School Foundation Public Educational Institutes (Law Firm Erasing, Attorneys Kim Jong-mun et al., Counsel for the defendant-appellant)

Head of Pyeongtaek Tax Office

April 28, 2016

1. The plaintiff's claim is dismissed.

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

The Defendant’s imposition of securities transaction tax of KRW 82,064,280 against the Plaintiff on February 26, 2014 is revoked.

1. Details of the disposition;

A. On August 28, 2002, the Plaintiff was donated 98,000 shares of Daejeon Cultural Broadcasting Co., Ltd. (hereinafter “ Daejeon Cultural Broadcasting”) (hereinafter “instant shares”) from the Nonparty (hereinafter “instant gift agreement”) and completed the Plaintiff’s transfer of ownership regarding the said shares.

B. Nonparty 2 and Nonparty 3 filed a lawsuit against the Plaintiff seeking revocation of the instant donation contract and delivery of the instant shares on the ground that the Plaintiff was a fraudulent act. On October 20, 2005, the court of first instance rendered a ruling to cancel the instant donation contract as a fraudulent act and to deliver the instant shares to Nonparty 2 and Nonparty 3 (Seoul Central District Court Decision 2003Da62656, 204Gahap9560, Oct. 20, 200) (the Seoul Central District Court Decision 2003Da62656, 204Gahap9560, Oct. 20, 200). The judgment of first instance became final and conclusive on May 10, 207 (Seoul High Court Decision 2006 or 105Da120747, Dec. 7, 2006).

C. On December 14, 2007, the Daejeon Cultural Broadcasting transferred the instant shares to the Nonparty in accordance with the previous final judgment. On April 24, 2008, the auction procedure was initiated for the instant shares with respect to the instant shares upon the application of the Korea Comprehensive Finance Corporation. On April 24, 2008, the said shares were sold at KRW 5,265,900,000 among the instant shares to the Busan Steel Co., Ltd. for KRW 38,000 on May 14, 2008, and the remaining KRW 38,810,000 shares among the shares was sold to the Busan Steel Co., Ltd. for KRW 38,810,000 on May 14, 200 (hereinafter referred to as the “sale of this case”). The said shares were purchased in combination with the Jeonju Construction Industry Co., Ltd.

D. On February 10, 2013, the Defendant rendered a disposition imposing securities transaction tax amounting to KRW 4,118,940 on the non-party on the sales of the instant shares, deeming that the value of the instant shares was KRW 490,000,000 as its tax base.

E. Since then, on February 26, 2014, the Defendant: (a) deemed a transferor of shares as the Plaintiff; and (b) revoked the imposition disposition of the said securities transaction tax against the Nonparty; and (c) rendered a disposition imposing securities transaction tax (including additional tax for negligent return and for negligent payment) KRW 82,064,280 on the Plaintiff by regarding the Plaintiff as the tax base (= KRW 5,265,90,000 + KRW 3,810,000 + KRW 3,810,000).

【Ground of recognition】 The fact that there is no dispute, Gap's No. 1, 4, 7, 8, 11, 15, Eul's evidence No. 1 (including all evidence attached with a serial number), and the purport of the whole pleadings

2. Summary of the parties' arguments;

A. The Plaintiff did not transfer the shares of this case to the mountain, mountain, mountain and mountain, etc., and did not receive the proceeds of sale or gain any profit from the consideration, and the person who received the benefit of the decrease in the debt due to the successful bid is the Nonparty, and thus, it cannot be deemed that the Plaintiff transferred the shares of this case at a cost, and thus

B. On February 10, 2013, the Plaintiff rendered a disposition imposing securities transaction tax of KRW 4,118,940 by deeming the Nonparty as the transferor, but without any special change in circumstances, against the Plaintiff. It is unlawful as it imposed duplicate taxation on the same matter.

C. The Defendant imposed securities transaction tax on the non-party, a representative of the Plaintiff prior to the instant disposition, on the non-party. This constitutes an expression of public opinion that the transferor is the non-party. In particular, the Plaintiff trusted that it did not make a return and payment for the payment of securities transaction tax, and the Plaintiff’s imposition of the additional tax for negligent payment and the additional tax for negligent payment in arrears in the instant disposition is contrary to the principle of trust protection.

D. The Defendant violated the National Tax Collection Act by failing to request the delivery of the proceeds from the auction procedure of the instant shares under the National Tax Collection Act, thereby unfairly infringing the Plaintiff’s property right.

E. Therefore, the instant disposition should be revoked as it is unlawful.

3. Relevant statutes;

The entries in the attached Table-related statutes are as follows.

4. Determination

A. Whether the Plaintiff transferred the instant shares at a cost in the mountain, mountain, mountain, and mountain.

1) The main text of Article 1 and Article 2(3) of the former Securities Transaction Tax Act (amended by Act No. 9274, Dec. 26, 2008) stipulate that securities transaction tax shall be imposed on the transfer of share certificates; “transfer” refers to the transfer of share certificates at a cost due to contractual or legal causes. According to the above provisions, securities transaction tax is a distribution tax regardless of whether the ownership of share certificates is transferred at a cost (see Supreme Court Decision 2007Du14695, Sept. 10, 200).

Meanwhile, the revocation of a fraudulent act by exercising the right of revocation under Article 406 of the Civil Act and restitution of a deviation property to the original state is only effective in relation to the creditor, beneficiary, or subsequent purchaser, and it does not directly acquire the debtor's right (see Supreme Court Decision 98Du11458, Dec. 8, 2000). In other words, even if the creditor is ordered against the beneficiary or subsequent purchaser to restore the ownership of the property in the debtor's future, he is considered as the debtor's responsible property in relation to the creditor, and the debtor does not acquire the right of ownership or disposal (if the creditor has left the proceeds in the compulsory auction procedure for which the creditor filed an application for the right of revocation of a fraudulent act and restitution of the deviation property in the auction procedure, the surplus is still paid to the beneficiary in the status of the actual owner). Therefore, the transferor shall be deemed as the beneficiary or subsequent purchaser, who transfers the ownership of the third party that does not affect the revocation of the fraudulent act if the property was sold in the auction procedure.

2) In light of the above legal principles, the sale of the shares in this case at an auction, which is a kind of sale, is a transfer of ownership at a cost due to legal causes, and the sale price is not attributed to the plaintiff, but is used as a dividend to the non-party's creditors. The transfer of shares in this case is not a transfer at a cost. The cancellation of the donation contract in this case was cancelled in accordance with the previous final judgment, and the name of the non-party was restored in the future, but the validity of the judgment revoking the fraudulent act was restored only to the non-party, and the non-party did not acquire the ownership or disposal authority of the shares in this case. As seen above, in relation to the third party other than the creditor, the plaintiff who is the beneficiary, and the securities transaction tax has the nature of the distribution tax imposed regardless of the occurrence of profits if the ownership is transferred at a cost. Thus, it is reasonable to deem that the plaintiff is a transferor of the shares in this case's sale.

Therefore, the plaintiff's assertion against this is without merit.

B. Whether the instant disposition constitutes double taxation

As seen above, the defendant initially imposed the securities transaction tax on the non-party upon the sale of this case, but revoked it ex officio and issued the disposition of this case against the plaintiff. According to such circumstances, the disposition of this case cannot be deemed as a double taxation.

Therefore, the plaintiff's assertion on this part is without merit.

C. Whether the instant disposition violates the principle of trust protection

In general, in administrative legal relations, in order to apply the principle of trust protection to the acts of administrative agencies, administrative agencies should have first given the name of public opinion that is the subject of trust to individuals (see Supreme Court Decision 2004Du13592, Feb. 24, 2006, etc.). The defendant is not obliged to impose the securities transaction tax on the non-party on February 10, 2013, or the Seoul regional tax office made a decision of revocation of fraudulent act on February 2013, it cannot be deemed that the plaintiff expressed a public opinion that the securities transaction tax should not be imposed on the sale of this case on the non-party on the sole ground that there is a lack of settlement of suspicion against the non-party regarding the fact that the shares of this case are transferred to the non-party. In addition, Article 10(1) and (2) of the former Securities Transaction Tax Act provides that the taxpayer is liable to pay the tax base and tax amount each month to the head of the competent tax office by the 10th day of the following month.

Therefore, the disposition of this case cannot be deemed to violate the principle of trust protection, and there is no justifiable reason to believe that the plaintiff cannot be found to have attributable to the failure to report the securities transaction tax and to pay the tax. Therefore, the plaintiff's assertion on this part is

D. Whether the failure to request the delivery violates the Framework Act on National Taxes

A claim for delivery under the former National Tax Collection Act (amended by Act No. 10527, Apr. 4, 2011) is a claim for distribution of delinquent taxes by joining a compulsory refund procedure that is already in progress by a tax authority, and where a taxpayer fails to fulfill a tax obligation, the tax authority may take over the compulsory refund procedure that is already in progress and request a distribution from the money realized of the object without directly participating in the procedure. Thus, the instant disposition, which is the tax imposition disposition, which is the cause of the tax claim collection procedure, cannot be deemed unlawful, cannot be deemed as the grounds for the above procedural reasons that constitute the collection procedure of the tax claim, and thus, the Plaintiff’s allegation in this part is without merit without any further need.

5. Conclusion

Therefore, the plaintiff's claim of this case is dismissed as it is without merit. It is so decided as per Disposition.

(attached Form omitted)

Judges Hah-man (Presiding Judge) Kim Jong-Un, Kim Jong-sung (Inability to affix his/her signature and seal on maternity leave)