[1] The meaning of "business subject to authorization or permission" under Article 84-4 (2) 3 of the former Enforcement Decree of the Local Tax Act, and whether a person who obtained permission for a housing construction business from an administrative agency constitutes the above authorization or permission for a housing construction business in order to conduct the said housing construction business (negative)

[2] In a case where a corporation whose main business is real estate sales sells the land acquired for housing construction within one year after converting it into the land for sale, whether it constitutes land for non-business use (negative)

[1] Article 84-4 (2) 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14878 of Dec. 30, 1995) refers to the case in which the purpose business itself is subject to authorization and permission, and it does not refer to the case in which authorization and permission should be obtained as a means in the course of carrying out the purpose business. Thus, where a person who already carries out the purpose business after obtaining permission for a housing construction business obtains approval for the housing construction project plan in order to carry out the housing construction business, the approval is not the case in which the "business is authorized and permitted".

[2] In full view of Article 84-4 (1) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14878 of Dec. 30, 1995), Article 84-4 (3) of the same Act does not impose any restrictions on the initial purpose of acquisition of the pertinent land in determining the general scope of non-business land of a corporation. In full view of each provision of paragraphs (3) and (4) of the same Article, if a corporation which engages in real estate sales as its main business acquired land for housing construction and sold it after converting it into sale within one year from the date of acquisition, the land does not constitute non-business land of a corporation, which was directly used for the corporation's unique business within the grace period as stipulated in

[1] Article 112 (2) of the Local Tax Act; Article 84-4 (1) and (2) 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14878 of December 30, 1995) / [2] Article 112 (2) of the Local Tax Act; Article 84-4 (1) 1 (e), (3), and (4) of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14878 of December 30, 1995)

[2] Supreme Court Decision 96Nu17561 delivered on July 11, 1997 (Gong1997Ha, 2549)

Mobilization Construction Corporation

Pakistan Market (Attorney Professional Young-young, Counsel for defendant-appellant)

Seoul High Court Decision 96Gu38461 delivered on August 19, 1997

The judgment below is reversed and the case is remanded to Seoul High Court.

The grounds of appeal are examined.

On the first ground for appeal

The lower court acknowledged the fact that the Plaintiff, a corporation that is engaged in a housing construction business, real estate sales business, housing site development business, etc., was subject to the purpose business on the corporate register and obtained the approval of the housing construction project plan for the construction of apartment buildings from April 25, 1995 to May 9, 195, and sold and disposed of the instant land on October 23 of the same year without using it for the housing construction business, and that the Defendant imposed acquisition tax on the grounds that the instant land constitutes non-business land of a corporation on February 6, 1996.

In addition, the court below determined that the "business of obtaining authorization or permission from the administrative agency" under Article 84-4 (2) 3 of the former Enforcement Decree of the Local Tax Act (amended by Presidential Decree No. 14878 of Dec. 30, 1995, hereinafter referred to as the "Enforcement Decree") should be determined independently from the business of the corporation according to its unique characteristics, and on the premise that the business of the authorization or permission is not included in the corporation's unique business, or even if it is intended in the corporate register, it should be determined by whether the plaintiff used the land in the housing construction project in accordance with the contents of the approval of the housing construction project plan. Thus, the court below determined that the plaintiff's sale of the land in this case without using it for the housing construction project cannot be deemed as directly using the unique business regardless of whether it constitutes real estate sales business, and even if the plaintiff changed the land for the purpose of acquisition within one year after the plaintiff acquired the land in this case.

However, the "business subject to authorization or permission from an administrative agency" under Article 84-4 (2) 3 of the Enforcement Decree refers to the case in which the target business itself becomes subject to authorization or permission, and it does not refer to the case in which authorization or permission should be obtained as a means in the course of performing the target business. Thus, in this case where the plaintiff who already obtained permission from a housing construction business and operates it as a target business, has already obtained approval for the housing construction business in order to carry out the housing construction business, the approval is not a type of authorization or permission when it is "business for which authorization or permission has been obtained", and it is not a determination of whether it is the plaintiff's unique

In addition, in determining the general scope of non-business land of a juristic person, Article 84-4(1) of the Enforcement Decree does not impose any restriction on the original purpose of acquisition of the land in question, and comprehensively considering each provision of paragraphs (3) and (4) of the same Article, if a juristic person operating real estate sales business as its main business acquired land for housing construction and converted it into sale and sale within one year from the date of its acquisition, the land is used directly for the corporation's unique business within the grace period under paragraph (1) 1 (e) of the same Article, and does not fall under non-business land of the juristic person (see Supreme Court Decision 96Nu17561 delivered on July 11, 197).

The court below should examine whether the plaintiff is a corporation whose main business is real estate sales business, and further determine whether the land in this case as a real estate sales businessman has used it directly within the grace period.

The judgment of the court below is erroneous in the misapprehension of legal principles as to the unique duties in determining land for non-business use of a corporation, which affected the conclusion of the judgment. The ground of appeal pointing this out is justified.

Therefore, the judgment of the court below shall be reversed without holding any judgment on other grounds of appeal, and the case shall be remanded to the court below. It is so decided as per Disposition by the assent of all participating Justices.

Justices Jeong Ho-ho (Presiding Justice)