[1] Whether the land acquired by a corporation for housing construction under the former Enforcement Decree of the Local Tax Act constitutes land for non-business use in the event that it is used for purposes other than housing construction or used for four years (affirmative)

[2] The method of applying Article 84-4 (4) 10 of the former Enforcement Decree of the Local Tax Act where land used for housing construction cannot be physically divided as a main complex building

[3] The meaning of "justifiable cause" under Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act

[4] The case holding that there is no "justifiable cause" under Article 84 (1) of the former Enforcement Decree of the Local Tax Act

[1] Article 84-4 (4) 10 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996) stipulates that "land which is not deemed land for non-business use of a corporation and for which four years have not passed since a corporation engaged in the construction, supply, or lease of a house was acquired for the purpose of housing construction," notwithstanding the provisions of paragraph (1) of the same Article. Thus, granting a longer grace period to the land acquired for the purpose of housing construction as above, the legislative purpose is to promote housing construction. Thus, if the corporation uses the land acquired for the purpose of housing construction for a purpose other than housing construction or uses it for housing construction for four years after the date of its acquisition, it is reasonable to interpret that the land does not constitute land for non-business use of a corporation, and thus, it shall not be exempted from the application of heavy tax rate

[2] In a case where the parts used for housing as the main complex building such as the main complex building and the land used for housing construction cannot be physically separated, Article 84-4 (4) 10 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996) can be applied to the land used for housing construction only for the portion of the land corresponding to the ratio calculated by calculating the ratio of the total floor area of the building for housing to the total floor area of the entire building

[3] "Justifiable reason" under Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 13870 of March 6, 1993) which provides land for non-business use of the corporation subject to acquisition tax refers to the external reason that the corporation cannot use its mind, such as prohibition and restriction pursuant to the law. In principle, the internal reason of the corporation is limited to the case where the corporation's own effort and promotion for using its unique business in its own business, and there is no time to do so without the negligence of the corporation.

[4] The case holding that there is no "justifiable cause" under Article 84 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 13870 of March 6, 1993)

[1] Article 112(2) of the former Local Tax Act (Amended by Act No. 5615, Dec. 31, 1998); Article 84-4(4)10 of the former Enforcement Decree of the Local Tax Act (Amended by Presidential Decree No. 15211, Dec. 31, 1996); Article 84-4(1)10 of the former Enforcement Decree of the Local Tax Act (see current Article 84-4(1)1(b) / [2] Article 112(2) of the former Local Tax Act (Amended by Act No. 5615, Dec. 31, 1998); Article 84-4(4)10 of the former Enforcement Decree of the Local Tax Act (Amended by Presidential Decree No. 15211, Dec. 31, 1996); Article 84-4(1)1(b) of the former Local Tax Act (Amended by Act No. 15214, Dec. 13, 1998>

[1] Supreme Court Decision 90Nu7050 delivered on February 26, 1991 (Gong1991, 1116), Supreme Court Decision 93Nu17546 delivered on May 13, 1994 (Gong1994Sang, 1735), Supreme Court Decision 96Nu58 delivered on August 23, 1996 (Gong196Ha, 2921) / [3] Supreme Court Decision 92Nu1773 delivered on June 23, 1992 (Gong192, 2311), Supreme Court Decision 95Nu7482 delivered on November 10, 195 (Gong195Ha, 3951), Supreme Court Decision 97Nu797989 delivered on September 23, 198 (Gong97989 delivered on September 197, 199)

friendly Construction Co., Ltd. (Law Firm Barun, Attorneys Dog Chang-soo et al., Counsel for the plaintiff-appellant)

Head of the Busan Metropolitan Government Shipping Authority (Attorney Park Jong-ok, Counsel for the defendant-appellant)

Busan High Court Decision 97Gu12839 delivered on August 12, 1998

The appeal is dismissed. The costs of appeal are assessed against the plaintiff.

1. Facts recognized by the court below

On July 30, 1992, a reorganization company, which is engaged in the construction business, purchased and acquired the instant land No. 2 on July 20, 1990 for the purpose of constructing a main complex building. The reclamation work was completed on July 30, 1992, including each of the instant land, and around that time, the reclaimed land was designated as a commercial area and an urban design zone under the Urban Planning Act, and around that time, on January 1, 1991, the land No. 1 was designated as a base protection zone, and the Defendant was designated as a base protection zone, and the total construction area, including the height of the building, was subject to prior consultation with the competent commander.

Article 4-4 of the Urban Design Standards (hereinafter referred to as the "Urban Design Standards") publicly notified by the Busan Metropolitan City and Busan Metropolitan City in May 1991 designated each land of this case as an area where multi-family housing can be constructed, the block permitted by multi-family housing can be multi-family housing, and multi-family housing can be multi-family housing, and the house ratio shall be less than 50% of the total floor area of the building. The 4-5 of the building shall be in consultation with related military units, and the 4-5 of the building shall be in accordance with the height restriction and the 50% height restriction and the 4-5 of the building shall be in accordance with the consultation with the building height restriction and related military units, and the government's "Measures for the Restriction on Building Permission for the Adjustment of Building Price and Supply and Demand of Construction Materials" may be separately reviewed on January 1, 1993. The construction of the Military Air Bases in May 26, 1993 shall be designated as the 30-day height and 100-day land.

On March 6, 1993 in accordance with the urban design standard of the instant case, friendly construction: (a) obtained a construction permit for the construction of one unit of a main complex building (29,282.48m2, part of multi-family housing, 7,560.5m2) on the instant land from the Defendant; (b) filed a construction report on February 28, 1994; and (c) obtained a construction permit for the construction of one unit of a main complex building (33,42.8m2, part of multi-family housing, 6,717.369m2 on the instant land on April 7, 1995; and (d) filed a construction report on May 24, 195. However, the actual construction was not commenced.

In February 16, 1996, it was excluded from the Military Air Bases under the Military Air Bases Act, and thus, the restriction on the height of flight on the whole land of the Military Airfield including each of the instant land is revoked, and accordingly no restriction on the height of the building therefor is possible.

On February 26, 1996, the Defendant rendered a disposition of imposing acquisition tax amounting to KRW 6,294,902,100 on the Plaintiff as land for non-business use on the part of the land equivalent to the ratio of the portion of the commercial building in the total floor area of the building for the main complex among each land of this case (hereinafter referred to as "the portion of the commercial building of this case"). On May 11, 1996, the Defendant issued a decision of correction to reduce acquisition tax amounting to KRW 6,237,073,340 on the ground of an error in the calculation on May 11, 1996 (hereinafter referred to as "the taxation disposition of this case").

Since then, friendly construction failed to perform any construction work after leaving each of the instant lands in the state of a site, and performing a small depth of 1 to 1.5 meters after May 30, 1996, even after the alteration of the part permitted on the 6th and upper floors among the urban design standards of this case as permitted on the 6th and upper floors, there was no application for alteration of construction permit or modification of design even after the alteration into the part permitted on the 6th and upper floors from February 27, 1997, and no construction work has continued in accordance with the existing construction permit.

2. Judgment on the Grounds for Appeal

On the first ground for appeal

Article 84-4 (4) 10 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 1481 of Dec. 31, 1994; Presidential Decree No. 15211 of Dec. 31, 1996) provides that "land which is not deemed land for non-business use of a corporation and is not deemed land for which four years have not passed since it is acquired for the purpose of housing construction," and the provision of Article 84-4 (4) 10 of the former Enforcement Decree of the Local Tax Act provides that "land acquired for the purpose of housing construction for which four years have not passed since it is the legislative purpose of granting a longer grace period to the land acquired for the purpose of housing construction. Thus, if the corporation uses the land acquired for housing construction for a purpose other than housing construction or is not used for housing construction for four years after the date of its acquisition, it shall be interpreted that the relevant land does not constitute land for non-business use (see Supreme Court Decision 90Nu75050 of Feb. 26, 29991).

Furthermore, in a case where the portion used for housing such as the main complex building and the portion not so used for housing construction can not be physically divided, the ratio of the total floor area of the building for housing to the total floor area of the entire building shall be calculated, and only the portion of the land corresponding to that corresponding to that corresponding to that corresponding to that corresponding to the said ratio may be applied to the above provisions of paragraph (4) 10 as the land used for housing construction.

Therefore, on the basis of the facts found above, the court below's determination on the application of Paragraph (4) 10 as to the portion of the land corresponding to the ratio of the area of the multi-use building site or the land of the planned site for non-business use by use to the total floor area of the building should be based on the grace period by use, is justifiable as it is in accordance with the above legal principles.

In addition, as examined below, the court below's decision on the starting point of the grace period does not affect the conclusion of the judgment, since friendly construction did not use each of the lands of this case for business purposes within the grace period, and as such, it does not accept all the plaintiff's grounds of appeal related to the recognition of the grace period.

On the second ground for appeal

Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 13870 of Mar. 6, 1993) which provides land for non-business use of a corporation subject to heavy acquisition tax refers to the external reasons that the corporation cannot use in mind, such as prohibition, restriction, etc. under the Acts and subordinate statutes. In the case of the internal reasons of the corporation, it shall be deemed that the corporation's internal reasons are limited to cases where the corporation has exceeded the period without the negligence of the corporation because it does not have enough time to make normal efforts and promotions to use for its unique duties (see, e.g., Supreme Court Decisions 92Nu1773, Jun. 23, 1992; 95Nu7482, Nov. 10, 195; 97Nu7097, Nov. 23, 1998).

In light of the above facts and records, as to the land No. 2 of this case, the above limitations on construction had already been revoked at the time of July 31, 1993 after the grace period of one year from the date of acquisition, and as to the land No. 1 of this case, the construction was restricted by the restrictions on construction at the time of November 21, 1990 after the grace period of one year from the date of acquisition, but this was already conducted prior to the acquisition of the land, but there was a restriction on the height of the building due to the restriction on flight altitude under the relevant Acts and subordinate statutes, etc. concerning each of the land of this case, but it was revealed that the friendly construction not only obtained the construction permission due to the above restriction, but also did not commence construction even after the cancellation of the restriction.

Accordingly, the restriction cannot be deemed as a cause impeding the use of each of the instant lands for the purpose of acquiring them, and it cannot be deemed that there was an external reason for the friendly construction to avoid using each of the instant lands for its unique duties. Moreover, the circumstances such as the aggravation of the financial situation, etc., which the Plaintiff satisfy for justifiable reasons, are merely an internal reason for the friendly construction. As such, the friendly construction cannot be deemed as a case where the friendly construction goes beyond the grace period due to lack of time, even though it performed normal efforts to use the respective of the instant lands for its unique duties.

Therefore, in the same purport, the court below's rejection of the plaintiff's assertion is just, and there is no error in the misapprehension of legal principles as to a corporation's legitimate ground for non-business decision, and thus, it does not accept this part of the ground of appeal.

In addition, the Supreme Court's decision, which is appealed in the grounds of appeal, is not appropriate to be invoked in this case, since the case is different from this case.

3. Conclusion

Therefore, the appeal is dismissed, and all costs of appeal are assessed against the plaintiff. It is so decided as per Disposition by the assent of all Justices who reviewed the appeal.

Justices Kim Jong-sik (Presiding Justice)