Seoul High Court Decision 2008Nu27379 Decided January 28, 2010

National Tax Service Review Corporation 2002-0184 (Law No. 630, 2003)

Re-revision is a taxation disposition, and it is illegal because it was conducted after the exclusion period of imposition (5 years).

Re-revision is a taxation disposition, and it was conducted after the exclusion period of imposition (5 years), so it is illegal, and the portion determined as not underreporting in June 1, 003 can not be included in the amount of underreporting.

2010Du5127 Revocation of Disposition of Corporate Tax Imposition

-Appellee

XX Stock Company

-Appellant

Samsung Head of Samsung Tax Office

Supreme Court Decision 2006Du3711 Decided September 25, 2008

Seoul High Court Decision 2008Nu27379 Decided January 28, 2010

October 27, 2011

The part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the Seoul High Court.

The defendant's appeal is dismissed.

The grounds of appeal are examined.

1. We first examine the Defendant’s grounds of appeal.

A. We first examine the ground of appeal No. 1.

Examining the records in light of the records, the lower court’s final imposition disposition of this case is a disposition of increased tax collection, not a collection procedure of national tax collection, which is subject to a lawsuit. In so doing, it is justifiable for the lower court to have determined that the aforementioned facts are the above facts, and there were no errors

B. We examine the second ground for appeal.

The exclusion period of the right to impose national taxes is a system established for the purpose of prompt determination of tax law relations, and no national tax may be imposed after the expiration of the exclusion period of the right to impose national taxes. Therefore, a disposition that imposed after the lapse of the exclusion period shall be null and void as a matter of course (see, e.g., Supreme Court Decisions 99Du3140, Dec. 28, 1993; 9Du3140, Jun. 22, 1999).

Meanwhile, Article 26-2(2) of the former Framework Act on National Taxes (amended by Act No. 8139, Dec. 30, 2006) provides that in a case where a decision or ruling on an administrative appeal or a lawsuit under the Administrative Litigation Act is rendered, a decision of correction or other necessary disposition may be made according to the relevant decision, etc. before one year passes from the date the decision or ruling becomes final and conclusive. This provision is established to prevent an unreasonable case that makes it impossible to make a decision or a disposition in accordance with the relevant decision or ruling if the procedure of litigation, such as an administrative appeal or an administrative litigation, is prolonged and made after the period of exclusion of taxation expires (see, e.g., Supreme Court Decisions 94Da3667, Aug. 26, 1994; 96Nu68, Sept. 24, 196). The provision provides that the exclusion period as a taxpayer upon the expiration of the taxation period can not be deemed as a new decision or decision of correction, as well as a new decision of reduction, or a decision of correction, etc.

The court below held that since the final imposition disposition of this case was null and void after five years have passed since it was allowed to impose corporate tax on the plaintiff for the business year 2000 as long as its substance is an excessive increase disposition even though it was refunded beyond a legitimate tax amount, the part of additional tax of this case is null and void. In light of the aforementioned legal principles, related Acts and subordinate statutes, and records, the above judgment of the court below is justified, and contrary to the allegations in the grounds of appeal, there are no errors in the misapprehension of legal principles of the exclusion period of imposition.

C. We examine the third ground for appeal.

In tax litigation, the provisions of Articles 18(2) and (3), and 20 of the Administrative Litigation Act do not apply pursuant to the provisions of the Framework Act on National Taxes, but the provisions of Articles 18(2) and (3), and 20 of the same Act do not apply. However, if two or more administrative dispositions for the same purpose were conducted in the course of development and are related to each other, or if the tax authority changed the taxation disposition subject to such disposition during the course of the tax litigation and the illegal cause exists, or if one of the persons liable for tax payment bears the same obligation by the same administrative disposition, it shall be deemed that the Commissioner of the National Tax Service and the National Tax Tribunal provided an opportunity for the National Tax Tribunal to re-determine the basic facts and legal issues, and if there is a justifiable reason, such as where the taxpayer seems to be harsh to have caused the taxpayer to go through the previous trial procedure, the taxpayer may file a lawsuit seeking the revocation of the taxation disposition even without going through the previous trial procedure (Supreme Court Decision 9Du1557 delivered on September

According to the records, the plaintiff already asserted that the tax rate for unfair underreporting should be applied to the final imposition disposition of this case, and that the same purport is applied to the final imposition disposition of this case. Thus, even in such a case, it seems harsh for the plaintiff who is the taxpayer to make the final imposition disposition of this case to put the previous trial procedure. Thus, the plaintiff can file an administrative lawsuit claiming the revocation of the tax disposition without going through the previous trial procedure on the final imposition disposition of this case.

In addition, even though the judgment of the court below did not decide on the defendant's argument that the filing of the lawsuit in this case was unlawful since the defendant did not go through the trial procedure, it is not unlawful in the judgment of the court below that affected the conclusion of the judgment, unless the defendant's argument cannot be accepted for the above reasons as seen earlier. Accordingly, the defendant's appeal on this part is without merit.

2. We examine the Plaintiff’s grounds of appeal.

In a case where the grounds for objection are recognized as justifiable in the process of appeal, and the necessary disposition was made accordingly, in view of the purport of the objection system and the law recognizing the correction method accordingly, the previous disposition cannot be reversed without any justifiable grounds (see Supreme Court Decision 89Nu6426, Oct. 23, 1990).

After finding the facts as stated in its reasoning, the lower court determined that, without having made any determination on the Defendant’s assertion on the binding force of the review and decision by the Commissioner of the National Tax Service on June 30, 2003, the amount of gross income, which the Plaintiff initially reported, was determined as KRW 000,000 upon the occurrence of the Plaintiff’s omission of income, etc., and the amount to be excluded from the tax base initially reported by the Plaintiff was calculated as a result of the adjustment of income amount, and the amount of under-reported was calculated as exceeding 1/3 of the tax base reduced as of June 8, 2009, and it is evident that the amount under-reported exceeds KRW 5 billion. Thus, it is evident that the amount under-reported exceeds the amount under-reported taxes and under-reported additional taxes, excluding the above KRW 00,000 after the lapse of the exclusion period of imposition, which has no effect, is within the scope of a justifiable tax amount.

However, the above determination by the court below is difficult to accept in light of the above legal principles and the following circumstances. According to evidence such as Gap evidence 2, etc., the Commissioner of the National Tax Service decided on June 30, 2003 that the sum of the omitted assets related to the shares sent should be excluded from the amount included in the above under-reported amount at the time of the examination and decision, and such determination has binding force on administrative agencies. In such a determination, even if the defendant asserts, the plaintiff's under-reported amount, including the omitted assets related to the above under-reported shares, should be 00 won. Thus, if the above under-reported amount is deducted from the under-reported amount, the remaining amount should be 00 won (= 00 won - 000 won) and the above under-reported amount should be deducted from the under-reported amount (amended by Act No. 6293 of Dec. 29, 200). Thus, the requirement of fair taxation under Article 76 (1) 2 (a) of the former Corporate Tax Act (amended by Act) is not more than 3000%.

In spite of its convergence, the court below determined that the Plaintiff’s insufficient return amount was more than 1/3 of the legitimate tax base and met the requirements for an unfair under-reported additional tax. Thus, the court below erred by misapprehending the legal principles on the binding force of the review and decision, and by misapprehending the legal principles on the application of the additional tax rate as provided by Article 76(1)2 of the former Corporate Tax Act, and omitting the judgment of the Plaintiff’s assertion, and by omitting the judgment of the Plaintiff’s assertion,

3. Conclusion

Therefore, the part of the lower judgment against the Plaintiff is reversed, and that part of 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 on the bench.