[1] The meaning of "Fraud and other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act

[2] In a case where a person who conducts a business of discounting and buying promissory notes before maturity did not keep and record books required under the tax law, but maintains and manages the records of transactions and profits and losses necessary for the imposition and collection of income tax in the form of computer data in the form of computer data, whether such act constitutes "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act (negative)

[3] In a case where a person who conducts a business of discounting and buying promissory notes prior to maturity did not keep a simple statement that is not prepared with the intent to record and keep the receipts and details of the disbursement of expenses, whether the act constitutes "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act (negative)

[4] Whether the act of not simply making business registration or not making a report of income constitutes "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act (negative)

[5] The legal nature of "period" as stipulated by the Financial Supervisory Commission pursuant to delegation of Article 7 (1) 1 of the Merchant Banks Act (=law order) and whether the act of running short-term financial business can be punished under a vending machine, in case where the Financial Supervisory Commission did not set the above period or did not publicly notify or announce it to the general public (negative)

[1] "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act refers to a deceptive scheme or other active act that makes it impossible or considerably difficult to impose and collect taxes, and it does not constitute a mere failure to report under the tax law or making a false report without accompanying any other act.

[2] If a person who conducts a business of discounting or purchasing a promissory note before maturity maintains and manages the transaction details necessary for imposing and collecting income tax and the records of profits and losses in the form of computer data by entering, storing, and managing the details of transactions and the matters concerning profits and losses necessary for the purchase, sale, or profit and loss of a promissory note in the form of a purchase, sale ledger, or profit and loss statement, instead of keeping and keeping the books required under the tax law, it is difficult to say that the person who conducts a business of repurchaseing a promissory note before maturity did not keep and record the books separately from those required under the tax law and did not commit an unlawful act to conceal income with it.

[3] In a case where a person who runs a business of discounting and buying promissory notes prior to maturity disposes of them without keeping a simplified statement that is not prepared with the intent to record and keep the receipts and details of the disbursement of expenses, but rather with the intent to keep them. The receipt of the disbursement of expenses is a document necessary for calculating the necessary expenses to be deducted from the total amount of income, and it is rather unfavorable to him/her unless it is discarded, and thus, it cannot be deemed as an act of disposing of it. If a simple statement of accounts is prepared for the purpose of simple confirmation of the basis for calculation of the discount amount, not for the purpose of recording and keeping the details of transactions, but for the purpose of simple confirmation of the basis for calculation of the discount amount, it shall not be deemed an unlawful act to conceal the income with it by obtaining it from the accounting officer without separately confirming the contents thereof.

[4] It does not constitute "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act if a person does not simply operate his/her business or report his/her income without accompanying any other act.

[5] Article 28 (1) 1-2 of the Merchant Banks Act provides that a person engaged in short-term financial business without authorization under Article 3-2 (1) of the same Act shall be punished by imprisonment with prison labor for not more than three years or by a fine not exceeding 20 million won. Meanwhile, Articles 2 (1) 1-2, 7 (1) 1 and 7 (8) of the same Act provide that "short-term financial business" shall be limited to the issuance, discount, trade, brokerage, acceptance, and guarantee of bills with maturity within the period of one year as determined by the Financial Supervisory Commission, and other businesses incidental thereto, which are determined by the Financial Supervisory Commission, and shall be delegated to the Financial Supervisory Commission with the authority to determine specific scope as to whether bills whose maturity comes within a short-term financial business. If the Financial Supervisory Commission's delegation of the same Act actually combines the contents of the same Act to supplement the scope of the short-term financial business and such issuance and sale of bills with the nature of external binding force, it shall not be publicly announced or announced as a public notice or order.

[1] Article 9 (1) of the Punishment of Tax Evaders Act / [2] Article 9 (1) of the Punishment of Tax Evaders Act / [3] Article 9 (1) of the Punishment of Tax Evaders Act / [4] Article 9 (1) of the Punishment of Tax Evaders Act / [5] Article 2 (1) 1, Article 7 (1) 1, and Article 28 (1) 1-2 of the Merchant Banks Act, Article 11 of

[1] Supreme Court Decision 85Do1518 delivered on March 8, 198 (Gong1988, 718), Supreme Court Decision 95Do2653 delivered on May 9, 1997 (Gong1997Sang, 1797), Supreme Court Decision 97Do2429 delivered on May 8, 1998 (Gong1998Sang, 167 delivered on April 9, 199 (Gong199Sang, 927) / [3] Supreme Court Decision 98Do3282 delivered on December 9, 198 (Gong199Sang, 278)

Defendant

Defendant and Prosecutor

Law Firm Bol Law, Attorney Park Jong-ok

Seoul High Court Decision 99No2017, 2205 decided Nov. 16, 199

The conviction part of the judgment below is reversed, and that part of the case is remanded to the Seoul High Court. The prosecutor's appeal is dismissed.

1. Prosecutor's grounds of appeal are examined.

"Fraud and other unlawful acts" under Article 9 (1) of the Punishment of Tax Evaders Act refers to fraudulent and other active acts that make it impossible or considerably difficult to impose and collect taxes, and it does not constitute a mere failure to report under the tax law or making a false report without accompanying any other acts (see, e.g., Supreme Court Decision 97Do2429, May 8, 1998).

However, according to the records, it can be seen that the defendant carried on the business of discounting or purchasing promissory notes prior to their maturity from August 17, 1995 to December 31, 197 and then returning them to others, and it does not keep and record books required under tax law as stated in the facts charged, and disposes of them without keeping documents such as receipts, etc., while the head of the competent tax office did not make a final return of global income tax base for business registration or income amount.

However, according to the records, the defendant, instead of keeping and keeping books required under tax law, has been engaged in the purchase and sale of promissory notes by entering the matters concerning the purchase and sale of promissory notes into a true and accurate computer so that he can easily output, and confirm the details of transactions and profits and losses arising therefrom in the form of purchase and sale ledger or profit and loss statement. Thus, if the defendant maintains and manages the records of transactions necessary for the imposition and collection of income tax and the profits and losses in the form of computer data in the form of computer data, it is difficult to say that the defendant did not keep and record the books separately from those required under tax law and caused the defendant to commit an unlawful act to conceal income.

Meanwhile, according to the records, it is known that the "documents, such as receipts, etc. that the defendant discarded" refers to a simplified statement, etc. prepared for the purpose of simple verification of the basis for the calculation of discount price by discounting and purchasing receipts or bills, etc. received by the accounting staff by discounting and purchasing them, etc. As such, the receipt of the above expenses disbursement is necessary for calculating the necessary expenses to be deducted from the total amount of income, as it is merely disadvantageous to the defendant as it is impossible to obtain necessary expenses deduction unless it is discarded, and thus it is rather disadvantageous to the defendant. Therefore, it cannot be said that the simple statement of account is not prepared for the purpose of recording and keeping the transaction details (the transaction details are separately entered and managed on the computer as seen earlier) but is prepared for the purpose of simple verification of the basis for the calculation of discount price (the transaction details are separately entered and managed on the computer). Thus, the defendant's act cannot be said to be an unjust act that has concealed income with it without being kept separately from the accounting staff.

If the facts that the defendant did not keep and record the books required under the tax law or did not keep the receipts, etc. and did not constitute an unlawful act, the remaining part of the defendant's act indicated in the facts charged is nothing more than that of business registration and income return. However, it does not constitute "Fraud or other unlawful act" under Article 9 (1) of the Punishment of Tax Evaders Act. Thus, among the facts charged in the case of this case, the violation of the Punishment of Tax Evaders Act, which the defendant evaded income tax by unlawful means, shall be deemed to have never been proven.

Therefore, we agree with the conclusion of the judgment of the court of first instance that acquitted the defendant on this part of the charges, and there is no violation of the law by misunderstanding the legal principles of the Punishment of Tax Evaders Act. The prosecutor's grounds for appeal cannot be accepted.

2. Furthermore, decisions are made ex officio.

A. According to the reasoning of the judgment below, the court below found the defendant guilty of the charges that the defendant purchased at a discounted price of KRW 33,374,178,291 at a discounted price of KRW 31,637,186,761, the total face value of KRW 5,850 for a promissory note with a maturity of six months from August 17, 1995 to April 12, 1999, and then purchased at a discounted price of KRW 31,637,186,761, and then sold at a discounted price of KRW 5,002 for KRW 29,40,69,335 at a discounted price of KRW 28,48,658,253, and during that period at a discounted price of KRW 1,736,91,530, net profit, KRW 817,548, and KRW 48 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes.

B. Article 11 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes is a provision for aggravated punishment of crimes under Article 28 (1) 1-2 of the Merchant Banks Act (hereinafter referred to as the "Act"). Article 28 (1) 1-2 of the Act provides that a person who conducts a short-term financial business without obtaining authorization under Article 3-2 (1) of the Act shall be punished by imprisonment for not more than 3 years or by a fine not exceeding 20 million won. Meanwhile, Article 2 subparagraph 1-2 of the Act and Article 7 (1) 1 and 8 of the Act provide that a person who conducts a short-term financial business without obtaining authorization under Article 3-2 (1) of the Act shall be punished by imprisonment for not more than 3 years or by a fine not exceeding 20 million won. In addition, Article 7 (1) 1-2 of the Act provides that "short-term financial business" of the Act shall be limited to the issuance, discount, brokerage, acceptance, guarantee, etc. of bills and other business incidental thereto.

However, the period set by the Financial Supervisory Commission upon delegation of the Act refers to the function of substantially supplementing the provisions of the Act on the Scope of Short-Term Financial Business, and combined with them to have the nature of a legal order having external binding force, and this becomes effective only when it is publicly notified or publicly announced in the form of public notice document. Thus, even if the Financial Supervisory Commission did not set such a period or determined it, it cannot be subject to criminal punishment for the reason that a person engaged in the business of issuing, discounting, trading, arranging, underwriting, and guaranteeing bills, etc., without authorization, is engaged in the short-term financial business without authorization (Supreme Court Decision 98Do3282 delivered on December 9, 198).

According to the records, the Financial Supervisory Commission may find out the fact that the above period was set as one year from the date when the merchant bank was handled" in the form of the regulations on the supervision of merchant banks, but no evidence was found that the merchant bank supervision regulations itself publicly announced or announced to the general public even after examining the records. Rather, the circumstance that the merchant bank supervision regulations do not make such public announcement or public announcement is found. Thus, even if the defendant was engaged in the business of discounting or purchasing promissory notes without authorization as stated in the facts charged, he cannot be punished as a crime of engaging in short-term financial business without authorization.

Nevertheless, the court below maintained the first instance judgment convicting the defendant of this part of the charges by applying Article 11 (1) 2 of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes, which is a provision for the aggravated punishment of a short-term financial business without obtaining authorization, shall be deemed to have committed an error of law that affected the judgment

3. Thus, the guilty part of the judgment of the court below cannot be maintained as it is, and the judgment of the court of first instance maintained by the court below constitutes concurrent crimes under the former part of Article 37 of the Criminal Act, since the violation of the Mutual Saving and Finance Company Act, which is the remaining convicted part, is sentenced to a single punishment. Therefore, the conviction part of the judgment of the court below cannot be reversed in its entirety.

4. Therefore, the guilty part of the judgment of the court below is reversed, and that part of the case is remanded to the court below for a new trial and determination, and the prosecutor's appeal is dismissed. It is so decided as per Disposition with the assent of all participating Justices

Justices Cho Cho-Un (Presiding Justice)