Legal information

Business license revoked? Court: New regulations cannot retroactively apply to old behavior and revoke penalties!

A catering company had its business license revoked by the Market Supervision Administration and took the administrative agency to court. In the end, the court ruled to revoke the penalty decision. This case revealed two common but fatal mistakes in corporate administrative law enforcement.

1. The new law shall not be retroactive.

A certain city's market supervision bureau cited regulations that will be implemented in 2022 and imposed penalties on the catering company's registration application in 2020, pushing back the time by two years. Laws have their own time boundaries, and "laws are not retroactive" is a basic principle of the rule of law - whichever law was in effect when the behavior occurred should be applied. New regulations issued afterward cannot be used to hold accountable old behavior.

2. Insufficient evidence and unfounded punishment

The core of administrative punishment lies in "based on facts". In this case, the Supervision Bureau determined that the company had "made a promise", but could not provide any evidence to support this key accusation. This is a typical determination of unclear facts and insufficient evidence, and cannot be established according to law.

Lawyer Ying Ting reminds: When faced with similar administrative penalties, companies must focus on examining two points - whether the regulations cited for law enforcement have been implemented when the behavior occurred, and whether the administrative agency has sufficient evidence. These two entry points are often the key breakthroughs in revoking illegal administrative penalties.

The typical value of this case is to draw a "safety boundary" for market entities: the rule of law is the best business environment, administrative agencies are not allowed to expand law enforcement powers at will, and selective law enforcement and retroactive law enforcement should be subject to judicial review. When faced with improper administrative behavior, enterprises must dare to safeguard their rights in accordance with the law.

A catering company sued a city's market supervision bureau for revocation of its business license

Summary of the case

A certain city's market supervision and administration bureau made an administrative penalty decision to revoke the business license of a catering company on the grounds that it promised that its business premises was not an illegal building when applying for registration, failed to change the registered business premises in accordance with the notice of correction, and continued to operate in the illegal building. After hearing, the court held that a certain city's Market Supervision Administration imposed administrative penalties on the company's application for registration in 2020 based on regulations implemented in 2022, which violated the principle of non-retroactivity of the law, applied the law incorrectly, and did not provide evidence that the company had made a commitment, so it ruled to revoke the penalty decision.

Typical meaning

The rule of law is the best business environment. Market entities such as enterprises are the most important participants in economic activities. Standardizing enterprise-related administrative law enforcement is an important measure to create a good business environment. In the process of enterprise-related law enforcement, administrative agencies should clearly identify facts, accurately apply laws, strictly distinguish the application boundaries of old and new laws, avoid selective enforcement, and stabilize the expectations of market entities to carry out normal business activities.