Whether the pertinent tax priority provision newly established by the amended Local Tax Act (Enforcement January 1, 1996), also applies to the right to collateral security established before its enforcement (negative), and whether the legal principle also applies to the priority relationship between the secured debt of the mortgage established before the statutory due date and the local tax (affirmative)

In light of the provisions of Article 13(2) of the Constitution prohibiting the deprivation of property rights by retroactive legislation and the purport of amendment of the Local Tax Act, the priority effect of the relevant tax under the Local Tax Act amended by Act No. 4995 of Dec. 6, 1995 shall not be applied retroactively to the mortgage, etc. that had already been established before the enforcement of the amended Local Tax Act. Furthermore, the priority effect of the relevant tax under the Local Tax Act cannot be demanded for the person who was mortgaged at the time of no priority provision under the Local Tax Act to predict that the provision of the priority provision under the Local Tax Act should be newly established in the future. Thus, applying the priority provision that was restored after the establishment of the mortgage to the mortgage that had already been established before the enforcement of the mortgage may not be permitted in that it infringes on the prediction of the mortgagee. Such a legal principle likewise applies to the priority relationship between the local tax and the mortgage that was established before

Article 31 (2) 3 of the Local Tax Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

Plaintiff

Sungnam-si (Law Firm Kim & Lee, Attorneys Kim Byung-kick et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 98Na15981 delivered on September 8, 1998

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

1. In light of the provisions of Article 13(2) of the Constitution prohibiting the deprivation of property rights by retroactive legislation and the purport of amendment of the Local Tax Act, priority effect of the relevant tax under the Local Tax Act amended by Act No. 4995 of Dec. 6, 1995 shall not be applied retroactively to the mortgage, etc. which was already established before the enforcement of the amended Local Tax Act. Furthermore, it cannot be demanded that the person who was mortgaged at the time of no priority provision under the Local Tax Act should expect that the priority provision under the Local Tax Act should be newly established in the future. Thus, applying the priority provision under the Local Tax Act which was restored after the establishment of the mortgage would not be permitted in that it infringes on the prediction of the mortgagee (see Supreme Court Decision 98Da59125, Mar. 12, 199). Such a legal principle equally applies to the priority relationship between the local tax and the mortgage where the local tax was established before the statutory due date.

According to the facts established by the court below, since the plaintiff's right to collateral security was established on April 26, 1995, prior to the enforcement of the amended Local Tax Act, the plaintiff's right to collateral security was established prior to the enforcement of the amended Local Tax Act. Thus, on the premise that the tax priority provision of the amended Local Tax Act applies retroactively to the right to collateral security of this case, the defendant's acquisition tax, etc. of this case constitutes so-called "mortgage", the plaintiff's right

2. Where the date of registration of seizure under Article 31 (2) 3 (e) of the Local Tax Act is occasionally imposed on taxpayers, etc. pursuant to the latter part of Article 28 (2) of the Local Tax Act, the argument in the grounds of appeal that this provision shall apply only to the case where property is attached because taxpayers, etc. failed to comply with the request for the provision of security for tax payment even though they did not comply with such request. The amendment of Article 31 (2) 3 (e) of the Local Tax Act as to the priority of acquisition tax of mortgage and mortgage (the latter part of Article 28 (2) of the Local Tax Act as to Article 31 (2) 3 (e) of the Local Tax Act before the amendment was made on December 6, 195) is based on the premise that the above provision is applied retroactively to the "the date of registration of seizure" under the latter part of Article 28 (2) 3 (e) of the Local Tax Act as to the above construction of the building of this case and the registration of seizure cannot be seen as the acquisition tax under the above provision of the local Tax Act.

3. Therefore, the appeal is dismissed, and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cho Chang-hoon (Presiding Justice)