The notification shall specify the summary of the offense, applicable provisions of the law, amount of penalty, etc. in detail in accordance with Articles 254 and 323 of the Criminal Procedure Act.

A written notice cannot be deemed as specifically stating the date, time, method, etc. of an offense to the extent that it can specify the facts of offense. Therefore, it is reasonable to deem that the instant notice disposition violates the procedure prescribed in the Enforcement Decree of the Procedure for the Punishment of Tax Evaders Act, and that the defect is serious and obvious and thus is void as a matter of course.

Contents are the same as attachment.

Article 13 of the Enforcement Decree of the Procedure for the Punishment of Tax Evaders Act

Seoul Central District Court 2018Gahap582048

○○○○○○○○ et al.

Korea

May 30, 2019

July 18, 2019

1. The Defendant’s each of the Plaintiffs’ KRW 792,982,467 and each of the said money from November 28, 2018

It shall pay 15% interest per annum from the date of full payment to the day of full payment.

2. The costs of the lawsuit are assessed against the defendant.

3. Paragraph 1 can be provisionally executed.

Cheong-gu Office

The same shall apply to the order.

1. Basic facts

A. The Plaintiff ○○○○○○○○○○○ (hereinafter referred to as the “Plaintiff”) is a corporation for the purpose of manufacturing and selling contact lenses, and the Plaintiff ○○○ is the representative director of the Plaintiff company. AAAA, BBBB, and CCC (hereinafter referred to as “related business entities”) are individual business entities of a sales agency established to sell contact lenses manufactured by the Plaintiff company.

B. The Plaintiff Company has filed corporate tax on corporate income, and the relevant business operators have filed global income tax on business income under their respective business operators’ names. Moreover, the value-added tax on each transaction between the Plaintiff Company and the relevant business operators has been reported and paid based on the relevant business operators.

C. As a result of the consolidated investigation of corporate tax for the business year from February 8, 2017 to May 23, 2017 with respect to the Plaintiff Company, the director of the regional tax office affiliated with the Defendant (hereinafter “the instant disposition office”) determined that: (a) there was processing purchase and processing personnel expenses; and (b) the relevant business entity constitutes a nominal master business entity for the dispersion of the Plaintiff Company; (c) determined that the relevant business entity’s income should be included in the gross income by deeming the relevant business entity as the income amount of the Plaintiff Company; and (d) on June 13, 2017, notified the Plaintiff Company of the results of such tax investigation.

D. The head of the ○○ Tax Office: (a) on July 5, 2017, according to the result of the tax investigation conducted at issue; and (b) on July 5, 2017, the Plaintiff Company

A total of KRW 1,563,513,050 and KRW 287,474,250 in 201 and KRW 287,474,250 in 2011 were notified of each correction (hereinafter “instant taxation”).

E. Meanwhile, on June 26, 2017, the instant disposition agency shall pay to the Plaintiffs the amount equivalent to each fine on the grounds of the following: (a) tax evasion (Article 3(1) of the Punishment of Tax Evaders Act); (b) violation of the duty to receive tax invoices (Article 10(1) through (3) of the same Act; and (c) the name lending (Article 11(1) of the same Act (Article 11(1) of the same Act).

The notice of this case was notified (hereinafter referred to as "the notice of this case"). Accordingly, the Plaintiff Company paid all the above fines on July 6, 2017, and July 3, 2017 by the Plaintiff ○○○.

F. The Plaintiffs appealed against the instant taxation and tried to the Tax Tribunal, and on March 15, 2018, the Tax Tribunal rendered a decision that “the instant taxation disposition is difficult to be deemed as the Plaintiff Company’s name-oriented business operator,” which included KRW 6,673,536,90 of the relevant business operator’s income from the Plaintiff Company’s income, thereby excluding the Plaintiff Company’s income, thereby correcting its tax base and tax amount. Accordingly, the head of ○○○○ Tax Office issued a decision to revoke the instant tax disposition that deemed the relevant business operator as the Plaintiff Company’s name-oriented business operator (hereinafter “the portion related to the Plaintiff Company’s name-oriented business”).

[Reasons for Recognition] Facts without dispute, Gap evidence 1 through 4, 6, Eul evidence 8, 9-1 and 2, the purport of the whole pleadings

2. Summary of the parties’ assertion

1) Of the total revenue amount of the relevant business entities 7,827,245,711, the amount calculated by subtracting the amount purchased from the Plaintiff Company from KRW 1,153,708,721.

A. The plaintiffs

1) Of the instant taxation dispositions, the part related to the nominal master business entity was finally revoked on the ground that it is difficult to regard the relevant business entity as the nominal master business entity. Therefore, the relevant part related to the nominal master business entity among the instant disposition disposition, which is a subsequent disposition based on the same factual basis, was invalidated.

2) In addition, the instant notice disposition is merely stated in the notice as “violation of the provisions of Articles 3(1), 10(1) through (3), and 11(1) of the Punishment of Tax Evaders Act” and its contents cannot be specified on the grounds that the specific date, method, etc. of a crime are not indicated. Thus, the instant notice disposition is null and void due to a serious and obvious defect in violation of the procedures prescribed in the Enforcement Decree of the Procedure for the Punishment of Tax Evaders Act.

3) Therefore, the Defendant, as unjust enrichment, is obligated to pay to the Plaintiffs the remainder of KRW 792,982,467, and damages for delay as to each of the above amounts, excluding the amount equivalent to the reasonable fine, as unjust enrichment.

B. Defendant

1) The instant disposition authority issued the instant disposition with a positive certificate that there exists an offense against the Plaintiffs. The mere fact that the instant disposition was revoked due to the occurrence of the offense is serious and obvious cannot be deemed as null and void as a matter of course solely on the basis that the instant disposition disposition was revoked.

However, the Plaintiffs voluntarily paid a fine in accordance with the instant notification disposition, even though they did not comply with the notification details if they have an objection to the notification disposition, and they could bring an objection against it in criminal proceedings. Therefore, the Defendant’s possession of a fine by the Defendant is due to the Plaintiffs’ receipt of the instant notification disposition and payment of the fine. As such, it cannot be said that the Plaintiffs obtained benefits without any legal grounds by putting the amount equivalent to the fine paid by the Plaintiffs pursuant to the instant notification disposition in receipt and possession

2) Since the notice disposition of this case was accompanied by the "written notice indicating the year of offense, details of offense, method of calculating fines, etc." in the notice of this case, it cannot be deemed that there was a serious and obvious defect in violation of the procedure prescribed in the Enforcement Decree of the Procedure for the Punishment of Tax Evaders Act, etc.

3. Determination

1) According to the above basic facts, the instant disposition authority: (a) since the pertinent business entity constitutes a nominal owner for the purpose of distributing the sales of the Plaintiff company, it issued the instant disposition with the confirmation that there exists an offense, such as tax evasion, violation of the duty to receive tax invoices, and the act of name lending, etc.; (b) however, the Tax Tribunal judged otherwise that the pertinent business entity cannot be deemed the Plaintiff company as the nominal owner; and (c) accordingly, issued a decision of correction to revoke the portion related to the nominal owner among the instant disposition. However, the mere fact that the instant disposition was corrected due to the absence of such an offense, which caused the instant disposition, does not necessarily mean that the defect of the instant disposition is serious and apparent, and thus, it is difficult to deem that

2) However, Article 15(1) of the Procedure for the Punishment of Tax Offenses Act provides that when the director of a regional tax office or the head of a tax office obtains positive evidence of a tax offense, he/she shall notify the person subject to the disposition of payment of the amount equivalent to the fine (amount equivalent to the fine), the goods subject to confiscation or forfeiture, or the amount equivalent to the surcharge. Article 13 of the Enforcement Decree of the Procedure for the Punishment of Tax Offenses Act provides that "the tax official shall prepare and serve the document in accordance with the Criminal Procedure Act."

This is a system in which an administrative agency notifies a person in violation of laws and regulations of monetary sanctions in lieu of an excessive punishment system imposed on a person in violation of punishment or a property punishment and has implemented it (see Constitutional Court Order 96Hun-Ba4, May 28, 1998). In the form of administrative sanctions or substance by a tax administrative agency, it notifies the offender subject to fines, minor fines, or confiscation of appropriate monetary sanctions. When the offender complies with the notification contents, it shall not be implemented as a regular punishment procedure, and if the offender complies with the notification contents, it shall not be carried out as a regular punishment procedure, and it has the nature of sanctions that are substantially imposed on the same case. Accordingly, it is necessary to specify the summary of the facts of the offense, applicable provisions of the law, amount of penalties, etc. in accordance with Articles 254 and 323 of the Criminal Procedure Act.

However, according to Gap evidence Nos. 1 and 6, and Eul evidence Nos. 1 (the same as evidence No. 6), each notice of this case includes only "violation of the provisions of Articles 3 (1), 10 (1), 10 (2), 2 (3), and 11 (1) of the Punishment of Tax Evaders Act" in the column of the offense and the column of the offense, and the notice of this case is accompanied by the calculation process of fines by each offense from 2012 to 2016. However, it is difficult to view that the above fact of recognition alone clearly states the date, method, etc. of the offense to the extent that the offense can be specified. Accordingly, the notice of this case is prescribed in the Enforcement Decree of the Procedure for the Punishment of Tax Evaders Act, etc.

It is reasonable to see that there is a defect in violation of one procedure, and that the defect is a serious and clear and void.

3) Therefore, the defendant has a duty to return the amount of fine equivalent to the above amount to the plaintiffs, as the plaintiffs suffered damages equivalent to the above amount without any legal ground, since the defendant has a duty to return the amount of fine equivalent to the above amount.

Meanwhile, the plaintiffs seek the return of 792,982,467 won [the amount of fine equivalent to the above disposition of this case 1,022,009,967 won, each of the reasonable fines recognized by the plaintiffs (i.e., fine equivalent to the corporate tax evasion + KRW 162,470,97 won, each of the fines equivalent to the corporate tax evasion + KRW 22,185,500, each of the fines equivalent to the value-added tax evasion + KRW 22,185,500, each of the 792,982,470 won, each of which is 44,371,000 won each of the fines equivalent to the fines related to the violation of the duty to receive the tax invoice] from each of the above fines amounting to unjust enrichment. The defendant is obligated to pay damages for delay calculated at the rate of 15,201, each of the above amounts to 792,982,467 won and each of the above amounts to be paid to the plaintiffs.

4. Conclusion

Thus, since the plaintiffs' claims are well-grounded, all of them shall be accepted as per Disposition.

shall be ruled.