Seoul High Court 2009Nu26175 (29 April 29, 2010)

National High Court Decision 2007west2783

If the original return or decision is partially corrected ex officio after a disposition for adjustment to increase, the taxpayer may seek cancellation of the increased tax amount by the disposition for adjustment to increase.

Although the tax authority may seek cancellation only within the limit of the amount of tax increased by the increase or decrease disposition, in cases where the tax authority made a partial reduction or decrease ex officio, regardless of the litigation procedure, on the grounds that there is an illegality in the initial return or determination after the increase or decrease disposition, the taxpayer may seek cancellation of the increased amount of tax by the increase or decrease

Article 22-2 of the Framework Act on National Taxes

2010du9808 Disposition of revocation of the imposition of corporate tax

○ Construction Corporation

○ Head of tax office

The Seoul High Court Decision 2009Nu26175 Decided April 29, 2010

April 14, 2011

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

The grounds of appeal are examined.

1. Where a disposition of increase or correction is taken, the original report or decision loses its independent existence value by absorbing the disposition of increase or correction, and in principle, it shall be subject to an appeal litigation regardless of whether the appeal period against the initial report or decision has elapsed, etc., and a taxpayer may also assert unlawful grounds for the initial report or decision in the appeal litigation (see Supreme Court Decision 2006Du17390, May 14, 2009).

However, Article 22-2(1) of the former Framework Act on National Taxes (amended by Act No. 911, Jan. 1, 2010; hereinafter the same) provides that "an increase in the amount of tax initially determined under the provisions of tax-related Acts shall not affect the rights and obligations under this Act or tax-related Acts with respect to the amount of tax initially determined." In light of the language and content of the aforementioned provision and the main purpose of legislation thereof, even if a disposition of increase or decrease is taken, it is intended to limit the objection against the amount of tax initially determined in the initial return or determination as a result of the lapse of the objection period, etc., the revocation may not be claimed against the amount of tax initially determined and conclusive, and the revocation may

Furthermore, in cases where the tax authority made ex officio a disposition of partial reduction or correction for reasons of illegality in the initial return or determination after the disposition of increased tax amount, regardless of the procedure for litigation, the taxpayer may seek revocation of the increased tax amount by the disposition of increased tax amount, regardless of this, as long as the substance of the tax has reduced the tax amount in the initial return or determination instead of re-reduction of the increased tax amount.

2. (1) According to the reasoning of the lower judgment, the lower court accepted the Plaintiff’s 2,040,467,220 won for the business year 1, 200, 200, 200, 200 won for the revised disposition 70, 200, 300 won for the revised disposition 20, 70,000 won for 20,000 won for 20,000 won for 70,000 won for 70,000 won for 70,000 won for 20,000 won for 70,000 won for 20,000 won for 7,00 won for 7,000,00 won for 20,000 won for 7,00 won for 20,000 won for 5,00 won for 7,00 won for 7,07,000 won for 2,00 won for 7,07.

(2) However, examining the record in light of the legal principles as seen earlier, the substance of the first reduction disposition in this case does not revoke part of the amount of tax increased by the instant increase order, but merely revoke part of the Plaintiff’s original return order. As such, the Plaintiff may still seek revocation of the amount of tax increased by the instant increase order in KRW 1,080,495,074, which deducts KRW 372,84,289, which was reduced by the second reduction order in this case from the amount of tax increased by the instant increase order in KRW 707,650,785.

However, the court below determined otherwise that the plaintiff could not dispute because the corrective measure of this case was revoked by the first and second corrective measure of this case. In so doing, the court below erred by misapprehending the legal principles on Article 22-2(1) of the former Framework Act on National Taxes, thereby affecting the conclusion of the judgment. The plaintiff's assertion pointing this out is with merit.

3. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.