Seoul Administrative Court-2017-Gu Partnership-76302 ( October 16, 2019)

Tax Tribunal-2016-C-4191 ( October 31, 2017)

Whether the bad debt amount of a debt-equity swap is deducted

(The same as the first instance court) The rehabilitation claim can be deemed to have been confirmed as irrecoverable in case the whole amount of capital reduction without compensation due to conversion of investment according to the rehabilitation plan, but the rehabilitation claim cannot be deemed to have been confirmed as irrecoverable in case only a part of the shares converted into investment has been reduced.

Article 45 of the Value-Added Tax Act

Seoul High Court 2019Nu47393 Disposition Revocation of Value-Added Tax Imposition

○ Construction Corporation

○ Head of tax office

November 1, 2019

November 29, 2019

1. The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's lawsuit corresponding to the revoked part shall be dismissed;

2. 3/5 of the total costs of the lawsuit shall be borne by the Plaintiff, and the remainder 2/5 by the Defendant, respectively.

1. Purport of claim

On August 1, 2016 and October 4, 2016, the Defendant revoked the Defendant’s disposition of increasing or decreasing KRW 000,000,000 in total value-added tax for the second period of 2015 against the Plaintiff.

2. Purport of appeal

The part against the defendant in the judgment of the court of first instance shall be revoked, and the plaintiff's claim corresponding to the revocation shall be dismissed.

1. Determination ex officio on the part of KRW 00,000,000 among the dispositions of this case

When an administrative disposition is revoked, such disposition shall lose its validity, and no longer exists, and a revocation lawsuit against a non-existent administrative disposition is unlawful as there is no benefit of lawsuit (see, e.g., Supreme Court Decision 2009Du16879, Apr. 29, 2010).

If the purport of the entire pleadings is added to the statements in the evidence Nos. 28 and 29, it can be acknowledged that the defendant ex officio cancelled the amount of KRW 00,000,000, which is the portion increased in excess of KRW 000,000 among the dispositions in this case on October 29, 2019 during the trial proceeding (the part against the defendant in the first instance trial). As such, among the lawsuits in this case, the above revoked part of the lawsuit in this case is seeking revocation of a disposition that has already lost its validity, and thus, it became unlawful as there is no interest in the lawsuit.

2. Whether the increased tax amount of KRW 454,711,750 among the dispositions of this case is legitimate

The reasoning for the judgment of the court concerning this part is the same as that of the judgment of the court of first instance, and thus, this part is cited in accordance with Article 8(2) of the Administrative Litigation Act and Article 420 of the Civil Procedure Act.

3. Conclusion

Thus, the plaintiff's lawsuit amounting to KRW 00,000,00 among the dispositions of this case (the part against the defendant of the first instance court), which has increased in excess of KRW 00,000 among the dispositions of this case (the part against the defendant of the first instance court), shall be dismissed, and the remainder of the plaintiff's claim shall be dismissed without any justifiable reasons. Since the defendant revoked the part against the defendant of the first instance court among the dispositions of this case, the part against the defendant of the first instance court in the judgment of the first instance shall be revoked, and the plaintiff's lawsuit amounting to the revoked part shall be dismissed in the conclusion of the judgment of the first instance, and the bearing of the total costs of the lawsuit shall be determined