Whether a corporation which does not engage in the livestock industry as its main business is excluded from non-business land in case where the livestock industry, which is its unique business, is changed to its category as the stock farm site.

In light of the provisions of Article 112 of the Local Tax Act and Article 84-4 of the Enforcement Decree of the same Act, the purpose of Article 84-4 (3) 4 of the same Act is to impose heavy acquisition tax on a corporation that does not engage in agriculture, livestock or forest business (hereinafter referred to as "agriculture, etc.") by treating the corporation as non-business land in principle, regardless of whether the corporation's own business includes the type of business, such as agriculture, etc., or whether it is directly used for the unique business of agriculture, etc.: Provided, That if a corporation that does not engage in agriculture, etc. acquires all its unique business to use it as non-business land, it becomes unreasonable to impose heavy taxation of acquisition tax because it is uniformly deemed that acquisition tax becomes a non-business land, and thus, "where the corporation directly changes its unique business to the category of the corporation's main business within one year from the date of acquisition, and directly uses it as its main business, it does not fall under the category of agriculture, etc. as its main business, and if the corporation does not directly use it within its answer within one year before its acquisition.

Article 112(2) of the Local Tax Act and Article 84-4(3)4 of the Enforcement Decree of the same Act

Attorney Jeon-gu et al., Counsel for the defendant-appellant-appellee

Young Gun;

Gwangju High Court Decision 93Gu11 delivered on August 12, 1993

The judgment below is reversed, and the case is remanded to the Gwangju High Court.

We examine the grounds of appeal.

1. According to the reasoning of the judgment below, the court below held that around 1976, the Plaintiff’s land of this case, the land category of which was a state-owned forest, created grassland with the permission of the State for the creation of grassland and the permission for a land loan, and obtained the permission of the investment in the stock farm development and the approval for the alteration of the investment plan, added the livestock industry to the purpose of the establishment of the Plaintiff corporation’s articles of incorporation as of December 1, 1981. The land category on April 17, 1985 was changed from forest to the land for stock farm, and continued to use it as the land for stock farm after acquiring the land of this case on September 24, 190, and the land of this case constitutes land excluded from the land for non-business use pursuant to the proviso of Article 84-4(3)4

The summary of the reasoning of the judgment by the court below is that Article 84-4 (3) of the Enforcement Decree of the same Act is the land for non-business use of the corporation, notwithstanding the provisions of paragraphs (1) and (2):

However, this does not apply to the case where there is a justifiable reason, and the subparagraph 4 provides that "before the acquisition by a corporation which does not engage in the agriculture, livestock industry or forestry industry as its main business, the rice field, orchard, stock farm land, and woodland shall be excluded from the case where the land category is changed within one year from the date of acquisition, and directly used for the original purpose of the corporation concerned." The fundamental purpose of Article 112 (2) of the Local Tax Act, which provides for heavy taxation on the acquisition of non-business land of the corporation, is to prevent real estate speculation and to promote the sound improvement and development of the national economy by preventing real estate utility and increasing the utility value of the land which is excluded from non-business land under the proviso of Article 84-4 (3) 4 of the Enforcement Decree, even if the corporation does not use the livestock industry as its main business, the land category of the corporation shall be changed within 1 year from the date of acquisition, and the land category of the corporation shall not be directly used for the original purpose of the stock farm, but shall not be directly used for the same purpose.

2. Although the lower court’s opinion on the purport of Article 112(2) of the Local Tax Act is not reasonable in principle, the lower court’s interpretation on the proviso to Article 84-4(3)4 of the Enforcement Decree of the same Act is difficult to accept.

In light of Article 112 of the same Act and Article 84-4 of the Enforcement Decree of the same Act, the purpose of Article 84-4 (3) 4 of the same Enforcement Decree is to impose heavy acquisition tax on a corporation that does not own agriculture, livestock or forest business (hereinafter referred to as "agriculture, etc.") by considering its unique business as a non-business land in principle, regardless of whether it is directly used for its unique business such as agriculture, etc., and it is unreasonable to impose heavy acquisition tax because it is uniformly considered as non-business land and thus, the acquisition tax should be imposed on such a corporation for correction. However, "where the land category of the corporation is modified within one year from the date of its acquisition, and directly uses agriculture, etc. for its unique business, etc." means that the corporation does not directly use the land category as a main business, etc. within the limit of one year from the date of its acquisition, and that it does not directly use the land category to the extent of its answer that it does not directly use the land category, etc. (the answer within one year from the date of its acquisition).

In addition, interpreting the proviso of Article 84-4 (3) 4 of the Enforcement Decree of the above Act as the court below's interpretation is correct because it disregards the purpose of legislation and expands the proviso of Article 84-4 (4) 4 without reasonable grounds or grounds.

3. Thus, the disposition imposing heavy acquisition tax is lawful on the ground that the land of this case was acquired by a corporation which did not engage in the livestock industry as its main business and does not fall under the proviso of the above subparagraph 4. In so determining, the court below erred by misapprehending the legal principles as to the scope of non-business land of the corporation under Article 84-4 (3) 4 of the Enforcement Decree of the above Act.

Therefore, the issue to point this out is with merit.

Therefore, the judgment of the court below is reversed, and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-soo (Presiding Justice)