2. The costs of the lawsuit are assessed against the defendant.

A. The plaintiff's business

A gold bullion wholesale company from January 30, 2003 to May 20, 2005 (ex officio closure of business)

B. The Plaintiff’s purchase transaction (hereinafter “purchase”) and report

(1) Receipt of a tax invoice (as shown in the details of receipt of the tax invoice different from the facts, hereinafter “instant purchase tax invoice”)

(A) Period: 50 times in total from January 1, 2003 to December 31, 2004

(B) Purchase Agency: Nonparty 1 Company and 37 other companies (hereinafter “Purchase Agency of this case”).

(c) Trade goods: Gold bullion equivalent to the value of supply of 335,252,004,000 won (hereinafter “this case gold bullion”).

(2) Value-added tax and each return and payment of corporate tax for each of 2003 to 2004

The purchase value equivalent to the input tax deduction and supply value shall be included in deductible expenses.

C. The Defendant’s correction and notification (the sum of the heads) (hereinafter “the initial disposition”).

(1) Grounds for Disposition: The purchase of this case is one of the process of a series of transactions under the pretext and form of a disguised transaction for the purpose of evading taxes without actual delivery or transfer of goods. The purchase tax invoice of this case received in the course of the transaction constitutes the “unlawful tax invoice” under Article 17(2)1-2 of the Value-Added Tax Act.

(2) Disposition details: Non-taxation of input tax amount, non-deductible of purchase amount, and application of non-deductible of evidence.

(unit: Won)

본문내 포함된 표 세목 과세기간 처분일 2005. 4. 1. 2005. 12. 1. 부가가치세 2003년 제1기 8,775,364,660 ？ 2003년 제2기 24,894,092,240 ？ 2004년 제1기 12,721,414,000 ？ 2004년 제2기 647,180,280 ？ 법인세(증빙불비가산세 부과) 2003사업연도 4,629,828,600 462,982,860 2004사업연도 2,075,311,480 207,531,140

D. The procedure of the previous trial: the dismissal of the plaintiff's appeal on May 2, 2006

E. Ex officio reduction disposition in the instant lawsuit (hereinafter “instant disposition”) is made on November 4, 2008, and the remaining part of the original disposition was reduced (hereinafter “instant disposition”).

(1) Reasons for reduction and correction: Sales of the instant gold bullion corresponding thereto (hereinafter “instant sales”) are also nominal and formal transactions; thus, the sales tax invoice issued in the course of the instant sales (attached Form 1; hereinafter “instant sales tax invoice”) shall also be deducted from the “illegal tax invoice”, the initial input tax amount, and the output tax amount, as in the instant purchase tax invoice, as in the case of the instant purchase tax invoice; and the amount calculated by deducting the amount from the amount of the original input tax and the output tax amount; additional tax on the return and payment in bad faith, and penalty tax on the nonperformance

(2) Disposition details

(unit: Won)

Value-added tax (including the head office and branch offices) on April 1, 2005 on April 1, 2005 on the second period 7,094, 710, 4304 1, 2004 2, 2004 2,618, 937, 2404 179, 932,010 on April 1, 2003

[Ground of recognition] Facts without dispute, Gap 1 through 25 evidence, Eul 1, 2, 26, 27 evidence (including each number), the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

(1) Even if the Plaintiff participated in a series of trade processes, so-called so-called bomban company, so long as the Plaintiff actually purchased gold bullion from the purchaser and actually sold it, the sales and purchase tax invoice cannot be deemed as a false tax invoice.

(2) Therefore, the Defendant’s disposition of this case, premised on this, is unlawful.

(b) Fact of recognition;

(1) Form of an irregular transaction for the purpose of tax evasion in the transaction of gold bullion

(a) Distribution routes of gold bullion in appearance;

? Foreign enterprises ? Imported Enterprises ? Primary Enterprises ? Two Primary Enterprises (Omission) ? Large Carbon Enterprises

? so-called Cubed Enterprise (hereinafter referred to as “ Cubed Enterprise”) / Large-sized Distribution Enterprises (Scubed Wholesale Enterprises)

? Exported ? Foreign Enterprises ?

(b) the settlement channel of the transaction price;

Although it is paid in sequence from exporters to importers in the reverse direction, from among the above distributors to the floor wholesalers, tax invoices are only issued according to the direction of specific persons or specific enterprises, and there are many cases where gold bullion trade or transportation is not actually conducted.

(C) The role of the bomb coal company

In the previous stage, gold bullion distributed under tax exemption shall be purchased and sold to the cushion Company as an additional tax amount equivalent to 10% of the value-added tax, and then the profit shall be withdrawn in cash within the short period and the State shall not collect the value-added tax.

(d) profits and distribution of the transactions of tax evasion;

The amount equivalent to the value-added tax that ○○ is paid by the Coup Ltd. shall be transferred in order by each of the companies in the immediately preceding phase through the tax invoice received from the immediately preceding phase company to deduct the input tax amount. In the end, the exporter exports gold bullion and then is to be refunded by the State according to the application of zero-rate tax rate.

Among the refund amount of value-added tax, the portion corresponding to the value-added tax that is not paid by the wide coal company is the ultimate source of profits from the wide coal business.

○ The profit is distributed in the form of margin to the domestic company involved in the margin business, or the amount calculated by the certain ratio out of the profit (the remainder after deducting the purchase price from the sales price) of the margin business is distributed separately to the participating company in the form of margin, and the export price and the import price are also distributed to the foreign company involved in the margin business in the form of the difference between the export price and the import price (the export price is lower than the import price if based on the domestic company).

(e) Joint tax evasion activities (public invitation of tax evasion).

In order to maximize its profit, a wide-scale coal business shall distribute a large quantity of gold in a short term, and shall have the following structure to prevent disputes between involved companies that may arise therefrom, or accidents, such as loss of proceeds:

Most of the same poles (the owner of a gold bullion shall prepare for the first payment for the import of gold bullion from the outside of the wide carbon business network) shall operate simultaneously with the exporter and the importer.

○ The State shall arrange to make direct transactions with an enterprise substantially controlled or trusted by it.

○ Substantial determination of volume, unit price, margin, etc. of transactions by the preceding week at each stage of transaction.

In most of the series of transactions from the importer to the exporter, most of the series of transactions have been made at a very short time or less than a day.

Most of the cases where the actual gold bullion is transported promptly with a coverer export company in the transaction stage (it is not a formal transport for disguised trade even if it is transported every transaction stage).

(2) Distribution of the gold bullion of this case

(A) Summary

○ Import Transaction: PREC US GTRUP METALD in Hong Kong, RICTRADING COMPY (hereinafter referred to as “PGLM,” “RICH”) 1, Hong Kong located 1,000,000 Hong Kong 1,000 Hong Kong 1,000 Hong Kong 2,000,000,000,0000,0000,000,000,000,000,000,000

○ Tax-Free Trade: A revenue company ? One or several intermediate tax-free trade companies [Non-Party 4 Company, etc.] ? Large Carbon Company [Non-Party 5 Company and Non-Party 6 Company (Representative Non-Party 7, etc.]; etc.];

○ Tax Transaction : One or more companies of heavy coal industry ? (the non-party 8, the non-party 9, the non-party 10, the non-party 11, etc.) ? Large wholesalers (the plaintiff, etc.) ? Export company [the non-party 12, the non-party 13 (the representative non-party 14), and the non-party 15 (the representative non-party 16)]; etc.];

○ Export Transaction: Exporter / PGLM, RIC

(B) An abnormal transaction behavior;

○ Gold bullion market price

The plaintiff, regardless of the purchase price of gold bullion, has always been distributed at a price lower than the domestic and international market price in a state where only a little margin is added to the purchase price.

The settlement of transport and transaction prices of gold bullion: The complete issuance of documentary evidence, such as payment of transport charges to the transport company, receipt of transport invoices and tax invoices, remittance of transaction prices to the purchaser company through Internet banking, issuance of tax invoices, etc.

○ On the other hand, in the case of each purchase and sale transaction of this case, if exports are first made and the export proceeds are remitted to the exporting company, then the payment was made in the way of remitting money to the exporting company such as the plaintiff, etc.

(C) The company involved in the instant transaction (hereinafter the name of the company is omitted)

Nonparty 6, Nonparty 5, Nonparty 17, Nonparty 18, Nonparty 19, Nonparty 20, Nonparty 21, Nonparty 22, Nonparty 23, Nonparty 24, Nonparty 25, Nonparty 26, Nonparty 27, Nonparty 28, Nonparty 29, Nonparty 30, and Nonparty 31.

(3) The conviction of the relevant company, etc.

(A) The Seoul High Court Decision 2008No1587 decided Feb. 4, 2009

(B) Defendant: Non-party 16 (Operation of Non-party 15 Company, Non-party 13 Company and Non-party 12 Company for Export)

(C) Recognized criminal facts

○ Raban Company: Nonparty 5, Nonparty 6, and Nonparty 17.

○ Other co-principals: The actual operator of the Plaintiff Company, Nonparty 3, etc. (the first public offering)

○ Amount of evasion: 4 billion won in total of value-added tax

[Ground of recognition] Each entry of Gap evidence 29 to 40, Gap evidence 45 to 93, Eul evidence 3 to 27 (including each number), and the purport of the whole pleadings

C. Determination

(1) Legal principles

(A) Article 1(1)1 of the Value-Added Tax Act provides that “the supply of goods” is subject to value-added tax, and Article 6(1) provides that “the supply of goods shall be a delivery or transfer of goods on all contractual or legal grounds.” In light of the fact that the value-added tax is characterized as multi-stage transaction tax, the delivery or transfer under Article 6(1) of the Value-Added Tax Act includes all acts of causing the transfer of the right to use and consume the goods, regardless of the existence of actual profits (see, e.g., Supreme Court Decisions 85Nu286, Sept. 24, 1985; 9Du9247, Mar. 13, 2001).

(B) In this case, the issue of whether a specific transaction constitutes the supply of goods under the Value-Added Tax Act shall be determined individually and specifically by comprehensively taking into account all the circumstances such as the purpose and background of each transaction party’s transaction, the volume and the subject to whom profits accrue, and the payment relationship of consideration by each transaction. The burden of proving that a specific transaction constitutes a “unlawful tax invoice” under Article 17(2)1-2 of the Value-Added Tax Act where the input tax deduction is denied on the ground that the specific transaction constitutes a nominal transaction for which no actual delivery or transfer of goods is made (see, e.g., Supreme Court Decisions 92Nu2431, Sept. 22, 1992; 2005Du16406, Apr. 14, 2006).

(2) Determination

(A) A series of entire transactions between the instant gold bullion are conducted within the short period until it is imported and exported, and there is so-called wide-scale coal companies that prepare and deliver a tax invoice while supplying gold bullion subject to value-added tax to a person who purchased the gold bullion exempt from value-added tax at the intermediate stage and then did not obtain any recommendation for tax exemption.

(B) Comprehensively taking account of the following circumstances revealed in the above facts and arguments, it is difficult to readily conclude that the purchase and sale transaction of this case is merely received by issuing a tax invoice or by merely taking the appearance of delivery of gold bullion and payment of the price for the purpose of disguised the trade of bombs, and that it is not a supply of goods subject to value-added tax.

The gold bullion was actually distributed from the importer to the exporter, and the gold bullion was actually distributed.

○ The Plaintiff purchased the instant gold bullion from the purchaser of the instant case, received it on the day, and paid the price, and received each tax invoice for the purchase of the instant gold bullion, respectively.

○ The Plaintiff sold the gold bullion of this case to the exporter around that time, delivered it on the day, and then delivered the tax invoice for the sales of this case, and then exported at that time.

○ The Plaintiff left profits from most of the instant gold bullion transactions, including the purchase and sale of the instant gold bullion.

○ The tax invoice for the purchase and sale of the instant case included the descriptions in the form of transaction, such as trading partners, transaction items, and transaction amount.

(C) Therefore, it is difficult to view that the separate purchase and sale tax invoice (the combined tax invoice) received as a result of the purchase and sale transaction of the instant gold bullion also falls under the “unlawful tax invoice” as it is written differently between the supplier and the actual supplier on the invoice.

(3) Judgment on the defendant's assertion

(A) Claim of violation of Articles 103 and 108 of the Civil Act

○ argument

The Plaintiff’s sales of the instant gold bullion to an exporter and let the exporter take it out to a foreign country is merely a formal disguised export aimed at the unlawful acquisition of national tax revenue by means of converting the tax-free gold bullion into the taxation amount by abusing the zero tax rate system and the input tax deduction recognized for the exporter rather than normal goods export. In light of the fact that Nonparty 2, the representative director of Nonparty 3 and Nonparty 16, the representative director of Nonparty 15, who arranged the Plaintiff’s instant transaction, were convicted in the criminal trial on suspicion of the conspiracy of tax evasion, it was clearly identified that the Plaintiff’s sales of gold bullion to the exporter was for an unlawful purpose.

The Plaintiff’s above trading act is anti-social and thus becomes null and void pursuant to Article 103 of the Civil Act or trades for the purpose of evading taxes through prior recruitment, and thus, the Plaintiff’s declaration of intent is false. Therefore, the instant tax invoices received based on invalid transactional act are different from the facts.

○ Judgment

As long as the Plaintiff transferred the authority to use and consume goods by purchasing the instant gold bullion from the purchaser of the instant case and selling it to the seller of the instant case, even if Nonparty 3, 16, etc., who arranged the instant transaction, was convicted in the criminal trial due to the suspicion of conspiracy of tax evasion with the Plaintiff, etc., and the Plaintiff took part in the trade using the said gold bullion after being aware of the structure of the instant gold bullion trade and was well aware of it, separate from the criminal liability for it, the instant gold bullion trade cannot be deemed null and void by Article 108 of the Civil Act as it was a false declaration of intention null and void or conspired under Article 103 of the Civil Act, and there is no other evidence to acknowledge it. The Defendant’s allegation in this part

(B) Claim for damages

○ argument

Even if the instant tax invoice is in accordance with the facts, the Plaintiff’s transaction of the instant gold bullion is a series of illegal acts committed for the purpose of unjustly refunding the value-added tax, and the Plaintiff is liable for compensating for damages inflicted on the Defendant in the instant gold bullion transaction. Thus, the instant disposition, which has the nature of the Plaintiff’s claim

○ Judgment

Even if the State suffers losses due to the illegal act of tax evasion involved by the Plaintiff, the State’s losses should be done through separate legal procedures, such as confiscation of criminal proceeds, collection of penalties, and fines. Under the principle of no taxation without law, the State’s claims for damages against the Plaintiff, etc. are to be preserved on the sole basis of the foregoing, without any legal basis, to conclude the purchase and sale transaction of this case in a fraudulent manner and impose taxes thereon. The Defendant’s assertion on this part is without merit.

D. Sub-committee

The instant disposition, which is based on the premise that the instant tax invoice for purchase and sale constituted “unlawful tax invoice” written differently from the actual one, is unlawful.

3. Conclusion

The plaintiff's claim of this case is justified.

[Attachment]

Judges Cho Sung-sung(Presiding Judge) (Presiding Judge)