The meaning of "business affairs authorized or permitted by an administrative agency" under Article 84-4 (2) 3 of the Enforcement Decree of the former Local Tax Act, and whether the purpose of use for permission of land transaction contract for individual land transactions falls under such purpose (negative)

Article 84-4 (2) 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996) refers to the case where the target business itself becomes an object of authorization and permission, not to the case where the authorization and permission should be obtained as a means in the course of carrying out the target business. Thus, permission for a land transaction contract for individual land transaction cannot be deemed as an object of authorization and permission under the Enforcement Decree of the same Act. The purpose of use for permission for a land transaction contract shall not be deemed as an "business for authorization and permission" under the Enforcement Decree of the same Act.

Article 112 (2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998); Article 84-4 (2) 3 (current Deletion) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996)

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Park Jong-soo et al., Counsel for plaintiff-appellant)

Sam General Construction Co., Ltd. and one other (Attorneys Jeong Sung-sung et al., Counsel for the plaintiff-appellant)

Mo City Mayor (Attorney Lee Byung-il, Counsel for defendant-appellee)

Seoul High Court Decision 97Gu27130 delivered on February 4, 1998

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

The grounds of appeal are examined.

The court below acknowledged the fact that the plaintiffs, who are corporations incorporated as business purposes on the corporate register, purchased the land of this case located within the land transaction contract permitted zone on May 1, 1995 with permission for a land transaction contract for materials, warehouses and reserved lots on the same day, and paid all remaining prices to each seller during the period from the 13th of the same month to the 18th of the same month, but did not use the land of this case for the purpose of use for the above land transaction contract permission, for the material storage and camping lots for the above land within the period of one year from the acquisition date. The defendant decided that the land of this case constitutes land for the purpose of use for non-business purposes on October 16, 1996 and Jan. 28, 197, and that the plaintiffs did not use the land of this case for the purpose of the purpose of the construction and sale contract for non-business purposes under Chapter 4 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1521, Dec. 31, 1996).

However, the "business subject to authorization or permission by an administrative agency" under Article 84-4 (2) 3 of the Enforcement Decree refers to the case in which the target business itself becomes subject to authorization or permission, and it is not to refer to the case in which the authorization or permission is required as a means in the course of performing the target business (see Supreme Court Decision 97Nu15104 delivered on January 15, 199), so permission for a land transaction contract for individual land transaction cannot be deemed as an "authorization or permission" under the Enforcement Decree, and the purpose of the permission for a land transaction contract cannot be deemed as an "business subject to authorization or permission" under the Enforcement Decree. Thus, even if the plaintiffs acquired the land in this case with the permission for a land transaction contract with the materials, storage and open site, it shall not be determined whether it is the plaintiffs' unique business by only the purpose of the permission for the land transaction contract.

In addition, according to the facts established by the court below, the plaintiffs, who conduct housing construction business, acquired the land in this case for the construction and sale of apartment houses and applied for the prior decision of the housing construction project plan, instead of fixed assets, in the corporate account book, and applied for the prior decision of the housing construction project. Thus, the land in this case constitutes "land acquired for housing construction by a corporation that conducts the construction, supply, or lease of housing for the purpose of housing construction" under Article 84-4 (4) 10 of the Enforcement Decree regardless of the purpose of use for the above land transaction contract permission. Therefore, it shall not be deemed as land for non-business use of the corporation until four years elapse from the date of

Nevertheless, the court below held that the land of this case cannot be deemed land for housing construction under Article 84-4 (4) 10 of the Enforcement Decree, and that the land of this case constitutes land for non-business use of a corporation under Article 84-4 (1) 1 (f) of the Enforcement Decree merely because the plaintiffs did not use it within one year from the date of acquisition according to the purpose of use for permission for land transaction contract. Thus, the court below erred in the misapprehension of legal principles as to the corporation's unique duties and land for housing construction, which affected the conclusion

Therefore, the judgment of the court below is reversed and the case is remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Song Jin-hun (Presiding Justice)