AS TO THE ADMISSIBILITY OF

Application No. 11919/86
by S. M.
against Austria


        The European Commission of Human Rights sitting in private on
8 May 1987, the following members being present:


                    MM. C.A. NØRGAARD, President
                        G. SPERDUTI
                        F. ERMACORA
                        G. JÖRUNDSSON
                        G. TENEKIDES
                        S. TRECHSEL
                        B. KIERNAN
                        A. WEITZEL
                        J.C. SOYER
                        H.G. SCHERMERS
                        G. BATLINER
                        H. VANDENBERGHE
                   Mrs  G.H. THUNE
                   Sir  Basil HALL
                   Mr.  F. MARTINEZ

                   Mr.  H.C. KRÜGER, Secretary to the Commission


        Having regard to Article 25 of the Convention for the
Protection of Human Rights and Fundamental Freedoms;

        Having regard to the application introduced on 14 December 1984
by S. M. against Austria and registered on 7 January 1986
under file No. 11919/86;

        Having regard to:

-       the report of May 1986 provided for in Rule 40 of the Rules of
        Procedure of the Commission;

-       the observations submitted by the respondent Government on
        19 January 1987 and the reply thereto submitted by the
        applicant on 29 January 1987;

        Having deliberated;

        Decides as follows:

THE FACTS

        The facts of the case, as submitted by the parties, may be
summarised as follows:

        The applicant, an Austrian citizen born in 1938, is a florist
resident in Vienna.  Before the Commission she is represented by
Mr.  P. Scheichelbauer, a lawyer practising in Vienna.

        As from 1 January 1965 the applicant ran, together with her
two sisters, a flower business in Vienna in the form of a general
partnership (Offene Handelsgesellschaft).  The applicant's share in
the profits and losses as well as in the assets of the company
amounted to 50%, the shares of her two sisters to 25% each.

I.

        On 10 April 1969 the then husband of the applicant, Mr.  E.P.,
notified the Tax Department (Finanzamt) by means of a
"self-accusation" (Selbstanzeige) that he wanted to correct tax
declarations for himself and his wife.  In particular, the turnovers
and profits for the years 1966 and 1967, as well as the turnover for
the year 1968, had been considerably higher than the ones hitherto
assessed and declared, respectively.  This statement, which at first
was only signed by E.P., was eventually also signed by the applicant
herself on 21 April 1969 and supplemented to the effect that "the
self-accusation overleaf also relates to the period of time from
1 January 1965 to 3 March 1966 (date of marriage)".

        On 10 December 1976 the Vienna Regional Court (Landesgericht)
in criminal cases convicted the applicant and two other persons of
offences of tax evasion under S.33(1) of the Code of Financial
Offences (Finanzstrafgesetz).  She was sentenced to a fine of
250,000 AS and four months' imprisonment suspended for three years.
The Court found in particular that the applicant had in the years 1965
to 1967, inter alia by not entering the turnover, falsifying balance
sheets and filing incorrect or incomplete tax declarations, violated
the duty under tax law to disclosure (Offenbarungspflicht) and
therefore together with the other persons reduced the amount of taxes
by a total of approximately 600,000 AS.

        In its judgment the Court stated, inter alia:

        "From the very day when this company was established, the
        tax evasions described in the judgment were committed.  This
        was done by not entering part of the turnovers attained, by
        drawing up incomplete and thus incorrect cash reports which,
        in turn, led to incorrect balance sheets and, finally, by
        filing tax returns, which because they were incorrect and
        incomplete then became the basis of tax assessments which
        did not correspond to the actual circumstances.
        Investigations on the part of the tax authorities in
        connection with the responsibility of the accused
        demonstrate that all the three accused were involved in all
        business activity that arose and that all three were
        acquainted with the company's business practices.  This also
        shows that all three accused had knowledge of the fact that
        the records, which are the basis of proper accounting, were
        incomplete and that therefore any further bookkeeping and
        fiscal transactions based on these records had to be incorrect.

        The accused were in the opinion of the Court also
        aware, due to their personal abilities, of the consequences
        with regard to bookkeeping and fiscal matters.  This
        knowledge, together with the fact that the accused
        maintained this practice, leads to the conclusion that their
        conduct can be regarded as amounting to a system ...

        It is ... not of importance whether the accused were aware
        of the full extent of the success of the system practised by
        them.  Rather, the fact suffices - and this has been
        established by the Court - that the accused approvingly
        (billigend) put up with committing tax evasions for
        themselves and the Brothers and Sisters M.OHG (the
        applicant's flower company) respectively, in the way
        described above."

        The applicant thereupon filed a plea of nullity which was
upheld by the Supreme Court (Oberster Gerichtshof) on 19 June 1979.
The latter quashed the previous decision and acquitted
(freigesprochen) the applicant of the offences on the ground of their
prescription.

        The Court found in particular that, according to the
respective legal provisions, prescription would have occurred if five
years had elapsed between the end of the year following the first
measure of prosecution and the date of judgment.  On 10 April 1969 the
applicant had filed a self-accusation, whereupon the auditing
commenced on 12 May 1969.  This date interrupted the period of
prescription.  The period then started again to run at the end of
1969.  Accordingly, the period of prescription had expired at the end
of 1974, i.e. long before the date of the first instance's decision
for which reason the offences with which the accused had been charged
were no longer punishable.

II.

        In 1980 the applicant requested in a supplement to her tax
declaration for that year that 89,600 AS should be deducted as
company expenses in view of the fact that she had expended this amount
for counsel in the criminal proceedings leading to the decision of the
Supreme Court of 19 June 1979.  The conditions therefore had been met
inasmuch as she had been acquitted.

        When the Tax Department (Finanzamt) refused to qualify these
expenses as company expenses the applicant unsuccessfully filed an
appeal with the Regional Finance Direction (Finanzlandesdirektion).
Thereupon, on 6 June 1984 the Administrative Court dismissed the
applicant's further complaint.  In its decision which was served on
the applicant on 17 June 1984 the Court found in particular:

        "Only costs for counsel of an accused who has been acquitted
        can be seen as having been caused by the company and
        therefore qualify as company expenses if the person is
        acquitted from the offence of which he has been accused.
        Thereby the offences must be able to be explained on the
        basis of strict criteria as having resulted directly from
        his company activity and having direct effects thereupon.

        Moreover, the accused must have been criminally acquitted of
        the offences because, according to the statements in the
        Court decision, the accused could not be charged with the
        respective criminal offence and, therefore, the respective
        suspicion had unjustifiably (zu Unrecht) been raised against
        him.  The Court sees no reason to depart from this legal
        opinion.

        In the present case neither the documents nor any
        submissions of the applicant in the proceedings permit the
        conclusion that the latter has in fact not committed the
        financial offences according to S.33(1)(a) of the Code of
        Financial Offences of which she has been accused, and that
        for this reason she was acquitted by the Supreme Court.
        Rather, the acquittal occurred after the decision of the
        convicting first instance decision had been quashed
        exclusively in view of the prescription.

        It cannot therefore successfully be contested if the
        authorities reached on the basis of these facts the
        conclusion that the disputed costs for counsel amounted to
        living expenses rather than to company expenses inasmuch as
        in the criminal proceedings conducted only the prescription
        which had occurred had been determined and not the
        applicant's innocence."

III.

        In 1981 the applicant again unsuccessfully requested the Tax
Department to consider 40,000 AS expended for counsel in the previous
criminal proceedings as company expenses.  Upon an unsuccessful appeal
her further complaint was rejected by the Administrative Court on
5 June 1985 on the same grounds as on 6 June 1984.  In its decision
the court noted that the legal issue was the same as that with which
it had previously been confronted, the only difference being that the
present case referred to the year 1981.  The Court found in particular
that the applicant had not contested the statements made in the
decision of 6 June 1984 according to which there was nothing which
would indicate that the applicant had in fact not committed the
offences.  The Court stated in this respect:

        "It has not been disputed - as also in the proceedings
        <leading to the decision of 6 June 1984> - either in the
        documents or in any of the submissions of the applicant
        during the proceedings that the latter had in fact not
        committed the offences according to S. 33 (1)(a) of the Code
        of Finance Criminal Law with which she had been charged."

IV.

        S.29 of the Austrian Code of Financial Offences concerns
"self-accusation" (Selbstanzeige).  In the version applicable at the
time when the judgment was passed, S.29 reads as follows:

        "(1)    Those who have committed a financial offence shall
        be exempt from punishment if they notify the public
        authority in charge of enforcing the applicable tax or
        monopoly regulations or the competent authority for
        financial offences of their misconduct (self-accusation).  A
        self-accusation is impossible when caught in the act.

        (2)     If such misconduct was accompanied by a tax evasion
        or another shortfall in receipts, exemption from punishment
        shall be granted only insofar as the authority is notified
        without undue delay of the circumstances material to the
        determination of the evasion or shortfall and the resulting
        amounts owed by the informant or for which he may be held
        liable are paid in conformity with the tax or monopoly
        regulations.  If facilitated terms of payment are granted,
        the period of grace must not exceed one year; when taxes
        have to be calculated by the taxpayer himself (S.201 and 202
        of the Federal Tax Code <Bundesabgabenordnung>)this period
        commences with the self-accusation; in all other cases with
        the date on which the informant is notified of the amount
        due.

        (3)     Exemption from punishment shall not be granted

        a)      if, at the date of filing the self-accusation,
        prosecution (S.14, para. 3) had already been levied against
        the informant, against other persons involved in the offence
        or against receivers;

        b)      if, at the date of filing the self-accusation, the
        offence had already been discovered in whole or in part and
        this fact was known to the informant, or

        c)      if, in the case of a deliberate financial offence,
        on the occasion of a search, inspection, clearance, or
        auditing of accounts or records by a fiscal authority the
        self-accusation is not filed as early as at the beginning of
        the official act.

        (4)     Regardless of the exemption from punishment,
        monopoly goods (spirits, salt, products covered by the
        tobacco monopoly) as well as the objects mentioned in S.39
        para. 2 shall be ordered forfeited.  This shall also apply
        to such receptacles and means of transportation as described
        in S.17 para. 2 sub-para. b, unless the special devices can
        be removed; the costs shall be borne by the informant.
        Compensation for lost value shall not be imposed.

        (5)     The self-accusation only applies to those for whom
        it is filed."


COMPLAINTS

        The applicant complains under Article 6 para. 2 of the
Convention that, even though she had been acquitted of the offences
with which she had been charged, the Administrative Court found in its
decisions of 6 June 1984 and 5 June 1985 that acquittal on account of
prescription did not amount to the applicant's innocence.  The
applicant states that in the respective criminal proceedings she had
claimed that she was not guilty.

PROCEEDINGS BEFORE THE COMMISSION

        The application was introduced on 14 December 1984 and
registered on 7 January 1986.

        On 13 October 1986 the Commission decided to bring the
application to the notice of the respondent Government and to invite
them to submit observations on its admissibility and merits pursuant
to Rule 42 para. 2 (b) of the Rules of Procedure.

        The respondent Government's observations were submitted on
19 January 1987 and the reply thereto by the applicant on
29 January 1987.


SUBMISSIONS OF THE PARTIES


A.      The respondent Government


I.     Requirements under Article 26 of the Convention


        The Government submit that the conditions of Article 26 of the
Convention have not been complied with.

        According to the Commission's case-law, Article 26 of the
Convention implies that in States in which the Convention attains the
status of constitutional law and in which there is a constitutional
court a complaint must have been raised before that court - if and to
the extent that State actions are subject to judicial review by a
constitutional court - before all domestic remedies have been
exhausted (see e.g.  No. 6965/75, Dec. 5.3.76, D.R. 5 p. 130).  However,
the applicant failed to file a complaint with the Austrian
Constitutional Court against the ruling of the Regional Finance
Direction in accordance with Article 144 of the Federal Constitution.
There is no established practice of the Constitutional Court
concerning this particular question of law which would have discharged
the applicant from her obligation to appeal to that Court.  On the
contrary, the decisions handed down by the Court so far with regard to
Article 6 para. 2 of the Convention show that a complaint filed with
the Constitutional Court in the present case would by no means have to
be regarded as hopeless, when taking into account the legal principle
of the presumption of innocence.

        Under Article 144(1) of the Federal Constitution an appeal may
be filed with the Constitutional Court on the ground of a violation of
constitutionally guaranteed rights after all administrative remedies
have been exhausted.  Insofar as the applicant considers the refusal
to recognise the costs for counsel as company expenses a violation of
Article 6 para. 2 of the Convention, she would have had to apply to
the Constitutional Court to exhaust all domestic remedies.  This
possibility was explicitly referred to in the directions given to her
concerning time and manner of appealing against the decision quoted
above.

        If it is objected that the issue of the violation of the legal
principle of the presumption of innocence was contained in the
complaint filed with the Administrative Court and that in accordance
with Article 140 of the Federal Constitution the Administrative Court
is entitled to apply to the Constitutional Court for checking the
constitutionality of a law, it must be pointed out that both
possibilities, namely the direct as well as the indirect appeal to the
Constitutional Court certainly require within the meaning of
Article 26 of the Convention that the applicant makes use of the
possibility to appeal directly to the Constitutional Court.

        Due to the combination of the circumstances of the present
case, this would have been required if only because the
constitutionality of an interpretation by the Administrative Court was
the decisive question in this case.  According to its practice, the
Constitutional Court is by no means bound by such an interpretation,
but also quashes decisions which are based on an unconstitutional
interpretation of a law by the Administrative Court.


II.    Complaint under Article 6 para. 2 of the Convention


1.      The Government recall at the outset with reference to the
Commission's case-law that the guarantees in Article 6 para. 2 apply
only to those "charged with a criminal offence".  However, the present
case is neither a criminal case nor a financial offence under criminal
law.  Furthermore, the Commission has repeatedly stated that tax
proceedings do not concern claims and obligations under civil law.

2.      The provision relevant to the question of the admissibility of
deducting company expenses is S.4(4) of the Income Tax Act, according
to which "Company expenses are expenses caused by the company".  These
expenses reduce the profits in consistent compliance with the
separation of company and external affairs.  Therefore, company
expenses are solely caused by the management of company affairs and
not by the possibly unobjectionable conduct of the taxpayer in terms
of criminal law.  In this respect therefore Article 6 para. 2 of the
Convention cannot be applied.  Thus, also in respect of the question
whether the applicant's costs for counsel in the criminal proceedings
could be qualified as company expenses, the only relevant issue could
be whether or not these expenses were attributable to the management
of company affairs or to her private life.

3.      In principle due to S.4 of the Income Tax Act the costs for
counsel in criminal proceedings could be regarded as costs of living
and thus as private expenses.  It is from this point of vantage that
the somewhat strict interpretation of the concept of company expenses
discussed here must be understood.  According to this interpretation
these costs, which are much more on the private side, can be regarded
as company expenses only to the extent that it is demonstrated beyond
doubt that the party concerned acted in strict compliance with the
law.  The relatively narrow limitation to a "true acquittal" (echter
Freispruch) results both from the need for enforceability and the need
to provide an absolute security that in cases of unlawful action the
costs of criminal proceedings do not reduce the profits.

        The argument of enforceability requires an explanation.  In
particular, the result of a less narrow limitation would be that in
cases of an "acquittal in law" (unechter Freispruch) the tax authority
at first would have to determine whether an offence has been
committed.  It goes without saying that it would be difficult for an
authority without criminal jurisdiction to determine such a question.
On the other hand, objections in terms of equality before the law
would have to be raised against an even broader interpretation, namely
that the costs of criminal proceedings could be qualified as company
expenses in the case of both a "true acquittal" and an "acquittal in
law".  Such an interpretation would make it possible to deduct these
costs as company expenses both in the case of lawful and unlawful
action.  Then, however, a deduction of the costs of criminal
proceedings as company expenses could not be denied even in case of a
conviction.

        As a result, depending on the nature of the acquittal, the
costs for counsel arising in the course of the criminal proceedings
can be regarded either as company expenses within the meaning of the
Income Tax Act or merely as private costs of living.

4.      The judgment of the Supreme Court of 19 June 1979 contains no
findings as to whether the accused could not be charged with the
respective offense or whether she was wrongfully suspected of having
committed the offence, since she was acquitted exclusively on the
ground of prescription.  The judgment contains neither positive nor
negative statements concerning her guilt.

5.      Therefore, the decision of the Administrative Court of
6 June 1984 cannot be regarded as implying that in view of the
decision of the Supreme Court the party concerned had committed the
offence.  The Supreme Court was not obliged to determine the issue of
the applicant's guilt and the acquittal was based exclusively on the
ground of prescription.  It was also not the concern of the tax
proceedings to comment on the existence of a suspicion of a criminal
act.  Thus, the presumption of innocence has not been violated insofar
as the Administrative Court regarded the judgment of the Supreme Court
as a decision which did not comment on the existence of the suspicion
of a criminal act and, as a result, comes to concrete conclusions,
namely by qualifying the amount expended by the applicant for counsel
in the criminal proceedings as private costs of living.

6.      Article 6 para. 2 of the Convention does not entitle the
accused to demand reimbursement of the amount spent on counsel when
the criminal proceedings are dismissed or the accused is acquitted.
According to this provision, it is not even prohibited to order the
acquitted person to pay part of the costs of the proceedings.  Only an
excessive and seemingly arbitrary imposition on the acquitted person
of the costs of the proceedings may be regarded as a violation of the
presumption of innocence.  The merely indirect burdening of the
applicant with the costs of the proceedings owing to the refusal to
qualify them as company expenses can by no means be considered as
being excessive or arbitrary.

7.      In its decision of 6 June 1984, the Administrative Court did
not determine the issue of guilt but only stated that it cannot be
inferred from the acquittal that the applicant's innocence had been
ascertained.  Following its consistent practice, the Administrative
Court thus only wanted to express that the suspicion had not been
raised unjustifiably.

        Differentiations of this kind in laws or in court decisions
which do not contain the presumption of guilt but merely state that
the guilt cannot be proven or that the suspicion cannot be refuted,
thus leaving the question of guilt as such unanswered, do not
contravene Article 6 para. 2 of the Convention, at least not in
connection with court orders as to costs, claims for compensation, and
in particular in connection with the permission or refusal to afford
deductions (see I. and C. v.  Switzerland, Comm.  Report 4.12.85,
para. 61).

8.      The aim of S.29 of the Code of Financial Offence concerning
"self-accusation" (quoted above in THE FACTS) is to encourage
taxpayers to disclose tax evasions by ensuring that they will be
exempt from punishment if they refund the taxes due, thus recovering
the losses.  Hence, the public interest in the collection of taxes
takes priority over the interest in the punishment of the offender.
Both self-accusation and prescription are grounds for quashing a
judgment.  Prescription absolutely disregards the question of guilt
and is based solely on the expiry of a certain period of time.
Conversely, the benefit of the self-accusation presupposes, according
to its definition ("those who have committed a financial offence
..."), a financial offence.

        In the present case the suspicion raised against the applicant
does not seem totally unjustified if it is considered that in her plea
of nullity she challenged the decision of the court of first instance
in the first place because of its refusal to exempt her from
punishment in spite of her self-accusation, while explicitly leaving
uncontested the facts ascertained in this decision.


III.     Conclusion


        The respondent Government therefore request the Commission to
declare the application inadmissible either under Article 26 of the
Convention for non-exhaustion of domestic remedies, or, subsidiarily,
as being manifestly ill-founded within the meaning of Article 27 para.
2 of the Convention.

B.      The applicant


I.     Requirements under Article 26 of the Convention


        The applicant submits that Article 26 embraces only admissible
remedies.  In the present case domestic remedies were exhausted by the
further complaint lodged with the Administrative Court.  A complaint
to the Constitutional Court is not possible if it is alleged that
ordinary law - in the present case the Code of Criminal Procedure -
has been violated.  A complaint to the Constitutional Court alleging a
violation of Article 6 of the Convention would have had no prospect
of success, particularly since that Court takes the view that Article
6 is not directly applicable in the domestic legal order.  In this
respect attention is drawn to the fact that the Constitutional Court
punishes wanton complaints.

        In the further complaint to the Administrative Court a
violation of Article 6 was alleged.  According to the prevailing
case-law of the Constitutional Court, the Administrative Court is
under no obligation to refer an application alleging a violation of a
right under the Convention to the Constitutional Court.


II.    Complaint under Article 6 para. 2 of the Convention


1.      The applicant first points out that the applicability to tax
matters of the Convention has already been accepted in certain cases.
In this respect he refers to an article by Berka, Die Europäische
Menschenrechtskonvention und die österreichische Grundrechtstradition
in the Austrian Law Journal 1979 at p. 369.

2.      Article 6 para. 2 of the Convention states that everyone must
be presumed innocent until proved guilty according to the law.  It is
irrelevant in this context that the applicant herself admitted the tax
evasion, since the present issue concerns the refusal of the
authorities to consider defence costs as company costs.  However,
Article 6 para. 2 expressly provides that guilt must be proved
according to the law.  In non-legal tax proceedings, in which the
true facts must be established through official channels, a confession
is no substitute for legal proof of guilt.  A confession may be true
or false; it may also be withdrawn.  Guilt is proved according to the
law only where the person who has confessed is convicted by a decision
having the force of law taken in accordance with the relevant legal
provisions, provided that such provisions do not infringe rights under
the Convention.

        The Government overlook the fact that an acquittal on the
grounds of prescription does not alter the fact that the applicant was
not proved guilty according to the law.  Since everyone is innocent
until he has been convicted in proceedings conducted according to the
law, it is immaterial whether he is innocent because no charge has
been laid, because criminal proceedings have been discontinued,
possibly because the charge has been withdrawn, or whether the accused
is acquitted because in doubt his innocence has been established,
because he is not responsible for his actions, on account of
prescription, or for other grounds.

        No legal proceedings have established the applicant's guilt.
The judgment of the Vienna District Criminal Court which convicted the
applicant was quashed by the Supreme Court and is therefore devoid of
effect.  It follows that the applicant must clearly be regarded as
innocent within the meaning of Article 6 para. 2 of the Convention.
The Government's arguments concerning the self-accusation are
irrelevant in that respect, since under the Convention a person is not
regarded as guilty if he has made a confession but - and with good
reason - only if he has been convicted in proceedings conducted
according to the law.  After all, people may confess because they are
afraid or because they have been put under pressure to do so.

3.      Thus the question of the applicant's guilt in no way remains
open, as the Government claim.  In the absence of a conviction she has
always been innocent.  It does also not depend on whether the
Administrative Court made no finding of innocence and thereby intended
to express the view that the suspicion raised against the applicant
was groundless.  The only question under Article 6 para. 2 can be
whether the applicant was found guilty in proceedings conducted
according to the law.  Ultimately the onus is not on the applicant to
show her innocence but on the public prosecutor to establish her
guilt.  There is an irreconcilable contradiction in the fact that the
Administrative Court states, on the one hand, that the defence costs
in criminal proceedings are to be regarded as incurred by the
business, and therefore as business expenses, if the accused is
acquitted of the offence with which she is charged while, on the other
hand, the Court states that the evidence failed to demonstrate that
the applicant had not committed the offence in question and that she
was acquitted by the Supreme Court "only" because the proceedings were
statute-barred.

THE LAW

        The applicant complains that, even though she had been
acquitted of the offences with which she had been charged, the
Administrative Court found in its decisions of 6 June 1984 and
5 June 1985 that this acquittal on account of prescription did not
amount to the applicant's innocence.  It is submitted that the onus
was not on the applicant to show her innocence but on the public
prosecutor to establish her guilt.  However, there have been no legal
proceedings which established the applicant's guilt.  The applicant
relies on Article 6 para. 2 (Art. 6-2) of the Convention which states:

        "Everyone charged with a criminal offence shall be
        presumed innocent until proved guilty according to law."

        The Government submit that according to the Commission's
case-law tax proceedings do not concern the determination of a person's civil
rights and obligations within the meaning of Article 6 para. 1 (Art. 6-1).
Moreover, the present case involves neither a criminal offence nor a financial
offence under criminal law, whereas Article 6 para. 2 (Art. 6-2) applies only
to those "charged with a criminal offence".

        The Commission has considered in the light of the case-law
established by the Convention organs whether the charges brought
against the applicant in the proceedings before the Vienna Regional
Court were "criminal" within the meaning of Article 6 para. 2 (Art. 6-2)
(cf. Eur. Court H.R., Engel judgment of 8 June 1976, Series A no. 22,
p. 34 f. para. 82; Öztürk judgment of 21 February 1984, Series A
no. 73, para. 48 p. 17).  The Commission finds that the provisions
defining the offences concerned belong under Austrian law to criminal
law since the respective Code of Financial Offences itself refers in
its German title to criminal offences (Finanzstrafgesetz).
Moreover, in the Commission's opinion, the nature of the offence,
namely the violation of the duty of disclosure, is criminal in
character.  Finally, the Commission considers that the degree of
severity of the sentence which the applicant incurred, namely a fine
of 250,000 AS and four months' imprisonment suspended for three years,
was of such a severity as to satisfy the criteria for a penal sanction
within the meaning of Article 6 (Art. 6) of the Convention as interpreted by
the Court in its judgments on the Engel and Öztürk cases.

        The Commission is therefore satisfied that in proceedings
before the Vienna Regional Court the applicant was "charged with a
criminal offence" within the meaning of Article 6 (Art. 6).

        The Government also submit that the conditions of Article 26
(Art. 26) of the Convention have not been complied with.  In particular, the
applicant failed to file a complaint with the Austrian Constitutional
Court against the ruling of the Regional Finance Direction in
accordance with Article 144 of the Federal Constitution.  There is no
established practice of the Court concerning this particular question
of law which would have discharged the applicant from her obligation
to appeal to it.  On the contrary, the decisions handed down by the
Constitutional Court so far with regard to Article 6 para. 2 (Art. 6-2)
of the Convention show that a complaint filed with it in the present case
would by no means have to be regarded as hopeless, when taking into
account the legal principle of the presumption of innocence.

        The Commission observes that the applicant's complaint is in
fact directed against a formulation employed by the Administrative
Court in its decision of 6 June 1984 and again of 5 June 1985, and
that there was no further remedy at the applicant's disposal to
challenge this decision before the Austrian Constitutional Court.

        The Commission concludes that the application cannot,
therefore, be rejected under Article 26 (Art. 26) of the Convention for
non-exhaustion of domestic remedies.

        The Government further submit that Article 6 para. 2 (Art. 6-2) of the
Convention does not entitle the accused to demand reimbursement of the
amount spent on counsel when the accused is acquitted.  Moreover, the
judgment of the Supreme Court of 19 June 1979 contains no findings as
to whether the accused could not be charged with the respective
offence or whether she was wrongfully suspected of having committed
the offence, since she was acquitted exclusively on the ground of
prescription.  Equally in its decision of 6 June 1984, the
Administrative Court only stated that it could not be inferred from
the acquittal that the applicant's innocence had been ascertained.  The
Court thus only wanted to express that the suspicion had not been
raised unjustifiably.  In the present case the suspicion raised
against the applicant does not seem totally unjustified if it is
considered that in her plea of nullity, directed against the decision
of the Regional Court, she explicitly left uncontested the facts
ascertained in that decision.

        The Commission observes that in the respective decision of
5 June 1985 the Administrative Court upheld its previous decision of
6 June 1984 according to which the applicant could not in her tax
declaration claim the respective expenses for counsel as being company
expenses.

        However, neither Article 6 para. 2 (Art. 6-2) nor any other provision
of the Convention guarantees a right to claim expenses for counsel as being tax
deductible in a case where the accused is eventually acquitted or the
proceedings are discontinued.

        On the other hand, the Commission and Court have admitted that
the application of Article 6 para. 2 (Art. 6-2) is not limited to cases where a
prosecution ends in the conviction or acquittal of the accused and
that the presumption of innocence will be violated if, without the
accused's having previously been proved guilty according to law, a
judicial decision concerning him reflects an opinion that he is guilty
(Eur. Court H.R., Minelli judgment of 25 March 1983, Series A no. 62,
p. 18 para. 37).

        It is true that in the present case the applicant complains of
a statement of the Administrative Court according to which her
acquittal of the criminal offences of tax evasion was only based on
the prescription of these offences and had not established her
innocence.  She complains in particular that this official statement
by a court, according to which she is presumed guilty because she
failed to prove her innocence constitutes a violation of her right to
be presumed innocent as set out in Article 6 para. 2 (Art. 6-2) of the
Convention.

        The Commission, having just found that in the previous
proceedings before the Vienna Regional Court the applicant had been
"charged with a criminal offence" within the meaning of Article 6
(Art. 6) of the Convention, observes that the applicant's complaint
concerns the subsequent tax proceedings relating to the deduction of
costs for counsel on company expenses.  The Commission notes in
particular that the present case has certain similarities with the
Minelli case where the Court concerned had first decided not to hear
that applicant as the limitation period had expired and thereafter
decided on the side effects of that case, namely by directing the
applicant to bear part of the court costs (see Eur.  Court H.R.,
judgment of 25 March 1983, Series A No. 62 para. 12).  However, the
present case differs from the Minelli case in that the deduction of
costs for counsel was decided upon in different subsequent
proceedings.  It is therefore in no way evident that at the relevant
time the applicant was still "charged with a criminal offence" within
the meaning of Article 6 para. 2 (Art. 6-2) of the Convention.

        However, the Commission does not find it necessary to resolve
the question whether Article 6 para. 2 (Art. 6-2) is also applicable to these
proceedings, since the application must in any event be declared
inadmissible for the following reasons.

        The Commission finds that the incriminated statement must not
be read in isolation, but in the context of the legal question which
the Administrative Court was called upon to decide.  In fact, the
latter was faced with the problem of the interpretation of S.4(4) of
the Income Tax Act according to which expenses for defence counsel can
be deducted from the taxable income if the criminal proceedings in
question have lead to an "acquittal".

        The Administrative Court came to the conclusion that only an
acquittal on the merits of the case can be accepted as the
prerequisite for deducting defence expenses from income.  In the
applicant's case the acquittal was based on prescription and did not,
therefore, meet that particular requirement.  This had been the only
point at issue.

        The Commission accepts that the finding of the Administrative
Court could have been formulated in less equivocal terms.
Nevertheless, in the circumstances of the present case, it finds that
the terms employed do not amount to a violation of the applicant's
rights under Article 6 para. 2 (Art. 6-2) of the Convention.  It
follows that the application is manifestly ill-founded within the
meaning of Article 27 para. 2 (Art. 27-2) of the Convention.

        For these reasons, the Commission

        DECLARES THE APPLICATION INADMISSIBLE.


Secretary to the Commission               President of the Commission




       (H.C. KRÜGER)                            (C.A. NØRGAARD)