Cho High Court Decision 2008Da2614 ( December 14, 2009)

The imposition of traffic tax on illegal distribution of petroleum products is illegal.

In order to collect traffic tax, etc. erroneously refunded by the Defendants, which became aware that the Plaintiff was negligent with regard to the illegal refund of traffic tax due to illegal distribution of petroleum products, and then the disposition imposing traffic tax is unlawful since the relevant legal provision cannot be a ground provision, and no other ground provision exists.

2010Guhap751 Such revocation as traffic tax, etc.

XXXX 주식회사 외

O Head of the tax office

April 20, 2011

June 15, 201

1. As shown in the separate sheet No. 2. Each disposition of the Defendants’ imposition of KRW 1,315,126,250 in total of traffic tax (including traffic, energy, and environment tax), KRW 20,732,570 in total of education tax, KRW 182,586,30 in total of education tax, and KRW 275,546.130 in total of education tax shall be revoked.

2. The costs of lawsuit shall be borne by the Defendants.

The same shall apply to the order.

1. Details of the disposition;

A. Plaintiff SP Co., Ltd. was engaged in petroleum refining business before dividing the portion of petroleum refining business as seen below. Plaintiff SP Energy Co., Ltd. is the company established by dividing the portion of petroleum refining business from Plaintiff SP Co., Ltd. on July 2007. The Plaintiffs sold petroleum products after setting a limitation on crude oil before and after the above division. The Plaintiffs reported and paid the special consumption tax, traffic tax, education tax, and driving tax on the supply to the head of Ulsan District Tax Office.

(b) Procedures for supplying duty-free petroleum and procedures for settlement;

1) The tax exemption system for petroleum products such as agriculture under Article 106-2 of the Restriction of Special Taxation Act and the relevant legal provisions is not the zero-rate system for supplying petroleum at the oil supplier's establishment from the beginning to the farm by purchasing the exempted oil at the tax-free price, but the tax exemption system for supplying the oil purchased at the dutiable value to the farm farm at the tax-free price, and then settling the ex post facto tax amount by the procedure

2) In the above procedure, oil refining companies like the plaintiffs supply gas stations through agencies or directly to gas stations as dutiable value-free prices, and gas stations supply gas stations to farmers, etc., and thereafter, oil companies like the plaintiffs, through agencies or directly settle accounts with gas stations to the extent of the amount of tax refunded by the tax authorities (Therefore, the above refund process does not benefit to the oil refining companies like the plaintiffs).

(c) distribution, etc. of certificates of supply of duty-free petroleum altered;

1) As to the extent that the Plaintiffs were supplied to farmers, etc. for tax-free petroleum, such as agricultural purposes, through an agency, directly, or directly supplying the oil to the gas station, the Plaintiffs received traffic tax refund, etc. through the above procedures, and settled accounts with them to the gas station. As above, one gas station was four gas stations, such as △△, etc.

2) However, through a special audit of the "Operational Status of the Board of Audit and Inspection's tax-free oil supply system" conducted from July 2007 to September 20 of the same year, it was revealed that four gas stations, such as the plaintiffs and agencies, traded through the plaintiffs and agencies, were settled by having the plaintiffs refund traffic tax, etc., so that four gas stations, such as the plaintiffs and agencies, were settled by the plaintiff by having them settle the amount of the tax-free oil supply certificate under the names of local agricultural cooperatives from October 2003 to April 2007 by providing the farmers with the tax-free oil for agriculture.

D. The Defendants’ imposition disposition and the plaintiffs’ appeal procedure

1) The head of Ulsan District Tax Office, as described in paragraph (c)(2) above, issued a reduction of traffic tax, special consumption tax, or education tax under Article 9 of the former Traffic Tax Act (amended by Act No. 8138 of Dec. 30, 2006) or Article 9 of the former Traffic, Energy, and Environment Tax Act (amended by Act No. 8829 of Dec. 31, 2007; hereinafter referred to as the "former Traffic Tax Act") or Article 11 of the former Special Consumption Tax Act (amended by Act No. 8829 of Dec. 31, 2007; hereinafter referred to as the "former Special Consumption Tax Act"), Article 10 of the former Education Tax Act (amended by Act No. 8137 of Dec. 30, 2006) or Article 16 of the former Local Tax Act (amended by Act No. 8137 of Dec. 16, 207) with respect to each of the following subparagraphs 301 and 16 of the former Local Tax Act.

(The following table omitted):

2) The Plaintiffs appealed against the above disposition and filed an appeal with the Tax Tribunal, and the decision of the Tax Tribunal following the appeal is as follows.

(The following table omitted)

3) According to the above decision of the Tax Tribunal, the Defendants issued a disposition to reduce or correct the amount of additional tax due to the failure to file a return, such as the entry of the “reduction and Correction” as shown in the separate sheet No. 2. Attached Table No. 2. (hereinafter the Defendants issued a disposition of imposition, such as the traffic tax remaining after correction)

[Ground of recognition] Facts without dispute, Gap evidence l through 7, Eul evidence 1, 2, 8, Eul evidence 2 through 6 (including provisional number), the purport of the whole pleadings

2. Whether each of the dispositions of this case is legitimate

A. The parties' assertion

i)Plaintiffs

The Defendants made each of the instant dispositions in accordance with Article 9(1) of the former Traffic Tax Act and Article 11(1) of the former Special Consumption Tax Act, which is unlawful for the following reasons.

A) In the case of this case, where the amount of the tax is collected because the gas station’s oil supply certificate is forged and the traffic tax is illegally refunded, as seen in the case of this case, Article 17(8) of the former Traffic Tax Act, Article 20(7) of the former Special Consumption Tax Act, Article 11(1) of the former Special Consumption Tax Act is not applicable, but Article 113(3) of the former Restriction of Special Taxation Act (amended by Act No. 8827 of Dec. 30, 2006) or Article 113(3) of the former Restriction of Special Taxation Act (amended by Act No. 8827 of Dec. 31, 2007) of the former Restriction of Special Taxation Act (amended by Act No. 113(3) of the former Restriction of Special Taxation Act, Article 17(8) of the former Traffic Tax Act shall apply mutatis mutandis, and Article 20(7) of the former Special Consumption Tax Act should be collected from the "employer for any purpose other than the original purpose."

B) In addition, the collection of traffic tax, etc. refunded from the Plaintiff who did not have any negligence or responsibility with respect to illegal distribution of tax-free petroleum for agriculture pursuant to Article 9(1) of the former Traffic Tax Act and Article 11(1) of the former Special Consumption Tax Act violates the principle of self-responsibility under the Constitution.

ii)the Head of the U.S. Tax Office

A) As traffic tax is a tax on the method of return and payment, a taxpayer shall submit a monthly tax base return along with an application for traffic tax refund pursuant to Article 7 of the Traffic Tax Act, and thereby, the tax base and tax amount that the taxpayer is liable to pay in the current month are determined to be the amount obtained by deducting the amount of refundable tax, etc. from the calculated tax amount, the tax authority need not separately verify and determine whether the taxpayer’s application for refund of traffic tax satisfies the requirements for refund. If the error or omission was verified in the details of the tax base and tax amount of the taxpayer’s application for refund of traffic tax, and the tax authority may rectify the amount of refundable tax which was erroneously reported pursuant to Article 9 of the Traffic Tax Act, such as taxes on other tax return and payment method regardless of whether the Plaintiffs intentionally or negligently participated, regardless of whether the tax base and tax amount of the taxpayer were intentionally or negligently

B) In addition, the Plaintiffs performed their duty to report the tax base, including the instant traffic tax, under their own responsibility, and corrected the relevant tax amount due to error in the details of the report, and thus, cannot be deemed to contravene the principle of self-responsibility. Moreover, the supply certificate of duty-free oil is a document that can be easily prepared if the official seal of the president of the NACF, which is affixed to the lower end, is forged without any separate function to prevent forgery or alteration. However, the supply certificate of duty-free oil is a document that can be easily prepared if the official seal of the president of the NACF is forged by allocating serial numbers on the right upper end of the certificate of supply of duty-free oil, preventing double issuance, etc., and the recipient is required to affix his signature and seal on the issuance ledger. The Plaintiffs did not perform their duty of due care even if they could sufficiently recognize the possibility of forgery of the main oil, and thus, each disposition of this case, including additional tax

iii)the defendant Ulsan Metropolitan City Mayor;

Under Article 1196-16 of the Local Tax Act, a taxpayer of driving tax stipulates as a taxpayer under Article 3 of the Traffic Tax Act, and Article 29 of the Local Tax Act provides that the time when the liability to pay driving tax comes into existence shall be when the liability to pay the traffic tax (traffic, energy and environment tax) that serves as the tax base. Therefore, the disposition of this case imposing driving tax by notification of imposition of traffic tax by the head of Ulsan Tax Office is legitimate.

(b) Related statutes;

3. Attached Table 3. It shall be as listed in relevant Acts and subordinate statutes.

(c) Fact of recognition;

(i)the process to operate tax-free oil systems, such as agriculture;

For the purpose of supporting the economic Myanmar of agricultural and fishing villages, the special provisions for exemption of traffic tax, etc. are prescribed in Article 106-2 of the former Restriction of Special Taxation Act (amended by Act No. 6297 of Dec. 29, 2000), and the special provisions for exemption of traffic tax, etc. are enacted, and the special provisions for exemption of value-added tax and zero-rate tax exemption, etc. (hereinafter referred to as the "special provisions for exemption"), which are the Presidential Decree, have been enacted upon delegation, and Article 27 of the special provisions for exemption of tax, delegate the details such as the procedures for the supply of tax-free oil and the procedures for the issuance of written confirmation of the supply of tax-free oil to the National Tax Service, and accordingly, the National Tax Service was enacted the regulations for the procedures for the provision of tax-free oil and the procedures for the issuance of written confirmation.

In addition, the former Ministry of Agriculture and Forestry designated as a supervisory agency of the agricultural tax-free petroleum system by the special provisions on the above-mentioned tax-free petroleum system has been operating the agricultural tax-free petroleum system by providing for the examination of the "Guidelines for the Supply of Tax-Free Petroleum for Agricultural Machinery", and the Agricultural Cooperatives designated as the agency of tax-free petroleum has been operating the agricultural tax-free petroleum

2) Illegal circulation of duty-free petroleum due to the above and alteration of a certificate of supply of duty-free petroleum and audit results by the Board of Audit and Inspection.

As seen earlier, while the Board of Audit and Inspection operated the tax-free petroleum supply system for agriculture, etc. based on the aforementioned relevant laws and regulations, it was revealed that the tax-free petroleum for agriculture, etc. was illegally distributed by means of forging and altering a certificate of supply of tax-free petroleum. In this regard, the request for disposition of the audit results published by the Board of Audit and Inspection around May 2008 includes the measures following the illegal distribution of tax-free petroleum, such as agriculture:

(The following table omitted)

(iii)the process of amendment, etc. to legislation;

A) Article 106-2 (2) of the Act on Special Cases concerning Taxation after the Special Audit and Inspection of the Board of Audit and Inspection provides that "if a person who is not a farmer, fisherman, or farmer, or farmer, or fisherman, receives petroleum products supplied by a petroleum retailer prescribed by Presidential Decree, such as a gas station (hereafter referred to as "petroleum retailer" in this Article) with value-added tax, individual consumption tax, traffic, energy, and environment tax, education tax, and driving tax, and supplies them to farmers, fishermen, etc., falls under paragraph (1) 1, a petroleum retailer may be entitled to a tax refund or tax exemption by applying for tax exemption under the Presidential Decree as prescribed by the Presidential Decree, or a tax exemption from the tax amount to be paid or collected."

Article 15-2(1)1 of the Decree on the Restriction of Special Taxation (amended by Presidential Decree No. 20544, Feb. 22, 2008) provides that "petroleum sellers prescribed by Presidential Decree" under Article 106-2(2) of the Act means petroleum refiners, petroleum exporters, or petroleum retailers under Article 2(7) through 9 of the Petroleum and Petroleum Substitute Fuel Business Act.

Accordingly, in the previous cases, only the oil company, such as the plaintiffs, can apply for the refund of traffic tax, etc. directly to the petroleum seller, such as oil stations, and in the case where a petroleum seller, such as oil stations, illegally distributes tax-free oil, the number of taxes and additional taxes can be estimated against the petroleum seller, such as oil stations, regardless of the reasons therefor.

B) Even if the Board of Audit and Inspection forged the certificate of supply of duty-free petroleum during the process of tax-free oil reduction and exemption, the Board of Audit and Inspection accused of fraud, etc. on the ground that the relevant agricultural cooperative’s storage that issues a certificate of supply of duty-free petroleum is practically impossible to verify the forgery or forgery of the certificate of supply of duty-free petroleum. Meanwhile, according to the Board of Audit and Inspection’s pointed out, the Board of Audit and Inspection has improved the system, such as a certificate of supply, so that the current status of supply of duty-free petroleum can be disclosed in real-time computer.

4) The Plaintiffs received a certificate of tax-free petroleum supply in the name of the president of the NAFFFFFFFFFFFFFFFFFFFFE 1,000 a total of 194 items from 2003 to 2007, and the total of 0.03% to 0.196% per annum. Considering the above circumstances, the Plaintiff’s certificate of tax-free petroleum supply for the submission of gas stations is merely 0.03% per annum from 2003 to 2007, considering the content of the letter of request for disposition as a result of the audit by the Board of Audit and Inspection.

It is virtually impossible to confirm whether the above and the alteration is made every day.

D. Determination

1) First of all, the relevant provisions of the former Traffic Tax Act or the former Special Consumption Tax Act (Article 17(8)(or Article 15(2)) and Article 20(7)(or Article 18(2) of the former Special Consumption Tax Act) shall apply mutatis mutandis to the legal relationship that collects the deducted and refunded traffic tax on the same ground as the instant case, under Article 113(3) of the former Restriction of Special Taxation Act, and Article 9(1) of the former Traffic Tax Act and Article 11(1) of the former Special Consumption Tax Act, which are the basis for each part of the instant disposition, shall not apply to whether each of the instant dispositions is unlawful.

In light of Article 113 (3) of the former Restriction of Special Taxation Act, the part concerning the quota of traffic tax deducted and refunded. (........) The procedure of this article provides that the provisions of paragraph (1) of the same article shall apply mutatis mutandis to the relevant goods, and Article 106-2 (2) of the former Traffic Tax Act shall apply mutatis mutandis to the case where the petroleum products are not used for the relevant purpose or are transferred within 5 years from the date of "entry into the country as tax-free goods" (Article 113 (3) of the former Restriction of Special Taxation Act and Article 106-2 (2) of the same Act shall apply mutatis mutandis to the cases where the former Traffic Tax Act or the former Special Consumption Tax Act is applied mutatis mutandis under Article 113 (3) of the former Restriction of Special Taxation Act and Article 106-2 (2) of the same Act shall be deemed to be the case where the petroleum products are not used for the above purpose or are transferred after "be admitted as tax-free goods" (Article 107-2) of the former Restriction of Special Taxation Act and Article 160-2).2).

However, according to the above, Article 113 (3) of the former Restriction of Special Taxation Act cannot be applied to the same case as the case in this case, since the gas station supplied the relevant petroleum to persons other than farmers, etc. before the oil station was brought into the farmers, etc., and therefore, Article 17 (8) of the former Traffic Tax Act or the former Special Consumption Tax Act (or Article 15 (2) of the former Special Consumption Tax Act) cannot be applied in accordance with the above provision. Article 20 (7) of the former Special Consumption Tax Act (or Article 18 (2) of the former Special Consumption Tax Act) cannot be applied mutatis mutandis.

2) Since the head of Ulsan District Tax Office rendered each of the dispositions in this case based on Article 9(1) of the former Traffic Tax Act and Article 11(1) of the former Special Consumption Tax Act, he/she should examine whether Article 9(1) of the former Traffic Tax Act and Article 11(1) of the former Special Consumption Tax Act can be applied to the legal relationship that permits the deduction and refund of traffic tax due to the same cause as the instant case.

Under Article 106-2 of the former Restriction of Special Taxation Act, the traffic tax that the plaintiffs paid or should pay as taxpayers under Article 7 of the former Traffic Tax Act. On the other hand, Article 7 (1) of the former Traffic Tax Act provides that "the taxpayer shall report the quantity and price of the goods taken out from the manufacturing place each month, calculated tax amount, tax payment, exempted tax amount, deducted tax amount, refunded tax amount, etc." and Article 9 (1) of the former Traffic Tax Act provides that "if there is any error or omission in the details of the return under Article 7 of the Traffic Tax Act, the head of the competent tax or customs office shall determine or correct the "tax base and tax amount". According to the language and text of the provision, the "tax amount under Article 9 (1) of the former Traffic Tax Act" includes the "tax amount exempted, deducted tax amount, etc. under Article 7 (1) of the former Traffic Tax Act, and it is not possible to interpret that the plaintiffs' tax base and tax amount are legitimate after deducting the amount of traffic tax after deducting each tax amount (see Article 9 (1) of the former Traffic Tax Act).

However, it is unreasonable to view it as such. The reasons are as follows.

① Article 9 of the former Traffic Tax Act shall be interpreted equally to the relationship with other provisions within the same Act regardless of the relationship with the former Special Taxation Act Article 106-2. However, the former Traffic Tax Act has several provisions on tax exemption and provides for cases where traffic tax is exempted or deducted or refunded pursuant to such provisions. According to such provisions, not only the person who takes out the goods to be subject to tax payment but also the other person (such as shipper, user, etc.). In particular, if the goods are similar to the case in this case, the interpretation of Article 17(5) of the former Traffic Tax Act, which provides for the basis of interpretation of Article 15(2) of the same Act, provides that the person subject to tax exemption shall be the person who takes out the goods, or the person who takes out the goods, and if the goods are used for any other purpose than the purpose of traffic tax exemption after bringing them into the place of carrying in, the person subject to tax exemption shall be entitled to tax exemption and the amount of tax exemption under each provision on tax exemption and exemption under each of the former Traffic Tax Act, which would be excluded from each tax exemption and exemption.

② The tax exemption system for petroleum products for agriculture, etc. under Article 106-2 of the former Restriction of Special Taxation Act is a system recognized for the purpose of tax policy that specifically supports agriculture for farmers, and the regulations that unfairly collect the traffic tax illegally deducted and refunded in the form of taxes by stating that there was no reason for tax exemption after the traffic tax was refunded due to its accompanying the tax exemption system have the nature of administrative sanctions that mainly functions to prevent the act of violation in the future (the securing of tax revenue will be limited to subordinate functions). Accordingly, such sanctions must be carried out according to the location of responsibility for the act of violation, and if they are entirely carried out, they shall be in violation of the principle of self-responsibility under the Constitution, and the interpretation of the relevant regulations shall be carried out in conformity with such constitutional principles (the Constitutional Court Order 2002HunGa27 delivered on June 24, 2004).

From this point of view, the interpretation and application of Article 9 of the former Traffic Tax Act, as seen above, leads to the conclusion that even if a taxpayer is not responsible for disposing of goods for any purpose other than the original purpose, it can collect the amount of tax deducted and the amount of tax to be collected solely on the ground that he/she was a taxpayer. This is ultimately contrary to the principle of self-responsibility because he/she is held liable for the failure to exercise his/her control or make decisions. Therefore, even if a taxpayer is entitled to deduction and refund based on a taxpayer’s report but there is no grounds for deduction and refund thereafter, it is clearly stated that there is no grounds for deduction and refund thereafter, and thus, there is no error or omission in the above reported deduction and the amount of tax to be refunded, if the taxpayer was not negligent in the above process, it is reasonable to interpret that it cannot be subject to the correction procedure under Article 9 of the former Traffic Tax Act on the ground that there is a separate basis for collecting the amount of tax to be collected under Article 9 of the former Traffic Tax Act.

Meanwhile, the aforementioned facts and the evidence revealed as follows. In other words, in the situation where the tax authorities, including traffic tax, etc. and the agricultural cooperatives, do not have a mutual verification as to whether the petroleum products meet the requirements for tax exemption until the illegal distribution in this case, it is not possible to require the Plaintiffs, who were private enterprises, who were ultimately in charge of submitting a certificate of tax exemption petroleum supply to the Defendants and paying the amount of tax refund to the agencies and gas stations, to verify the above and alteration of the certificate of tax exemption petroleum supply. As seen earlier, according to the audit and inspection by the Board of Audit and Inspection of Korea, even if the certificate of tax exemption was forged during the process of tax exemption exemption, it is practically impossible to verify the forgery of the certificate of tax exemption petroleum supply and the daily distribution of the certificate of tax exemption petroleum in the name of the head of the agricultural cooperative in the national agricultural cooperatives, including the traffic tax, etc., and the Plaintiffs, who received the certificate of tax exemption petroleum supply under the name of the head of the agricultural cooperative in the agricultural cooperatives, a regional cooperative management agency, etc., to receive the above certificate of tax exemption and alteration.

3) In full view of these points, each of the dispositions of this case rendered by the Defendants, which became aware that they did not constitute the tax-free goods for agriculture later, to purify the traffic tax, etc. erroneously refunded, cannot be a ground provision under Article 9(1) of the former Traffic Tax Act and Article 11(1) of the former Special Consumption Tax Act, and there is no other ground to permit the Defendants to purify it from the Plaintiffs.

Therefore, since each disposition of this case is unlawful, the plaintiffs' assertion is justified.

3. Conclusion

Therefore, the plaintiffs' claim of this case against the defendants is justified and it is so decided as per Disposition by the assent of all.