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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Case summary

A. On October 24, 2012, the Plaintiff is a corporation established with the Songpa-gu Seoul Metropolitan Government D as its principal office for the purpose of running food, agricultural and fishery products, and various miscellaneous products sales business, etc.

B. On April 10, 2013, the Plaintiff acquired the instant land 2,409 square meters (hereinafter “instant land”) in Suwon-si, Suwon-si, Suwon-si, and reported and paid a total of KRW 184,719,040,00, including acquisition tax. On December 30, 2013, the Plaintiff newly constructed a building with a total of KRW 4,960,93 square meters on the instant land on the third floor and rooftop (hereinafter “instant building”) and acquired the instant land, and filed a return on and pay acquisition tax, etc. total of KRW 105,746,940.

C. The Plaintiff is running a wholesale and retail business of agricultural and fishery products, industrial products, etc. with the trade name of “E” in the remaining part of 212.3 square meters (hereinafter “the instant building part”) among the total store size 1,616.35 square meters.

From February 6, 2014 to October 9, 2015, the Plaintiff leased the instant building part for the purpose of the sale store of clothes, pet cards, etc., beauty art center, general restaurant, etc., respectively.

E. On July 31, 2017, the Defendant imposed and collected acquisition tax on the instant land KRW 32,782,770 on the Plaintiff, and KRW 6,134,520 on local education tax, and KRW 10,492,490 on the instant building, and KRW 1,956,190 on the local education tax.

(hereinafter “Disposition in this case”). For that reason, the Plaintiff’s lease of the instant building to a third party cannot be deemed as direct use of acquisition tax and excluded types of business, such as the distribution industry under the Distribution Industry Development Act, and thus, heavy tax rates should apply.

2. The lower court determined that the instant disposition was lawful on the following grounds.

Acquisition tax on the "real estate acquired within five years after the establishment of a corporation in a large city" under the Local Tax Act and subordinate statutes.