Appropriateness of the notification disposition

A lawsuit against the Director of the Regional Tax Office seeking confirmation of the illegality of a notification disposition that has not been disposed of as the object of an administrative litigation is unlawful.

Article 55 of the Framework Act on National Taxes, Article 15 of the Procedure for the Punishment of Tax Evaders Act

Daejeon District Court-2017-Gu -104063 Nullification, etc. of the notification disposition

AAAA et al. and one other

Daejeon Director of the District Tax Office and one other

November 29, 2017

8.01.24

1. The instant lawsuit shall be dismissed.

2. The costs of lawsuit are assessed against the plaintiffs.

Cheong-gu Office

Defendant OO Commissioner of the Regional Tax Office confirms that each disposition of fine of KRW 263,980,450 that was issued to the Plaintiffs on May 1, 2017 is null and void.

Defendant Republic of Korea shall pay Plaintiff BB 263,980,450 won with 5% interest per annum from May 20, 2017 to the date of full payment.

1. Details of the disposition;

A. As a result of the investigation by item of value-added tax conducted on the Plaintiff AAA (hereinafter “Plaintiff”) on January 2015, the Director of the Regional Tax Office issued a false tax invoice of KRW 1,331,108,50 toCC without supply of goods or services during the investigation period, and notified the disposition authority of the taxation data to confirm that the Plaintiff received false tax invoices of KRW 1,308,696,000 from DDD without supply of goods or services, and that the Plaintiff received false tax invoices of KRW 1,308,69,00 from DDD without supply of goods or services.

B. Accordingly, on June 9, 2017, the head of the tax office, the disposition office, imposed the Plaintiff Company a disposition of imposing value-added tax of KRW 49,647,430 on the Plaintiff Company.

C. On May 1, 2017, the commissioner of the regional regional tax office notified the Plaintiffs of the payment of the amount equivalent to fines of KRW 263,980,450, respectively, pursuant to Article 15(1) of the Procedure for the Punishment of Tax Evaders Act on the grounds of breach of duty to issue a tax invoice (hereinafter referred to as “instant disposition”). Accordingly, Plaintiff BB paid KRW 263,980,450 on May 19, 2017, but the Plaintiff Company failed to pay the said amount, thereby filing a criminal charge as a violation of the Punishment of Tax Evaders Act on June 9, 2017.

[Reasons for Recognition] Unsatisfy, Gap evidence 18 to 20 (including branch numbers, if any), Eul evidence 1 to 11, the purport of the whole pleadings

2. Whether the lawsuit against the director of the regional tax office of defendant OO is legitimate;

A. Main Safety Defenses

The instant notification disposition is not a disposition subject to administrative litigation, and thus, the lawsuit against the Commissioner of the Regional Tax Office is unlawful.

B. Determination

Article 55 (1) of the Framework Act on National Taxes provides that a person whose rights and interests are infringed upon by this Act or any other disposition that is unlawful or unreasonable or because he/she has not received necessary measures as a disposition under this Act or other tax-related Acts may request the cancellation or modification of such disposition or request necessary measures pursuant to this Chapter: Provided, That this shall not apply to any disposition falling under any of the following subparagraphs," and Article 55 (1) of the Procedure for the Punishment of Tax Evaders Act provides that a notice disposition under the Procedure for the Punishment of Tax Evaders Act does not constitute a disposition under Article 55 (1) of the same Act, and ultimately, it does not constitute a subject of administrative litigation (see, e.g., Supreme Court Decision 79Nu89, Jun. 12, 197). In light of the fact that a notice disposition under the Procedure for the Punishment of Tax Evaders Act has the nature of a criminal procedure prior to its entry into force, and thus, it does not compel the other party to perform such disposition or form any rights and duties against the other party (see, see, e.g., Supreme Court Decision 197Mo486.

Ultimately, a lawsuit seeking confirmation of nullity, etc. is a lawsuit to confirm the validity or existence of a disposition, etc. by an administrative agency (Article 4 subparagraph 2 of the Administrative Litigation Act). The lawsuit against the director of the regional tax office having jurisdiction over the illegality of a disposition of notification which is not a disposition subject to an administrative litigation and seeking confirmation of invalidity is unlawful. The defendant's defense of principal

3. Whether the lawsuit against the defendant is lawful

A. Relevant legal principles

The filing of a claim for the return of tax already paid on the premise that the tax imposition disposition is null and void as a matter of course is in accordance with the civil procedure as a claim for return of unjust enrichment under a civil law (see, e.g., Supreme Court Decision 94Da55019, Apr. 28, 1995). The consolidation of related claims under Articles 38 and 10 of the Administrative Litigation Act requires that the original appeal litigation shall be lawful. Thus, if the original appeal is dismissed on the ground that it is unlawful, the relevant claims joined therein shall be dismissed as inappropriate (see, e.g., Supreme Court Decision 200Du697, Nov. 27, 2001).

B. Determination

In light of the above legal principles, to seek the return of a fine already paid on the premise that the instant notice disposition is void as a matter of course by virtue of its authority, it shall follow the civil procedure as a claim for return of unjust enrichment under civil law. However, as seen earlier, if the lawsuit against the director of the regional tax office is to be dismissed on the ground that the lawsuit against the defendant OOO director is unlawful and thus, if the appeal is dismissed on the ground that it is unlawful, the lawsuit against the defendant Republic of Korea as to the joined requester should be dismissed

4. Conclusion

Therefore, since the lawsuit of this case is unlawful, it is decided to dismiss it. It is so decided as per Disposition.