If the taxation disposition is to be null and void as a matter of course, it is not sufficient to say that there is an illegality in the disposition, and the defect is so serious.

In order for taxation to be null and void as a matter of course, the fact that there is an illegality in the disposition is insufficient, and the defect must be objectively obvious as it seriously violates the important part of the law and regulations.

Article 29 of the Value-Added Tax Act

Seoul High Court 2018Na204059 Return of Unjust Enrichment

AA and 1

Korea

on October 16, 2010

on October 13, 2019

1. All appeals filed by the plaintiffs are dismissed.

2. The costs of appeal are assessed against the Plaintiffs.

1. Quotation of the reasons for the judgment of the first instance;

The reasoning of this Court’s judgment concerning this case is the same as that of the judgment of the first instance except for the addition as follows, and thus, the same is cited in accordance with the text of Article 420 of the Civil Procedure Act.

[Supplementary Parts]

○ The following legal principles shall be added to the 8th day below the judgment of the first instance court.

In order for a taxation disposition to be deemed null and void as a matter of course, the mere fact that there is an illegality in the disposition is insufficient, and its defect must be objectively obvious as it seriously violates the relevant statute (see, e.g., Supreme Court en banc Decision 2017Da242409, Jul. 19, 2018). Moreover, in a lawsuit claiming the invalidation of an administrative disposition as a matter of course, the party seeking the invalidation is responsible for asserting that the defect existing in the relevant administrative disposition is significant and apparent (see, e.g., Supreme Court Decision 82Nu154, Feb. 28, 1984).

Then, the plaintiffs asserted that the sales recorded in the end report of July 115, 125,135 are the proceeds of supply which include value-added tax, on the ground that "The above evidence is written in the end of July 19, 201 (including the value-added tax)" and "The sales" are written in the end of July 15, 125,135 (including the total of January and July 201) after the end of July 201. However, in light of the fact that "the sales" is written in "the end of July 201, 115,125, 135 won", and "the value-added tax 11,512,514 won" in the end of July 201, it is difficult to conclude that the above "value-added tax 100" is included in the above "the value-added tax 1000,000 won."

○ The following judgments shall be added to the 8th 14th 14th am.

“Other Plaintiff Park 00 argues that it is no basis for recognizing Plaintiff Park 00, the representative of the Plaintiff company, as a bonus for the Plaintiff Park 00, by deeming that the omitted amount of sales, etc. was leaked out of the company.

In a case where a juristic person fails to enter its sales in an account book despite the fact of sales, the total amount omitted in sales shall be deemed to have been leaked out, except in extenuating circumstances. In such a case, the special circumstance that the omission in sales is not leaked out, shall be proved by the claimant (see, e.g., Supreme Court Decision 2001Du2560, Dec. 6, 2002).

However, the Plaintiff Company did not assert and prove specific circumstances that the amount of income, such as cash, was under-reported by the Plaintiff Company from 2011 to 2013, and that Plaintiff Park Park 00 did not leak the amount of the return out of the company. Accordingly, Plaintiff Park Park 00’s allegation is without merit.

2. Conclusion

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