Whether there exists justifiable grounds for exemption from additional tax

There is room to view that the Plaintiff was aware of the fact of the processing transaction, or that the Plaintiff allowed the processing transaction to achieve the purpose of increasing the business performance by impliedly recognizing such processing transaction, and thus, it is difficult to deem that the Plaintiff has justifiable grounds.

Article 22 of the Value-Added Tax Act [Additional Tax]

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the plaintiff.

1. Revocation of a judgment of the first instance;

2. The Defendant’s imposition of value-added tax of KRW 17,587,200 for 2001 against the Plaintiff on May 10, 2004, the second value-added tax of KRW 191,319,580 for 2001, the first value-added tax of KRW 191,839,930 for 202, and the second value-added tax of KRW 52,704,960 for 202 for 202 shall be revoked.

This Court’s reasoning concerning this case is identical to the reasoning of the first instance judgment in addition to adding the following parts to the last part of paragraph (e) of Article 2 in the column of reasoning of the first instance judgment (section 8 in title 13), and therefore, this Court’s reasoning is acceptable as it is in accordance with Article 8(2) of the Administrative Litigation Act, Article 420 of the Civil Procedure Act.

【Additional Part】

In addition, Article 9 (3) of the former Value-Added Tax Act (amended by Act No. 7007 of Dec. 30, 2003; hereinafter referred to as the "Act") provides that where a tax invoice is delivered prior to the delivery of goods, the time of such delivery shall be deemed the time of supply for the goods. Thus, the plaintiff's return of value-added tax for the first period, No. 2001, 2002, 1, 2002, and 2, 2002, stating that the sale and purchase tax for each of the tax invoices of this case is legitimate. However, Article 9 of the Act provides that where a tax invoice is delivered prior to the delivery of goods falls under a different taxable period from the time of the delivery of the value-added tax, the delivery of the tax invoice prior to the delivery of the goods shall not be accepted, as long as it constitutes the basis for the supply of the goods prior to the delivery of the goods.

Finally, the Plaintiff asserts that the instant disposition made against the Plaintiff who did not have any income from the processing transaction is unlawful in violation of the substance over form principle. However, in order to facilitate the exercise of taxation authority and the realization of tax claims, the additional tax on incomplete entry of the aggregate tax invoices by seller is imposed on the business operator liable to pay value-added tax by stating the entries on the aggregate tax invoices by seller to the tax authority correctly and accurately, and without considering the business operator’s intent and negligence in the event that the business operator violates it without good cause, so if the business operator who supplied the goods enters differently the supply value of the aggregate tax invoice by stating each of the sales amount and processing amount arising from the processing transaction and the purchase amount by seller, the business operator is liable to pay additional tax on incomplete entry of the aggregate tax invoices by seller as to the supply value of the aggregate tax invoices by seller, which is a sanction, and this is not related to the substance over form principle. The Plaintiff’s assertion also cannot be accepted.

Therefore, the judgment of the court of first instance is legitimate, and the plaintiff's appeal is dismissed. It is so decided as per Disposition.