Any lawsuit that is instituted without going through a request for examination or adjudgment and a decision thereon (hereinafter referred to as the "request for examination") shall be illegal.

Any lawsuit that is instituted without going through a request for examination or adjudgment and a decision thereon (hereinafter referred to as the "request for examination") shall be illegal.

Article 55 of the Framework Act on National Taxes

2017-Gu short-35267 Revocation of Disposition of Imposing capital gains tax

AA

@@세무서장

on 03 October 07, 2018

on October 14, 2018

1. The instant lawsuit shall be dismissed.

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

Cheong-gu Office

The Defendant’s disposition of imposition of capital gains tax of KRW 00,00,000, which belongs to the year 2007 against the Plaintiff on July 1, 201, is revoked (the purport of the claim is examined as above).

1. Details of the disposition;

1. Judgment on the defendant's main defense of safety

A. Main Safety Defenses

In light of the Plaintiff’s actual transfer value of KRW 00,00,000, the Plaintiff’s disposition of imposition of capital gains tax stated in the purport of the claim (hereinafter “instant disposition”) as the instant lawsuit, the Plaintiff asserts that the tax is excessively excessive and unlawful. Accordingly, the Defendant asserts that the instant lawsuit is unlawful as it was filed without going through a request for examination or a request for trial under the Framework Act on National Taxes and a decision thereon (hereinafter “pre-trial procedure”).

B. Determination

The main sentence of Article 55 (1) of the Framework Act on National Taxes provides that "any person whose rights or interests are infringed by this Act or any disposition made by other Acts and subordinate statutes or by failing to be made necessary dispositions may request the cancellation or modification of such disposition or request necessary dispositions pursuant to the provisions of this Chapter", and Article 56 (2) of the same Act provides that "any administrative litigation against any illegal disposition as provided in Article 55 shall not be instituted without a request for examination or adjudgment and a decision thereon pursuant to this Act, notwithstanding the main sentence of Article 18 (1), Article 18 (2) and (3) of the Administrative Litigation Act," thereby declaring a necessary principle of transfer for administrative litigation, and Article 18 (1) of the Administrative Litigation Act provides that "any revocation lawsuit may be instituted without going through an administrative appeal pursuant to the provisions of other Acts and subordinate statutes: Provided, That the same shall not apply to cases where any provision that no lawsuit for cancellation may be instituted without going through an adjudication on the administrative appeal for the relevant disposition is prescribed by other Acts and subordinate statutes."

However, the instant disposition is based on the former Income Tax Act (amended by Act No. 9897, Dec. 31, 2009) and constitutes “disposition pursuant to the tax law” under the main sentence of Article 55(1) of the Framework Act on National Taxes, and the Plaintiff filed the instant lawsuit without going through the entire trial procedure. Accordingly, the instant lawsuit is unlawful as it violates Article 56(2) of the Framework Act on National Taxes and the proviso of Article 18(1) of the Administrative Litigation Act.

As to this, the Plaintiff asserts that there exists a justifiable reason under Article 18(2)4 of the Administrative Litigation Act for failing to go through the previous trial procedure, since the Plaintiff had been residing in a foreign country for a long time and worked as a teacher, and became aware of the instant disposition on August 2017.

However, even if the facts alleged by the Plaintiff are acknowledged, the fact that the tax imposition disposition was known after the lapse of the period for a request for examination or adjudgment under the Framework Act on National Taxes is a matter related to the observance of the period for a request for examination or adjudgment, and cannot be a justifiable ground for failure to go through the preceding trial itself. Thus, the Plaintiff’s above assertion is without merit (the Plaintiff merely sought revocation of the instant disposition by specifying it as “calculated for an excessive reason” and did not seek confirmation of invalidity on the ground that the tax notice was not lawfully served).

Next, the Plaintiff did not know that it should undergo the pre-trial procedure prior to the filing of the instant lawsuit. Therefore, the Plaintiff asserts that there exists a justifiable cause as prescribed by Article 18(2)4 of the Administrative Litigation Act.

However, “justifiable cause” under Article 18(2)4 of the Administrative Litigation Act is limited to cases where two or more administrative dispositions are taken in the course of step-by-step and development, and are related to each other, and the tax authorities have changed the subject of taxation during the continuation of tax administrative litigation, and the reason for illegality exists. In a case where several persons are jointly liable for the same obligation through the same administrative disposition, or where one of the persons liable for tax payment grants an opportunity to make a new determination on the basic facts and legal issues, and where the Commissioner of the National Tax Service and the Tax Tribunal grants a taxpayer an opportunity to make a new determination on the basic facts and legal issues of the instant disposition, and where it seems that it would be harsh to cause the taxpayer to undergo a new trial proceeding (see, e.g., Supreme Court Decision 2012Du20618, Dec. 11, 2014). Accordingly, the Plaintiff’s assertion that the instant disposition and the Tax Tribunal did not have any opportunity to make a determination on the basic facts and legal issues of the instant disposition, and that is unreasonable.

2. Conclusion

Therefore, since the lawsuit of this case is unlawful, it is decided to dismiss it. It is so decided as per Disposition.