[1] The purport of Article 84-4 (4) 9 of the former Enforcement Decree of the Local Tax Act

[2] Where a corporation acquires land by reclaiming it pursuant to the Public Waters Reclamation Act, the standard for determining the unique duties of a corporation related to non-business land of a corporation under Article 84-4 (2) of the former Enforcement Decree of the Local Tax Act (=the purpose of reclamation authorized

[3] The case holding that the sale of reclaimed land itself is also included in the purpose of reclamation and it is directly used for the corporation's unique business where the purpose of reclamation for public waters reclamation is "the creation of residential land"

[4] Whether land acquired by a license for reclamation of public waters falls under the proviso of Article 84-4 (3) 2 of the former Enforcement Decree of the Local Tax Act and is excluded from non-business land of a corporation under the main sentence of subparagraph 2 (affirmative)

[1] Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996) provides for cases falling under non-business land of a corporation under Article 112 (2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), and provides for cases not falling under subparagraph 1 (f) through (d) of Article 112 (2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), and stipulates that a corporation's land shall not be directly used for its unique business without a justifiable reason within one year from the date of its acquisition, and Article 84-4 (4) of the former Enforcement Decree of the Local Tax Act provides that "land reclaimed under the Public Waters Reclamation Act (amended by Presidential Decree No. 5615 of Dec. 31, 1998) shall be excluded from the grace period of construction work completion.

[2] Under Article 84-4 (2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996), "the business of obtaining authorization or permission from an administrative agency", which is one of the unique business of a corporation related to land for non-business use of a corporation, shall be determined independently from the business of a corporation according to the contents of authorization or permission. Thus, whether a corporation used the land acquired through reclamation under the Public Waters Reclamation Act directly for its unique business shall be determined by the purpose of reclamation authorized at the time of acquisition of the reclamation license.

[3] The case holding that the sale of reclaimed land itself is also included in the purpose of reclamation and it is directly used for the corporation's unique duties where the purpose of reclamation for public waters reclamation is "the creation of residential land"

[4] Land acquired by a corporation by obtaining a license for reclaiming public waters from an administrative agency is excluded from land for non-business use of a corporation under the proviso of Article 84-4 (3) 2 of the former Enforcement Decree of the Local Tax Act (amended by the Presidential Decree No. 14481 of Dec. 31, 1994).

[1] Article 112(2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), Article 84-4(1) and (4)9 (current deletion) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996) / [2] Article 112(2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), Article 84-4(1) and (2) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996) (amended by Act No. 15294 of Dec. 14, 1996), Article 84-4(1) of the former Local Tax Act (amended by Presidential Decree No. 15194 of Dec. 16, 1998) / [194) of the former Local Tax Act (amended by Act)

[2] Supreme Court Decision 92Nu2226 delivered on November 13, 1992 (Gong1993Sang, 157), Supreme Court Decision 96Nu11556 delivered on October 10, 1997 (Gong1997Ha, 3509), Supreme Court Decision 98Du11205 delivered on February 8, 200 (Gong200Sang, 630)

Large Construction (Large Construction Co., Ltd.)

City Mayor Do Governor

Busan High Court Decision 98Nu1161 delivered on December 3, 1998

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

1. As to the second and third points

Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 15211 of Dec. 31, 1996, hereinafter referred to as the "Enforcement Decree") provides for cases falling under non-business land of a corporation under Article 112 (2) of the former Local Tax Act (amended by Act No. 5615 of Dec. 31, 1998), and provides for general cases not falling under subparagraph 1 (a) through (d) of the same paragraph within one year from the date of acquisition of land by a corporation without justifiable reasons. Paragraph (4) of the same Article provides that "land reclaimed under the Public Waters Reclamation Act and for which four years have not passed from the date of authorization of completion of construction work (hereinafter referred to as the "Enforcement Decree") shall be determined as one of the reasons for excluding the above paragraph (4). Thus, if a corporation acquires land for non-business purpose of a corporation under Article 112 (1) 1 (f) through (d) of the Enforcement Decree of the Public Waters Reclamation Act, it shall be determined as one of non-business purposes.

The court below determined that it is reasonable to interpret that the reclamation of the public waters in this case means the reclamation of the public waters in order to create the reclaimed land as the land suitable for the residence, i.e., site, and the purpose of the reclamation of the public waters in this case, and that the reclamation of the public waters in this case includes the sale of the reclaimed land itself within the meaning of supplying the reclaimed land to others by creating the residential area, rather than the purpose of the reclamation of the public waters in this case by creating the residential area itself, and by creating the residential area itself, the purpose of the reclamation of the public waters in this case is to develop the reclaimed land as the land suitable for the residence, and the purpose of the reclamation of the public waters in this case is not to create the residential area itself, unless there are other circumstances.

In comparison with the evidence of the record, it is reasonable that the court below interpreted that the sale of the land of this case is included in the sale of reclaimed land itself for the purpose of reclamation of public waters of this case, and therefore, it is reasonable that the court below determined that the sale of the land of this case is excluded from the corporation's own land for non-business purpose because it was directly used for the corporation's own business within the four-year grace period stipulated in Article 84-4 (4) 9 of the Enforcement Decree within the above-mentioned legal provisions and legal principles, and there is no unlawful ground such as the interpretation of the meaning of the "construction of residential land" for non-business purpose of reclamation of public waters of this case or the interpretation of the legal principles as to non-business purpose of Article 84-4 (4) 9

In addition, the precedents cited by the Defendant are not appropriate to invoke this as it is because it is different from this case in a case where the sale of reclaimed land itself does not include the purpose of reclamation of public waters.

All of the arguments in the grounds of appeal are rejected.

2. On the first ground for appeal

The court below held that the land of this case is excluded from non-business land stipulated in the main sentence of Article 84-4 (3) 2 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14481 of Dec. 31, 1994) since the plaintiff acquired a license for reclaiming public waters from an administrative agency. The court below held that the land of this case falls under the proviso of Article 84-4 (3) 2 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14481 of Dec. 31, 1994) and there is

We cannot accept this part of the grounds of appeal.

3. On the fourth ground for appeal

The Defendant’s assertion in this part of the grounds of appeal that the sale of reclaimed land itself in the case of reclamation of public waters is deemed to have been used directly for the corporation’s inherent business including its purpose of its reclamation is in violation of the taxation practices so far. The assertion that the sale of reclaimed land itself goes against the taxation practices has not been specifically stated in the lower court and is asserted only in the final appeal, and thus, it cannot be deemed a legitimate ground of appeal

We cannot accept this part of the argument such as incomplete hearing, violation of precedents, and misunderstanding of legal principles.

4. Conclusion

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

Justices Shin Shin-chul (Presiding Justice)