Law Firm Tae-Gyeong, et al., Counsel for the defendant-appellant

Law Firm Fixed Rate, Attorney Park Jong-soo

Attorney Jeon-won et al., Counsel for the defendant-appellant

According to the reasoning, records, etc. of the original judgment, the following facts are revealed.

A. From the beginning of 2008 to the beginning of 2009 to the beginning of 2011, the Plaintiff repeatedly lent money to Nonparty 1 and Nonparty 2 (hereinafter “ Nonparty 1, etc.”) by setting the maturity of payment within three months as the necessary fund for art business, and at 10% of the interest principal, as the necessary fund for art business. Of them, Nonparty 1, etc. was paid the principal and interest equivalent to 10% of the leased principal with respect to the money loaned until 2010.

B. From May 29, 2012 to June 5, 2012, Defendant imposed a disposition of imposition, such as global income tax, etc. for 2009 and 2010 on Plaintiff 1 with respect to the interest received by the Plaintiffs from May 29, 2012 to June 5, 2012, and imposed a disposition of imposition, such as global income tax for 2008 to 2010 on the rest of the Plaintiffs (hereinafter “the first disposition”).

C. Accordingly, Plaintiff 1, Plaintiff 2, Plaintiff 4, and Plaintiff 5 filed a lawsuit against Defendant 1, the head of the Sungdong District Tax Office, the head of the District Tax Office, the head of the Northern District Tax Office, and the head of the tax office having jurisdiction over the Republic of Korea. During each lawsuit, Plaintiff 1 filed a lawsuit seeking revocation of the initial disposition. On June 12, 2013, Plaintiff 4, and Plaintiff 5 filed an objection with Nonparty 1, etc. on June 18, 2013, that the agreement was revoked on the ground of their deception with Nonparty 1, etc., and that there is no interest income accrued in each of the pertinent taxable periods. However, each of the trials rendered a judgment against each of the Plaintiffs, including Nonparty 1, etc. on the ground that there is insufficient evidence to acknowledge the fact of deception, and each of the judgments became final and conclusive both from December 11, 2014 to July 25, 2015 (hereinafter referred to as “instant final judgment”).

D. Meanwhile, Nonparty 1, etc. was convicted of being convicted of violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Fraud) by deceiving Plaintiff 2, 3, 4, and 5, etc. from September 201 to November 201, and each judgment became final and conclusive (hereinafter referred to as “each of the instant criminal judgments”) on the following grounds: (a) he borrowed money as a necessary fund for the art transaction of money from early 2008 on the basis of money and extended money to “the so-called “the so-called” method in which the principal and interest of the existing borrowed money, etc. are paid with other borrowed money, etc.; and (b) Nonparty 1, etc. obtained money by deceiving Plaintiff 2, 3, 4, and 5 from September 2011 to November 201.

E. On June 1, 2015, Plaintiff 1 expressed his/her intention to revoke each lease agreement on the grounds of his/her deception to Nonparty 1, etc. on May 21, 2015, and on June 12, 2015, Plaintiff 1 filed a request for correction against the Defendants as to the initial disposition.

F. From June 29, 2015 to August 13, 2015, the Defendant rejected each Plaintiff’s request for correction on the grounds that the existence of each of the preceding final and conclusive judgments in the instant case existed (hereinafter “instant refusal disposition”);

G. On March 22, 2016, Plaintiff filed the instant lawsuit against the Defendant seeking revocation of each of the instant rejection dispositions.

2. Determination ex officio as to each appeal by the defendant Sungdong Head of the tax office, the head of the Gu's government office, the head of the North Jeonju tax office, and the head of the Nam

A. Since the existence of res judicata of a final and conclusive judgment is a matter of ex officio investigation, the court may ex officio investigate and determine it even without a party’s assertion (see, e.g., Supreme Court Decisions 89Meu2329, Oct. 23, 1990; 92Da3892, May 22, 1992). Meanwhile, as in a lawsuit seeking revocation of a tax disposition, a lawsuit seeking revocation of a rejection disposition against a request for reduction and correction as in the ordinary case of a lawsuit seeking revocation of a tax disposition is based on the substantive and procedural grounds for revocation of the disposition. The subject of the trial is the objective existence of the tax base and amount of tax stated in the tax base return. Thus, the individual illegal grounds for the determination of the tax base and amount of tax are merely an attack and defense method that claims that the person’s claim is justifiable (see, e.g., Supreme Court Decision 2002Du9261, Aug. 16, 2004).

B. Examining the aforementioned factual relationship in light of the aforementioned legal principles, the subject matter of each of the preceding final and conclusive judgments and the subject matter of each of the instant lawsuits are identical to the objective existence of the tax base and tax amount of each interest income belonging to each of the corresponding periods of taxation, and the revocation of each of the lending contracts on the grounds of deception by Nonparty 1, etc. is an attack and defense method that had already been exercised prior to the closing of argument in each of the preceding final and conclusive judgments. As such, once again the above plaintiffs asserted the revocation of each of the lending contracts on the grounds of deception by Nonparty 1, etc., and seek revocation of each of the instant refusal dispositions against the above Defendants cannot be admitted as contrary to the res judicata effect of each of the preceding final and conclusive judgments in this case. Accordingly, the claim by the above plaintiffs shall be dismissed. Nevertheless, the lower court rejected the claim under the erroneous premise that the subject matter of each of the preceding final and conclusive judgments and the subject matter of the instant lawsuit are the subject matter of a lawsuit in this case. Furthermore, the lower court dismissed the judgment dismissing the claim of the first instance judgment and dismissed the judgment.

3. Ex officio determination on the appeal by the director of the tax office who is divided by the defendant

A. Article 45-2(2)5 of the former Framework Act on National Taxes (amended by Act No. 13552, Dec. 15, 2015) and Article 25-2 subparag. 2 of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 26946, Feb. 5, 2016) stipulate that “Where a contract related to the effect of the first declaration, determination, or correction, such as the transaction or act, which served as the basis for calculating the tax base and the amount of tax, is cancelled by the exercise of the right of rescission or is cancelled or cancelled due to unavoidable reasons that occurred after the formation of the pertinent contract.”

However, if the taxable income is deemed to have a tax-bearing force as it controls and manages the benefits in reality in view of the economic aspect, it shall be sufficient to deem that there is a tax-bearing force, and the legal evaluation of the relationship between the cause for which the income was derived is not necessarily required to be lawful and effective (see, e.g., Supreme Court Decision 83Nu123, May 28, 1985).

B. The lower court, based on its reasoning, determined that each interest income accrued from the exercise of the right to cancel each loan agreement between Plaintiff 3 and Nonparty 1, etc. is nonexistent, and thus, the part against Plaintiff 3 among the dispositions of refusal of each of the instant case on different premise is unlawful. However, the lower court’s aforementioned determination is difficult to accept in light of the legal principles as seen earlier. However, even if Plaintiff 3 lawful revocation of each loan agreement on May 21, 2015 to Nonparty 1, etc. on the grounds of his deception, if Plaintiff 3 was holding the bonds against Nonparty 1, etc. that did not refund the interest accrued from each of the above loan agreements, it should be deemed that each interest income accrued in 208 or 2010, which had the capacity to pay for the said Plaintiff’s tax, still exists in economic aspect. Accordingly, the lower court should have determined whether each of the interests that the said Plaintiff received from Nonparty 1, etc. was returned to Nonparty 1, etc., and then should have determined whether the above disposition of refusal was unlawful.

Nevertheless, the lower court, contrary to its stated reasoning, determined that the foregoing rejection disposition was lawful. In so determining, the lower court erred by misapprehending the legal doctrine on the existence of interest income and failing to exhaust all necessary deliberations, thereby adversely affecting the conclusion of the judgment.

4. Conclusion

Therefore, without examining the grounds of appeal by the Defendant, the lower judgment is reversed ex officio without examining the grounds of appeal by the Defendant, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Sang-ok

Justices Noh Jeong-hee

Justices Kim Jae-hwan of the District Court