Whether the liquor tax imposed on the Plaintiff is void as it violates the principle of no taxation without law.

As long as the judgment dismissing the claim for revocation of the instant taxation disposition in the preceding administrative litigation became final and conclusive, res judicata as to the lawfulness of the instant taxation disposition, the Plaintiff cannot seek the return of the tax paid on the premise that the instant taxation disposition is null and void.

2018dada 5007965 Undue gains

AAAA agricultural partnership

Korea

June 12, 2018

July 26, 2018

1. The plaintiff's claim is dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

Cheong-gu Office

The defendant shall pay to the plaintiff 113,768,378 won and the amount calculated by the ratio of 1.16% per annum from August 1, 2014 to the service date of a copy of the complaint of this case, and 15% per annum from the next day to the day of complete payment.

1. Basic facts

A. The Plaintiff is an agricultural partnership that is engaged in a brewing business upon obtaining a license for manufacture of alcoholic beverages on December 9, 1998. The Plaintiff is manufacturing and selling traditional liquor under Article 3(1)-2 of the Liquor Tax Act from the end of March 199 to the present.

B. Aaaaa Commissioner of the National Tax Service, around May 2014, notified the Plaintiff of the result that the Plaintiff did not pay the liquor tax amount of KRW 260,798,449 on June 2, 2014, by omitting a return of tax base for liquor tax, after conducting an investigation of value-added tax and liquor tax items from January 1, 201 to December 31, 2013.

C. On July 4, 2014, the head of the tax office issued a notice of rectification and correction of the total amount of KRW 260,798,449, and the total amount of the liquor tax and education tax on June 201, June 2011, June 2011, June 2012, June 2012, December 2012, June 2012, June 2013, June 2013, and December 2013 (hereinafter “instant taxation”), and the Plaintiff paid the said tax (hereinafter “instant taxation”).

D. On October 2, 2014, the Plaintiff filed a request for examination with the Commissioner of the National Tax Service on October 2, 2014, and the Commissioner of the National Tax Service dismissed the Plaintiff’s request for examination on June 16, 2015.

E. Accordingly, the Plaintiff asserted that the instant taxation disposition should be revoked in an unlawful manner, and filed a lawsuit against the head of the Youngcheon Tax Office seeking revocation thereof. However, on February 19, 2016, the Chuncheon District Court rendered a judgment dismissing the Plaintiff’s claim on the grounds that the instant taxation disposition is lawful (Seoul District Court 2015Guhap5083), and the Plaintiff’s appeal and appeal against it were dismissed [Seoul High Court 2016Nu310, 2016Du56752] The said Chuncheon District Court’s judgment became final and conclusive on February 3, 2017 (hereinafter “prior administrative litigation”).

Facts that there is no dispute over the basis of recognition, Gap evidence 1 through Gap evidence 4, Eul evidence 2 through Eul evidence 4, the purport of the whole pleadings

2. The assertion and judgment

A. Summary of the plaintiff's assertion

1) Article 21(2) of the Liquor Tax Act provides, “The tax base for liquor tax on alcoholic beverages other than spirits shall be the price at which alcoholic beverages are shipped out of a manufactory.” Article 20(1)1 of the Enforcement Decree of the Liquor Tax Act provides, “The price of alcoholic beverages shipped out from a manufactory shall be the sale price (ordinary price) by all manufacturers according to their usual wholesale quantity and transaction method.” In interpreting the above provision, “the price at the time of withdrawal” refers to the price at which the goods are shipped out to a wholesaler directly. As such, the price at the time of withdrawal means the price at the time of the goods being sold to the wholesaler as the manufacturer, the Plaintiff must set the price at the time of the goods shipped out to the wholesaler as the manufacturer and the consumer, and the tax base shall be determined. The Defendant, while imposing the tax in this case, reported that the price at which the Plaintiff sold to the wholesaler and the consumer, namely, the price at which the Plaintiff sold the goods to the wholesaler as the manufacturer, and the portion at which the liquor tax was sold to the general consumer, etc.

In addition, the Defendant applied the main tax rate of 15% to the fruits produced by the Plaintiff while rendering the instant taxation. However, there are many differences between the Plaintiff’s actual sales amount and the Defendant’s shipment amount converted, and thus, the Defendant actually applied the main tax rate of 36% to the negligence owners.

As such, since the instant taxation disposition violates the Liquor Tax Act and is null and void as a matter of course, the Defendant is obligated to return the tax paid by the Plaintiff as unjust enrichment to the Plaintiff.

2) In calculating the ex-factory price for the preceding 15 years, the Plaintiff filed a return, excluding packing expenses, and the tax authority did not provide administrative guidance to rectify the Plaintiff’s method of calculating liquor tax. Considering such circumstances, it is unreasonable to expect the Plaintiff to expect the return of tax base including packing expenses. Therefore, the Plaintiff ought to be deemed to have justifiable grounds, which are grounds for exemption from penalty tax. Accordingly, the Defendant is obliged to return penalty tax imposed upon the Plaintiff

B. Determination

1) The lawsuit seeking revocation of a taxation disposition is based on the substantive and procedural illegality of the taxation disposition, as the ground for revocation.

As such, the object of the review is the objective existence of tax base and tax amount, which are tax obligations recognized by the tax authority's taxation disposition, that is, the appropriateness of the taxation disposition concerned. If a judgment dismissing a request for cancellation of taxation disposition becomes final and conclusive, res judicata has been created as to the legitimacy of the taxation disposition, and the plaintiff cannot seek confirmation of invalidity, and thus, res judicata effect of a final and conclusive judgment dismissed in a lawsuit seeking revocation of taxation disposition also extends to the lawsuit seeking confirmation of invalidity of the taxation disposition. Since the defendant is the defendant in the lawsuit seeking revocation of taxation disposition, res judicata effect in the lawsuit seeking revocation of taxation disposition against the administrative agency concerned extends to the state or public organization to which the pertinent disposition belongs (see Supreme Court Decision 98Da10854, Jul. 24, 1998).

According to the facts acknowledged earlier, inasmuch as the judgment dismissing the claim for revocation of the instant taxation disposition in the prior administrative litigation became final and conclusive and the res judicata effect has arisen as to the lawfulness of the instant taxation disposition, the Plaintiff cannot further seek the return of the tax paid on the premise that the instant taxation disposition is null and void.

Even if there was no determination as to the Plaintiff’s assertion as seen earlier in the preceding administrative litigation, the circumstances that the Plaintiff recommended are prior to the closing of argument in the preceding administrative litigation, which are merely an attack and defense method as to the legitimacy of the instant taxation disposition, and are irrelevant to the occurrence of res judicata.

Therefore, the Plaintiff’s assertion seeking the return of tax paid on the premise that the instant taxation is void as a matter of course is without merit.

2) Penalty taxes under tax law are administrative sanctions imposed, as prescribed by individual tax law, in cases where a taxpayer violates various duties, such as a return and payment of taxes, without justifiable grounds, in order to facilitate the exercise of the right to impose taxes and the realization of a tax claim. The taxpayer’s intentional or negligent act does not constitute justifiable grounds for not having caused the taxpayer’s breach of such duties (see, e.g., Supreme Court Decision 2002Du10780, Jun. 24, 2004).

Even if the Plaintiff reported to exclude packing expenses during the past 15 years, as alleged by the Plaintiff, it is difficult to deem that there exists a justifiable reason for not imposing additional tax on the Plaintiff solely on the ground that the tax authority did not have any problem as to the Plaintiff’s method of calculating liquor tax, even if the Plaintiff reported to exclude packing expenses during the past 15 years.

Therefore, we cannot accept the Plaintiff’s assertion claiming the return of additional tax on the premise that the Plaintiff has justifiable grounds as the exemption of additional tax.

3. Conclusion

The plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.