The case holding that the court below erred in the misapprehension of legal principles on the premise that the revocation claim is no longer established on the premise that the revocation claim is revoked by the first correction disposition on the ground that the increase in corporate tax for the business year 2004 was revoked on or around February 5, 2006, and that the second correction disposition on March 31, 2004, the statutory due date of return of corporate tax for the business year 2004, before the expiration of the due date of request for correction from March 31, 2005, which was the statutory due date of return of corporate tax for the business year 2004, was unlawful, since the correction disposition on December 5, 2006, which was issued on or before the expiration of the due date of request for correction, on the ground that the increase in corporate tax for the business year 2004, was revoked by the first correction disposition.

Article 45-2(1) of the former Framework Act on National Taxes (Amended by Act No. 7528, Jul. 13, 2005); Articles 22-2(1) and 45-2(1) of the former Framework Act on National Taxes (Amended by Act No. 9911, Jan. 1, 2010); Article 45-2(2) of the Addenda (Amended by Act No. 9911, Jul. 13, 2005); Articles 12 and 19 of the Administrative Litigation Act

KPK Co., Ltd. (Law Firm LLC, Attorneys So-young et al., Counsel for the plaintiff-appellant)

Head of Ulsan District Office

Busan High Court Decision 2010Nu4414 decided January 14, 2011

The part of the judgment of the court below against the plaintiff concerning the imposition of corporate tax for the business year 2004 shall be reversed, and that part of the case shall be remanded to Busan High Court. The remaining appeal shall be dismissed.

The grounds of appeal are examined.

1. Article 22-2(1) of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter the same) provides that “The rectification that increases the amount of tax initially finalized under tax-related Acts shall not affect the rights and obligations under this Act or other tax-related Acts with respect to the amount of tax initially finalized.”

In light of the language and text of the above provision and the legislative purport of the above provision are to restrict any objection against the amount of tax in the initial return or decision which cannot be raised any longer due to the lapse of the objection period or the period of filing a request for correction, etc., if a request for increase or correction is made, the initial return or decision should lose its independent existence value due to the absorption of the disposition for increase or correction, and as a matter of principle, a taxpayer shall be subject to an appeal litigation, and a taxpayer may also assert any illegal cause as to the initial return or decision in the appeal litigation. However, even though the period of objection or the period of filing a request for correction cannot be claimed any longer than the limit of the amount of tax increased by the increase or correction (see, e.g., Supreme Court Decisions 2006Du17390, May 14, 2009; 2008Du2280, Apr. 14, 2011; 208Du9814, Apr. 14, 2011).

2. (a) The lower court accepted the Plaintiff’s request for reduction of KRW 2,649,491, KRW 203,934, and KRW 34,402,929 for the business year 204, and notified the Plaintiff of the revised depreciation rate of KRW 200 for the business year 20,000 upon the premise that the revised depreciation rate of KRW 20 for 20,000 for 20,000 for 20,000 for 20,000 for 30,000,000 for 20,000,000 won for 20,000,000 won for 20,000,000 won for 20,000,00 won for 20,000,000 won for 3,00,000 won for 2,000,00 won for 2,06,000.

B. (1) First, even if the increased amount of duty among the instant adjustment disposition was revoked by the first adjustment disposition, it constitutes a part of the original adjustment disposition as it was incorporated into the instant adjustment disposition, and thus, it is erroneous that the lower court determined that the instant adjustment disposition was entirely revoked by the first adjustment disposition and did not exist any longer.

(2) However, even if a correction disposition is made as seen earlier, the original return tax or final tax amount that cannot be raised any longer due to the lapse of the objection period or the period for filing a request for correction cannot be claimed to be revoked. Therefore, we examine whether there exists any part of the claim for revocation, which is already sought for revocation of such tax amount.

Article 45-2(1) of the former Framework Act on National Taxes (amended by Act No. 7528, Jul. 13, 2005; hereinafter “former Framework Act on National Taxes”) provides the period for filing a request for correction within two years after the statutory due date of return expires, but Article 45-2(1) of the amended Framework Act on National Taxes (hereinafter “amended Act”) provides that the period for filing a request for correction shall be within three years after the statutory due date of return expires, and Article 45-2(2) of the Addenda provides that the amended provision shall apply to a request for decision or correction for which the period for filing a request for correction has not expired under the former provisions of Article 45-2(1) of the former Framework Act on National Taxes (amended by Act No. 7528, Jul. 13, 20

However, in the case of corporate tax for the business year 2002, on December 5, 2006, after the two-year period for filing a request for correction from March 31, 2003, which was the statutory due date of return, passed by the two-year period for filing the request for correction under the former provisions prior to the amendment, the plaintiff cannot dispute this within the scope of the tax amount reported by the corporate tax return for the business year 2002, or seek a revocation by dissatisfaction. Thus, the conclusion of the court below's rejection of the lawsuit seeking the revocation of the disposition imposing corporate tax for the business year 202 is justifiable, and the above error of the court below did not affect the conclusion of the judgment. The ground for appeal pointing this out is not acceptable.

However, in the case of corporate tax for 2004 business year, from March 31, 2005, the statutory due date of filing the request for correction from March 31, 2005, before the expiration of the statutory due date of filing the request for correction, the Plaintiff is entitled to seek cancellation as well as the amount of tax initially reported, but the lower court rejected the claim seeking cancellation on the premise that the correction of corporate tax for 2004 business year was revoked by the first reduction and correction, and no longer exists. In so doing, the lower court erred by misapprehending the legal doctrine on Article 22-2(1) of the former Framework Act on National Taxes, thereby adversely affecting the conclusion of the judgment. The grounds of appeal on this part are with merit ( insofar as the amount of tax initially reported constitutes a part of the correction correction disposition by absorption of the amount of tax initially reported, which constitutes a revocation disposition after filing a lawsuit against the revocation disposition, and thus, the revocation disposition also becomes appropriate, barring any special circumstances, to the extent that the taxpayer has no interest in the revocation disposition as well as the revocation disposition.

3. Therefore, the part of the judgment of the court below against the plaintiff regarding the disposition imposing corporate tax for 2004 business year is reversed, and that part of the case is remanded to the court below for further proceedings consistent with this Opinion. The remaining appeal by the plaintiff is dismissed. It is so decided as per Disposition by the assent of all participating Justices on

Justices Lee Sang-hoon (Presiding Justice)