[1] In a case where the Defendant was convicted of committing a crime of violating the Petroleum and Petroleum Substitute Fuel Business Act where he sold pseudo petroleum products, and was prosecuted for evading taxes without reporting and paying the value-added tax, etc. even though he manufactured and sold pseudo petroleum products, the case holding that the identity of basic factual relations cannot be acknowledged between the facts constituting a crime of violating the Petroleum and Petroleum Substitute Fuel Business Act and the facts charged as a result of tax evasion

[2] The meaning of the act of evading taxes by manufacturing pseudo petroleum products under Article 5 of the former Punishment of Tax Evaders Act

[1] In a case where the Defendant was convicted of committing a crime of violation of the Petroleum and Petroleum Substitute Fuel Business Act (hereinafter “petroleum Business Act”), and was charged with evading taxes without reporting and paying the value-added tax, etc. even if he manufactured and sold pseudo petroleum products, the case affirming the judgment below that the res judicata of the final judgment does not extend to the charges of violation of the Petroleum Business Act on the grounds that the crime of violation of the Petroleum Business Act is different from the facts charged due to tax evasion, and the damage legal interests cannot be recognized as identical to the facts charged in violation of the Petroleum Business Act on the grounds that the same purport is that the res judicata of the final judgment does not extend to the facts charged.

[2] Article 5 of the former Punishment of Tax Evaders Act (amended by Act No. 11613, Jan. 1, 2013) which provides that “any person who evades a tax by manufacturing pseudo petroleum products” shall be punished. Article 5 of the former Punishment of Tax Evaders Act (amended by Act No. 11613, Jan. 1, 2013) provides that the Punishment of Tax Evaders Act is wholly amended by Act No. 9919, Jan. 1, 2010 (hereinafter “Punishment Clause”). Before the whole amendment, Article 9(1) of the Punishment of Tax Evaders Act provides that a person who evades a tax or obtains a tax refund or deduction shall be punished. However, prior to the whole amendment, the punishment provision was newly established to expand or strengthen the punishment of pseudo petroleum products as a tax offense in relation to the manufacture of pseudo petroleum.

The term "tax evasion by manufacturing pseudo petroleum products" in the penal provision refers to the removal of pseudo petroleum products from the market by manufacturing them or independently supplying goods for business purposes, thereby avoiding the imposition and collection of taxes. In light of the language and text of the penal provision, legislative history and purpose, the Punishment of Tax Evaders Act, etc., the mere act of failing to file a tax return or filing a false tax return in relation to the manufacture of pseudo petroleum products without any active act making it impossible or considerably difficult to impose and collect taxes.

[1] Articles 29(1)1 and 44 subparag. 3 of the former Petroleum and Petroleum Substitute Fuel Business Act (Amended by Act No. 10958, Jul. 25, 201); Article 5 of the former Punishment of Tax Evaders Act (Amended by Act No. 11613, Jan. 1, 2013); Article 8(1)1 and (2) of the former Act on the Aggravated Punishment, etc. of Specific Crimes (Amended by Act No. 11136, Dec. 31, 201); Articles 29(1)1 and 326 subparag. 1 of the Criminal Procedure Act / [2] Article 9(1) of the former Punishment of Tax Evaders Act (Amended by Act No. 9919, Jan. 1, 2010); Article 15(1) of the former Punishment of Tax Evaders Act (Amended by Act No. 13815, Jan. 1, 2013)

Defendant

Defendant

Attorney Park Han-young

Busan High Court (Chowon) Decision 2012No225 decided June 14, 2013

The appeal is dismissed.

The grounds of appeal are examined.

1. Claims that the effect of res judicata of the final and conclusive judgment extends;

In criminal proceedings, the identity of facts charged or facts constituting a crime should be determined based on the same factual basis. This should not be determined only on the basis of the identity of pure facts, and it should be determined based on whether the basic facts are substantially identical in consideration of normative factors, other than the Defendant’s act and natural and social facts (see, e.g., Supreme Court en banc Decision 93Do2080, Mar. 22, 1994; Supreme Court Decision 2016Do1526, Jan. 25, 2017).

The judgment against the Defendant was final and conclusive to commit a violation of the Petroleum and Petroleum Substitute Fuel Business Act (hereinafter “petroleum Business Act”), and the Defendant sold pseudo petroleum products. The facts charged in the instant case are that the Defendant evaded taxes without reporting and paying the value-added tax, even if he manufactured and sold such pseudo petroleum products.

Criminal facts of a crime of violation of the Petroleum Business Act are different from the facts charged in this case due to tax evasion. Therefore, the identity of basic facts cannot be recognized between criminal facts of a crime of violation of the Petroleum Business Act and the facts charged in this case (see Supreme Court Decision 2010Do16094, Feb. 9, 2012).

In the same purport, the lower court is justifiable to have determined that res judicata of the said final and conclusive judgment does not extend to the facts charged in this case. In so doing, the lower court did not err by failing to exhaust all necessary deliberations, as otherwise alleged in the grounds of appeal, by misapprehending the legal doctrine on identity

2. Opinion on interpretation of Article 5 of the former Punishment of Tax Evaders Act;

Article 5 of the former Punishment of Tax Evaders Act (amended by Act No. 11613, Jan. 1, 2013) which provides for punishment for “a person who evades a tax by manufacturing pseudo petroleum products” is a newly established provision upon the amendment of the Punishment of Tax Evaders Act by Act No. 9919, Jan. 1, 2010 (hereinafter “instant provision”). Before the aforementioned amendment, Article 9(1) of the Punishment of Tax Evaders Act provides that a person who evades a tax or obtains a refund or deduction of a tax shall be punished by “Fraud or other unlawful act” under Article 9(1) of the Punishment of Tax Evaders Act. However, the instant provision was newly established in order to expand or strengthen the punishment for a tax offense in relation to the manufacture of pseudo petroleum. However, the instant provision does not expressly state “Fraud or other unlawful act” as a constituent element.

In the instant case, “an act of evading taxes by manufacturing pseudo petroleum products” refers to the act of a person liable to pay taxes, such as traffic, energy, environment tax, education tax, value-added tax, etc., is exempted from the imposition and collection of such taxes by removing pseudo petroleum products from the market by manufacturing them or independently supplying goods for business. In light of the language, legislative history and purpose of the instant provision, the system of the Punishment of Tax Evaders Act, etc., the act of not simply failing to file a tax return or filing a false tax return in relation to the manufacture of pseudo petroleum products without any active act that makes it impossible or considerably difficult to impose and collect taxes impossible or making it difficult to impose and collect taxes.

The lower court’s determination to the same purport is justifiable. In so doing, the lower court did not err by misapprehending the legal doctrine on the act of tax evasion and the specification of the facts charged under the Punishment of Tax Evaders Act without exhaust all necessary deliberations as

3. Claims on the existence of tax liability, scope of evaded tax amount, etc.;

A. The lower court: (a) premised on the premise that the Defendant was liable to pay traffic, energy, and environment tax and value-added tax under the Traffic, Energy and Environment Tax Act and the Value-Added Tax Act as a person who carried out the products or independently supplied the goods on a business basis by manufacturing pseudo petroleum products and selling them in total to the Nonindicted Party; and (b) determined that the Defendant evaded the transport, energy, and environment tax and value-added tax without paying the amount equivalent

① In relation to value-added tax, the Defendant asserted that the value of the light oil supplied by the Nonindicted Party should be deducted from the value of the oil used in the manufacture of pseudo petroleum supplied by the Defendant, or that the input tax amount should be deducted at least, and that Article 2(1) and Article 3 of the Traffic, Energy, and Environment Tax Act in relation to traffic, energy, and environment tax violates the principle of clarity of taxation requirements, and thus, pseudo petroleum is unconstitutional, and that the amount of individual consumption tax paid by the Defendant should not be subject to taxation under the above Act and be deducted from the amount of the

B. Examining the reasoning of the lower judgment in light of the evidence duly admitted, the lower court did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal doctrine on taxpayers, tax bases, taxable objects, deduction of tax amounts, etc. under the Traffic, Energy, and Environment Tax Act and

In addition, the Traffic, Energy, and Environment Tax Act that imposes traffic, energy, and environment tax on a manufacturer of pseudo petroleum products falling under “alternative oil” cannot be deemed to be in violation of the Constitution because it violates the principle of clarity of taxation requirements, etc. (see Constitutional Court en banc Decision 2013Hun-Ba17, Jul. 24, 2014).

4. Claims on intention to evade tax;

The allegation in the grounds of appeal on this part is that the judgment of the court below is unlawful, since the court below erred in finding facts against the rules of evidence and misunderstanding the legal principles on the tax evasion, although the defendant did not have any intention to evade tax.

However, the recognition of facts and the selection and evaluation of evidence belongs to the exclusive authority of the fact-finding court unless they exceed the bounds of the principle of free evaluation of evidence. In light of the records, even if examining the reasoning of the lower judgment, the fact-finding by the lower court cannot be deemed to have exceeded the bounds of the principle of free evaluation of evidence, and there was no error of misapprehending the legal doctrine regarding

5. Conclusion

The Defendant’s appeal is dismissed as it is without merit. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Chang-suk (Presiding Justice)