Supreme Court Decision 2009Du5022 (Law No. 97.09)

Seoul High Court 2008Nu20989 ( October 12, 2009)

In order to be used as taxation data, there must be adequate evidentiary documents.

In order to be confirmed as a transaction with data, there must be evidence in accordance with the statement at the end of the year, and if the transaction partner does not undergo an investigation, such as the unilateral statement in which the opportunity to counter-examine or cross-examine is not given and the confirmation of confirmation of facts about the transaction partner's vindication, it cannot be easily considered as data

The contents of the decision shall be the same as attached.

1. Revocation of a judgment of the first instance;

2. Each disposition imposed by the Defendant against the Plaintiff on June 8, 2007 by KRW 7,752,90 for the first term of 2005 and KRW 13,076,350 for the corporate tax of 2005 shall be revoked.

3. All costs of the lawsuit shall be borne by the defendant.

The same shall apply to the order.

1. Details of the disposition;

A. The Plaintiff, a company engaged in aggregate production, transportation, and sales, etc., brought in the original tin with a vehicle of AA Industry Development Co., Ltd. (hereinafter “AA industry”), and paid the price thereof, and received four copies of tax invoices (hereinafter “tax invoices of this case”) equivalent to the total amount of KRW 60,794,800 in the name of AA industry as follows (i.e., the value of supply of KRW 55,268,000 + tax amount of KRW 5,526,80).

- A tax invoice of KRW 8,349,00 on March 31, 2005 (i.e., value of KRW 7,590,000 + tax amount of KRW 759,00)

② A tax invoice of KRW 15,939,00 on April 29, 2005 (i.e., value of KRW 14,490,000 + one sheet of tax invoice of KRW 1,449,00)

③ A tax invoice of KRW 21,194,80 on May 31, 2005 (i.e., value of KRW 19,268,00 + one sheet of tax amount of KRW 1,926,800)

④ A tax invoice of KRW 13,920,000 for supply value + 13,920,000 for supply value + 1,392,00 for supply value) one sheet of tax invoice on June 30, 2005

B. Upon filing a preliminary return of value-added tax for the first time on April 23, 2005 with the Defendant on March 31, 2005, the Plaintiff filed a final return of value-added tax for the first time on March 31, 2005, 759,000 won equivalent to KRW 7,590,000, and on July 25, 2005, upon filing a final return of value-added tax for the first time on July 25, 2005, the Plaintiff filed a final return of value-added tax for the first time on July 25, 2005 (=14,490,000 + KRW 19,268,000 + KRW 13,920,000 + KRW 13,920,000) with the amount of tax equivalent to KRW 767,80,000,000 for each input tax return to the Defendant on March 31, 2006.

C. Upon receipt of the notice from the head of Nowon Tax Office of taxation that the instant tax invoice was issued without real transaction, the Defendant deducted the input tax amount of KRW 55,268,00 from the said tax invoice, and deducted the above KRW 55,268,00 from the deductible expenses, and imposed KRW 7,752,90 on the Plaintiff on June 8, 2007, and KRW 13,076,350 of the corporate tax for the business year 2005 (hereinafter “instant disposition”).

[Reasons for Recognition] Facts without dispute, Gap evidence 5, Eul evidence 1, Eul evidence 2-1 through 13, Eul evidence 5 and 6-1 through 3, Eul evidence 7-1 through 6, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

Although the Plaintiff purchased tin from the AA industry as stated in the tax invoice of this case and paid the price in full, the Defendant, without any objective data, deemed the instant tax invoice as a processing tax invoice and issued the instant disposition. Thus, the instant disposition was unlawful.

B. Determination

(1) Facts of recognition

(A) From April 26, 2006 to May 31, 2006, the head of the Nowon Tax Office requested three companies including the Plaintiff to submit materials to prove real transactions with the said three companies, including the Plaintiff, when investigating three companies including the AA industry under suspicion of issuing false tax invoices.

(B) Around May 9, 2006, the Plaintiff submitted financial data that remitted KRW 55,794,800, out of the aggregate of the above supply value and value-added tax amount to the account of AA industry, and KRW 5,000,000 to the account of AB and YellowCC.

(C) On May 16, 2006, the last day of the last day of the transaction on the Maximum DD, which is the actual owner of the three companies in the No.S. No. 12, “A industry’s name, dump trucks, dump trucks, 10, and 12. The last day of the transaction was to issue a tax invoice after receiving a little amount of fees, and there was no case where the fee was paid at 6%. As the actual transaction was not used by the bank, it was most processed transaction using the bank only with the customer requesting to cease the transaction more than the actual transaction. On deposit of money, the transaction was made by directly returning the money in cash or by deposit with the bank account opened by the customer. Of the sales tax invoices issued in the name of A.S. industry 1, 2005, all of the transaction partners and 8 transaction partners including Plaintiff and 8 transaction partners were indicated in the name of the transaction parties.

(D) From September 2002 to December 2005, mostD had been accused of having issued false tax invoices over 11 occasions, and the money that the Plaintiff remitted to the account of the AA industry was withdrawn in cash within 3 days.

(E) The head of the Labor Relations Office classified the instant tax invoice as a false tax invoice without any further investigation, such as confirming the fact that the amount deposited from the AA industry account was returned to the Plaintiff.

(F) On June 2, 2006, the director of the Nowon District Prosecutors' Office filed a charge of issuing false tax invoices equivalent to KRW 7.5 billion in the supply price to 72 enterprises including the Plaintiff during the first period of 2004, 271, and 2005, but the Seoul Northern District Prosecutors' Office suspended indictment on the grounds that the location of the Plaintiff was unknown on December 13, 2006.

(G) On June 8, 2007, the Defendant notified the Plaintiff of the taxation data that the instant tax invoice was processed, and issued a disposition imposing the value-added tax for the first time in 2005 and corporate tax for the 2005 business year on the Plaintiff.

[Ground of recognition] Gap evidence 4, 5, Eul evidence 7 through 15, Eul evidence 3-1 through 7, Eul evidence 8-2, Eul evidence 14 through 17 (including paper numbers), the non-contentious facts, the purport of the whole pleadings

(2) Determination

In a lawsuit seeking revocation of disposition imposing tax, the burden of proving the facts of taxation requirements exists on the person liable to taxation, on the other hand, a statement made by a person other than a taxpayer prepared in the course of investigation by an investigation agency or a tax authority is merely a statement made by a person other than a taxpayer, if there is evidence in conformity with the statement or there is no complementary investigation such as confirmation of facts about a taxpayer, and thus, it cannot be deemed as a taxation data on a taxpayer unless there are other special circumstances (see, e.g., Supreme Court Decision 85Nu887, Jan. 20,

In the instant case, the Plaintiff denied that the instant tax invoice was issued by asserting that the Plaintiff was false after making an actual transaction with the KimF, a member of the AA industry branch, and remitting the transaction price to the fraternity designated by KimF, and that the instant tax invoice was issued. As such, the Defendant, who is responsible for proving that the instant tax invoice was false, traded by way of returning the remitted money to the company conducting financial transactions, and the Plaintiff, one of them, should have provided evidence that corresponds to the fact that the amount remitted by the Plaintiff was returned to the Plaintiff again, or secured the credibility of the relevant statement through a supplementary investigation, such as confirmation of facts against the Plaintiff, in order to make the Plaintiff’s statement that the instant tax invoice was false as legitimate taxation data.

However, the fact that most of the money transferred by the Plaintiff to the AA industry account was withdrawn within 3 days cannot be readily concluded that the Plaintiff received the said money. Unlike the records, there is no evidence to acknowledge that the Plaintiff received the said money, and there is no evidence to establish the basis to memory by distinguishing it from the AA industry branch owners and 72 processing transaction companies. In addition, according to the above evidence, the head of the Nowon-gu Tax Office did not conduct a complementary investigation, such as confirmation of the facts against the Plaintiff who submitted the remaining financial data related to the tax invoice of this case in trust of the Maximum D's above statement, and there was no room to cross-examine the instant tax invoice with the Maximum D's statement during the investigation process by the tax authorities, as well as the Plaintiff did not have an opportunity to resist the Maximum D's statement, and there was no room to cross-examine the instant tax invoice due to the unknown location of the Maximum DD in the trial process of this case.

In full view of the above circumstances, mostD’s statement stated in the end of the preceding half of the tax invoice does not correspond to the contents of the statement, and it did not undergo a supplementary investigation, such as confirmation of facts against the plaintiff who is liable for tax payment, and it is merely a unilateral statement that has not been given an opportunity to counter-gambling or cross-examination, and barring any special circumstances, it cannot be easily viewed as taxation data, and mostD has issued a false tax invoice habitually, or it cannot be deemed that the credibility of the mostD’s statement as to the tax invoice of this case is raised separately solely on the ground that the mostD was charged with the issuance of the tax invoice of this case or the mostD was involved in the criminal case by issuing the tax invoice of this case. In addition, the tax authority bears the burden of proving the fact that the taxpayer was opposed only when it was proved in light of the empirical rule, and therefore, in this case, the defendant did not prove the fact that the tax invoice of this case was false on the ground that the plaintiff did not submit the books or documentary evidence other than the financial data of this case.

Therefore, the disposition of this case based on the premise that the tax invoice of this case was issued without real transaction is unlawful.

3. Conclusion

Therefore, the plaintiff's claim shall be accepted on the grounds of its reasoning, and the judgment of the court of first instance is unfair on the grounds of its conclusion, and it is so decided as per Disposition after cancelling the judgment of the court of first instance and cancelling the disposition of this case.