[1] Whether a violation of Article 110 subparag. 1 of the Attorney-at-Law Act and a violation of Article 111(1) may be established in a case where even an attorney-at-law who has been commissioned legal cases on a regular basis may evaluate that the pretext of receiving money and valuables is irrelevant to his/her status and scope of duties (affirmative)

[2] The period during which value-added tax evasion was committed (i.e., the period from January 1 to June 30 of the first term portion, and from July 1 to December 31 of the second term portion, 25 days after the end of each taxable period, respectively)

[1] Articles 2, 3, 110 Item 1, and 111 (1) of the Attorney-at-Law Act / [2] Articles 3 (1) and (5) of the Punishment of Tax Evaders Act, Article 5 (1) Item 2, and Article 49 of the Value-Added Tax Act

[1] Supreme Court Decision 2005Do3255 Decided November 23, 2006 (Gong2007Sang, 82) Supreme Court Decision 2002Do3600 Decided June 28, 2007 (Gong2007Ha, 1195) Supreme Court Decision 2012Do2409 Decided January 31, 2013 / [2] Supreme Court Decision 2008Do680 Decided March 27, 2008 (Gong2008Sang, 642)

Defendant

Defendant

Attorneys Han Jae-chul et al. and four others

Seoul High Court Decision 2017No203 decided July 21, 2017

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. As to each violation of the Attorney-at-Law Act

A. Violation of the rules of evidence and misapprehension of the legal principle on Article 110 subparagraph 1 of the Attorney-at-Law

1) Article 110 Subparag. 1 of the Attorney-at-Law Act provides that an attorney-at-law shall be punished for receiving or promising to receive money, valuables, or other benefits under the pretext of offering them to or associating with a judge, prosecutor, or other public officials of a trial and investigative agency. Article 111(1) provides that any person shall be punished if he/she receives or promises to receive money, valuables, or other benefits under the pretext of offering or arranging the case or affairs handled by a public official. Considering that an attorney-at-law is in a position of performing his/her duties independently and freely as a legal professional with public nature (Article 2 of the Attorney-at-law Act), even if he/she is requested as an attorney-at-law on a regular basis, it shall be determined that he/she directly or indirectly contact with the relevant public official or received money, valuables, or other benefits under the pretext of offering or arranging them; Article 110(1)5 of the Attorney-at-Law Act provides that he/she may be deemed to have received money, valuables, or other benefits, etc.

On the other hand, the selection of evidence and its probative value based on the premise of fact-finding belong to the free judgment of the fact-finding court (Article 308 of the Criminal Procedure Act).

2) As to the part on the violation of the Attorney-at-Law related to Non-Indicted 1, the lower court determined that the Defendant received money under the pretext of the teaching system and solicitation of the judge, prosecutor, and other public officials of the trial and investigative agency by receiving KRW 5 billion in total from Non-Indicted 1.

In addition, in full view of the facts and circumstances as indicated in its reasoning, the lower court determined that: (a) the Defendant received KRW 2 billion from Nonindicted 2 on June 26, 2015, and KRW 1 billion from Nonindicted 3 on October 30, 2015; and (b) the Defendant received cash of KRW 1 billion from September 3, 2015 to September 10, 2015; and (c) the Defendant received KRW 1 billion on the pretext of teaching and solicitation related to the bail in the appellate court of the case of “○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○○ on June 26, 2015).

Furthermore, the court below affirmed the judgment of the first instance court that held that the violation of the Attorney-at-Law Act with respect to Nonindicted 2 and Nonindicted 1 is both constituted at the same time, and the violation of Article 111(1) of the Attorney-at-Law on the pretext of solicitation and the violation of Article 110(1) of the Attorney-at-Law on the ground that the violation of the Attorney-at-Law with respect to Nonindicted 2 and Nonindicted 1 is both established, on the grounds that the violation of Article 110 subparag. 1 of the Attorney-at-Law Act and the violation of the same Act on the pretext of solicitation are both established, on the contrary that the violation of the provision of Article 110 subparag. 1 of the Attorney-at-Law Act and the violation of the provision of Article 111(1) of the Attorney-at-Law on the pretext

3) Examining the reasoning of the lower judgment in light of the aforementioned legal principles and records, the lower court did not err by misapprehending the bounds of the principle of free evaluation of evidence against logical and empirical rules or by misapprehending the legal doctrine on the application of Article 110 subparag. 1 of the Attorney-at-Law Act, contrary to what is alleged in the grounds

B. Violation of the rules of evidence and misapprehension of the legal principle concerning additional collection

In a case where the Defendant received money and valuables from the presiding judge or investigative agency in charge of the criminal cases of Nonindicted 1 and Nonindicted 2 as well as for solicitation thereof, it is reasonable to deem that the full amount of the money and valuables received except the money and valuables returned to Nonindicted 1 and Nonindicted 2 is subject to confiscation and collection. Even if the Defendant used part of them as other attorney-at-law’s expense, it is merely a means of consumption of the goods acquired as a violation of the Attorney-at-Law Act, and thus, it cannot be excluded from collection (see, e.g., Supreme Court Decision 2005Do

Although the lower court recognizes that the entire amount received from Nonindicted 1 and Nonindicted 2 is under the pretext of teaching and solicitation for the full bench, it is inappropriate for the Defendant to deduct part of the expenses that the Defendant paid in the course of appointing another attorney-at-law from the additionally collected amount. However, the lower court’s conclusion that did not exclude another attorney-at-law claimed in the grounds of appeal from the additionally collected amount is justifiable. On other premise, the allegation in the grounds of appeal that the Defendant should exclude the amount paid as the fees of another attorney-at-law selected separately by the Defendant for Nonindicted 1 and Nonindicted 2 from the additionally collected amount cannot be accepted.

2. As to each portion of the tax evasion

A. misunderstanding of facts and misapprehension of legal principles as to the evasion of value-added tax in 2015 relating to KRW 2 billion received from Nonindicted Party 1

1) Article 3(5) of the Punishment of Tax Evaders Act provides that in the case of taxes imposed and collected by the taxpayer’s report the time when the act of tax evasion under Article 3(1) of the Punishment of Tax Evaders was committed by the taxpayer’s report, when the relevant time limit for payment expires after the Government’s decision or review of the tax base of the relevant tax item, and in the case of taxes not corresponding to this, when the relevant time limit for payment expires. Therefore, the act of tax evasion constitutes a violation of value-added tax under Article 5(1)2 and Article 49 of the Value-Added Tax Act from January 1 to June 30, 200 and from January 30, 200 to December 31, 200 upon the expiration of the reporting and payment period of 25 days after the end of each tax period (see Supreme Court Decision 2008Do680, Mar. 27, 2008).

Meanwhile, Article 16 of the Value-Added Tax Act provides that the time of supply for services subject to value-added tax shall be the time falling under any of the following subparagraphs, while subparagraph 1 provides that “when the provision of services is completed.”

2) Review of the reasoning of the lower judgment and the record reveals the following facts.

A) When the Defendant accepted the case of habitual gambling appeal against Nonindicted Party 1, the Defendant received KRW 2 billion from Nonindicted Party 1 on December 24, 2015. On January 7, 2016, the Defendant submitted a counsel appointment and filed a request for release on bail for the pleading of the instant case. On the other hand, on March 3, 2016, upon submitting the statement of grounds for appeal and presenting the statement of grounds for appeal, and resigned on March 3, 2016.

B) However, the Defendant did not issue a tax invoice or receipt for KRW 2 billion received from Nonindicted Party 1 until he/she resigns as above. On April 28, 2016, the Defendant issued an electronic tax invoice related to the sales of the said money using the National Tax Service’s electronic tax invoice issuing system.

3) Examining the foregoing facts in light of the legal doctrine as seen earlier and the relevant provisions, it is reasonable to view that the supply of the Defendant’s service as an attorney-at-law in the criminal case of Nonindicted Party 1 was completed by resignation of his defense counsel on March 3, 2016, which belongs to the first taxable period of the year 2016, as the time of supply for services with the amount of KRW 2 billion received from Nonindicted Party 1 pursuant to Article 16 subparag. 1 of the Value-Added Tax Act is the time of supply for services with the amount of KRW 2 billion received from Nonindicted Party 1. Therefore, the period of return and payment of value-added tax on the services provided by the Defendant ought to be deemed as July 25, 2016

However, the Defendant issued an electronic tax invoice on April 28, 2016, which was prior to the filing and payment deadline of the above report and payment deadline, and the Defendant cannot be deemed to have evaded value-added tax on the sales of the above portion by fraud or other unlawful act.

Nevertheless, the lower court determined otherwise, on the premise that around December 24, 2015, when the Defendant received KRW 2 billion from Nonindicted 1, 2015, the supply price for the service was the time of supply for the second quarter of the year 2015, that the act of evading value-added tax with regard to KRW 2 billion was completed upon the lapse of January 25, 2016, which was the date of the return and payment of value-added tax for the second quarter of the year 2015. In so determining, the lower court erred by misapprehending the legal doctrine as to the time of supply for the service under the Value-Adde

B. The remaining grounds of appeal

For the reasons indicated in its holding, the lower court determined that: (a) as long as the Defendant rejected the Defendant’s assertion on the name of the money received from Nonindicted 2 and Nonindicted 1 and thereby convicted the Defendant of each violation of the Attorney-at-Law Act, the charges of violation of the Punishment of Tax Evaders Act may also be found guilty; and (b) rejected the Defendant’s assertion that the money received from Nonindicted 2 was not subject to tax return or was unable to be reported in advance; and (c) the portion paid by the Defendant to other attorneys out of the fees received from Nonindicted 1 and Nonindicted 2 was merely a means of consuming part of the money that was already incurred by the Defendant’s sales; and (c) the amount equivalent thereto shall not be deducted from the evaded tax amount; and (d) the amount that the Defendant received from Nonindicted 2 and Nonindicted 1 is inseparably combined with the price for the money under the pretext of teaching and solicitation and legitimate pleading activities

Examining the reasoning of the lower judgment in light of the relevant legal doctrine and the evidence duly admitted, the lower court did not err in its judgment, but did not err by misapprehending the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal doctrine on the establishment of crimes of tax evasion and calculation of the amount of tax evaded

3. Scope of reversal

As seen above, the part of the judgment of the court below on the second term portion of value-added tax for the second term of 2015 relating to the fee of KRW 2 billion received from Nonindicted 1, which the court below found guilty, should be reversed, and so long as the part on the charge is reversed, the remaining part on the second term portion of 2015, which is the relation of the crime, should also be reversed. Furthermore, since the above part and the remaining part that the court below found guilty were sentenced to a single sentence in the first instance court on the ground that there is a concurrent relation under the former part of Article 3

4. Conclusion

Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Yong-deok (Presiding Justice)