Where the Ordinance on Taxation or Exemption of Market Price is amended and there is no transitional provision in the Addenda, the Ordinance to be applied (=Ordinance enforced at the time of the establishment of the tax liability)

In cases where the ordinance on taxation or exemption of the market price is amended disadvantageous to taxpayers, if the previous ordinance is applied to taxpayers with special transitional regulations to protect the person liable for tax payment's vested rights or trust, the previous ordinance shall be applied. However, unless there is a transitional provision that the previous provision is continuously applied after the enforcement of the amended ordinance, unless there are other special circumstances, the previous ordinance, which is enforced before and after the amendment, shall be applied at the time of the establishment of tax liability among the ordinances before and after the amendment of the amended Ordinance.

Articles 7 and 9 of the Local Tax Act

Supreme Court Decision 87Nu453 delivered on April 9, 1985 (Gong1985, 738) Supreme Court Decision 87Nu88 delivered on May 12, 1987 (Gong1987, 1007) Supreme Court Decision 89Nu4468 delivered on April 10, 1990 (Gong1990, 1081), Supreme Court en banc Decision 93Nu566 delivered on May 24, 1994 (Gong1994Ha, 1860), Supreme Court Decision 94Nu5502 delivered on June 30, 195 (Gong195Ha, 2648), Supreme Court Decision 95Nu825 delivered on August 22, 1995 (Gong1959, 195)

Seoul High Court Decision 2001Na14488 decided May 1, 201

The head of Jung-gu Seoul Metropolitan Government (Attorney Han Jong-hun, Counsel for defendant-appellant)

Seoul High Court Decision 97Gu53276 delivered on August 20, 1998

The judgment below is reversed. The case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. According to the reasoning of the judgment of the court below, the court below, comprehensively based on the evidence adopted in its judgment, found that the plaintiff Han-sung Securities Co., Ltd., the plaintiff Hansung Development Co., Ltd., the bankrupt Hanhwa-si Co., Ltd., and the non-party Pacific Construction Co., Ltd. (hereinafter referred to as the "non-party Pacific Construction") were consolidated into the plaintiff Hansung Development Co.,, Ltd. on October 16, 1996, under the Urban Redevelopment Act, the joint developer was designated (hereinafter referred to as the "the plaintiff, etc.") on October 31, 1984, and the above joint developer was designated as the joint developer under the revised Ordinance of the Seoul Special Metropolitan City Ordinance No. 728 on October 30, 1989, which had already been approved for the implementation of the redevelopment Project, and did not have the nature of the urban planning tax imposed on the plaintiff 1, 196, which had already been approved for the execution of the redevelopment Project by the second district Ordinance on October 16, 196.

2. However, in cases where the municipal ordinance on the imposition or exemption of the market price is amended disadvantageous to a taxpayer, the previous municipal ordinance should be applied to a taxpayer with special transitional provisions in order to protect the taxpayer's vested rights or trust (see, e.g., Supreme Court Decisions 83Nu453, Apr. 9, 1985; 87Nu8, May 12, 1987; 89Nu4468, Apr. 10, 199). Unless there are transitional provisions that the previous municipal ordinance is continuously applied after the enforcement of the amended municipal ordinance, unless there are special circumstances, the previous municipal ordinance that is enforced at the time of the establishment of tax liability among the municipal ordinances before and after the amendment of the amended municipal ordinance shall be applied (see, e.g., Supreme Court Decision 95Nu825, Aug. 22, 195).

Furthermore, according to Article 1858, Article 2, subparagraph 1 of the Ordinance at the time of designation of the project implementer, the property tax and urban planning tax have been exempted for the land and buildings acquired by the project implementer under the Urban Redevelopment Act to implement the redevelopment project within the redevelopment area from the authorization date of the implementation of the redevelopment project until the year when the implementation of the redevelopment project is completed. However, the same Ordinance was amended by Ordinance No. 1963 on February 23, 1984 and enforced on January 1, 1985 (hereinafter referred to as the "Ordinance No. 1963") deleted the above reasons for such exemption, while Article 1, Paragraph 2, of the Addenda of the Ordinance, "The previous provision shall govern the Si tax imposed or to be imposed under the previous provision as at the time this Ordinance enters into force, and Article 1858, Paragraph 2, of the Addenda of the previous Ordinance, which had been prescribed as to the implementation period, until December 31, 1985.

Therefore, the transitional provisions stipulated in Article 2 of the Addenda of the Ordinance No. 1963 have been invalidated after the lapse of December 31, 1994, and since no transitional provisions exist at the time of June 1, 1996, which is the tax base date for the taxation of this case, the tax liability should have been applied to the amended Ordinance, i.e., when the tax liability was established, unless there are other special circumstances. However, the judgment of the court below that Article 1858 Item 1 of the previous Ordinance, which determined by the court below as to exemption of property tax and urban planning tax, can be applied to the taxation of this case under the protection of vested rights and trust, was erroneous by misapprehending the legal principles on trust, which affected the conclusion of the judgment, and the precedents cited by the court below, which affected the conclusion of the judgment, cannot be invoked as they are in this case, contrary to this case. The part contained in the grounds of appeal on this point, is with merit.

3. Therefore, the judgment of the court below shall be reversed, and the case shall be remanded to the court below for a new trial and determination. It is so decided as per Disposition with the assent of all participating Justices.

Justices Jeong Jong-ho (Presiding Justice)