Where the contractor fails to pay the value-added tax agreed to be paid separately from the contract price, the contractor shall not be liable for compensation even if the contractor fails to receive the input tax deduction of value-added tax because the contractor did not prepare a tax invoice.

The case affirming the judgment of the court below which held that where the contractor fails to pay the amount of value-added tax as a result of the contractor's failure to receive value-added tax, even if the contractor's failure to receive value-added tax, and the contractor's failure to receive the input tax due to this, it shall not be due to the error of the contractor who did not issue the tax invoice, but due to the contractor's fault that caused the contractor's failure to pay the amount of value-added tax equivalent to the agreed value-added tax, it shall not be offset against the contractor's claim for the construction price and the damages which the contractor

Article 390 of the Civil Act, Articles 16(1) and 17(1) of the Value-Added Tax Act

Aro Water Quality Industry Corporation

Korea Metal Industry Co., Ltd. (Attorney Gyeong-sik, Counsel for the plaintiff-appellant)

Seoul High Court Decision 95Na6269 delivered on October 5, 1995

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

The grounds of appeal are examined.

1. On the second ground for appeal

Examining the reasoning of the judgment below in light of the records, it is just for the court below to acknowledge facts as stated in its judgment by taking into account the evidence adopted in its judgment, and there is no error of violating the rules of evidence or failing to exhaust all necessary deliberations. The grounds for appeal

2. On the first ground for appeal

According to the facts duly established by the court below, although the plaintiff and the defendant agreed to pay the value-added tax separately while entering into the construction contract of this case, it is clear that the defendant did not pay the amount equivalent to the value-added tax at the time of paying part of the construction contract of this case to the plaintiff. Thus, even if the plaintiff did not issue the tax invoice because it was impossible for the defendant to receive the value-added tax, it shall be deemed that it was caused by the plaintiff's mistake not due to the plaintiff's error that did not issue the tax invoice but to the defendant's mistake that did not pay the amount equivalent to the value-added tax agreed. Therefore, the court below's rejection of the defendant's defense that the plaintiff's claim amount and the value-added tax amount would offset the damages that did not receive the tax invoice

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the defendant who is the appellant. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Jong-chul (Presiding Justice)