were accepted, then taken to its absurd

conclusion, even tax (for ex. income tax) could be regarded as an

income, since they are used to finance public goods, in whose enjoyment

the tax subject would potentially share in the future.
 

It

is necessary at this juncture to react to the objection that the

mentioned arbitrariness of the legislature in the treatment and

definition of statutory terms gives rise to conflict with the principle

of the substantive law-based statute on the grounds of indefiniteness

and lack of clarity.
According to the Constitutional Court’s constant

jurisprudence, „the indefiniteness of certain provisions of legal

enactment must be considered as in conflict with the requirements of

legal certainty, thus even of the law-based state (Art. 1 para. 1 of the

Constitution), only in the case that the intensity of that

indefiniteness excludes the possibility of their normative content being

established with the aid of customary interpretive approaches.“

(Judgments No. Pl. ÚS 4/95, No. Pl. ÚS 9/95, No. Pl. ÚS 2/97, No. Pl. ÚS

23/02, No. Pl. ÚS 40/02, No. Pl. ÚS 44/02, No. Pl. ÚS 10/06, and No.

Pl. ÚS 25/06 – see above).
 

The

requirement of definiteness of tax provisions in statutes is found also

in economic scholarship. Karl Engliš wrote: „if it is required for tax

obligations to be prescribed in a statute, protection is sought for the

taxpayer from arbitrariness by the public authorities, thus, there is

naturally also the requirement for this obligation to be prescribed

definitely, in a manner excluding arbitrariness, definitely as regards

the obliged subjects, the base of the tax and payment obligation, its

extent and period.“ (K. Engliš, The National Economic System, Vol.. II.,

Prague 1937, p. 193; id., Financial Theory – The Outline of Economic

Theory of Public Authorities, Brno 1929, p. 196).
 

However

much we cannot but agree with the petitioner that, in Act No. 592/1992

Sb., as amended by Act No. 261/2007 Sb., the legislature made arbitrary

use of the categories of tax object and tax base, and in consequence

thereof the Act in question ushers in a tax the actual subjects of which

are not only income from independent activity and from job perquisites,

rather also levies on sickness insurance, pension insurance, on the

state employment policy, and on public health insurance, despite the

fact that the legal rules under adjudication do not give rise to

indefiniteness which would exclude the possibility to establish its

content by the usual interpretive methods (or the determination of the

base and rate of tax).
 

It it

necessary to react to the implications which flow from the preceding

considerations. Is it constitutionally acceptable to tax any sort of

subject? Should the legislature, in its statutory arrangement, depart

from the traditional conceptual framework for income tax, that would be

in conflict with the constitutional order solely in the case that such

construction should have a confiscatory impact, if it should be

exceedingly disproportionate, alternatively if it were indefinite to

such a degree as to exlude the determination of its content by the usual

interpretive methods. None of these alternatives, which would give rise

to a derogational ground, was met in this case, especially in view of

the income tax rate under Act No. 586/1992 Sb., as amended by Act No.

261/2007 Sb.
 

There remains

only to make a side note or, in judicial language, obiter dictum. The

taxation of taxes, fees, or other analogous statutorily-prescribed

obligatory charges is certainly at the present time an „original“

thought. This calls to mind one of history’s famous taxes, that of the

Roman Emperor, Vespasian, who in reaction to the criticism of his son,

Titus, relating to its lack of dignity, uttered the famous phrase:

„Pecunia non olet.“ [Translator’s Note: This Latin phrase means “Money

does not smell”.]
 


XI./d
 

The Objection of Technical Legislative Defects
If

the petitioner objects that § 16 and § 21 para. 1 of Act No. 586/1992

Sb., on Income Tax, as amended by Act No. 261/2007 Sb., are

unconstitutional, namely on the grounds of their indefiniteness, which

gives rise to a conflict with the principle of the law-based state, then

Court cannot agree with its arguments.
 

Points

49 and 50 of Art. I of Act No. 261/2007 Sb., which amend the same

provisions of the Act on Income Tax (§ 16) – the otherwise identical

text contains a different tax rate (point 49, a rate of 15 % of the tax

basis, then point 50, a rate of 12.5 % of the tax basis), whereas

according to Art. LXXXI para. 1 of Act No. 261/2007 Sb., § 16 of Act No.

586/1992 Sb., as amended by Art. I, Point 49 of Act No. 261/2007 Sb.,

enters into effect on 1 January 2008, then according to Art. LXXXI para.

1, lit. c) of Act No. 261/2007 Sb., § 16 of Act No. 586/1992 Sb., as

amended by Art. I, Point 50 of Act No. 261/2007 Sb., enters into effect

only as of 1 January 2009. Due to these facts no indefiniteness arises

between Points 49 and 50 of Art. I of Act No. 261/2007 Sb.
 

As

has already been mentioned, according to Point 64 of the same Article,

in § 21 para. 1 of the Act on Income Tax, the number, „24“, is replaced

by the number, „21“, in Point 65 the number, „21“, is replaced by the

number, „20“, in the same provision of the Act on Income Tax, and in

Point 66, the number, „20“, is replaced by the number, „19“,.again in

the same provision. Then according to Art. LXXXI point 1, lit. c) of Act

No. 261/2007 Sb., Art. I, Point 65 of the mentioned Act comes into

effect on 1 January 2009, and according to Art. LXXXI point 1, lit. e)

of Act No. 261/2007 Sb., Art. I, Point 66 of the mentioned Act comes

into effect on 1 January 2010. The rate at which legal persons will be

taxed after 1 January 2008 is at the same time determined by Art. LXXXI

para. 1, according to which § 21 para. 1 of Act No. 586/1992 Sb., as

amended by Art. I, Point 64 of Act No. 261/2007 Sb., enters into effect

on 1 January 2008; therefore, not even in this case have the statutory

provisions given rise either to any indefiniteness or any gaps in the

setting of the date of entry into effect.
 


XII.


Proceeding

from all the grounds discussed, the Constitutional Court has rejected

on the merits [§ 70 para. 2 of Act No. 182/1993 Sb.] the proposed

annulment of Part One, Part Two, Part Three, Part Four, Part Five, Part

Six, Part Seven, Part Eight, Part Nine, Point 1 in Art. XVII of Part

Ten, Part Eleven, Part Twelve, Part Thirteen, Part Fourteen, Part

Forty-Five, Part Forty-Six, Part Forty-Seven, Part Fifty, Part

Fifty-One, and Part Fifty-Two of Act No. 261/2007 Sb., and the proposed

annulment of § 6 para. 4, first sentence, § 6 paras. 13 and 14, § 7

para. 8, first sentence, § 16, § 21 para. 1, and § 38h para. 1, lit. b)

of Act No. 586/1992 Sb., on Income Tax, as subsequently amended.
 

Notice: A decision of the Constitutional Court cannot be appealed. (§ 54 para. 2 of the Act on the Constitutional Court).

Brno, 31 January 2008




The Dissenting Opinion of Constitutional Court Justices Pavel Rychetský and Jan Musil
We

do not agree either with the statement of judgment or with the

reasoning of Judgment No. Pl. ÚS 24/07. Pursuant to § 14 of Act No.

182/1993 Sb., on the Constitutional Court, as subsequently amended, we

file an opinion dissenting from the Judgment, for which we give the

following reasons:
 

1. We are

of the view that Act No. 261/2007 Sb., on the Stabilization of Public

Budgets, was not adopted in the constitutionally-prescribed manner. The

consideration of the Bill in the Parliament of the Czech Republic was

marked by several defects, which are of constitutional dimension.
 

2.

The Bill submitted by the Government affected a broad and bright

palette of statutes, no part of which can be classified under a unifying

idea. The Government Bill is rather a conglomerate of all possible

legal rules. Alone the designation of the proposed act as an „Act on the

Stabilization of Public Budgets“ is misleading – in reality a

considerable part of the provisions of this Act bear either no or a

negligible connection to the stabilization of public budgets. Not even

the most controversial novelties introduced by this new statutory

regulation, that is the regulation of fees in health care, have no

direct connection with public budgets – they concern the receipts of

health care facilities, the predominant portion of which are private.

The changes in the staffing of organs of the Universal Health Insurance

Company of the CR (Part Forty-Two of the Act), for ex., bear no

relations whatsoever to public budgets, nor do the amendments to the

Labor Code, for ex. in the content of the confirmation of employment in §

313 para. 1 (Part Twenty-Seven, Art. XLI of the Act), changes in the

Act on Electronic Communications (Part Forty-Four of the Act), or the

repeal of the Act on Cash Desks Subject to Registration (Part Seven of

the Act), etc.
 

3. The

subject matter of the legal rules are matters which in substance do not

relate to each other and which it would be appropriate to regulate

entirely separately. This is quite evident in those parts of the Act

relating to ecological taxes (Part Forty-Five of the Act – „Tax on

Natural Gas and other Types of Gases“; Part Forty-Six – „Tax on Solid

Fuels“; and Part Forty-Seven – „Tax on Electricity“). The inclusion of

what are, in the substantive sense, three new statutes into one

collective statute is a serious violation of the legislative directive

(Government’s Legislative Rules). At the same time, they have in part

the character of „concealed legislation“ (see Constitutional Court

Judgment No. 37/2007 Sb.), as the title of the Act does not express its

actual content.
 

4. We find

to be constitutionally defective the manner in which extensive

substantively unrelated proposed amendments („limpets“, which are

characterized in Constitutional Court Judgment No. Pl. ÚS 77/06) were

submitted and considered. This occurred during the detailed debate in

the second reading of the Bill in the Assembly of Deputies with the

submission of proposed amendments by Deputies Mirek Topolánek and Petr

Tluchoř. The amendments were very voluminous – Mirek Topolánek’s

amendments contained 81 changes on 37 pages of text; Petr Tluchoř’s

proposed amendments cover 14 pages of text. The submitted proposed

amendments were in no way substantiated and, as is customary in the case

of Assembly amendments, they were not subject to the comment procedure,

which is otherwise required for Government bills. The Deputies had only

a very short time in which to become acquainted with them (five days

prior to the start of the third reading). The proposed amendments

contained extensive changes to the Government Bill, overstepped its

original intent, and did not relate to the basic themes and objectives

of the Act. These problems are manifested, for ex., in the the following

points:
- the enlargement of the original Bill with additions to the

Act on Public Health Insurance (Part Forty of the Act, Art. LXIV) in a

new Part Six „The Regulation of Prices and the Reimbursement of

Medicinal Preparations and Foodstuffs for Special Medical Purposes“,

which introduces a new system of regulation of the price of medicines

(Assembly Print No. 222/3, Proposed Amendment No. B14/8);
-  

 amendments to the Act on Public Health Insurance (Part Forty of the

Act), especially the introductory provisions (Proposed Amendment No.

B14/1);
-    amendments to the Act on Value-Added Tax (Part Four of

the Act) supplemented by a provision on groups and group registration

(Proposed Amendments Nos. B2/1 and B2/3);
-    an amendment to the

Act on Pension Insurance (Part Twenty-Four of the Act), which relates to

taking into account, in the period for pension insurance, of the time

devoted to care for handicapped children up to the age of 10 (Proposed

Amendment No. B12);
-    certain proposed amendments effected the

amendment of statutes which were not even referred to in the Government

Bill, specifically the amendment to the Act on the Competence of Czech

Republic Organs in the Field of Prices (Part Forty-Eight, Proposed

Amendment No. B16), the amendment to the Act on Prices (Part Forty-Nine,

Proposed Amendment No. B16), and the Act on Accounting (Part Fifty,

Proposed Amendment No. B17).
 

5.

When the bill was considered in the Assembly of Deputies, the

democratic rules on free and informed parliamentary debate were

violated. Due to the extensive volume and complexity (as well as

non-transparency) of the submitted proposed amendments, which were not

substantively related to the Bill, there was no actual opportunity, in

the Assembly of Deputies‘ Plenary Session during the second reading,

either for serious debate on them or to oppose them effectively. Nor was

opportunity to do so made available in the subsequent third reading,

which is designated rather for eliminating technical legislative errors

in a bill (§ 95 para. 2 of the Act on the Standing Orders of the

Assembly of Deputies) and for the concluding vote. In this situation,

prior to the approval the submitted Bill by the Assembly of Deputies,

neither the Deputies, nor even citizens or interest groups, had the

opportunity, while having sufficient information on the matter, to make

their views known. One of the fundamental objectives of public

parliamentary debate on bills was thereby disavowed. Without doubt that

had negative impact on the opportunity for parliamentary debate, and the

quality thereof, consequently also on the opportunity for, and quality

of, public discussion, on the rights of interest group to have their

opinions heard, and finally on the information of the public on ongoing

political decisions. It thereby also resulted in a violation of the

protection of the minority in political decision-making, enshrined in

Article 6 of the Constitution.
 

6.

If extensive and comprehensive proposed amendments are tabled by a

Deputy, who is at the same time the Prime Minister, such a situation

would thrust upon an objective observer justified doubts as to whether

this approach did not result in the circumvention of the institute of

legislative initiative under Article 41 para. 2 of the Constitution and

the principle of collegial decision-making by the Government under

Article 76 of the Constitution. Such a manner of proceeding makes it

more difficult to recognize (both for the legislative organ and the

citizens) what is the relevant will of the Government, a constitutional

body. This approach (non-observance of the role and boundaries of the

legislative and the executive powers in the legislative process) results

in a violation of the principle of the separation of powers, which is

an immanent principle of the democratic law-based state, protected by

Article 1 para. 1 of the Constitution.
 

7.

We are of the view that the manner in which Act No. 261/2007 Sb. was

considered in the Senate of the Parliament of the Czech Republic,

resulting in its decision not to deal with the Bill, was not in

conformity with constitutional requirements.
 

8.

The Senate’s expression of intent not to deal with a bill is one type

of resolution on the merits of a bill, provided for in Art. 46 para. 2

of the Constitution; there is no doubt that, as a general matter, this

alternative for decision-making by the second chamber of the Parliament

must be regarded as constitutionally-conforming. However, the question

is whether the choice of this possible decision in a specific case can

be entirely left to the unfettered discretion of the Senate and not

subject to any objective and democratically revisable criteria. We

believe that to countenance absolute license in the application of this

alternative for decision-making by the Senate is not compatible with the

constitutional principle of the democratic law-based state, expressed

in the Preamble and in Article 1 para. 1 of the Constitution. By

proceeding in such a capricious manner, the Senate would call into

question the very reason for its own existence in a democratic

parliamentary system.
 

9. We

are convinced that in each individual case in which the Senate

explicitly makes known its intention not to deal with a bill, there

should exist an objective reason for the selection of this alternative

for decision-making. The reason for choosing not to deal with an act

should, during the course of its consideration in the Senate, be

expressly and transparently made known so that it is accessible to

external democratic review mechanisms. After all, only in that way would

it be possible to prevent the abuse of this institute, for ex., to

silence the opposition.
 

10.

It must be acknowledged that to lay down generally in advance such

objective criteria for the consideration of bills before the Senate is

not simple and the advancement up till now of Czech parliamentarianism

has not yet succeeded in reaching its definitive and explicit

standardization. As this problem has been assessed in the expert

literature, the purpose of several alternatives for the consideration of

a bill before the Senate, which are provided in Art. 46 of the

Constitution, is to allow for the separation of those bills which the

Senate will give thorough consideration to, from those for which such

consideration is not regarded as necessary (for ex., Kysela, J.,

Bi-Cameral Systems: Theory, History and Comparison of Bi-Cameral

Parliaments, Prague, Eurolex Bohemia, 2004, pp. 477-479).
 

11.

We do not aspire to enounce categorical and exhaustive enumeration of

the objective criteria for the mechanism for selecting the manner of

considering bills in the Senate. It should rather be a task for the

legislature de lege ferenda to find and lay down such criteria and then

enshrine the applicable rules in the Standing Orders of the Senate. It

would be desirable to lay down at the same time the procedure for such

selection; discussions have weighed, for ex., a scheme for the

preliminary selection of the manner of considering bills to be conducted

in the guarantee committee or in the Senate caucuses.
 

12.

Nonetheless, we believe that one of the indispensable objective

criteria for decision as to whether the Senate should deal with a bill

or not, is the substantive weight of the act under consideration and its

significance in the state’s legal system. The existing conventions in

parliamentary procedure, which have been formed during the period of the

Senate’s existence, actually evince a stable trend toward dealing with

important legislative enterprises having serious impact on citizens.

During the first decade of the Senate‘s operation, 1081 bills were

submitted to it, and resolutions not to deal with a bill have been

adopted only in 244 cases (that is, in 23% of them). In the Senate’s

fifth electoral term (2004-6), of the 237 bills submitted to it, the

Senate expressed its intention not to deal with a bill in a mere 30

instances (that is, about 13% of the time). In the year 2006, 126 bills

were submitted to the Senate, which declined to deal with only 19 of

them (that is, 15%). The Senate even dealt on the merits with such

complicated reform bills as the acts adopted in connection with the

creation of regions (Act No. 132/2000 Sb. and Act No 320/2002 Sb.), as

it was acknowledged that they were important norms.
 

13.

The failure to respect this criterion of the significance of an act in

the Senate’s decision whether or not to deal with the bill can, in

specific cases, be regarded as a serious procedural error in the

legislative procedure which can call into doubt the constitutionality of

the act‘s adoption and can be weighed by the Constitutional Court as

one of the grounds for annulling the act.
 

14.

The case under consideration concerns a statute which, without doubt,

is of extraordinary consequence for citizens‘ future life and for their

future legal and social position. It is indispensable in the course of

the parliamentary consideration of such a fundamental norm, to accord

the widest lattitude possible in order to seek and find societal

consensus, on which depends the statute‘s acceptance and effectuation.
 

15.

The manner in which the Senate proceeded in this case embodied the

characteristic features of capriciousness, among others due to the fact

that the Prime Minister and members of the Government were permitted to

speak during the general debate, whereas (with the exception of

procedural points by Senate officials), „ordinary“ Senators and

representatives of the opposition were not. This resulted, among other

things, in the violation of the procedural rule, „the equality of arms“,

and with the constitutional rule of the protection of the minority in

political decision-making, as enshrined in Article 6 of the

Constitution.
 

16. We believe

that the Constitutional Court should, in connection with its

adjudication of the legislative procedure employed in adopting the

contested act, raise the question whether the content and form of the

approved text of Act No. 261/2007 Sb. even fulfills the conceptual

requirements for a statute, in the substantive sense of the word. We are

convinced that a negative response must be given to this question.
 

17.

The Czech Constitution does not define the term, „statute“; its

conceptual characteristics can, however, be deduced from general

principles of the democratic law-based state, primarily from Article 1

para. 1 of the Constitution, which provides that „[t]he Czech Republic

is a sovereign, unitary, and democratic state governed by the rule of

law, founded on respect for the rights and freedoms of man and of

citizens.“ From the perspective of constitutionalism, an act of state

power addressed to citizens as a statutory norm, purporting to be of a

generally binding nature and enforceable by sanction in relation to all

its addressees, must satisfy certain substantive and formal

requirements, deducible from the constitutional texts, from the general

principles of the law-based state, and also from Constitutional Court

jurisprudence. Even though designated by the legislative power as a

statute, a text which, due to serious constitutional defects, does not

satisfy the requirements of the substantive conception of the law-based

state and which an entitled petitioner submits to the Constitutional

Court for its adjudication, is subject to the Constitutional Court’s

derogational authority.
 

18.

Since it began its operations, the Constitutional Court has placed

extraordinary emphasis on the fact that a statute be, both in terms of

form and of content, a predictable, consistent source of law (Judgment

Pl. ÚS 77/06). The Constitutional Court underlined that „in a law-based

state a statute is not merely an internal memorandum for the state

machinery“, rather that it is „a publically-issued medium which should,

first of all, lay out for the citizens themselves what they are

permitted to do and what they must not do, what they are still permitted

to do what they must no longer do“. In a law-based state „not only is

the manner in which the courts are capable of interpreting the laws

important, but so is how they will be interpreted by the civic public.

Legal uncertainty for the citizens means the loss of the credibility of

the law-based state and, equally, an impediment to civic activity.“

(Judgment No. Pl. ÚS 43/93, published as No. 16/1994 in the Sb. n. a u.

ÚS [Translator’s Note: “Sb. n. a u. ÚS“ is the abbreviation in Czech for

the Court’s reporter, The Collection of Judgments and Rulings of the

Constitutional Court], Vol. 1). In a later judgment, the Constitutional

Court asserted that „the principles of clarity and definiteness in the

law represent a component of the principle of legal certainty, thus of

the principle of the law-based state.“ (Judgment No. Pl. ÚS 16/93,

published as No. 25/1994 Sb. n. a u. ÚS, Vol. 1). In Judgment No. Pl. ÚS

21/01 the Constitutional Court emphasized that among the basic

principles of a law-based state “belong the principle that laws should

be foreseeable and comprehensible, and the principle that they should be

internally consistent”. A given act cannot be a statute if it lacks the

character of rules that people can acquaint themselves with and which

they can follow.
 

19. Lon L.

Fuller, an eminent figure in legal philosophy and theory, included among

his eight principles of law the indispensable requirement of the

clarity of statutes (Fuller, L., The Morality of Law, Prague, Oikoymenh,

1998, p. 63 and foll. [Translator’s Note: The reference here is to the

Czech translation of the English original.]). The equally renowned

British legal philosopher H. L. A. Hart asserted that rules of law „must

be intelligible and within the capacity of most to obey.“ (H. L. A.

Hart, The Concept of Law, Oxford, Oxford University Press, 1961, p.

202).
 

20. The constant

jurisprudence of the European Court for Human Rights has also declared

the same requirements on the quality of a statute (a statute must be

accessible to all affected persons, who must be enabled to foresee the

consequences for them following from the act; the statute must be

precise) (compare, for ex., Berger, V., The Jurisprudence of the

European Court for Human Rights, IFEC 2003, pp. 455-6, point 4: Kruslin

v. France, Huvig v. France; pp. 502-503, point 4, Autronic AG v.

Switzerland). The Strasbourg court has deduced these requirements from

the principle of the law-based state, declared in the Preamble to the

Convention for the Protection of Human Rights and Fundamental Freedoms.
 

21.

We are cognizant of the fact that the criteria laid down by the

Constitutional Court „of harmonious, predictable, and transparent law“

(for ex., in Judgment No. Pl. ÚS 21/01) cannot be understood absolutely,

in a concrete case it is necessary to specify the degree of their

violation. The Constitutional Court ties the assessment of the degree of

violation of the principles of legislative process in concrete cases

with the test of proportionality in linkage with the principles of the

protection of citizens‘ justified confidence in law, legal certainty,

and acquired rights, alternatively to further principles protected by

the constitutional order, fundamental rights, freedoms and public goods.
 

22.

After weighing the tests mentioned in the preceding paragraphs, we

submit that Act No. 261/2007 Sb. has trespassed against the elementary

and essential requirements placed on statutes in such a gross manner

that it has disrupted the very principle of the law-based state,

enshrined in the Preamble and in Article 1 para. 1 of the Constitution.

The text of the Act is substantively inconsistent, unclear and

incomprehensible. Orientation in the complicated text of the Act is

extremely onerous even for experts – lawyers, for citizens – laymen, who

are, of course, also the addressees of the legal norm, the text of the

Act is practically incomprehensible.
 

23.

The Act’s text suffers from a number of deficiencies and errors of a

technical legislative nature, which will without doubt bring about

interpretive problems. Without proposing to carry out a detailed

analysis of each particular error of this type, we will merely draw

attention to several examples:
-    in Part One (Art. I) – points 49

and 50 – both points lay down a new wording of § 16 on Income Tax, yet

they have a different content and a different day for coming into effect

(point 49, on 1 January 2008, point 50, on 1 January 2009);
-    in

Part One (Art. I) – point 58 repeals litera „zq“ in § 19 para. 1 of Act

No. 586/1992 Sb., on Income Tax; however, such litera does not appear in

the valid statutory text;
-    in Part Thirteen (Art. XXI), Part

Three of Act No. 357/2005 Sb. is repealed as of 1 January 2008; Part

Three of Act No. 357/2005 Sb. contains an amendment to Act No. 463/1991

Sb., which was repealed as a whole by Act No. 110/2006 Sb., in effect as

of 1 January 2007;
-    in Part Fourteen (Art. XXII), Part Ten of

Act No. 115/2006 Sb. is repealed as of 1 January 2008; Part Ten of Act

No. 115/2006 Sb. contains an amendment to Act No. 463/1991 Sb., which

was repealed as a whole by Act No. 110/2006 Sb., in effect as of 1

January 2007;
-    Part Twenty-Six (Art. XI) – the legal text is

considerably non-transparent, as it repeals several provisions of

particular articles or entire articles of Act No. 189/2006 Sb., which

Amends Several Acts in Connection with the Adoption of the Act on

Sickness Insurance; these (now amended or repealed) articles amended

various acts with effect from 1 January 2007;
-    Part Thirty-Two

(Art. LII) – points 1 and 2 amend § 73 paras. 3 and 4 of Act No.

128/2000 Sb., on Municipalities, which, according to Article XLV of Act

No. 189/2006 Sb., should have already been amended as of 1 January 2007;

however, that Article XLV had already been repealed by Article XL point

9, currently of Act No. 261/2007 Sb.;
-    Part Thirty-Three (Art.

LIV) – points 1 and 2 amend § 48 paras. 2 and 3 of Act No. 129/2000 Sb.,

on Regions, which, according to Article XLVII of Act No. 189/2006 Sb.,

should have already been amended as of 1 January 2007; however, that

Article XLVII had already been repealed by Article XL point 9, currently

of Act No. 261/2007 Sb.;
-    Part Thirty-Four (Art. LVI) – points 1

and 2 amend § 53 paras. 3 and 4 of Act No. 131/2000 Sb., on the Capitol

City of Prague, which, according to Article XLIX of Act No. 189/2006

Sb., should have already been amended as of 1 January 2007; however,

that Article XLVII had already been repealed by Article XL point 9,

currently of Act No. 261/2007 Sb.;
-    Part Thirty-Eight (Art. LXII)

– the end of the text reading „in Part Six of Art. VI, points 1, 5, 7,

and 10 are repealed“ is incomprehensible (it is not clear to which act

these repealing provisions relate);
-    Parts Forty-Five (Art.

LXXII), Forty-Six (Art. LXXIII) and Forty-Seven (Art. LXXIV) are

actually separate tax acts; it is open to question whether this manner

of promulgating acts (incorporated into the test of another act) is at

all in harmony with Article 52 of the Constitution or with Act No.

309/1999 Sb., on the Collection of Laws and on the Collection of

International Agreements – according to this Act, statutes are

promulgated by the publication of their full text and their designation

by the corresponding serial number; it will be cumbersome to find a

comprehensible manner for citing or making reference to particular

sections of statutory text because the numbering of sections in Parts

Forty-Five , Forty-Six, and Forty-Seven of Act No. 261/2007 Sb. is

repeated – which can cause a muddle for those using the Act.
-    the

repealing provisions, found in various places in the textu of Act No.

261/2007 Sb., and coming into effect on differing dates, are so

complicated as to verge on utter unintelligibility; as an example can be

give the amendments to the provisions on the pay of state attorneys in

the case of temporary incapacity to carry out their office (§ 9a of Act

No. 201/1997 Sb., due to amendment to its text by Act. 279/2002 Sb.);

already prior to the approval of Act No. 261/2007 Sb., this provision

was repealed by Act No. 189/2006 Sb., which Amends Certain Acts in

Connection with the Adoption of the Act on Sickness Insurance, as

amended by Act No. 585/2006 Sb. (in effect from 1 January 2008); the

repealing provision of Article XL of Act No. 189/2006 Sb. is repealed in

Part Twenty-Six of the contested Act No. 261/2007 Sb., in the first

instance with effect from 31 December 2007 (Art. XL, point 9 in

conjunction with Art. LXXXI point 1, lit. b/), so that it could be newly

formulated in Part Thirty-One (in Art. XLIX point 5) with effect from 1

January 2008, and immediately thereafter, in the very next point, it

was once again reapealed with effect from 1 January 2009 (Art. XLIX

point 6, in conjunction with Art. LXXXI point 1, lit. c/);
-    a

consequential constitutional problem is presented by the actual

retroactivity of statutes, which arises due to the fact that in point 1,

lit.a) of Article LXXXI, the entry into effect of certain of the Act’s

provisions was set as the day of the Act’s promulgation; after all, it

is evident that all of the addressees of the Act could not acquaint

themselves with its wording on the day of its promulgation, as the

distribution of the particular installment of the Collection of Laws is

always delayed past the date of the formal promulgation; although § 3

para. 3 of Act No. 309/1999 Sb., on the Collection of Laws and on the

Collection of International Agreements, allows for such an approach,

however, only as an exception and „if such is required by an urgent

general interest“ – in this case, such urgent interest was in no way

substantiated; the abuse of this manner of proceeding may lead to an

unconstitutional state of affairs, as actual retroactivity is manifest;

this problem has been criticized in the literature many times (Cvrček,

F., Vacatio Legis in Czech Legislative Practice, Lawyer [Právník], No.

7/2001; Kysela, J., On the Margin of Validity, Entry into Effect, and

the Retroactivity of Statutes, Legal Perspectives [Právní rozhledy] No.

22/2005).
 

24. The difficulty

with becoming acquainted with this very extensive Act is amplified by

the very brief vacatio legis (for the majority of provisions the time

elapsing between their publication and their entry into effect amounts

to about two-and-a-half months; certain provisions entered into effect

on the day of their promulgation – see Art. LXXXI, point 1, lit. a/)
 

25.

The Constitutional Court has already in its preceding jurisprudence

(see especially Judgment No. Pl. ÚS 21/01) made an emphatic appeal to

the Parliament of the Czech Republic in respect of the observance of the

principles of comprehensibility, transparency and clarity of the legal

order, which rank among the components of the law-based state, as well

as compliance with democratic principles in the legislative process

(Art. 1 of the Constitution ); the Constitutional Court has thereby

opened up, also pro futuro, a derogational grounds under Art. 1 para. 1

of the Constitution of the CR. It is generally asserted by the civic

public and by legal theory, that the legislative process in the Czech

Republic is suffering further defects (for ex. the increase in cases

where statutes are adopted whose date of entry into effect is the date

of promulgation). Gloomy relations in the creation of statutes in the

Czech Republic is shown by the inadequate functionality of control

mechanisms from within the legislative process. Naturally, that

increases the pressure on the operation of external mechanisms,

represented, as far as concerns constitutionalism, by the Constitutional

Court (see also Filip, J., Legislative Practice and Constitutional

Court Jurisprudence, The Journal of Legal Science and Practice [Časopis

pro právní vědu a praxi] No. 3/2005, writing about „legislative mischief

and atrocities“).
 

26. This

is a situation that is all the more serious because it is not an excess,

rather it is becoming an unfortunate practice of which, in addition,

the Members of Parliament are aware, which is attested, for ex., by the

critical 25 January 2006 Senate Resolution No. 303, in which was

asserted, among other things: „the unremitting amendment of statutes

that have already been amended several times and the practice of

carrying it out by appending them to bills with unrelated content makes

more difficult or even precludes the stabilization of a consciousness as

to what applies as law“. The literature has already drawn attention to

that for years, in part as a violation of the Act on the Standing Orders

of the Assembly of Deputies, in part as a circumvention of the right of

the Government, pursuant to Art. 44 of the Constitution, to give its

opinion on each bill, which can also be seen as the right of other

participants in the legislative process to know the Government’s opinion

(Hujer, M., Proposed Amendments in the Assembly often Have no

Substantive Relation with the Bill under Consideration, Parliamentary

Report [Parlamentní zpravodaj] No. 8-9/2001; Kysela, J, in Klíma, K. et.

al., Commentary on the Constitution and Charter, Pilsen, 2005, p. 236;

Voříšek, V., The Sins of the Priests-Lawgivers, Legal Perspectives

[Právní rozhledy] No. 16/2006).
 

27.

After summarizing all of the above-mentioned defects in the procedure

for the adoption of the contested Act, we concluded that the

unprecedented high number of these defects, as well as their gravity,

reaches a constitutionally relevant level and it was appropriate for the

Constitutional Court to annul Act No. 261/2007 Sb., due to the

violation of the principle of the separation of powers and its

democratic nature (the Preamble to, as well as Article 1 para. 1 and

Article 2 para. 3 of, the Constitution) and due to the violation of the

principle of the protection of the minority in political decision-making

(Article 6 of the Constitution).
 

28.

Nor do we agree with that part of the statement of judgment which

rejected on the merits the petition to annul § 6 para. 4, the first

sentence, § 6 paras. 13 and 14, § 7 para. 8, the first sentence, and §

38h para. 1, lit. b) of Act No. 586/1992 Sb., on Income Tax, as amended

by Act No. 261/2007 Sb.
 

29.

One cannot but agree with the petitioner that the legislature made

arbitrary use (institute of „super-gross salary“) of the categories of

the tax object and the tax base and, in consequence thereof, the given

Act puts in place a tax, the actual object of which is not only income

from independent activity and job perquisites, but also levies on

sickness insurance, pension insurance, state employment policy, and

public health insurance.
 

30.

Such a statutory framework, which abandons the traditional conceptual

delimitation of income tax, is in conflict with the constitutional

order. On the grounds of indefiniteness and lack of clarity, it is in

conflict with the principle of the substantive law-based state under

Article 1 para. 1 of the Constitution of the CR. Accordingly, the

contested provisions should have been annulled.

Brno, 1 February 2008
 




The Dissenting Opinion of Justice František Duchoň
 

1.

In contrast to the majority of my colleagues, I am of the view that the

manner in which Act No. 261/2007 Sb. was adopted, in both chambers of

the Parliament of the Czech Republic, cannot be regarded merely as a

lack of political culture, as is asserted in the reasoning of the

Judgment, rather it reaches such a constitutional dimension that it

would make annulment by the Constitutional Court entirely in order. In

comparison with the conclusions of Judgment No. Pl. ÚS 77/06, to which I

make reference, this represents a clear step backwards. Accordingly, I

join the dissenting opinion of Justice Jan Musil, and I am, in essence,

in accord with his constitutional arguments.
 

2.

In my view, the adoption of Act No. 261/2007 Sb. represented the

high-water mark in a trend in the practice of the adoption of statutes,

which has dragged on (and been criticized) already for several electoral

terms. In particular, the introduction of proposed amendments that lack

any close relation to the content of the amended statute, has already

occurred several times and continues to occur, resulting in such an

inroad into the legal order of the Czech Republic as to make it lacking

in quality and totally non-transparent.
 

3.

In the last two electoral terms, a further trend can be added to that

long-term negative trend, and this one can only be characterized as the

„forceful“ or „athletic“ adoption of statutes. What else should we call

the approach of the Assembly of Deputies of the Parliament of the CR ,

when it declined to grant the opposition’s motion to extend the period

for the consideration of the mentioned Act, or decision-making on a

number of proposed amendments submitted by a Deputy – Prime Minister (or

the Prime Minister - Deputy) on 15 August 2007. The same can be

asserted even about the manner in which this Act went through the

Senate.
 

4. Throughout the

entire period of its existence, human society has formed rules making

possible a bearable life for individuals. These rules, among others,

always contained also the means to resolve conflicts such that the

continuing reasonable functioning of the society was ensured. The

democratic ordering of modern democratic states of the European-Atlantic

civilization can be regarded as the culmination of this effort. One of

the fundamental roles of the modern state, founded on the principle of

the „rule of law“ is that of setting reasonable rules, acceptable for

the majority of society, their observance and the thorough imposition of

sanctions for their violation. If the state itself, through its supreme

organs, violate these rules, it thus debases their significance and, in

essence, provides an example or inducement for proceeding in a similar

manner. The law suffers thereby, as it loses its internal morality,

justice suffers, and the legal consciousness of individuals is naturally

also weakened. All of this causes the lives of the decent majority to

be more troublesome and needlessly complicated.
 

5.

It remains only to point out that a game played without rules has its

own „quality“, so that it is not a game which can be watched. Law

adopted without rules also has a similar quality. In a conflict

conducted according to rules, the defeated usually recognizes the

victor‘s predominance. In a conflict conducted without rules or rules

adapted by the victors , the defeated awaits merely the opportunity,

later to pay his competitor in kind. It seems that this second trend

will prevail in the long run and we can now „only look forward“ to what

the future brings us in this respect.

4 February 2008
 



The Dissenting Opinion of Justice Eliška Wagnerová


I can concur neither with the statement of judgment nor with the reasoning given in this Judgment, for the following reasons:

A Missed Opportunity
 

1.

The decision in this matter could have contributed to the elaboration

of the conception of democracy in the Czech constitutional order;

however, that did not occur, in part with the explicit reference to

restraint (see „As to b)“ in Part X/a of the reasoning to the Judgment),

in part because that restraint flows implicitly from the reasoning to

the Judgment. Does it truly concern though restraint in relation to

legal rules, which without doubt packs a powerful political punch, from

which then results, throughout the diverse grasp of individual political

streams, even the manner of expert resolution projecting into the

adopted conception of „the stabilization of public budgets“, moreover in

a situation where the Constitutional Court has nearly abandonned its

role in the supervision of the process for, and the manner of, the

formation of the norm under review and shifts the response to questions

tied to supervision into the field of a normative system other than law?
 

2.

I cannot accept the manner in which the majority proceeded because it

is not transparent; it is formalistic, and paradoxically I regard it as,

in its consequences, not self-restrained. I see the lack of

transparency in the fact that the majority did not define where it sees

the boundary between the genuine democratic adoption of a parliamentary

decision and the mere exploitation of an advantage in votes very

fleetingly held by the Government and its parliamentary majority, since

it is not politically founded, thus subject to change following the next

election with the return to the contrary legal arrangements in basic

areas affecting every person living in this state; the person thereby

becomes an instrumentalized object, through which is run a battle for

the effectuation of particular conception of the „good administration“

of public affairs, which is unfair, as it entirely disregards opposition

views. This deficiency can serve as an indicia of the fact that the

majority is in agreement with the content of the reform, naturally

making it an approach which, in actuality, is very far from

self-restrained. I then see formalism in the fact that, without regard

to the political nature and the problematic complexity objected to in

the statutory arrangements under adjudication, the majority is satisfied

with such an interpretation of the constitutional procedural institutes

as would correspond to the procedure for the adoption of a standard

mono-thematic legal framework; that is, in interpreting the procedural

institutes, it did not react either to the unusual voluminousness of

formally-compiled legal arrangements or to further circumstances

accompanying the adoption of the contested Act (see below). The majority

has then entirely excluded from constitutional procedural

considerations the value requirements in the guise of at least a minimal

claim to the presence of „fairness“ in parliamentary processes.
 

3.

I am thus of the view that in cases such as the case presently under

adjudication, the Constitution Court may, or even must, very carefully

scrutinize precisely the procedure for the adoption of reform statutes.

In those case, moreso than in the case of other statutes, the

requirement of a wider consensus comes to the forefront, namely in the

interests of fulfilling the democratic principle (see below). Beyond

that, victory may never be had by a mere fragile and problematically

generated numerical force, underpinned by the asserted „claim to truth“,

which cannot, without more, be a simple constitutional criterion. This

is due to the fact that the purpose of this requirement is to gain the

actual political majority’s agreement with the adopted legal

arrangement, as only in this way can a politically motivated amendment

to it be prevented in the future.
 

4.

History demonstrates that the displacement of democratic discussion

from the foundation of democracy has never paid off. Up until 1989, we

experienced deep in our bones, from positions of extremely-conceived

leftistism, the fruition of the „better since more scientific“ opinion

of the avant-garde (testimony to which is the pre-revolutionary wording

of Art. 4 of the Constitution of the CSSR), which thus rationalized a

„self-sustaining“ monistically conceived power. However, the reduction

of political discussion in favor, at that time, “solely“ of expert

opinions belongs, for ex., both among the requirements of contemporary

neo-conservatism, and into the concept of „the third way of the new

left“. However, our constitutional system rests on the respect for, and

actual fruition of, the pluralism of political forces and their

admittance to the solution of problems. Therefore, great importance must

be ascribed to the principle of pluralism, which is at the very

foundation of our democracy (just as it is at the foundation of the

conception of democracy in the other democratic states in Europe) and

thus forms one of the essential attributes of a democratic law-based

state in the sense of Art. 9 (2) of the Constitution of the CR, thus at

the same time one of the fundamental values of our constitutional order.

The Czech constitutional order simply gives priority, not to the search

for unique „correct solutions“, rather to a system which is founded on a

rigorous confrontation of the proffered solutions, in a fair discourse

involving all political actors.
 

5.

This conclusion is confirmed also by the conception of Art. 22 of the

Charter, according to which any statutory provisions relating to

political rights and freedoms, as well as the interpretation and

application of them, shall make possible and protect the free

competition among political forces in a democratic society. There is no

reason for this normative directive, naturally originally intended for

the assessment of the exercise of individual fundamental rights, not to

be applied also as an interpretive rule in the interpretation of

objective law governing the processes within constitutional

institutions, in which the competition of political forces continues,

albeit already transformed into institutional form. As Ernst Fraenkel

states (Strukturdefekte der Demokratie und deren Überwindung) the

observance of the principle of fair play in applying the rules governing

the process of the formation of political will belongs among the

generally acceptable code of irrevocable values (which corresponds to

the character of the values protected by Art. 9(2) of the Constitution

of the CR). Otherwise, for ex., in the FRG the issue of the curtailment

of rights which, according to their interpretation, result for Members

of Parliament from their constitutional law status (typically of

opposition members of parliament) were resolved in conflicts of

competence, as is demonstrated by many decisions of the Federal

Constitutional Court on the given issue. Finally, Pl. ÚS 77/06 has

already drawn attention, through rich reference to Czech and foreign

literature which, accordingly, is no longer necessary to repeat, to the

necessity of fairness of the parliamentary process.

The Unimportance of the Senate in the Legislative Process?
 

6.

The freedom of expression and the freedom of parliamentary debate is an

essential attribute of each free legislature and must be considered as

inherent to the very foundation of a parliament as such (Haxey‘s case

(1397) – A petition to Parliament requesting the curtailment of

expenditures of the royal household).
 

7.

In one of its decisions (judgment of 21 July 2000, 2 BvH 3/91), the

German Federal Constitutional Court asserted that it also regards the

rules governing the legislative process, to the extent they are not

contained in the Constitution itself, as a subject of a parliamentary

chamber‘s self-regulation, as are the function of the composition of

committees and the manner in which they work, further the realization of

the right to exercise the legislative initiative, to information and

supervision, as well as the creation and regulation of rights of

political factions and the exercise of the parliamentary right of free

expression and parliamentary debate. At the same time the court

emphasized that this list containing the subjects of self-regulation and

instruments of parliamentary autonomy is not final. That is the case

because this list must be elaborated again and again in view of the

changing political relations such as to make possible the adaptation to

changed working conditions. Thus, in contrast to earlier constitutional

epochs, parliamentary autonomy may gain new relevance through the

circumstance that the Parliament and the Government no longer stand in

opposition to each other, as is presupposed in classic theory, rather

the boundary runs through the middle of the parliamentary plenum: the

Government and the parliamentary majority supporting it form a political

unity vis-a-vis the opposition. The Parliament must also react to the

growing complexity of regulation needs. Therefore, if a modern

parliament does not wish to lose its capacity to act, it must develop

work strategies for apportioning interaction and coordination of the

political formation of will.
 

8.

Naturally, the regulatory power of Parliament relating to its own

affairs is not boundless. It is subject to constitutional limitations,

in particular the principle enshrined in the Constitution of

representative democracy founded on the freedom of members of Parliament

in carrying out their mandates, as well as on the equality of all

members of Parliament as the representatives of all the people (Art. 15,

Art. 23 (3) and Art. 26 of the Constitution of the CR). The

requirements as to the form and interpretation, above all, of the

standing orders of the parliamentary chambers follows from these

constitutional requirements.
 

9.

What I have already written should indicate the point of departure for

my reasoning connected with the assessment of the process for adopting

the contested Act, without my having dealt with its substantive content.

The majority opinion adopts the view that both the rejection of the

motions by opposition Deputies for the extension of the time limits for

consideration of the Bill in the committees of the Assembly of Deputies,

further the extent of the „proposed amendment“ to the Bill introduced

by the Prime Minister in conjunction with the deadline which divides the

second and third reading, and the manner in which the institute, „not

to deal with a bill“, was employed by the Senate, constituted mere

errors on the plane of political culture, alternatively a reflection of

the level thereof. I cannot share this assessment, as I consider it as

formal in the extreme. It does not take into account the function of

time limits and further legal institutes which, although seemingly

serving „solely“ the self-regulation of parliamentary chambers, are yet

possessed of meaningful potential in the form of influencing the final

form of the adopted act, the legitimacy of which is then derived

precisely from meticulous respect for fairly interpreted and fairly

applied procedural rules. In my opinion, the majority assessment is thus

the repudiation of parliamentarianism viewed in the substantive sense,

that is, conceived as the institutionalized exchange of views between

representatives of groupings with competing opinions present in society

and with the aim to find such compromise as would satisfy the majority

of a society originally fragmented in opinion.
 

10.

The problematic nature of the majority opinion in assessing the

Senate’s approach to adopting the decision not to deal with the Bill

manifestly comes to the forefront. One can wonder that the Judgment did

not even contain a review of the situation which arose in the Senate

Plenary after Senate Print No. 106, containing the Bill of the contested

Act, should have been acted upon. In that situation, then, one cannot

wonder that what has played out in the Senate was not (as it could not

even have been) assessed in terms of a constitutionally-conforming

interpretation of the Standing Orders of the Senate. In other words, the

Judgment did not bring to light all factual circumstances accompanying

the adoption of the decision not to deal with the Bill.
 

11.

Evidently therefore the Judgment did not make an interpretation, in

particular, of § 69 of the Standing Orders of the Senate, which governs

the preferential right to speak enjoyed by the President of the

Republic, members of the Government, the Chairperson and Deputy

Chairpersons of the Senate and chairpersons of the Senate caucuses. The

Judgment thus left open the issue of the phase in the process of the

adoption of statutes at which this right is to be asserted, in

particular, it did not resolve the question of whether the preferential

right to speak can be asserted only after the start of debate and not

before that. With the aid of a teleological interpretation of this

provision, one can deduce that this right can reasonably be asserted

only as of that phase of debate which, to begin with, all Senators may

take part in, as a person with preferential rights should have the

opportunity to react immediately to the views brought forward by them

and thereby shape the ongoing flow of the discourse. On the other hand,

no reason can be found justifying either the diminution in the assertion

of the principles of a democracy founded on pluralism interpreted in

light of the constitutionally-enshrined status of each Senator as the

representative of all people and possessing a free mandate (Art. 23(3)

and Art. 26 of the Constitution of the CR) or the practice of according

the opportunity for discourse only to persons with preferential rights.
 

12.

In actual fact, however, the preferential right to speak was asserted

in the phase prior to the start of debate, thus the persons listed in §

69 of the Standing Orders of the Senate were given the opportunity, for

dozens of minutes even perhaps an hour, to express their views on the

matter, whereas members of the chamber were compelled to listen to their

speeches without being afforded the opportunity to react to them. As

was asserted above, such an interpretation of the Standing Orders of the

Senate draws an unfounded distinction between the individual members of

the Senate, without addressing, by means of a constitutionally

conforming interpretation, the issue of the purpose of the institute of

the preferential right to speak. In addition, to interpret the Standing

Orders of the Senate in this manner results in an unreasonable increase

in the influence of the executive power, moreover to the detriment of

the legislative power itself and to the legislative process, and it

brings to the forefront a deviation from the original theory of the

separation of powers. Art. 38 (1) of the Constitution of the CR must

also be interpreted only in a constitutional context established in this

way. I cannot assess this error solely on the level of informal

normative systems (political culture), as that would contravene the

uncompromising assertion of the democratic principle founded on the

plurality of opinion, as well as the claim to the fairness of the

process, which are, as mentioned above, essential attributes of the

democratic law-based state, if not its very essence.
 

13.

I am also convinced of the unconstitutionality of the Senate’s manner

of selecting the bills for which it will employ the institutue „not

dealing with a bill“. An elementary requirement, even in a law-based

state as merely formally conceived, is the exclusion of arbitrariness

from public authorities‘ decision-making. In the exercise of its powers,

even Parliament, that is, both of its chambers, is bound by the law,

first and foremost by the Constitution and the standing orders

interpreted in conformity therewith, by the settled practice of the

parliamentary chambers and their bodies which, owing to long-term

repetition, can be considered as an unwritten part of the legislative

procedure, if they can be found to be in harmony with the higher values

of law formation, of the democratic political system, etc. Adherence to

the procedural rules contained in the mentioned sources of law must be

demanded due to the fact that, although the addressees of these norms

are not private persons, the non-observance of them may, in the final

outcome, meaningfully affect fundamental rights of private persons.

There is no doubt that the addressees of a legal norm have the right

legitimately to expect that any limitation upon their fundamental rights

carried out by law will be by a statute which is the result of a

discourse conducted across the political spectrum, namely a discourse in

which all participants had the opportunity elaborately to acquaint

themselves with the matter under consideration and to give their

informed view upon it. It is also proper that such a process make

possible an open discussion between the proponents of competing views,

including minority views. Therefore, those procedures enter into

prominence which ensure, on the one hand, the hearing of the parties

and, on the other, the formal quality of the legislative work. From this

perspective, the legislative procedure becomes „the actual source of a

statute’s legitimacy“.
 

14.

The fact that the Standing Orders of the Senate do not contain more

detailed rules for the selection of those bills which the Senate is not

prepared to deal with cannot, in my view, excuse the inapposite

assessment of the function of the second chamber in the legislative

process, as the Judgment has done. Otherwise I have already, in my

dissenting opinion to the judgment in matter Pl.ÚS 10/03, given my views

on the diminution of the constitutional relevance of the second

chamber, and I have no choice but once again to point out that the

considerations cited in the Judgment do not enjoy support in the

Constitution of the CR. Art. 15 para. 1 entrusts power to Parliament as

the sole entity whose internal composition is envisaged in para. 2 of

that constitutional provision. However, even were the status of the

Senate capable of being assessed as actually (not constitutionally)

weaker in terms of the assertion of its authority in the legislative

process, it would not be possible also to admit „actually weaker

requirements on the conception and exercise of democracy“ in this

parliamentary chamber. The constitutional requirements on the quality

and exercise of democracy in the organs of the democratic law-based

state cannot be inferred from their actual political power.

A New Era?
 

15.

Before a year has passed, the Constitutional Court Plenum has decided

to modify the point of departure, or the referential criteria, for

assessing the regularity of a bill, or proposed amendments thereto,

aimed at ensuring that the law is foreseeable and transparent, and that

it is even possible to become acquainted with it, such as was laid down

in Part III of Judgment No. Pl. ÚS 77/06. Today‘s judgment has reduced

the principles laid out there to a mere scrutiny of the absence of a

close relation between the proposed amendment and the bill and has

trivialized the conclusions reached in last year‘s Judgment. Not only

has it repudiated the condemnation made in the already-cited Judgment of

„concealed legislation“ (point 54 of Judgment Pl. ÚS 77/06); on the

contrary, it literally approved of the phenomenon of „concealed

legislation“ by means of speculation, which, in my view, is unfounded,

about shifting paradigms on which basis one must proceed in assessing a

legal system. If the judgment from last year regarded the constitutional

problem as residing in a person’s inability to acquaint herself with

the law, because orientation in the law becomes impossible without the

use of electronic information systems, and reasoned why it is

unacceptable, without more, to put the addressees of the law in the

situation of having to adapt to this deviation, today’s Judgment finds

it to be sufficient that one can orient himself in the legal order with

the assistance of computerized legal information systems, indeed it

approves the situation where separate statutes (in the given case, there

were four separate statutes) be published under a single numerical

designation, ringed by amending provisions relating to dozens of further

statutes. The Judgment evidently approves even of statutes concealed in

this way, presumably even in terms of the requirement that the law be

foreseeable, as it results from the principle of the law-based state

(Art. 1 (1) of the Constitution of the CR) and from the principle of

legal certainty derivable therefrom. Today’s Judgment considers this

state of affairs as corresponding to the requirement of the transparency

and definiteness of the law; it even introduces a new designation of

such a statute as a „mixed statute“, even though, as is well known, this

designation is reserved for those legal enactments which contain both

legal norms of a substantive, as well as of a procedural, character (for

ex., the Electoral Act).
 

16.

The futuristic vision which today‘s Judgment ushers in is in conflict

with the doctrinal conclusions of the theory of law as they were treated

by legal theorists throughout the 20th Century (for all, V. Knapp:

Theory of Law, C.H.Beck, 1995, pp. 114, 126 – 127). Even though the

Judgment modestly asserts that its ambition is merely to make reference

to the ongoing changes in the legal system, and further that it is even

the expression of a restrained assessment (presumably of the contested

statute), nonetheless one cannot overlook the fact that it contents

itself with the mere analysis of the Czech legal order after 1990, and

that, from the frequency of amendments, as well as amendments to

amendments, it deduces some sort of lasting „change of period“. It does

so without evaluating the undeniable fact that the evaluated era is a

transitive era, because there was a changeover from one political system

to a new and fundamentally different political system, that neither the

political elite nor the state administration were possessed of the

needed knowledge and experience, which resulted in the adoption of a

number of defective statutes, which had to be amended not due to a

changing political consensus or the establishment of a new parliamentary

majority, nor even due to social change; rather it was quite often a

matter of the correction of banal errors which, however, were often

fatal in their consequences. The Judgment also does not take into

account the precipitate changes in the legal order of the CR effectuated

in connection with the CR’s accession to the EU. Thus, if we would

seriously wish to consider whether the time has come for a change of

paradigm for how law is regarded as a system, we would have to carry out

an analysis of the legal orders of those states whom fate has allowed

to undergo a calm evolution in recent decades. If we do not have

available an analysis of the relevant factual data, then futuristic

considerations of a „new era“ modifying established claims to the legal

system constitute nothing else than the utterances of a visionary, the

implications of which we are, of course, not capable of envisioning.
 

17.

For that matter, just in this way success in the endeavor evidently

eluded the French revolutionaries who, after the royal couple‘s abortive

attempt to flee the country and after their execution, replaced the

first Sieyès Constitution of 1791 with the Rousseauian, egalitarian,

democratic, Jacobin Constitution, adopted in 1793. History moved too

quickly, however, and France found itself in a state of war with all

European monarchies so that this constitution, or the exercise of power,

had to be modified even before it could come into effect. At that time

it was entirely suspended, and the Convention entrusted all power into

the hands of the revolutionary government with a central body at its

head – that is, into the hands of what later became the infamous

Committee of Public Safety. The execution of Robespierre in 1794

concluded the Terror and brought about once again the need for a new

constitution. Then in 1795 the „Directory“ Constitution saw the light of

day; however, the conflict between the Directory and the legislature

led to its overthrow guided by Napolean, and the „Consul“ Constitution

was subsequently adopted in 1799. This historical excurcus illustrates

that sometimes history literally hurtles about headlong. At the same

time, however, the indicated French constitutional gallop attests to the

fact that certain helter-skelter changes in paradigm, even if only

declared yet not effectuated at that time, might have great attractive

force even centuries later, notwithstanding the fact that they were,

from the beginning, accomplished through the suffering of

contemporaries.
 

18. The

author of this dissent wishes to remain connected with the ground under

her feet; she does not have the ambition of a reformer, therefore she

has no option but to stick, in relation to the foreseeability,

transparency, lucidity and consistency of the legal order, to the

conclusions which are contained in the reasoning of Judgment Pl. ÚS

77/06.