The fact is that it was illegal. It didn't need a rule to decide its legality. I can only speculate that they didn't expect to be forced to pay all the tax back

The fact is that it was illegal. It didn't need a rule to decide its legality. I can only speculate that they didn't expect to be forced to pay all the tax back. Perhaps they expected a kind of warning given the local government was on their side. There were/are others doing this (i.e. Microsoft,Google etc) so they decided to stick with the herd.