VAT court ruled tax authorities must apply the milder penalty version of the law valid on the day of decision.

The Supreme Court set aside a lower court decision and remanded the case for a new ruling based on the principle of favoring the taxpayer. The taxpayer argued that the 1996 amendment to the VAT Act, which introduced a milder penalty for cash register violations, should apply retroactively to a 1995 tax period. The court accepted this argument because the new law contained no transitional provisions and the penalty was deemed a punitive measure rather than a tax adjustment. Consequently, tax authorities are required to apply the softer penalty version of the statute that was in force at the time of their decision.