Whether the legal nature of the request for delivery under Article 56 of the National Tax Collection Act and whether the relevant tax is in arrears at the time of the request for delivery (affirmative), and where the taxpayer is in arrears with the payment deadline for the national tax due under Article 14(1)1 through 6 of the National Tax Collection Act due to the occurrence of a cause under Article 14(1)1 through 6 of the National Tax Collection Act, and the taxpayer is in arrears with the payment deadline, whether the tax authority may request the delivery of the relevant national tax without any need to wait for the tax payment deadline

A request for delivery under Article 56 of the National Tax Collection Act is a claim for distribution of delinquent taxes by joining a procedure for compulsory refund in progress by the tax authorities, and it is in the same nature as a demand for distribution in compulsory execution. Therefore, the relevant tax is in arrears at the time of the request for delivery.

In full view of the language and structure of Article 56 and Article 14(1)1 through 6 of the National Tax Collection Act, the purpose and character of the provision of a request for delivery, the grounds for filing a request for delivery, etc., in cases where a taxpayer is in a state of default due to the occurrence of a cause under Article 14(1)1 through 6 of the National Tax Collection Act and the payment deadline for the national tax for which a notice of payment was issued is excessive, the tax authority may request the delivery of the relevant national tax without the need to wait for the excess of the payment deadline specified in the reminder issued or the notice of demand issued.

Articles 14(1) and 56 of the National Tax Collection Act

[Plaintiff-Appellant] Plaintiff 1 and 1 other (Law Firm Gyeong, Attorneys Lee Dong-young et al., Counsel for plaintiff-appellant)

gallon sports corporation

Defendant 1 and four others (Attorney Park Young-sik, Counsel for the defendant-appellant)

Seoul High Court Decision 2017Na2076556 decided January 9, 2019

The part of the lower judgment against the Defendants is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined.

1. Article 56 of the National Tax Collection Act provides that “In cases falling under Article 14(1)1 through 6, the head of a tax office shall request the relevant executing court, etc. to deliver the amount in arrears.” Article 14(1)1 through 6 provides that “When a disposition is taken to collect delinquent taxes due to the default of national taxes, local taxes, or public charges” (Article 14(1)1 through 6), “when a disposition is taken to collect delinquent taxes due to the default of payment of national taxes, local taxes, or public charges” (Article 14(2)3), “when a disposition to suspend transactions is taken at a clearing house under the Bills of Exchange and Promissory Notes Act” (Article 4), “when an auction commences (Article 5),” “when a corporation is dissolved” (Article 6).

A request for delivery under Article 56 of the National Tax Collection Act is a claim for distribution of delinquent taxes by joining a procedure for compulsory refund in progress by the tax authority, and it is equivalent to a demand for distribution in compulsory execution. Therefore, the relevant tax is in arrears at the time of the request for delivery (see Supreme Court Decision 91Da44834 delivered on April 28, 1992).

In full view of the language and structure of the relevant provision, the purport and character of the system for requesting delivery, the grounds for demanding delivery, etc., where a taxpayer is in arrears with the payment deadline of national taxes that occurred and the payment notice was issued, the tax authority should be deemed to be able to claim delivery of the relevant national taxes without any need to wait for the excess of the payment deadline specified in the reminder issued or the notice issued.

2. According to the reasoning of the lower judgment and the record, the head of Seocho District Tax Office notified that he/she shall pay KRW 2,636,310, and value-added tax of KRW 52,349,110, each of the instant real estate, which is the property subject to the responsibilities of the Central Comprehensive Construction, by July 31, 2013, to the Central Comprehensive Construction Co., Ltd. (hereinafter “Central Comprehensive Construction”) on April 12, 2013 (hereinafter “Central Comprehensive Construction”) by July 2, 2012; and (2) the ownership of each of the instant real estate, which is the property subject to the responsibilities of the Central Comprehensive Construction, was transferred for the first time to Defendants 2, 3, and 5,634, and 970 (hereinafter “instant claim, etc.”). As of August 23, 2013, the total amount of the said value-added tax including the additional tax as of October 23, 2013, as of the date of calculating damages suffered by the Plaintiff.

Examining these facts in light of the legal principles as seen earlier, even if the Plaintiff applied for a compulsory auction for each of the instant real estate owned by the Jung-gu General Construction around August 23, 2013, even if the Plaintiff had not committed any tort, the claim of value-added tax, etc. for the instant comprehensive construction by the head of Seocho District Tax Office was in arrears upon the lapse of the payment period on July 12, 2013 and the payment notice was served on July 31, 2013, and the cause under Article 14(1)5 of the National Tax Collection Act occurred in the Jung-gu General Construction, which is the taxpayer, the head of Seocho District Tax Office may request the delivery of the instant claim of value-added tax, etc. from the above auction procedure pursuant to Article 56 of the National Tax Collection Act without any need to wait for the excess of the payment period specified in the letter of demand issued or the letter of demand issued.

Nevertheless, on August 23, 2013, based on the reply of the head of Seocho Tax Office to submit taxation information, the lower court rejected the Defendants’ assertion that the amount of claims, including the value-added tax, in this case, should be excluded in calculating the amount of damages since the Plaintiff’s claims, such as value-added tax, are the national tax claims that can be claimed as well as the Plaintiff’s claims, and thus, should be excluded in calculating the amount of damages. In so doing, the lower court erred by misapprehending the legal doctrine on the request for delivery under the National Tax Collection Act and the calculation of the amount

3. Therefore, the part of the lower judgment against the Defendants is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Noh Jeong-hee (Presiding Justice)