Daejeon District Court 2010Guhap4836 ( October 12, 2011)

This disposition is legitimate at the time of acquisition due to the uncertainty of the date of settlement of price.

In the case of registration of transfer of ownership under the Act on Special Measures, if it is the principle that the date of liquidation is the time of acquisition and the date of liquidation is unclear, the date of receipt of registration shall be deemed the time of acquisition, so the disposition of reduction or exemption of capital gains tax shall be deemed the time of acquisition, and thus the disposition of reduction

Article 69 of the Restriction of Special Taxation Act

Article 162 of the Enforcement Decree of Income Tax Act

2011Nu2048 Invalidity of a disposition imposing capital gains tax

XX

Head of Hongsung Tax Office

Daejeon District Court Decision 2010Guhap4836 Decided October 12, 2011

March 29, 2012

April 19, 2012

1. The plaintiff's appeal is dismissed.

2. The action for the selective claim added in the trial shall be dismissed;

3. The costs of the lawsuit after the appeal shall be borne by the plaintiff.

On July 1, 2010, the judgment of the first instance is revoked. In choice, the defendant confirms that the imposition of capital gains tax of KRW 000 on the plaintiff in the year 2008 is null and void, or that the above disposition is revoked (the plaintiff added the claim for revocation of the above disposition to the court of the first instance).

1. Details of the disposition;

The reasoning for this Court’s explanation is as follows: “On July 1, 2010, July 7, 2010, the third party 1, July 7, 2010, and the third party 2 of the judgment of the court of first instance (“the Plaintiff filed the instant lawsuit on December 7, 2010 without filing an objection, a request for examination, or a request for adjudication.” This part of the judgment is identical to the corresponding column of the reasoning for the judgment of the court of first instance, and thus, it is cited as it is in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

2. Whether the instant disposition is lawful and valid

A. The plaintiff's assertion

1) Since the instant disposition has the following defects, it is a disposition to be cancelled in an unlawful manner, or its defect is so serious and clear that it is null and void.

① The Plaintiff was unable to receive a tax notice.

② On May 20, 192, the Plaintiff entered into a contract with LA to purchase each of the instant land, and completed the remainder payment with LA around June 20, 1992, on or around April 11, 1998, the remainder payment date indicated in the contract, and acquired each of the instant land and directly cultivated the instant land 1 for not less than eight years while residing in the neighboring area, so the Plaintiff met the requirements for reduction and exemption of capital gains tax on the instant land 1 pursuant to Article 69 of the former Restriction of Special Taxation Act, even though the Defendant met the requirements for reduction and exemption of capital gains tax on the instant land 1.

③ In the case of registration of transfer of ownership under the Act on Special Measures, if the time for payment is not specified, the acquisition date of the first land acquisition time of this case by the Plaintiff shall be recognized as the time of acquisition. Thus, even though the time of acquisition of the first land of this case on May 20, 1992, the date of registration is the date of acquisition, the Defendant shall be deemed the date of acquisition, which is the date of receipt of the registration,

④ A public official in charge of Hongsung Tax Co., Ltd. requested the Plaintiff, who was found to be a tax office after receiving a demand notice around August 2010, to submit financial data proving that the payment was made in full on or around 1992 without guiding the Plaintiff about the period of objection for 90 days, and notified the Plaintiff that the objection period was not subject to capital gains tax reduction or exemption on or around November 201, 2010, when the objection period was over. The Plaintiff failed to go through the procedure of the previous trial because it waits for the result of the said internal investigation.

2) In addition, on December 24, 2009, female public officials in distress of the name of the Hongsung tax secretary stated to the effect that the Plaintiff should pay transfer income tax to the Plaintiff upon submitting the written confirmation and a certificate of personal seal impression, etc. on or around December 24, 2009, and the Plaintiff was engaged in a livelihood business with respect to the transfer income tax while forgotten, but thereafter, the Defendant issued a demand notice of default of transfer income tax on around August 2010 to the public official in charge of the change of the public official in charge. This is contrary to the good faith, and thus the instant disposition is null and void as a defect of significant and apparent administrative act.

B. Relevant statutes

The court's explanation on this part is the same as the statement in the corresponding column of the judgment of the court of first instance. Thus, it is citing this in accordance with Article 8 (2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

C. Determination

1) As to the part on the revocation claim

In filing an appeal seeking a cancellation of a disposition imposing tax, an appeal shall be filed by filing a request for examination or adjudgment which is a prior trial procedure and subject to a decision on such request (Articles 55 (1) and 56 (2) of the Framework Act on National Taxes; Article 18 of the Administrative Litigation Act); and a request for examination or adjudgment shall be filed within 90 days from the date on which the notice of the relevant disposition is received (Articles 61 (1) and 68 (1) of the Framework Act on National Taxes); in order to make a request for examination or adjudgment after filing an objection, the appeal shall be filed within 90 days from the date on which the decision on the objection is notified (Articles 61 (2) and 68 (2) of the Framework Act on National Taxes), and in cases where the request for examination or adjudgment is illegal due to the lapse

In full view of the purport of the arguments in Eul's evidence Nos. 3, 4, and 6 (including each number), it is reasonable to view that the defendant received a tax payment notice from the plaintiff on July 1, 2010, and received a tax payment notice on July 6, 2010 on the plaintiff's transfer income tax of 000 won for the year 2008. On July 6, 2010, the plaintiff sent the tax payment notice (the corrected tax amount of 00 won) by registered mail (registration number 00,0000) to 215-1, the plaintiff's domicile. The plaintiff's wife, who is a person living with the plaintiff, received the tax payment notice from the above domicile on July 7, 2010 and signed the special delivery certificate, and therefore, the plaintiff received the tax payment notice on July 7, 2010 for the plaintiff's non-compliance with the requirements of this case's administrative appeal procedure for the disposition in this case as unlawful.

2) As to the claim for nullification confirmation

A) First, the Plaintiff’s assertion that the Plaintiff was unable to receive a tax payment notice on July 7, 2010 is acceptable, since the fact that the Plaintiff was served a tax payment notice by registered mail was as seen above.

B) Whether the capital gains tax reduction requirements are met

In an administrative litigation claiming the invalidity of an administrative disposition as a matter of course and seeking the invalidity confirmation thereof, the Plaintiff is liable to assert and prove the reason why the administrative disposition is null and void (Supreme Court Decision 99Du11851, Mar. 23, 200). Moreover, the fact that the land transferred to another party, such as the land of this case, as the land of this case, falls under the requirements for reduction and exemption of capital gains tax, because it has been owned for more than eight years, should also be proven as the transferor.

According to Gap evidence No. 7, the plaintiff was registered as a farmer in the farmland ledger from May 20, 1992, and a copy of the real estate sales contract (Evidence No. 3) stating that the date of the remainder payment was set on June 20, 1992 when the plaintiff purchased each of the land of this case from Guro on May 20, 1992, and a copy of the receipt (Evidence No. 4) stating that the plaintiff paid 00 won in full payment out of the remainder payment to Jongno on April 11, 1998. The land seller sold the land of this case No. 1 to the plaintiff on May 20, 192, but the registration of transfer was not completed due to his personal reason, and the plaintiff was also obligated to sell the land of this case to the plaintiff on July 5, 2006 and the certificate No. 2149, Dec. 16, 200 (Evidence No. 4).

However, in light of the following circumstances acknowledged by the aforementioned evidence, it cannot be deemed that there is any defect in the disposition of this case since it is difficult for the Plaintiff to recognize that the Plaintiff paid all the remaining purchase and sale of the land of this case to the Dong on June 20, 1992 or April 11, 198, or that the land of this case was cut down for not less than eight years. Thus, the Plaintiff’s assertion on this part cannot be accepted.

① The fact that the registration of transfer has been completed for about 14 years after the payment of the purchase price in full is difficult to obtain it easily unless there is a special relation or circumstance between the parties to the transaction. Accordingly, the plaintiff alleged that the personal situation of the party to the transaction was due to the seller. On the other hand, the witness of the first instance court stated that the plaintiff was due to the seller's personal situation, and that the document required by the plaintiff or the real estate intermediary was all harmed. However, even though the payment was made in full as the plaintiff's assertion, if the registration of transfer was delayed due to the personal reason of the doorA, the plaintiff who was not known to each other would be in accord with the empirical rule to take any measure against the loss that may occur in the future, and even if the plaintiff appears to have neglected it for 14 years without any measure, it is difficult to believe the plaintiff's above assertion. On the other hand, if all necessary documents were delivered, there is no reasonable reason to suggest that the plaintiff delayed the registration of transfer for 14 years or has completed the registration in accordance with the Act.

② The sales contract and receipts (Evidence A 3 and 4) submitted by the Plaintiff are all copies and the originals were not submitted. Furthermore, the above receipts (Evidence A 4) are the only direct evidence of the Plaintiff’s payment of the remainder to the literatureA on April 11, 1998. According to the result of the court’s order to submit documents against the Defendant at the court of first instance, it appears that the above receipts were not included in the supporting documents submitted by the Plaintiff to the Defendant prior to the filing of the instant lawsuit. According to the evidence evidence No. 5, the Plaintiff’s assertion that the property tax for the first land of this case for the first year before 2003 does not exceed KRW 2,000,000,000 as stated in the above receipts was paid to the Defendant for deliberation following the payment of the property tax of the literatureA is not easily accepted, and thereafter, the Plaintiff’s assertion that part of the remainder of the Plaintiff’s transfer registration against the above KRW 100,000 was rejected as evidence, but it is not inconsistent with the assertion and submission of the remainder.

③ There is no direct evidence supporting the Plaintiff’s direct cultivation of the land No. 1 in addition to the statement by the witness of the first instance trial. However, the testimony by the literatureA merely stated that “the Plaintiff appears to have cultivated the land No. 1 in the instant case, and that there is little room for the Plaintiff to look at the tobacco fry of the land No. 1 in the instant case from the Plaintiff who was carrying the tobacco fry on the truck.” Thus, the testimony alone is insufficient to promptly recognize the fact that the Plaintiff fryed the land No. 1 in the instant case for not less than eight years.

C) For registration of transfer of ownership under the Act on Special Measures, on the date of payment

According to the provisions of Article 98 of the former Income Tax Act (amended by Act No. 9897 of Dec. 31, 2009; hereinafter referred to as the "former Income Tax Act") and Article 162 of the Enforcement Decree of the same Act (amended by Presidential Decree No. 22034 of Feb. 18, 2010), in calculating gains on transfer of assets, the time of acquisition and transfer shall be regarded as "the date of settlement of the price". However, in principle, if the date of liquidation is unclear, it shall be regarded as the date of receipt of registration.

The Plaintiff’s assertion purport that in the case of transfer registration of ownership under the Act on Special Measures for Land 1, if the date of liquidation is unclear, the time of acquisition shall be recognized as the date of registration rather than the date of receipt of the registration. However, it is only the Plaintiff’s independent view, which is inconsistent with the above provision of the Act and subordinate statutes, and rather, it is more reasonable to strictly interpret the above provision, which accords with the principle of no taxation without law and fair taxation, and thus, the Plaintiff’s assertion on this part

D) As to the Defendant’s assertion that the appeal period has lapsed

The issue of whether there is a defect in the disposition of this case shall be determined at the time of the disposition of this case. This part of the plaintiff's assertion is merely the purport of the defendant's responsibility with respect to the process during which the appeal period has lapsed after the disposition of this case, and it is not an circumstance to determine the legitimacy of the disposition of this case. Thus, the plaintiff's assertion of this part

E) As to the assertion that it violates the good faith principle

In order to apply the principle of trust and good faith to the tax authorities' acts in tax law relations, the tax authorities should name the public opinion list subject to trust of taxpayers, and the public opinion list of the tax authorities should be made by the tax officials in a position of responsibility in principle.

However, the plaintiff's assertion that "No evidence exists to acknowledge that female public officials in charge of the transfer of each land of this case need to pay the transfer income tax to the plaintiff on or around December 2009 in the name of the Hongsung tax secretary, and even if it is assumed that such fact is recognized, it cannot be viewed as a public opinion list of the tax authorities, so the plaintiff's assertion on this part cannot be accepted.

F) Ultimately, the Plaintiff’s above assertion that there is a defect in the disposition of this case is not recognized. Thus, the Plaintiff’s assertion that the defect is serious and clear cannot be accepted without any need to further examine.

3. Conclusion

Therefore, the plaintiff's claim to nullify the invalidity is dismissed as it is without merit, and the lawsuit for the selective claim added in the trial is dismissed as unlawful, and the judgment of the court of first instance which dismissed the plaintiff's claim to nullify the invalidity is legitimate. Therefore, the plaintiff's appeal is dismissed and the lawsuit for the selective claim added in the trial is dismissed. It is so decided as per Disposition.