Plaintiff (Seoul Law Firm, Attorneys Yellow-chul et al., Counsel for the plaintiff-appellant)

the director of the tax office of Western

August 20, 2009

1. Of the instant lawsuit, the part concerning the preliminary claim seeking revocation of the disposition imposing value-added tax listed in the [Attachment No. 1] shall be dismissed.

2. Each disposition of value-added tax listed in the [Attachment 2] Nos. 2 and 3 among the Plaintiff’s primary claims is invalid.

3. The plaintiff's remaining main claims and other conjunctive claims are all dismissed.

4. Of the costs of lawsuit, 90% is assessed against the Plaintiff, and the remainder is assessed against the Defendant, respectively.

With respect to the imposition of each value-added tax on the Plaintiff listed in the separate sheet that the Defendant rendered against the Plaintiff, it is confirmed that the above imposition is null and void mainly, and the above imposition is revoked as preliminary.

1. Details of the disposition;

A. From April 30, 1993, the Plaintiff was engaged in the livestock industry (e.g., the fish industry) which is a value-added tax-free business in the name of “○○○○○○○○○,” from around April 30, 1993, and became concurrently engaged in the livestock industry and the domestic waste collection intermediate treatment business after obtaining a license for the waste intermediate treatment business on April 6, 1998. On April 6, 2005, the Plaintiff registered the fertilizer production business under the Fertilizer Control Act on April 21, 2005, and registered as a taxable entrepreneur on the ground of concurrent taxation and tax exemption.

B. As above, the Plaintiff did not report value-added tax on the portion of sales, which was manufactured and sold in the taxable period (from No. 1 to No. 1, 2001, 2005, hereinafter referred to as “the retirement expenses of this case”) prior to the registration of business as a taxable entrepreneur, by deeming the portion of sales, which was manufactured and sold, as tax exemption.

C. On June 7, 2006, the Defendant deemed that the manufacture and sale of retirement fees of this case constitutes the supply of goods subject to value-added tax, and determined and notified the value-added tax as shown in the following table (the Defendant deemed that the supply of waste disposal services to local governments as well as the manufacture and sale of retirement fees of this case for the taxable period from the first period from 2001 to 1, 2002 as well as the supply of waste disposal services to local governments constitutes subject to value-added tax, and then determined and notified the value-added tax as stated in the “first disposition” column included in the tax base (the first disposition No. 1 to 3 below) (the first disposition on July 3, 2006, the first disposition on January 3, 2007, and the first disposition on June 1, 2007). However, each disposition on the reduction of value-added tax by excluding the supply proceeds from the supply proceeds of waste disposal services as stated in the following table (hereinafter referred to as “each disposition on the first disposition”).

본문내 포함된 표 순번 과세기간 공급가액 당초 처분 감액경정결정 처분일 고지세액(원) 경정결정일 경정세액 1 2001년 제1기 161,925,000 2006. 7. 3. 80,829,002 2007. 10. 19. 34,093,316 2 2001년 제2기 136,195,000 2007. 1. 3. 86,424,963 〃 27,422,864 3 2002년 제1기 46,069,090 2007. 6. 1. 67,495,411 〃 8,950,560 4 2002년 제2기 122,032,000 2007. 11. 1. 22,344,059 ？ ？ 5 2003년 제1기 146,614,000 〃 22,348,372 ？ ？ 6 2003년 제2기 27,255,000 〃 4,004,032 ？ ？ 7 2004년 제1기 148,372,000 〃 20,987,219 ？ ？ 8 2004년 제2기 54,320,900 〃 7,383,839 ？ ？ 9 2005년 제1기 54,607,500 〃 4,012,785 ？ ？

D. On December 31, 2007, the Plaintiff filed an appeal against the instant disposition with the Tax Tribunal, but the Tax Tribunal dismissed the said claim on November 24, 2008.

[Ground of recognition] Facts without dispute, Gap evidence Nos. 1 through 8, Eul evidence Nos. 1 through 6, 8, 9, 10 (including each number), and the purport of the whole pleadings

2. The plaintiff's assertion

For the following reasons, the Plaintiff asserted that the instant disposition was unlawful, and sought the revocation of the disposition in question around the first place.

A. Procedural illegality

(1) After receiving the notice of pre-assessment on June 7, 2006, the Plaintiff filed a request for pre-assessment review with the Defendant on July 2006. The Defendant, before making a decision on the above pre-assessment review, issued each disposition imposing the value-added tax for the first period ( July 3, 2006), the second period ( January 3, 2007) in 201, and the first period ( June 1, 2007) in 202 (attached Form 1, 2, and 3). Each of the above dispositions is in violation of Article 81-12 of the Framework Act on National Taxes and Article 63-9 (4) of the Enforcement Decree of the same Act and is null and void.

(2) Therefore, the date of each of the above dispositions shall be deemed to be November 10, 2007, not the date of the above disposition that is null and void, but the date of the disposition for reduction and correction. The above date of disposition shall be deemed to be the date of the above disposition, and the period for imposition of five years from the day following the due date of return and payment (the first period portion: July 25, 2001; January 25, 2002; January 25, 2002; July 25, 2002; July 25, 2002) has expired, each of the above dispositions is unlawful.

(b) The supply of goods or services essential for the livestock industry or medical and health services exempt from value-added tax;

Under Article 12 (1) 1 and 4 of the Value-Added Tax Act, and Articles 28 (3) and 29 (11) of the Enforcement Decree of the Value-Added Tax Act, the collection, transportation, and disposal of livestock and domestic wastes (medical health services) constitute the supply of goods or services exempt from value-added tax pursuant to Article 12 (1) 1 and 4 of the Value-Added Tax Act, and Articles 28 (3) and 29 (11) of the Enforcement Decree of the Value-Added Tax Act. Since the contents of a contract concluded between a local government and a local government include the disposal of domestic wastes ( plant wastes) collected and transported in feed, the Plaintiff must dispose of domestic wastes collected and transported. As such, the retirement expenses of this case produced by using excreta and food wastes of pigs constitute the supply of goods essential for the supply of goods (or simple processed goods) or medical health services (collection, transportation, and disposal services). Accordingly, the value-added tax should be exempted pursuant to Article 12 (3) of the Value-Added Tax Act.

On the other hand, the defendant made the disposition of this case on the basis of the General Rules 12-29-1 of the Value-Added Tax Act which is not effective as a law, and in this regard, the disposition of this case is unlawful against the principle

3. Relevant statutes;

The entries in the attached Table-related statutes are as follows.

4. Determination

Since the primary claim and the conjunctive claim are almost identical, it will be judged together with the primary claim except the part of the judgment on the defendant's main safety defense in the disposition of value added tax for the first period of January 2001.

A. Determination as to the assertion of procedural illegality (each disposition in the No. 1, 2, and 3 of the attached Table of Disposition)

(1) Determination on the first argument

(A) According to Article 81-12(1) and (3) of the Framework Act on National Taxes (amended by Act No. 9263, Dec. 26, 2008; hereinafter the same), a person who has received a prior notice of taxation may request the head of a tax office or the director of a regional tax office concerned to review the legality of the notification (hereinafter referred to as “pre-assessment review”). Upon receipt of a request for pre-assessment review, the head of a tax office, etc. shall make a decision through a review of the pre-assessment review and notify the applicant of the result. According to Article 81-12(2)3 of the Framework Act on National Taxes and Article 63-9(4) of the Enforcement Decree of the same Act, the head of a tax office, etc. who has received a request for pre-assessment review shall withhold the determination or decision of the tax base and amount until the decision is made on the request. However, where the period from the date of notice to the expiration date of the exclusion period of taxation falls under any subparagraph of Article 81-12(2).

Comprehensively taking account of the contents of the above provisions, the pre-assessment review procedure is illegal as it imposes national taxes as a pre-determination procedure for taxpayers' prior rights without a decision on the pre-assessment review because it deprives taxpayers of the opportunity to relieve their rights. However, in cases falling under any of subparagraphs of Article 81-12(2) of the Framework Act on National Taxes, it may be imposed without a decision on the pre-

On June 7, 2006, the Defendant, before the instant disposition, notified the Plaintiff of taxation. On July 5, 2006, the Plaintiff filed a request for pre-assessment review with respect to the above notice on July 3, 2006, which was within 30 days after the Plaintiff received the above pre-assessment notice. The Defendant made a request for pre-assessment review on July 3, 2006, the first-term value-added tax, the second-term value-added tax on January 3, 2007, and the first-term value-added tax on June 1, 2007, and the second-term value-added tax on June 1, 2007, which was 200 and 205 months from the expiration date of imposition period of value-added tax until 20 years from the expiration date of imposition period of 200 and 207 months from the expiration date of imposition period of value-added tax on June 7, 2006.

Therefore, the imposition of value-added tax for the first period of January 200 among the above imposition disposition of value-added tax is lawful because the period from the notification of prior notice of taxation under Article 81-12(2)3 of the Framework Act on National Taxes and the proviso of Article 63-9(4) of the Enforcement Decree of the same Act to the expiration date of the exclusion period of imposition is not more than three months. However, each imposition of value-added tax for the second period of February 2001 and the first period of January 2002 does not constitute a case where the tax base and tax amount can be determined before the decision on the request for review of legality of taxation under each of the above provisions is made. Thus, there was an error of law committed before the decision on the request for review of legality of taxation under each of the above provisions. Such procedural illegality is grave and apparent in that the existence of such defect is objectively apparent by the above provision itself. Thus, each imposition disposition of value-added tax for the second period of February 200 and the second period of January 2002 should be null and void.

(C) As to this, the defendant asserted that there was no need to give notice of the result of the request for pre-assessment review as the same result as the plaintiff did not make a request for pre-assessment review by withdrawing a request for pre-assessment review on October 23, 2007. Thus, since the above procedural defect was cured, the defendant's assertion that the above procedural defect was cured, the plaintiff made the imposition of the pre-assessment review on February 3, 2001 ( January 3, 2007) and January 1, 2002 ( June 19, 2007) respectively, and the decision of reduction of this case was made on October 23, 2007 ( October 19, 2007) and the fact that the above request for pre-assessment review was withdrawn by the parties, but as long as the procedure defect existed after the initial pre-assessment review, it cannot be viewed that the plaintiff voluntarily withdrawn the request after the previous disposition, the above argument by the defendant is without merit.

(2) Judgment on the second argument (the exclusion period for imposition of value-added tax for the first period of 2001)

In a case where a disposition to reduce tax base and amount of tax is not the initial disposition and separate tax assessment, but the substance of the disposition changes the initial disposition, which causes favorable effects to taxpayers, and thus the part of the disposition to cancel part of the amount of tax is not yet cancelled, the object of appeal litigation is the remaining part of the original disposition without cancellation, and it is not the object of appeal litigation. In this case, whether the correction disposition goes through legitimate pre-trial procedure, and whether the period of appeal and the period of exclusion of tax are complied with shall be determined based on the initial disposition (see Supreme Court Decision 98Du3211, May 26, 1998). The Plaintiff’s disposition to the effect that the imposition of value-added tax for the first period of 1, 2001 (attached Table 1) was made before the decision on the request for pre-assessment review, but the Plaintiff’s above disposition to the effect that the period of imposition within 20 years prior to the expiration of the period of imposition expires is not more than 30 years prior to the expiration of the period of imposition.

B. Determination as to the assertion that it constitutes the supply of goods essential for the livestock industry or medical health services exempt from value-added tax

(A) The Plaintiff asserts that the manufacture and sale of the retirement fees in this case constitutes the supply of goods essential for the supply of livestock industry (e.g., fish industry) or domestic wastes (food and plant wastes) as a tax-free business, which is the supply of the collection, transportation, and disposal services (medical health services). In light of the transaction practices under Article 3 subparag. 2 of the Enforcement Decree of the Value-Added Tax Act, the Plaintiff’s supply of goods that are ordinarily deemed to be incidental to the collection, transportation, and disposal services of domestic wastes, or goods that ordinarily constitute contingent or temporary supply related to the main business under subparagraph 3, and therefore, the value-added tax shall also be exempted even to the supply of the retirement fees in this case. Therefore, it is examined as to whether the Plaintiff’s manufacture and sale of the retirement fees in this case constitutes the supply of goods that are naturally incidental to the supply

According to Article 12(1)1 and 4 of the Value-Added Tax Act, Article 28(3) and Article 29 subparag. 11 of the Enforcement Decree of the same Act, the supply of domestic waste collection, transportation, and disposal services (medical and health services) and livestock products by a business operator licensed for a domestic waste disposal business shall be exempted from value-added tax. According to Article 1(4) of the Value-Added Tax Act and Article 3 subparag. 2 and 3 of the Enforcement Decree of the same Act, the supply of goods or services essential for the supply of goods or services, which are the main transaction, shall be deemed to be included in the supply of goods or services. The supply of goods or services, which are considered to be included in the supply of goods or services, are ordinarily deemed to be incidental to the supply of goods or services, in light of the practice of the transaction (Article 3 subparag. 2 of the Enforcement Decree of the Value-Added Tax Act), and goods or services that are contingent or temporarily supplied in connection with the main business (Article 3 subparag. 3). 3).

Therefore, according to the overall purport of each statement and pleading, as a whole, evidence Nos. 5, Eul evidence Nos. 3 through 6, 8, 9, and 10 (including various numbers), the plaintiff was concurrently engaged in a free business after obtaining a license for a waste intermediate disposal business on April 6, 1998 and a domestic waste collection interim disposal business, etc., and the local government entered into a waste disposal contract with a local government to collect, transport, and dispose of domestic wastes (plant waste). The retirement expenses in this case were produced by using food waste, etc. in the above process of domestic waste disposal. Meanwhile, among each waste disposal contract concluded between the plaintiff and the local government such as Gangseo-gu Seoul Metropolitan Government Office, Kimpo-si, etc., the above waste disposal contract is not separately stipulated in the terms of the contract, but can be acknowledged as being supplied to the farm that is not the above local government.

According to the above facts, the retirement expenses of this case can be deemed to constitute goods inevitably generated in the course of collecting, transporting, and disposing of domestic wastes as by-products generated after the process of disposal of domestic wastes. However, in light of the fact that the Plaintiff was a local government that entered into a waste disposal contract, while the retirement expenses of this case were to be separately supplied to farms, etc. that do not have any relation with the above waste disposal services, etc., it is difficult to view the supply of the retirement expenses of this case as goods being supplied incidental to the quantity of money or the collection, transportation, and disposal of domestic wastes, or as goods being supplied contingent or temporarily in connection with the above business.

Therefore, the Plaintiff’s assertion on the premise that the supply of retirement fees in this case is included in the supply of goods essential for the supply of both money and medical health services (domestic waste collection, transportation, and disposal services) exempt from value-added tax is without merit.

Meanwhile, the grounds for the instant disposition are based on Article 1(1)1 of the Value-Added Tax Act, not directly based on Rule 12-29-1 of the Value-Added Tax Act (other medical and health services that are not exempt from taxation) as asserted by the Plaintiff, but on the other hand, based on the interpretation standards of tax-related Acts concerning the scope of the supply of goods or services that are deemed essential to the supply of duty-free medical and health services. Thus, the Plaintiff’s assertion that the instant disposition was unlawful on a different premise is also without merit.

C. Determination on the main safety defense against the disposition imposing value-added tax on the first quarter of 2001 among the conjunctive claims

(1) The parties' assertion

The defendant asserted that the part of the conjunctive claim of this case seeking the revocation of the disposition imposing value-added tax for the first period of January 2001 is unlawful because the plaintiff did not go through legitimate pre-trial procedures, and as asserted earlier by the plaintiff, it cannot be said that the above disposition has validity as a duty payment notice because there is a defect in the procedure of the duty payment notice prior to the decision on the request for pre-assessment review. Thus, not on July 3, 2006, but on November 10, 2007, the date of the above disposition should be determined whether the above disposition had gone through legitimate pre-trial procedures as of November 10, 207, not on November 31, 2007, which was within 90 days from the date of the notice of the disposition imposing value-added tax on October 31, 207.

(2) Determination

A disposition to reduce tax base and amount of tax is not the initial disposition and separate taxation, but the substance of the disposition changes the initial disposition, and thereby brings a favorable effect to taxpayers, such as partial revocation of tax amount. Thus, in a case where the correction disposition is not yet revoked and the remaining part of the disposition remains illegal, the object of an appeal litigation is not yet revoked, and the correction disposition is not the object of an appeal litigation, and it is not the object of an appeal litigation, and it is not the object of an appeal litigation. In this case, the determination of whether the correction disposition was lawful before the original disposition should be based on the initial disposition. Meanwhile, according to Articles 56(2) and 68(1) of the Framework Act on National Taxes, an administrative litigation against a national tax disposition cannot be filed without a request for examination or adjudgment under the Framework Act on National Taxes and a decision thereon, notwithstanding the provisions of Articles 18(1) main sentence and (2) and (3) of the Framework Act on National Taxes, and a request for an appeal may be filed within 90 days prior to the date (the date of receipt) on which a request for examination or adjudgment of national tax disposition is unlawful.

In accordance with the above legal principles, the imposition disposition of value-added tax for the first period of January 2001 (attached Form 1) was made before a decision on the request for pre-assessment review, but the period from the notice of pre-taxation under Article 81-12(2)3 of the Framework Act on National Taxes and the proviso of Article 63-9(4) of the Enforcement Decree of the same Act to the expiration date of the exclusion period of imposition is not more than 3 months. As seen earlier, the above facts and the purport of the arguments are as follows. According to the above facts and the whole purport of the arguments, the plaintiff was recognized to have filed a request with the Tax Tribunal on December 31, 2007, which was more than 90 days after he became aware of the imposition disposition of value-added tax for the first period of January 200, and thus, the above request for a trial is unlawful as it has been filed for the lapse of the request period, and therefore, the part seeking the revocation of value-added tax for the first period of 2001.

5. Conclusion

Therefore, the part concerning the preliminary claim seeking the revocation of the imposition disposition of value-added tax for the first period of January 2001 (attached Form No. 1) among the lawsuit in this case is unlawful, and thus, it is dismissed. Since the part concerning the preliminary claim seeking the revocation of the imposition disposition of value-added tax for the second period of February 2001 and the first period of January 2002 (attached Table No. 2 and 3) among the primary claims is justified, it is accepted, and the remaining main claims and the remainder of the preliminary claims are all dismissed. It is so decided as per Disposition.

[Attachment]

Judges Cho Il-young (Presiding Judge)