Whether the transfer of land, etc. directly used for the factory by voluntary auction falls under the case of transfer for the purpose of transferring the factory under Article 59-3 (1) 7 of the former Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978).

Where land and buildings directly used for a factory due to voluntary auction due to nonperformance are transferred, even if the land was purchased to re-establish a factory thereafter, it cannot be viewed as a transfer for the purpose of transferring a factory under Article 59-3 (1) 7 of the former Corporate Tax Act (amended by Act No. 3099, Dec. 5, 1978).

Article 59-3 (1) 7 of the former Corporate Tax Act (Amended by Act No. 3099, Dec. 5, 1978)

Korea Heavy Industries Corporation

The director of the tax office

Daegu High Court Decision 85Gu190 delivered on July 23, 1986

The appeal is dismissed.

The costs of appeal are assessed against the plaintiff.

The grounds of appeal are examined.

(1) On the first ground for appeal

In its reasoning, the judgment of the court below rejected the defendant's assertion that the tax disposition of this case, which the defendant newly issued after the above judgment, violated the res judicata effect of the final judgment of this case of 83Gu114, on the ground that the defendant's imposition of corporate tax of this case and defense tax of 1982 against the plaintiff on January 25, 1982 as to the transfer of real estate of this case, was not legally notified to the plaintiff because the above disposition of this case was not effective since it was not legally notified to the plaintiff, and the judgment became final and conclusive, and the res judicata effect of the judgment is limited to the grounds for cancellation of the above administrative disposition. Thus, the disposition of this case, which was newly issued by the defendant after the above judgment, rejected the defendant's assertion that the above disposition of this case cannot be permitted because it goes against the res judicata effect of the final judgment of this case of 83Gu114, and it is just and there is no violation of the law

(2) On the second ground for appeal:

Article 59-3 subparag. 7 of the Corporate Tax Act (Act No. 3099) provides that special surtax shall not be imposed on any income accruing from the transfer of land within the scope prescribed by the Presidential Decree for the purpose of relocating a factory operated for more than two consecutive years under the conditions as prescribed by the Presidential Decree. Article 124-5(1) of the Enforcement Decree of the same Act provides that "where a factory site exceeding the transferred area is acquired and a factory is constructed before or is constructed within one year from the date of transfer, the value of the machinery, equipment, etc. directly used for the factory before the transfer." Article 59-3(3) of the same Act provides that special surtax shall be collected immediately in case where land and building directly used for the factory due to voluntary auction due to nonperformance is transferred, even if the land was purchased for the new construction of the factory, it shall not be deemed that the land was transferred for the purpose of transferring the factory for more than 5 years under the premise that the transfer of real estate by the plaintiff was made for the purpose of transferring the land to the above 5-year factory."

(3) Ultimately, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating judges.

Justices Kim Jong-sik (Presiding Justice)