Seoul High Court 2010Nu5105 ( November 02, 2010)

Seocho 209west 1838 (2009.03)

In an appeal litigation seeking revocation of a disposition of increase or decrease, it can be argued that there is an excessive reason for the initial report as well as the grounds for tax authorities' correction of increase or decrease.

After examining and determining the processing sales out of the sales by the pertinent taxable period for which the Plaintiff asserted the grounds for excessive reporting, the relevant part must be determined by calculating a reasonable tax amount excluding the tax base of value-added tax reported by the Plaintiff and determining the illegality of the instant disposition.

2010Du26179 Disposition to revoke the imposition of value-added tax.

AAA

The director of the tax office

Seoul High Court Decision 2010Nu5105 Decided November 2, 2010

April 26, 2013

The part of the judgment below regarding the imposition of value-added tax on the second term portion in 2001, the first term portion in 2002, the second term portion in 2002, the first term portion in 2003, and the second term portion in 2003 is reversed, and this part of the case is remanded to the Seoul High Court. The remaining appeals are dismissed.

The grounds of appeal are examined.

1. As to the grounds of appeal on the service of the revised report guide

According to the reasoning of the judgment below, the court below acknowledged the facts as stated in its reasoning after compiling the adopted evidence, and found that the plaintiff could have sufficiently known the fact that the defendant recommended a revised return, and in light of the circumstances that the defendant did not have any legal obligation to deliver a revised return guide prior to the disposition to increase the value-added tax obligor or to notify the revised report guide, the court below determined that even if the plaintiff was not directly served the revised report guide, it is insufficient to consider it as the grounds for revocation of the disposition of this case. In light of the records, the above judgment of the court below is just and acceptable, and contrary to the allegations in the grounds of appeal, there

2. As to the grounds of appeal on the principle of tax equity

According to the reasoning of the judgment below, the court below rejected the Plaintiff’s assertion that: (a) the Defendant informed the merchants whose cross-transaction of the tax invoice data was confirmed through the revised tax invoice to make an accurate revised tax return for the three taxable periods of 1, 2005, 1, 2006, and 2, 2006 on their own; and (b) provided explicit guidance that if a revised tax return is not filed or if an unfair reduced tax return is filed, the entire period of the data generation may be reviewed; (c) regardless of whether a revised tax return is filed or not; or (d) resulted in a violation of the equity in taxation on the premise of such trust. In light of the relevant legal principles and records, the court below’s above measures are just and acceptable; and (d) contrary to the allegations in the grounds of appeal, there were no errors by misapprehending the legal principles

3. As to the grounds of appeal on processing sales

A. According to the reasoning of the judgment below, the court below rejected the Plaintiff’s assertion that, even if there was no actual sales since the sales price was processed during each taxable period from the second to the first period from 2001 in 2006, as long as the part reported by the Plaintiff was finalized in each of the pertinent taxable periods, such part should not be deducted from the total sales, without further examining whether the sales declaration transaction was processed or processed, the sales declaration transaction should be deducted from the tax base as a processing transaction, or that the sales should be re-determined by the method of estimated research.

B. However, it is difficult to accept the lower court’s decision that did not proceed to determine whether a sale declaration transaction constitutes a processing transaction solely on the ground that the part reported by the Plaintiff was finalized.

(1) Article 45-2(1) of the former Framework Act on National Taxes (amended by Act No. 8830, Dec. 31, 2007; hereinafter the same applies) provides that "any person who has filed a tax base return within the statutory due date of return may request the head of the competent tax office to determine or correct the tax base and amount of the national tax which was initially filed or revised within three years after the statutory due date of return when he falls under any of the following subparagraphs, (referring to the tax base and amount of tax after such determination or correction, where such determination or correction is made pursuant to the provisions of each tax-related Act)." subparagraph 1 provides that "where the tax base and amount of tax recorded in the tax base return exceed those that to be reported under the tax-related Acts, and the tax base and amount of tax recorded in the tax base return falls short of the deficit or amount of tax to be returned under the tax-related Acts. 20, the former Value-Added Tax Act (amended by Act No. 826, Dec. 31, 2007) provides that "any taxpayer or person liable to file tax return for correction may be declared within the following tax base:

(2) According to the reasoning of the judgment of the first instance court as cited by the court below and the evidence duly admitted by the court below, in order to make approximately 1,223 business operators of the BB Tax Accounting Office a tax return and a mutual agreement and purchase tax invoice issued under the following conditions without real transactions in order to make the tax base, the input tax amount, and the tax amount to be paid at a certain level. The plaintiff filed a tax return after deducting the input tax amount of the purchase tax invoice issued by both countries from the output tax amount for each taxable period. However, the plaintiff filed a tax return on the basis of the sales tax invoice issued by the corresponding taxable period as well as the input tax amount for each taxable period. The defendant deducted the input tax amount on February 10, 209 on the ground that the above purchase tax invoice was a tax invoice different from the fact. However, for the taxable period from January 1, 2004 to February 206, 2006, the defendant recognized the amount of the Plaintiff's deposit in the 6th taxable period from the Plaintiff's account number to the 2000 years.

(3) In light of the aforementioned legal provisions and legal principles, with respect to the imposition of value-added tax for five taxable periods from the second five taxable periods from the second taxable period to the second taxable period of 2003 among the instant disposition, the Plaintiff asserted the grounds for filing an excessive return of the processed sales. As such, the lower court should have deliberated and confirmed the processed sales during the pertinent taxable period by the Plaintiff, and should have determined the illegality of the instant disposition by calculating a reasonable tax amount excluding the amount of value-added tax reported by the Plaintiff. Nevertheless, the lower court erred by misapprehending the legal doctrine on the remainder of grounds for appeal, which affected the conclusion of the judgment by failing to exhaust all necessary deliberations.

(4) However, the imposition of value-added tax for the six taxable periods from the first half of 2004 to the second half of 2006 among the disposition of this case is legitimate and acceptable in its conclusion that it is difficult to view that the Defendant imposed value-added tax on the basis of the supply value of sales transactions determined by the Defendant through a field investigation, and due to the processing transaction, and it is difficult to view it due to the processing transaction. However, although the court below did not decide whether the sales declaration transaction was a processing transaction solely on the ground that the part reported by the Plaintiff was finalized, it is inappropriate in its reasoning, such as not making a decision as to whether the sales declaration transaction was a processing transaction, but it is inappropriate in its conclusion rejecting the Plaintiff’s assertion that the sales during the above taxable period should be deducted from the tax base

C. Meanwhile, the allegation in the grounds of appeal to the effect that the instant disposition violates the principle of substantial taxation, the principle of good faith, and Articles 13(1), 17(1), and 21(1) and (2) of the Value-Added Tax Act is a new assertion in the final appeal or a case where there is no specific and explicit reasons as to the violation of the Value-Added Tax Act (see, e.g., Supreme Court Decision 2008Da14633, Apr. 14, 201).

4. Conclusion

Therefore, the part of the judgment below regarding the imposition of value-added tax on the second term portion in 2001, the first term portion in 2002, the second term portion in 2002, the first term portion in 2003, and the second term portion in 2003 is reversed, and this part of the case is remanded to the court below for a new trial and determination, and the remaining appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.