The People's Procuracy (VKS) secured a landmark victory in Hanoi's first public interest civil case, compelling Landmark Luong Son Company Limited to pay over 5,4 billion VND in tax arrears to the state budget. This ruling came on the afternoon of 31/7 from People's Court area 5, which opened a public first-instance trial for the civil case requesting the fulfillment of tax obligations.

This case marks a significant precedent, being the first public interest civil lawsuit in Hanoi tried under a pilot mechanism by the National Assembly. This mechanism allows the VKS to initiate civil proceedings to protect vulnerable groups, such as children and the elderly, or to safeguard public interests.

In this case, People's Procuracy area 5 acted as the plaintiff, suing Landmark Luong Son Company Limited. The court summoned Tax Authority branch 11 – Hanoi as a party with related rights and obligations.

A representative of People's Procuracy area 5, Hanoi – the plaintiff in the first public interest civil case tried in Hanoi. Photo: Danh Lam

The lawsuit originated when People's Procuracy area 5 received information from Tax Authority branch 11 about companies with substantial tax debts. Through verification and direct work with the enterprise, the Procuracy determined that as of 31/5, Landmark Luong Son owed over 6,3 billion VND to the state budget. This amount encompassed various taxes, other receivables, and late payment fees arising from tax management.

In the pre-procedural stage with the Procuracy, Landmark Luong Son attributed its delayed financial obligations to unpaid debts from partners, which led to cash flow difficulties. The company pledged to settle its tax obligations before 29/6 but failed to meet this deadline.

On 23/6, People's Procuracy area 5 demanded full tax compliance. Following this action, the enterprise paid 1,2 billion VND but did not fully settle the remaining amount.

People's Procuracy area 5 then sent a written recommendation to Tax Authority branch 11 to initiate a public interest civil lawsuit. Tax Authority branch 11 stated that despite applying all administrative enforcement measures as regulated, it was unable to pursue legal action. It subsequently requested the Procuracy to exercise its right to sue under the public interest protection pilot mechanism.

At the trial, the representative of People's Procuracy area 5, the plaintiff, emphasized that the defendant's delayed tax payments were not merely a debt relationship between the enterprise and the management agency. Instead, these delays infringed upon state budget revenue and public assets.

Landmark Luong Son's representative acknowledged all tax debt figures, attributing financial difficulties to outstanding customer debts. The company also noted an additional payment of 500 million VND after the lawsuit was filed. Landmark Luong Son requested the trial panel to consider exempting it from late payment fees and allowing gradual repayment of the remaining debt according to a specific schedule to maintain business operations.

Tax Authority branch 11 provided the latest updated figures to the trial panel. As of the trial date, Landmark Luong Son still owed over 5,4 billion VND to the budget. This sum included over 5,1 billion VND in principal tax debt and other revenues, and 309 million VND in late payment fees. The tax authority supported the Procuracy's lawsuit, urging the court to compel immediate payment of this amount.

Presiding Judge Vu Quang Dung announced the verdict on the afternoon of 31/7. Photo: Danh Lam

Announcing the verdict on the afternoon of 31/7, the trial panel assessed that Landmark Luong Son's failure to fully comply with tax obligations affected public interest, despite prior reminders and enforcement measures. The court rejected the enterprise's requests for exemption from late payment fees and gradual repayment, as these did not meet eligibility criteria for exemption or reduction.

Consequently, the court accepted the Procuracy's lawsuit, ruling that Landmark Luong Son must fulfill its obligation to pay the state budget a total of over 5,4 billion VND, calculated up to 31/7.