Early High Court Decision 2016J 0927 (O6.01)

Whether the claim for this case is legitimate

The assertion that the actual payer of the value-added tax shall refund to the Plaintiff the amount reported as the output tax amount of the tax invoice at issue is unreasonable, since it is difficult to view that the Plaintiff is a person whose rights or interests were infringed due to unfair disposition or absence of necessary disposition.

Article 55 of the Framework Act on National Taxes

Suwon District Court 2016Guhap66835 Disposition Rejecting Value-Added Tax Correction

JO

O Head of tax office

2017.03.08

2017.04.05

1. The instant lawsuit shall be dismissed.

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

Cheong-gu Office

The defendant's rejection disposition against the plaintiff on February 17, 2016 is revoked.

1. Basic facts

A. In 2014, the Plaintiff issued 84 copies of the tax invoice (hereinafter “instant tax invoice”) stating that the Plaintiff supplied scrap scrap equivalent to KRW 5,220,215,760 to ss Co., Ltd. (hereinafter “ss”) during the second period of 2014, and filed a return on the second period of value-added tax with the Defendant in 2014, on the amount of KRW 5,379,313,960, including the price of the copper scrap.

B. Around that time, the purchaser of copper scrap, etc. of the instant tax invoice, pursuant to Article 106-9(3) of the Restriction of Special Taxation Act (amended by Act No. 12853, Dec. 23, 2014; hereinafter the same), paid a value-added tax on the output tax amount stated in the said tax invoice according to the special case for payment of value-added tax by the purchaser of copper scrap scrap.

C. On June 26, 2015, on the ground that the instant tax invoice was prepared falsely, the Defendant revised the Plaintiff’s secondary value-added tax base of KRW 5,379,313,960 by 159,09,098,200,215,760, subtracting the sales amount of the said tax invoice from KRW 5,220,215,760, and the Defendant revised the value-added tax assessment of KRW 5,483,545 ( separate from KRW 104,404,315, hereinafter referred to as “the instant decision to revise the reduction”).

D. On December 28, 2015, the Plaintiff filed a claim for correction of tax base and tax amount (hereinafter referred to as “instant claim for correction”) with the intent to seek the refund of KRW 417,617,261 (including additional tax for insincere faith) remaining after deducting the value-added tax that was reduced or corrected from the 2nd value-added tax of the Plaintiff’s previous 2014 (hereinafter referred to as “value-added tax”). On February 17, 2016, the Defendant notified the Plaintiff that “the value-added tax declared and paid by the Plaintiff based on the processed tax invoice cannot be refunded” (Article 2-2, hereinafter referred to as “instant notification”).

E. On February 22, 2016, the Plaintiff filed an appeal seeking revocation of the instant rejection notice with the Tax Tribunal, but the Tax Tribunal dismissed the Plaintiff’s appeal on June 1, 2016, and the Plaintiff filed the instant lawsuit seeking revocation of the said rejection notice with the competent court.

Facts without any dispute, Gap evidence 1, 2-1, 2-2, Gap evidence 3-1, 2-2, Eul evidence 1-3, the purport of the whole pleadings, and the purport of the whole pleadings.

2. The assertion and judgment

A. Summary of the parties' assertion

1) Plaintiff’s assertion

The value-added tax of this case is the tax amount based on the sales of each tax invoice of this case, which is a processing tax invoice, and paid without any cause. As such, the Defendant is obligated to refund the value-added tax to the Plaintiff pursuant to Articles 45-2(1) and 51(1) of the Framework Act on National Taxes. The Defendant’s refusal notice of this case

2) Defendant’s assertion

A) The Plaintiff is not a person who has paid the value-added tax of this case, and cannot be deemed as a claimant for correction under Article 45-2(1) of the Framework Act on National Taxes, and the Plaintiff’s right or interest cannot be deemed to have been infringed upon due to the instant refusal notice.

B) Although the Plaintiff issued the instant tax invoice by falsity and filed the instant value-added tax return based thereon, seeking a refund of value-added tax on the ground that each of the said tax invoices was issued by falsity is not permissible against the good faith and good faith.

B. Relevant statutes

It is as shown in the attached Form.

C. Main Safety Judgment

First, it is examined as to whether the above refusal of refund constitutes a refusal disposition (inaction) subject to administrative litigation.

1) If a withholding agent collects and pays an amount of tax on income which is not subject to withholding from a withholding agent in excess of the amount of tax to be collected or to be collected from a withholding agent, the State’s unjust enrichment held by the withholding agent without any legal ground. Articles 51(1) and 52 of the Framework Act on National Taxes merely provide for the procedures for refund by the tax authority as an internal procedures for handling the national tax refund and additional dues for which the claim for refund has become final and conclusive, and as a result, the claim for refund is not determined by the determination of national tax refund (including additional dues). Thus, the determination of the national tax refund decision or the refusal of refund of the request for refund is not a disposition that specifically and directly affects the existence or scope of the claim for refund against the taxpayer, and it cannot be deemed a disposition subject to appeal (Supreme Court Decision 2001Du8780, Nov. 8, 2002). In light of the contents, form, legislative intent, etc. of the refund-related provisions of the Value-Added Tax Act, the State’s obligation to pay is reasonable.

2) On June 26, 2015, the Defendant rendered a correction of the instant tax invoice with the purport of deducting the total sales amount of the instant tax invoice from the base of value-added tax for the second period of value-added tax in 2014 and reducing the value-added tax imposed on the Plaintiff accordingly. On December 28, 2015, the Plaintiff issued the instant request for correction with the purport of seeking refund of value-added tax KRW 417,617,261, which was reduced according to the above reduction correction decision, to the Defendant on December 28, 2015. Accordingly, the Defendant notified the Plaintiff of the instant refusal on the ground that the value-added tax declared and paid pursuant to the processing tax invoice cannot be refunded on February 17, 2016, and the fact that the Plaintiff filed the instant lawsuit seeking revocation of the Defendant’s notification of rejection is identical to the fact recognized as the basis of the first

According to the above facts, the defendant's refusal notice of this case is not a rejection disposition against the claim for the correction of value-added tax, but a "Notice of Refusal of the plaintiff's claim for the refund of value-added tax already reduced by the correction decision of this case," and in light of the legal principles as seen in the above 1, the notification of this case cannot be deemed a disposition that has specific and direct influence on the existence or scope of the plaintiff's claim for the refund of value-added tax of this case

3) The Plaintiff’s lawsuit seeking revocation of the instant refusal notification is unlawful.

3. Conclusion

Since the lawsuit of this case is unlawful, it is decided to dismiss it and it is so decided as per Disposition.