Cho High Court Decision 2008west066 (Law No. 8619, 2008)

Whether there was an actual supply of goods related to the wholesale and retail business of home appliances

In light of the fact that a tax invoice issuer prepares and distributes a number of false tax invoices without actual transactions, the details of payment settlement under the deposit sheet exceed the amount of credit purchase at the time, and the fact that there was a considerable amount of goods transaction without issuance of the tax invoice with other companies, it shall be judged as false tax invoices.

The contents of the decision shall be the same as attached.

1. All of the plaintiff's claims are dismissed.

2. Litigation costs shall be borne by the plaintiff.

The Defendant’s imposition of value-added tax for the second period of February 2001 against the Plaintiff on June 8, 2007, including 22,503,920 won, 39,696,580 won of value-added tax for the first period of January 2002, and 33,660,210 won of value-added tax for the second period of February 2002 shall be revoked.

1. Circumstances of the disposition;

A. From June 10, 1996, the Plaintiff, a business operator operating a wholesale and retail business of household appliances with the trade name of 173 Ma-202 from Jongno-gu, Seoul, Jongno-gu, Seoul. From June 10, 1996, the Plaintiff received 43 copies of purchase tax invoices equivalent to the total value of 51,607,040 won and value-added tax amount of 51,46,70,744 won as listed in the following table, and filed a return on the purchase tax invoice from the output tax amount to the Defendant by deducting the above tax amount from the input tax amount when filing the value-added tax for each of the above periods.

B. On November 8, 2005, the head of the Chungcheong District Tax Office revealed the fact that a large number of tax invoices were issued falsely, and filed a criminal charge. On the other hand, the Plaintiff notified the Defendant of the fact that the said Chapter 43 tax invoices issued by ○ Electronic was investigated as false tax invoices received without real transactions. Accordingly, the Defendant deemed the said Chapter 43 tax invoices as false tax invoices received without real transactions and deemed the said input tax amount as non-deduction from each of the above input tax amounts during the period from Llst to February 2002, 201, adjusted the Plaintiff’s value-added tax amount from each of the above periods, and issued the said input tax amount from June 8, 2007 to 11,80,283 won (including additional tax), value-added tax for the second period of 2,250,203, 2003, 20630, 206, 2006, 206, 2006, 2006, 2006, 2636, 26,26, etc.

C. The plaintiff filed an objection against the defendant on August 24, 2007, but was dismissed on December 2007.

21. The Tax Tribunal filed a request for a judgment with the Tax Tribunal. In January 2001, the Tax Tribunal rendered a decision to revoke the imposition of value-added tax for the first period of 2001 on the grounds that the purchase tax invoices issued by the Plaintiff from ○ Electronic were not false tax invoices received without real transactions, and at the same time, 35 Chapter 35 of the purchase tax invoices issued from ○ Electronics during the period from February 2001 to February 2002 (hereinafter “the instant tax invoices”) dismissed the claims for each of the instant dispositions on the grounds that they were false tax invoices received without real transactions.

[Reasons for Recognition] Class A, Evidence Nos. 1, 2, 3, 12, 13, 14, and 18 (including a natural disaster, if any)

2. The plaintiff's assertion and judgment

A. The plaintiff's principal

The Defendant’s imposition of each of the instant tax invoices, which was made based on the actual transaction but deemed false as having been received without actual transaction, was unlawful.

(b) Related statutes;

It is as shown in the attached Form.

(c) Fact of recognition;

(1) On June 1991, from around December 1991 to December 193, 1993, the new ○○-gu and his/her Dong-dong had engaged in the wholesale business of household-based products with the trade names, such as ○○ Electronic Store, ○-Electronic Store, and ○○-si, Yongsan-gu, Seoul, as the representative director on January 21, 1994, the new 2-8 from Yongsan-gu, Yongsan-gu, Seoul, as the wholesale business of household-based electrical appliances, and the Plaintiff had operated the said new ○-gu electronic company as an employee of the said new ○-dong electronic company and had operated the new ○ electronic company.

(2) The Plaintiff had been supplied with and sold electronic equipment from ○○ Electronic, etc. while operating Maritime ○○ Electronic. Since the Plaintiff’s personal work together with Maritime ○○ Electronic, the Plaintiff indicated “○○ ○○” in the original market, such as the daybook and inventory book of Maritime ○ Electronic.

(3) Around April 11, 2001, new ○○-gu transferred 73% of the shares in the ○○-type shares held in the name of new ○-type, etc. to Kim ○-type, etc. Around that time, Kim ○-type was appointed as the representative director of the ○-type electronic company and operated the ○-type electronic company until December 31, 2002. However, as a result of a tax investigation, Kim ○-type issued false sales tax invoices equivalent to KRW 3,182,785,00 among the two-term transactions in the 2-year name of 2001, 1,810,04,000 among the first-term transactions in the 202, and KRW 1,549,268,000 among the two-year transactions in the 202.

(4) The original market book of the Maritime Commerce stated that the Maritime Commerce was supplied with goods equivalent to KRW 103,394,90, KRW 190, KRW 190,000 for February 56, 2001, KRW 100,254,00 for January 2, 2002, and KRW 52,670,00 for February 2002, but the Plaintiff received the purchase tax invoice for each of the 103,394, KRW 190, KRW 190, KRW 300,030, KRW 168,894,020 for the Plaintiff as shown in the instant invoice. After the commencement of the tax investigation, the Plaintiff received the purchase tax invoice for 201, KRW 131,610,00 for 20 for 20,000 for 15,000 for 20,000 for 205,200.

(5) The Plaintiff asserted that, upon filing the above objection, the Plaintiff paid 19,90,000 won for the second period of 2001 with the purchase price, 45,200,000 won for the first period of 202, and 13,300,000 won for the second period of 202, and submitted a copy of the check kept in micro films equivalent to the above amount. However, the copy of the check does not clearly appear to have been endorsed and delivered by the Plaintiff to the Plaintiff.

(6) On the other hand, the original market division of the Maritime ○ Electronic stated that the goods equivalent to KRW 319,839,00 have been supplied from 20 business entities with the trade names such as '○○', 'reliance○', '○○', and '○' during the above period, but the Plaintiff did not receive the purchase tax invoice.

[Ground of recognition] The aforementioned evidence, Gap evidence Nos. 3, 4, 5, Eul evidence Nos. 6 through 11, Eul evidence Nos. 15 through 17, and the purport of the whole pleadings

D. Determination

According to Article 17 (1) and (2) 1-2 of the Value-Added Tax Act, the value-added tax amount payable by an entrepreneur shall be the amount calculated by deducting the input tax amount from the output tax amount, but the case where a tax invoice has not been issued or where all or part of the requisite entry items under Article 16 (1) of the Act are not entered or entered differently from the fact in the delivered tax invoice is not deducted from the input tax amount, and as a matter of principle, the defendant must prove the falsity of the tax invoice, such as that the tax invoice is not accompanied by the real transaction on the basis of direct evidence or overall circumstances, since the defendant is the defendant, who is the tax authority, in principle, has the burden of proving that the tax invoice is false, and if the defendant has proved this point to the extent reasonably acceptable, it is necessary to prove that the plaintiff's assertion that the tax invoice is not false is in a position to present the relevant evidence and materials (see, e.g., Supreme Court Decision 96Nu8192, Sept. 26, 1997

In light of the following circumstances acknowledged by the above facts: (a) it was revealed that the Plaintiff prepared and delivered the instant tax invoice to the Plaintiff without actual transaction; (b) the Plaintiff’s original market and the instant tax invoice are almost inconsistent with the entry of the name, quantity, unit price, etc.; (c) KRW 209,467,00 (= KRW 56,543,000 + KRW 10,254,6700 + KRW 52,6700 + KRW 52,000) or KRW 51,610,000 on the deposit sheet issued by the Plaintiff for the actual transaction; and (d) it is difficult for the Plaintiff to prove that the amount of the purchase price of the instant tax invoice to be paid to the Plaintiff during the said taxable period exceeds the amount of KRW 15,100,000,000 for each of the instant tax invoices issued by the Plaintiff to the Plaintiff, even if there is no substantial difference between the amount of the purchase price of the instant tax invoice and the amount of the instant tax invoice issued to the Plaintiff.

Therefore, each of the instant dispositions, based on the premise that the instant tax invoice was processed without any actual transaction or prepared by falsity, is lawful.

3. Conclusion

Thus, the plaintiff's claim of this case seeking revocation on the premise that each disposition of this case is illegal is dismissed as it is without merit.