The State of Rio de Janeiro, by the Law in question, had regulated the sole paragraph of Article 116 of the National Tax Code (“Código Tributário Nacional”) to establish the procedures to be adopted by inspection to disregard the acts or legal transactions done for the purpose of concealing the occurrence of taxable event or the nature of the constituent elements of the tax obligation.
The sole paragraph of Article 116 of the National Tax Code (“Código Tributário Nacional”), delegates authority to the ordinary law to establish the procedures needed to do so, without clarifying whether the jurisdiction is for an ordinary law issued by the Federal Government and national application or the regulation would be up to each Organ of the Federation, so can the taxpayers come to question the application of the standard under discussion, should it be used in this case by the State Tax Authorities.