Incheon District Court-2015-Gu Group-50174 (Law No. 18, 2017)

Whether a judgment subject to a retrial due to omission of judgment under Article 8 (2) of the Administrative Litigation Act constitutes a judgment subject to retrial

The rejection of a lawsuit for retrial is difficult to deem that any special private exists on the failure to file a petition for retrial, as alleged as grounds for retrial.

Article 39 (Secondary Liability to Pay Taxes by Investor)

Seoul High Court 2019Nu10017 Claim to nullify the invalidity of the designated disposition of the person liable for secondary tax payment

○ ○

○ Head of tax office

oly, 2019.24

oly 2019.17

1. The lawsuit of this case shall be dismissed.

2. The costs of review shall be borne by the Plaintiffs (Plaintiffs).

On June 7, 2011, the judgment subject to a review and the judgment of the first instance are revoked. Each notice of payment stated in the separate sheet "amount of tax after reduction or correction" issued by the Defendant (hereinafter referred to as the "Defendant") designating the Plaintiffs (hereinafter referred to as the "Plaintiffs") as the secondary taxpayer of ○○ Engineering Co., Ltd. and designating the Plaintiffs as the secondary taxpayer of ○○○○ Engineering is invalid. On April 1, 2012, the Defendant confirmed that the disposition of imposition of KRW 27,189,100, out of the global income tax of KRW 31,179,618, which reverts to ○○○○ on April 1, 2012, is invalid.

1. Determination of the original judgment

The record reveals the following facts.

(a) Details of the disposition;

1) The Plaintiffs and the next ○○○○ Engineering Co., Ltd. (hereinafter referred to as the “instant company”) hold shares as listed below, as a shareholder registered in the shareholder registry of ○○○○ Engineering Co., Ltd. (hereinafter referred to as the “instant company”). From December 7, 2005 to September 5, 2006, Plaintiff Park Sang-○ held office as the representative director of the instant company.

2) The head of the ○○○ Tax Office (the head of the competent tax office changed to the Defendant on April 7, 2014) requested the head of the ○○ District Public Prosecutor’s Office to file a criminal charge against the instant company on the charge of violating the Punishment of Tax Evaders Act by the instant company, Plaintiff Park ○, and tea ○○, and conducted a tax investigation on the instant company. On April 11, 2011, the instant company issued a revised assessment of the corporate tax in the business year between 2006 and 2009 and 2006 to 2009, and notified the change in the amount of income to be the Plaintiff Park ○ and the next ○○ as the representative director (the amount of false labor expenses paid in the business year 2006, which was reduced by 88,900,000 won paid during the period from January 8, 206 to 200, the Defendant notified the Plaintiff 14th of the re-audit on the amount of income.

3) On June 7, 2011, the Defendant deemed the Plaintiffs and the next ○○○ as the oligopolistic shareholder of the instant company, and notified the Plaintiffs and the second ○○○○ to designate the Plaintiffs as the secondary taxpayer and to pay the tax amount corresponding to the shareholding ratio of each of the instant company’s delinquent tax amount, and thereafter, the said tax amount was reduced upon correction of reduction on November 6, 2014. The tax amount of the payment notice issued against the Plaintiffs after correction of reduction was as indicated in the column of “amount of tax after correction of reduction or correction in the attached list” (hereinafter “each payment notice” in the column of “amount of tax after correction in the attached list”) written by the Defendant against the Plaintiffs on June 7, 2011.

4) On April 1, 2012, the Defendant: (a) revised the global income tax amount of KRW 8,900,000,000, which was notified of change in the amount of income, as seen above, by adding the amount of income accrued in 2006 to the amount of income accrued in the year of 2006 by Plaintiff Park gambling○ in addition to the amount of income accrued in the year of 2006, KRW 31,179,618, which was initially reported; (b) adjusted the amount of global income tax of KRW 27,189,100 to KRW 31,179,618; and (c) imposed and imposed the imposition of KRW 27,189,100 on Plaintiff Park○○ in the global income tax reverted in the year of 2006 (hereinafter “instant disposition imposing the instant income tax”).

B. Progress of litigation

1) On June 30, 2017, the Plaintiffs filed a lawsuit seeking confirmation of invalidity of the instant notice of payment and the instant disposition of imposition of income tax (hereinafter collectively referred to as “each of the instant dispositions”). On April 5, 2018, the Incheon District Court rendered a judgment dismissing all the Plaintiffs’ claims (Supreme Court Decision 2017Guhap52706 Decided April 5, 2018).

2) The Plaintiffs were dissatisfied with the above judgment and filed an appeal on April 18, 2018. On September 19, 2018, this Court rendered a judgment dismissing all appeals by the Plaintiffs (this Court Decision 2018Nu44045, hereinafter referred to as “the judgment on review”). The original copy of the judgment subject to review was served on the Plaintiffs’ legal representative on September 27, 2018.

3) The Plaintiffs were dissatisfied with the judgment subject to a retrial and filed an appeal on October 4, 2018. The Plaintiffs, through the appellate brief submitted on November 6, 2018, asserted to the effect that “the Defendant was able to easily confirm that the Plaintiffs were not beneficial shareholders through the materials that they received from the prosecutor’s office. Nevertheless, the Defendant’s each disposition against the Plaintiffs ought to be deemed null and void on the grounds that the defect was serious and obvious.” The Supreme Court dismissed all of the Plaintiffs’ appeals in accordance with Article 4 of the Act on Special Cases Concerning the Procedure for Appeal on December 27, 2018 (Supreme Court Decision 2018Du59113). The said judgment was served on the Plaintiffs’ legal representatives on December 28, 2018.

2. Whether the litigation for retrial of this case is legitimate

A. The plaintiffs' assertion

The key issue of the instant case is whether the Defendant, at the time of the disposition, knew that the Plaintiffs were not beneficial shareholders. Data that served as the basis for the judgment in the process of the instant disposition, were investigated by the prosecution. The investigation records clearly state the fact that the Plaintiffs were not beneficial shareholders. In the judgment subject to a retrial, it is contrary to the facts stated in the investigation records, which are official documents, that the Plaintiffs could not know that they were beneficial shareholders. Therefore, failure to determine the investigation records (Evidence) constitutes grounds for retrial under Article 451(1)9 of the Civil Procedure Act (when omitting judgment on important matters that could affect the judgment).

B. Determination

In light of the proviso of Article 451(1) of the Civil Procedure Act, a litigation for a retrial cannot be filed against the judgment of the court of final appeal which became final and conclusive on the grounds alleged in the grounds of appeal, and if the judgment of the court of final appeal is omitted, it can be known if the original copy of the judgment was served on the original copy of the judgment, and the reasons for the judgment were read. Thus, barring any special circumstance, barring any special circumstance, the omission of judgment could have been asserted as the grounds for final appeal, but if the original copy of the judgment of the court of final appeal was not known, it may not be brought a lawsuit for retrial (see, e.g., Supreme Court Decisions 70Da2688, Mar. 30, 197; 2005Da58236, Jan. 12, 2006). This applies to a case where the final appeal against the judgment of final appeal was dismissed under Article 4 of the Act on Special Cases Concerning the Procedure for final Appeal (see, e.g., Supreme Court Decision 2014Da1314.4.

In other words, the Plaintiffs returned to the instant case, and after filing an appeal, the Plaintiffs could easily confirm that the Plaintiffs were not beneficial owners through the materials that they received from the prosecution.

Nevertheless, as seen earlier, the Defendant’s submission of the grounds of appeal stating that the defect of each of the instant dispositions against the Plaintiffs ought to be deemed null and void as it is serious and clear. In view of such circumstances, it is difficult to deem that there were any special circumstances for not asserting the omission of judgment as the grounds of appeal, as alleged in the grounds for retrial. Therefore, regardless of whether the Plaintiffs asserted omission of judgment as the grounds for retrial, omission of judgment cannot be a legitimate ground for retrial as to the judgment subject to retrial, and thus, the lawsuit of this case is deemed unlawful in accordance with Article 8(2) of the Administrative Litigation Act and Article 451(1) proviso of the Civil Procedure Act.

3. Conclusion

Therefore, the lawsuit of this case is unlawful and thus it is so decided as per Disposition.