[2] The requirements and time limit for the change of the grounds for disposition in a lawsuit for revocation of taxation

[3] Whether a corporation may withhold taxes from the corporation pursuant to the Income Tax Act by asserting and proving the actual attribution of income to the representative director and the type of income, separate from the disposition of income based on Article 94-2 of the Enforcement Decree of the Corporate Tax Act (affirmative)

[4] The person who bears the burden of proof and the degree of proof in tax action

[2] Since the subject matter of a taxation revocation lawsuit is objective existence of legitimate tax amount, the tax authority may submit new data that can support the legitimacy of the tax base or tax amount recognized in the pertinent disposition, or exchange and change the reasons within the scope that maintains the identity of the disposition, even if during the lawsuit, until the conclusion of the fact-finding trial. It is not always possible to determine the legitimacy of the disposition by only the data at the time of the disposition or to claim only the reasons for the disposition.

[3] According to Articles 142(1) and 143 of the former Income Tax Act (amended by Act No. 4803 of Dec. 22, 1994), a person who pays dividend income, wage and salary income belonging to Class A, and other income to a resident or a nonresident in Korea shall withhold income tax from the person, and pay it by the 10th day of the month following the month in which the date of collection falls. Thus, separate from the disposition of income which is deemed to have been paid based on Article 94-2 of the former Enforcement Decree of the Corporate Tax Act (amended by Presidential Decree No. 1446 of Dec. 31, 1994), the tax authority may withhold it from the disposition of income which is deemed to have been paid by the representative director, by asserting and proving the real attribution of income to the representative director and the type of income.

[4] Generally, in tax litigation, the burden of proving the facts of taxation requirements should be borne by the imposing authority. However, if it is revealed that the facts of taxation requirements have been presumed in light of the empirical rule in the specific litigation process, it cannot be readily concluded that the pertinent disposition of imposing tax is illegal disposition that fails to meet the taxation requirements, unless the other party proves that the facts in question were not eligible for application of the empirical rule.

According to the reasoning of the judgment below, when the defendant corrected the corporate tax base, etc. of the plaintiff on June 27, 1990, the court below determined that the plaintiff's disposition was unlawful under Article 32 (5) of the former Corporate Tax Act (amended by Act No. 4804, Dec. 22, 1994; hereinafter referred to as the "Act") and Article 32-9 (1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 946, Dec. 14, 1994; hereinafter referred to as "the non-party's disposition was based on the non-party's 9-14 (the non-party's 9-1) and 9-14 (the non-party's 9-1) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 946, Dec. 31, 1994; hereinafter referred to as "the non-party's 9-19 (1) of the same Act).

On November 30, 1995, the Constitutional Court rendered a decision that Article 32(5) of the Act is unconstitutional because it comprehensively delegates it to the Presidential Decree, which is a subordinate law, without presenting any standard in determining the taxation requirements related to the disposition of income corresponding to the basic matters concerning the rights and obligations of the people. Meanwhile, Article 94-2(1) of the Enforcement Decree of the Act provides that the kinds of income subject to taxation and the limitation of delegated legislation shall be deemed delegation order requiring specific and individual authorization of the law, and it cannot be deemed that there are grounds for delegation of the Enforcement Decree of the Act other than Article 32(5) of the Act, and therefore, Article 32(5) of the Act becomes invalid due to the Constitutional Court's decision of unconstitutionality as well as Article 94-2 of the Enforcement Decree of the Act, which is established according to delegation of the above provisions, and Article 94-6(6) of the Enforcement Decree of the Act becomes invalid (see Supreme Court Decision 96Nu6868, May 6, 1997).

In the same purport, the court below is just in holding that the disposition of this case cannot be the basis of the law, and there is no error of law such as the theory of lawsuit.

However, since the subject matter of a taxation revocation lawsuit is objective existence of legitimate tax amount, the tax authority may submit new data, which can support the legitimacy of the tax base or tax amount recognized in the relevant disposition, even during the lawsuit, or exchange or change the reasons to the extent that the identity of the disposition is maintained. It is not always possible to determine the legality of the disposition only by the data at the time of the disposition or to assert only the reasons for the disposition (see, e.g., Supreme Court Decisions 88Nu7255, Dec. 22, 1989; 96Nu8796, May 16, 1997); Article 142(1) and Article 143 of the former Income Tax Act (amended by Act No. 4803, Dec. 22, 1994; hereinafter the same shall apply) to residents or non-residents, and the person who pays the income tax on the subject matter of taxation to whom the income tax should be withheld and paid within the same tax base and tax amount as stated in the following Article 1420 of the Enforcement Decree.

On the other hand, if the facts alleged in the facts requiring taxation are revealed in light of the empirical rule in the specific litigation process, it cannot be readily concluded that the other party is an illegal disposition that failed to meet the requirements for imposing taxes unless it proves that the facts at issue are not eligible for the application of the empirical rule (see, e.g., Supreme Court Decisions 89Nu183, Sept. 12, 1989; 89Nu6006, Apr. 27, 1990; 91Nu5730, Nov. 8, 1991; 93Nu2124, Apr. 28, 1995; 93Nu2124, Apr. 28, 1995).

According to the records, the defendant asserted the relevant provisions such as Article 21 (1) 1 (a) of the Income Tax Act as well as Article 21 (1) 1 (a) of the Income Tax Act concerning the tax base of Class A earned income and the basis of tax amount of the tax amount withheld at the court below. Thus, the court below should have deliberated on whether the changed grounds for disposition are identical and the same as the changed grounds for disposition can be maintained and judged as to whether the disposition in this case can be maintained as it is based on the above provisions of the Income Tax Act.

Nevertheless, the court below's decision that the disposition of this case was unlawful immediately by a decision of unconstitutionality as to Article 32 (5) of the Act was erroneous. It erred by misapprehending the legal principles as to changes in the grounds for disposition in tax litigation, thereby failing to exhaust all necessary deliberations or omitting judgment. The grounds for appeal pointing this out are with merit.

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Lee Yong-hun (Presiding Justice)