The burden of proving that the business has not been actually discontinued in case of submitting a report on the determination of business discontinuance and the report on business closure;

A business operator under the Value-Added Tax Act refers to a person who continues to provide goods or services with a form of business that may create added value and with repeated intent. The commencement, discontinuance, etc. of such business is determined by the substance of the relevant fact regardless of registration or reporting under the Act. However, if a business operator submits a written report of closure of business to the head of the competent tax office and claims that the report of closure of business is made by mistake and that the report of closure was not actually closed, it is necessary

Article 5(4) of the former Value-Added Tax Act (amended by Act No. 5032 of Dec. 29, 1995); Article 10(1) of the former Enforcement Decree of the Value-Added Tax Act (amended by Presidential Decree No. 14471 of Dec. 31, 1994); Article 6(1) and (2) of the former Enforcement Rule of the Value-Added Tax Act (amended by Ordinance of the Prime Minister No. 478 of Dec. 31, 1994)

Supreme Court Decision 84Nu102 Decided October 8, 1985 (Gong1985, 1481) Supreme Court Decision 87Nu909 Decided June 28, 198 (Gong1988, 1162)

[Judgment of the court below]

Head of Sungnam Tax Office

Seoul High Court Decision 94Gu33561 delivered on September 5, 1995

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

We examine the grounds of appeal.

The First Ground for Appeal

A business operator under the Value-Added Tax Act refers to a person who has a business form capable of creating added value and continuously supplies goods or services with repeated intent. The commencement, discontinuance, etc. of such business shall be determined by the substance of the relevant fact, regardless of registration or reporting under the Act (see, e.g., Supreme Court Decisions 84Nu102, Oct. 8, 1985; 87Nu909, Jun. 28, 1988); however, in a case where a business operator submits a written report of closure of business to the head of the competent tax office and claims that the report of closure was made by mistake and that the business operator was not actually closed, it is necessary to prove such fact.

The court below accepted the plaintiff's assertion that the report of business closure of this case was made by mistake and was temporarily suspended, not actually closed, and that the plaintiff was closed, in light of the above legal principles, and there is no error of law by misapprehending the legal principles as to the business closure under the Value-Added Tax Act. There is no ground for appeal.

The Second Ground of Appeal

In the event that an entrepreneur closes his business, the remaining goods shall be deemed to have been supplied to the entrepreneur at the time of the closure of his business, and the remaining goods shall not be deemed to have been produced or supplied as a result of the supply of the products to the manufacturing of the products while the entrepreneur who closes his business under the Value-Added Tax Act newly registers his business and operates the same kind of business as the previous one.

The decision of the court below to the same purport is just, and there is no error of law by misunderstanding the legal principles as to the legal fiction of self-supply of remaining goods upon closure of business. There is no ground for discussion.

Therefore, the appeal is dismissed and all costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Jeong Jong-ho (Presiding Justice)