Plaintiff (Law Firm Rate, Attorneys Kang Han-hun et al., Counsel for the plaintiff-appellant)

Head of the tax office;

June 16, 2009

Seoul Administrative Court Decision 2006Guhap39864 Decided August 19, 2008

1. The part of the claimant's claim to revoke the revocation of the refund of value-added tax of KRW 493,370,200 for the second period of value-added tax for 204 added at the trial shall be dismissed;

2. The part of the judgment of the first instance against the plaintiff shall be revoked.

The Defendant’s imposition of value-added tax of KRW 1,407,05,670 for the first period of October 4, 2005 and the second period of value-added tax of KRW 107,335,640 for the second period of 2004 shall be revoked, including the claim extended in the trial.

3. The defendant's appeal is dismissed.

4. 1/5 of the total litigation costs is assessed against the Plaintiff, and the remainder of 4/5 is assessed against the Defendant, respectively.

1. Purport of claim

On October 4, 2005, the Defendant revoked the imposition of value-added tax of KRW 1,407,05,670 for the first term portion of value-added tax for the year 2004 against the Plaintiff, the imposition of KRW 107,335,640 for the second term portion of value-added tax for the year 2004, the imposition of KRW 493,370,200 for the second term portion of value-added tax for the year 2004, and the imposition of KRW 329,919,280 for the corporate tax for the business year 2004 (the Plaintiff added the claim for revocation of the revocation of the revocation of the value-added tax and expanded its purport in filing a claim for revocation of the revocation of the imposition of value-added tax

2. Purport of appeal

Of the judgment of the court of first instance, the part against the plaintiff shall be revoked. The defendant's imposition disposition of value-added tax 1,407,05,670 won for the first period of October 4, 2005 and value-added tax 106,485,820 won for the second period of 2004 against the plaintiff shall be revoked.

Defendant: The part against Defendant in the judgment of the first instance court shall be revoked, and the Plaintiff’s claim corresponding to the above revocation shall be dismissed.

1. Quotation of the reasons for the judgment of the first instance;

The court's reasoning for this case is that the testimony of Non-party 8 and 9 of the witness against this case is hard to believe in light of the following facts acknowledged: the witness's testimony of the non-party 8 and 9 against this case is deleted; the " March 8, 2004" of the 18th 9th 18th 19 is " March 3, 2004"; the "the 23th 15th 11th 15th 15 of the same month" is "the 18th 18th 203." (the corresponding part of the judgment of the court of first instance is the same as the above) of the 18th 18th 18th 18th 18th "B" is "the 1,863,423,193 won" of the 19th 204 30th 30th 2004.

2. Parts changed;

"D. Determination"

1) Whether each disposition of value-added tax of this case is legitimate

A) Article 1(1)1 of the Value-Added Tax Act provides that “the supply of goods” is subject to value-added tax, and Article 6(1) provides that “the supply of goods shall be a delivery or transfer of goods on all contractual or legal grounds.” In light of the characteristics of value-added tax as multi-stage transaction tax, delivery or transfer under Article 6(1) of the Value-Added Tax Act includes all acts of causing the transfer of authority to use and consume goods, regardless of the existence of actual profits (see, e.g., Supreme Court Decisions 85Nu286, Sept. 24, 1985; 9Du9247, Mar. 13, 2001; 9Du9247, Mar. 13, 201). In this case, the issue of whether a specific transaction among a series of transactions constitutes the supply of goods under the Value-Added Tax Act shall be determined on the grounds that there is no specific transaction under Article 29(1)2 of the Value-Added Tax Act, including the purpose and circumstance of each transaction, the allocation, the allocation of goods, and payment.

Based on the facts acknowledged earlier, the instant gold bullion was traded only once a day through a series of companies from which it was imported and exported. The instant gold bullion was purchased at the intermediate stage and supplied gold bullion subject to value-added tax to a person who was exempted from value-added tax, and then did not pay the amount equivalent to the value-added tax. The export price of the instant gold bullion is lower than the import price. The mere fact that the parties to the instant gold bullion did not prepare a letter of promise to sell goods while trading gold bullion, it is difficult to readily conclude that the instant gold bullion transaction was not the supply of goods subject to value-added tax for nominal transactions [it is difficult to conclude that the Plaintiff’s purchase from Nonparty 10 on March 29, 2004 at 20 km and 100 km now from Nonparty 1 Co., Ltd., Ltd., and thereafter, at the intermediate stage, there is no evidence to acknowledge that the place of receipt of the gold bullion was “non-party 28 Co., Ltd.” (Article 3-8, 9, 12-3) or 3).

B) In the first instance, the Defendant asserted that the Plaintiff received a false tax invoice as if the value-added tax was included, on the grounds that the Plaintiff did not have any value-added tax collected from the first place. However, there is no evidence to acknowledge it.

C) Therefore, each of the instant dispositions imposing value-added tax on the premise that the instant tax invoice is either a different “listed tax invoice” between the actual supplier and the supplier on the tax invoice, or a “processed tax invoice” received without a real transaction is unlawful.

D) As to the amendment of the purport of the claim in the trial (the addition of the claim and the extension of the purport of the claim)

(1) On June 3, 2009, upon filing an application for amendment of the purport of the claim, the Plaintiff amended the purport of the claim to seek revocation of the imposition of KRW 106,485,820 for the second term value-added tax of KRW 107,335,640 for the second term portion of value-added tax in 2004 and revocation of the imposition of KRW 493,370 for the second term portion of value-added tax in 2004, respectively.

In a case where the tax authority rendered a decision of correction to reduce or increase the amount of tax payable pursuant to Article 21(1) of the former Value-Added Tax Act on the grounds that a taxpayer had an omission or error in the initial tax base, tax amount, or amount of tax payable, etc., the determination of tax liability arising from the initial return cannot be maintained. Therefore, the taxpayer’s decision of correction should be made by means of filing a lawsuit seeking revocation of the original return tax amount in order to be paid the amount of tax refundable. Since penalty tax is a kind of administrative sanction imposing on a taxpayer who violates the obligations prescribed in tax-related Acts without justifiable grounds in order to facilitate the exercise of the tax authority’s right to impose taxes and the realization of tax claims, it is a kind of national tax prescribed in the relevant tax-related Acts and its nature is different in nature from the national tax determined to be established pursuant to the relevant tax-related Acts. Thus, the disposition of imposition of additional tax is separate from the principal tax (Supreme Court Decision 200Du7520 delivered on October 26, 201).

The disposition of imposition of value-added tax of KRW 106,485,820 for the second term of 2004 for the Plaintiff’s return contains omission and error in the refund tax amount originally reported by the Defendant, and thus, the disposition of refusal to refund and the disposition of imposition of additional tax are combined. The disposition of imposition of value-added tax is separate from the disposition of refusal to refund the principal tax, and where the Defendant rendered the disposition of refusal to refund, the confirmation of the tax liability arising from the Plaintiff’s return cannot be maintained any longer. Thus, the Plaintiff shall file a separate lawsuit for revocation against the disposition of refusal to refund against the Defendant’s rejection to receive the refund tax amount.

Therefore, the part of the Plaintiff’s claim for revocation of imposition of value-added tax of KRW 106,485,820 for the second term portion of value-added tax in 2004 should be deemed to have been sought only for the revocation of imposition of value-added tax for the second term portion of value-added tax in 2004. On June 3, 2009, an amendment to the purport of the claim on June 3, 2009 shall be deemed to have expanded the scope of the claim for revocation of imposition of value-added tax (107,35,640-106,485,820) and, apart, to have added a new claim seeking revocation of

(2) Furthermore, as to the legitimacy of the claim to revoke the refund refusal disposition of value-added tax amounting to KRW 493,370,200 for the second half year of 2004, separate taxation from the disposition imposing value-added tax is different from the disposition imposing value-added tax, and the lawsuit for revocation is also subject to a prior trial procedure and compliance with the filing period. Since the correction decision of value-added tax (No. 1-2) was submitted on December 15, 2006 at least after the date for preparatory pleadings of the first instance court of the first instance court of the first instance, the plaintiff was aware of the above rejection disposition. The plaintiff filed a lawsuit to revoke the refund refusal disposition of this case on June 3, 2009, which was more than one year thereafter, it is clear in the record that the plaintiff filed a lawsuit to revoke the refund refusal disposition of this case without having to determine whether the plaintiff should be subject to the previous trial procedure for the above rejection disposition, and it is unlawful for the plaintiff to amend the claim of value-added tax and its amendment within the scope of the second half year of the appeal.

2) Whether the disposition of the instant corporate tax was lawful

According to Articles 76(5) and 116(2)2 of the Corporate Tax Act, the chief of the district tax office having jurisdiction over the place of tax payment shall, where a corporation receives goods from an entrepreneur in connection with its business and fails to receive a tax invoice under Article 16 of the Value-Added Tax Act, collect an amount calculated by adding an amount equivalent to 2/100 of the amount not received as corporate tax. According to Article 16 of the Value-Added Tax Act, where an entrepreneur registered as a taxpayer supplies goods, he shall deliver a tax invoice stating the registration number, name or title, registration number, value-added tax number, value-added tax amount, etc. of the supplier to the person who

As seen earlier, so long as the instant gold bullion transaction cannot be deemed to be a supply of goods subject to value-added tax, the instant tax invoice received accordingly constitutes a legitimate tax invoice under Article 16 of the Value-Added Tax Act, and thus, the application of KRW 331,636,458 of the corporate tax tax on the premise that the instant tax invoice is “unlawfully different tax invoice” is illegal, and as long as the penalty tax is revoked, the imposition disposition of KRW 329,919,280 of the corporate tax of this case shall also be revoked.

3. Conclusion

Therefore, the part of the claim of the plaintiff's refusal of refund of value-added tax of KRW 493,370,200 for the second term of 2004 added in the trial among the claim of this case is unlawful and dismissed, and all other claims including the extended claim in the trial are accepted. The part of the judgment of the court of first instance which lost the plaintiff among the judgment of the court of first instance shall be revoked, and the defendant, including the claim extended in the trial of the court of first instance, against the plaintiff on October 4, 2005 and the imposition of value-added tax of KRW 1,407,335,640 for the second term of 204 for the second term of 204 as well as value-added tax of KRW 107,335,640 for the second term of 204 as well as value-added tax for the second term of 204 for the defendant's appeal shall be dismissed

Judges Ahn Young-chul (Presiding Judge)