Cho Jae-2017-China-526 (Law No. 17, 2017)

Whether a seller can receive a refund of value-added tax paid by the purchaser pursuant to the special case of payment by the purchaser.

A lawsuit related to the refund of overpaid or erroneously paid amount by a purchaser is not subject to appeal litigation but subject to civil litigation.

Special Cases concerning the payment of value-added tax by purchasers of 9 ices, etc. under Article 106 of the Restriction of Special Taxation Act

Incheon District Court-2017-Gu Partnership-53167 (Law No. 25, 2018)

MaO

O Head of the tax office and one other

8.04.27

2018.05.25

1. All of the instant lawsuits are dismissed.

2. The costs of lawsuit shall be borne by the Plaintiff.

A. The part concerning the claim for revocation of each rejection notice of this case

1) Defendant ○○ Head of the tax office’s defense on the principal safety

Each of the instant requests for correction is nothing more than seeking refund of value-added tax already reduced through the decision of correction of each of the instant applications. As such, the Defendant’s notification of each of the instant requests for correction of value-added tax is not a rejection disposition against value-added tax claim, but merely a simple decision of rejection. However, the Plaintiff is disputing each of the instant notifications of rejection that are not recognized as disposition. As such, among the instant lawsuits, the part concerning each of the instant requests for revocation of notification of rejection

2) Determination

Articles 51(1) and 52 of the Framework Act on National Taxes merely provide for the procedures for refund of tax refund and additional dues, for internal administrative affairs of which the right to claim refund becomes final and conclusive. Thus, the right to claim refund is not finalized only by the determination of national tax refund (including additional dues). Thus, the determination of whether to claim refund of national tax refund or the right to claim refund of a request for a decision is not a disposition that specifically and directly affects the existence or scope of the right to claim refund owned by the taxpayer, and thus cannot be deemed a disposition subject to appeal litigation (see, e.g., Supreme Court Decision 2001Du8780, Nov. 8, 2002).According to the overall purport of the facts and arguments, the following facts are as follows: ① Defendant ○○○ Head of a tax office rendered a decision of correction of each of the instant cases with the effect that the amount of value-added tax imposed initially subtracting the sales of each tax invoice of this case from the tax base of value-added tax for 1 and 2 years; ② thereafter, each of this case’s claim for refund of value-added tax cannot be accepted by Defendant ○.

Examining the above facts in light of the relevant legal principles as seen earlier, the notice of refusal by the head of ○○ Tax Office of this case is not a rejection disposition against the claim for the correction of value-added tax, but merely a notice of refusal to refund the Plaintiff’s claim for each of the value-added tax already reduced by the decision of each reduction of this case. Therefore, it cannot be deemed that the Plaintiff’s specific and direct impact on the existence or scope of the right to claim the refund of value-added tax of this case. Thus, the Defendant’s defense on this issue does not constitute a “disposition” subject to appeal. Accordingly, the Defendant’s defense on this issue is justified.

B. Part of claim for refund of value-added tax

1) Defendant Republic of Korea’s defense

On August 8, 2017, the Plaintiff filed a civil lawsuit against the Defendant Republic of Korea seeking refund of the amount of tax reduced due to the decision to correct the reduction of the amount of tax in this case, and filed a party lawsuit on December 30, 2017 with respect to the same subject matter of tax on the same date, which constitutes a duplicate lawsuit, and thus, is unlawful.

2) Determination

A) The consolidation of related claims under Articles 10 and 44(2) of the Administrative Litigation Act requires that a lawsuit seeking revocation should be lawful. Thus, in a case where a lawsuit seeking revocation is dismissed on the grounds that its original revocation is unlawful, the joined claims shall be dismissed as they fail to satisfy the requirements for the lawsuit (see Supreme Court Decision 95Nu13708, Mar. 14, 1997). Therefore, as long as the lawsuit claiming revocation of each of the instant refusal notification by the principal claimant should be dismissed as illegal, the above part claiming the payment of refund, which is a combined claim, shall not be dismissed as being inappropriate due to the lack of the requirements for the lawsuit.

B) Meanwhile, the main text of Article 51(1) of the Framework Act on National Taxes provides that “if a taxpayer has erroneously paid or overpaid the amount of national tax, surcharges, or expenses for disposition on default, or there is a tax refund to be refunded under the tax-related Acts, the head of a tax office shall immediately determine such erroneous amount, excess amount, or refundable amount as a refund of national tax.” Article 51(1) of the Framework Act on National Taxes declares the legal doctrine that in a case where there has already been erroneous payment, the existence and scope of which have already been determined as unjust enrichment, it would be reasonable for the State to immediately return such erroneous amount without waiting for a taxpayer’s application for refund. As such, the amount of erroneous payment, the existence and scope of which have already been determined, may be claimed by a taxpayer as a civil suit seeking a return of unjust enrichment (see, e.g., Supreme Court Decisions 2008Da2918, Apr. 23, 2009; 2013Da212639, Aug. 27, 2015).

C) Ultimately, the part of the claim for the payment of value-added tax in the instant lawsuit in no further need to be determined on the Defendant Republic of Korea’s main defense is deemed unlawful.

3. Conclusion

Therefore, since all of the lawsuit of this case is unlawful, it is decided to dismiss it as per Disposition.