A. Interpretation of Article 194-12 (2) 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 12783 of Aug. 24, 1989) and classification according to business purposes such as corporations

(b) Scope of “justifiable cause” which is not used directly for a proper business under Article 234-22 (1) 2 of the former Local Tax Act;

A. According to the purport of Article 234-2(1)2 and (2) of the former Local Tax Act (amended by Act No. 4128 of Jun. 16, 1989), Article 194-12(1) and (2)3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 12783 of Aug. 24, 1989), and Article 84-4(3)5 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 12783 of Aug. 24, 1989), among land annexed to a building, the part exceeding the area calculated by multiplying the floor area of the building by the applicable multiple by the applicable multiple by specific-use area of the site shall be deemed as land which is not "direct use" for a corporation's own business, and unlike this, the land and the use of the building should not be re-determined to determine the subject of taxation of the land and

(b) The term “justifiable cause”, which is not used directly for a proper business under Article 234-2(1)2 of the former Local Tax Act, shall be an external reasonable and reasonable reason, and the circumstances such as the developments leading to the acquisition of a building site by a corporation, the status of the possession and use of the building site, or the details thereof, shall not be deemed as a “justifiable cause” which does not directly use for a proper business due to

A. B. Article 234-2(1)2(a) of the former Local Tax Act (amended by Act No. 4128 of Jun. 16, 1989); Article 234-2(2) of the former Local Tax Act (amended by Act No. 4128 of Jun. 16, 1989); Article 194-12(1) and (2)3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 12783 of Aug. 24, 1989); Article 84-4(3)5 of the former Enforcement Decree of the Local Tax Act

B. Supreme Court Decision 84Nu639 delivered on April 9, 1985 (Gong1985, 748)

Postal & Food Corporation

Head of Busan Metropolitan City North Korea

Busan High Court Decision 89Gu1315 delivered on August 11, 1990

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

We examine the grounds of appeal.

1. According to the reasoning of the judgment below, the court below found that the plaintiff owned the 4th floor of this case on the site of this case owned by him and used directly to real estate rental business which is one of the plaintiff's objective businesses by leasing the 1267 square meters "A" part of the 5th floor of this case to the non-party branch industry corporation from among the 5750 square meters of the site of this case, and used directly for the manufacturing and selling business of the 483 square meters of "B" part of the building of this case and the 484.4 meters of the remaining part of the site of this case for 483 square meters of the site of this case, and therefore, the site of this case is used for the plaintiff's objective business, so it did not constitute the land which is not directly used for the corporation's proper business under Article 234-2 (1) 2 of the Local Tax Act of this case and the 194-12 (2) 3 and 84-4 (3) 5 meters of the land size of this case.

2. According to Article 234-22 (1) 2 of the Local Tax Act (amended by Act No. 4128 of Jun. 16, 1989), land owned by a juristic person which is subject to heavy holding tax shall be all land not directly used by the juristic person without any justifiable reason. Paragraph (2) of the same Article provides that the scope of proper business and standards for direct use shall be prescribed by the Presidential Decree, and it shall be delegated by the Presidential Decree, and Article 194-12 (1) of the Enforcement Decree of the same Act (amended by the Presidential Decree No. 12783 of Aug. 24, 1989) provides that "direct use" shall be excluded from the land owned by the juristic person's own business and the land owned by the juristic person which is the land subject to heavy holding tax shall be excluded from the area of the land owned by the juristic person's own business and the land owned by the juristic person's own business area which is the land subject to 94-12 (2) of the same Article 3) of the same Decree.

In addition, the phrase “justifiable cause” that is not used directly for the proper business under Article 234-22(1)2 of the Local Tax Act shall be an objective and reasonable external reason, and as in the instant case, the circumstances such as the process of acquiring the instant site, the status of possession and use, details, etc. shall not be deemed to constitute “justifiable cause” that is not directly used for the proper business for the internal reason of the Plaintiff corporation.

Ultimately, the judgment of the court below is erroneous in the misunderstanding of legal principles under Article 234-22(1)2 of the Local Tax Act and Article 194-12(2)3 of the Enforcement Decree of the same Act, which affected the conclusion of the judgment. The grounds for appeal pointing this out are with merit.

3. 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 Yoon Young-young (Presiding Justice)