The Death of Res Judicata and the Lottery of Brazilian Tax Law

Abstract

The purpose of this article is to critically assess the content and future effects of the ruling handed down by the Federal Supreme Court when examining The General Repercussion Cases n. 881 and n. 885, through which the understanding was established that it would be compatible with the Brazilian Constitution the authorization for an automatic overuling of individual res judicata, in so-called relations of continued treatment, when there occurs a change in Supreme Court precedents. This ruling was based on the Court’s attempt to establish a balance between legal certainty, equality of taxpayers and the respect of free market principle. In this study, we evaluated the extent to which this new binding thesis may have changed, semantically, the traditional meaning of res judicata, as well as whether it is not, prospectively, putting the taxpayer’s legal security at risk, through an authorization that will allow tax authorities to invalidate, by their own power and legal interpretation, the authority of a final and unappealable court decision. Lastly, an attempt was made to criticize the unstable and merely lottery perspective that tax law could assume, evaluating whether the “rebus sic stantibus clause” was correctly used in the reasoning adopted by the Federal Supreme Court.