Limited-liability Company National Highway Corporation (Attorney Cho Jae-han, Counsel for defendant-appellee)

Busan Director of Regional Tax Office

February 27, 2009

Busan District Court Decision 2007Guhap1423 Decided May 29, 2008

1. Revocation of a judgment of the first instance;

2. The instant lawsuit shall be dismissed.

3. All costs of the lawsuit shall be borne by the Plaintiff.

1. Purport of claim

The defendant's disposition of notification of change in income amount against the plaintiff on March 7, 2006 shall be revoked.

2. Purport of appeal

The part of the judgment of the first instance against the defendant shall be revoked, and the plaintiff's claim corresponding to the above revocation shall be dismissed.

1. Details of the disposition;

The following facts are not disputed between the parties, or can be acknowledged by taking into account the following facts: Gap evidence 1, Gap evidence 2-1, 2, Eul evidence 1-5, and non-party 2's testimony of non-party 1-2.

A. On April 8, 2005, the Plaintiff included 6,512,792,610 won as a short-term bond of shareholders, executives, and employees in the amount of corporate tax for the business year 2003, as a bonus to Nonparty 1 (non-party to the judgment of the Supreme Court) who was the representative director at that time, and filed a revised tax return on the tax base and the amount of tax that included the details of disposal as a bonus to Nonparty

B. The Plaintiff did not pay the withholding labor income tax according to the above revised return, and on September 27, 2005, the director of the Busan District Tax Office issued a tax payment notice of KRW 2,320,562,020 to the Plaintiff (hereinafter “instant tax withholding disposition”).

C. Meanwhile, as a result of the tax investigation conducted between December 2005 and January 30, 2006 with respect to the plaintiff and the non-party 1, the defendant confirmed that the plaintiff omitted from the tax return the amount of KRW 5,408,417,702 and the amount of KRW 32,451,611, out of the acquisition cost of the land and the building for business (land number omitted) and the building for business (land and building on the land and building on the land) of the non-party 1, and that the plaintiff's disposal amount of KRW 6,512,792,610, the above disposal amount of the non-party 1 reported to the non-party 5,408,417,702, which was the sum of KRW 32,451,611, and the amount of the above lease income was leaked to the non-party 1,36,826,519, and thus, the plaintiff's disposal amount of the above income amount to the non-party 1.

2. Whether the lawsuit of this case is lawful

A. The defendant's main defense

(1) Procedure of the previous trial

The plaintiff filed a trial on June 12, 2006 after the 90-day period from March 7, 2006 when the disposition of this case was notified. Thus, the lawsuit of this case was not lawfully equipped with the requirements for the previous trial.

(2) Benefits of action

The disposition of this case is limited to KRW 1,136,826,519, which is the object of objection, and the remaining KRW 1,104,374,90 is limited to KRW 32,451,611, which was newly disposed of as to the omitted portion of the leased income, and the amount of the disposition of this case was reduced to KRW 5,408,411,00,000 from KRW 6,512,792,610,00,000,000,000,000 won, which was a withholding agent for income tax, was reduced to KRW 5,408,411,00,000,000,000 won, which was the amount of the disposition of this case, and there is no legal interest to seek the cancellation of the disposition of this part.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination as to whether the requirements for the previous trial procedure are met

(1) Whether the period of appeal is expired

According to Articles 55(1), 56(2), 61(1), and 68(1) of the Framework Act on National Taxes, in order to file an administrative litigation seeking cancellation of a disposition related to national taxes, a request for examination or adjudgment and a decision thereon shall be made as the procedure of the previous trial, and the request for examination or adjudgment shall be filed within 90 days from the date (when a notice of disposition is received, the date of its receipt) on which the person becomes aware of the disposition.

In addition, where a request for administrative appeal, which is a prior trial procedure of an appeal seeking the revocation of an administrative disposition, is unlawful due to the lapse of the period, administrative litigation shall also be dismissed as it does not meet the requirements of a prior trial (see Supreme Court Decision 90Nu8091 delivered on June 25, 191).

After receiving a notice of the instant disposition from the Defendant on March 7, 2006, the Plaintiff filed an appeal seeking the revocation of the instant disposition with the National Tax Tribunal on June 12, 2006. On December 28, 2006, the Plaintiff filed an appeal with the National Tax Tribunal on December 28, 2006, which was subject to the rejection decision by the National Tax Tribunal on the grounds of the progress of the agency requesting the adjudication, and the fact that the instant lawsuit was filed is not disputed between the parties, or may be acknowledged by taking into account the overall purport of the pleadings as a whole.

According to the above facts, the plaintiff filed a request for a trial on June 12, 2006, which was clear from March 7, 2006 to June 90, 2006, the expiration date of the period of the request for a trial from March 7, 2006, which was the date when the notice of the disposition of this case was received, and barring special circumstances, the lawsuit of this case did not lawfully meet the requirements of the previous trial procedure.

(2) Judgment on the Plaintiff’s assertion

(A) Summary of the assertion

On September 27, 2005, the director of the Busan District Tax Office rendered a defect in the disposition of withholding tax against the plaintiff on September 27, 2005, and the plaintiff appealed and filed an appeal with the National Tax Tribunal on October 7, 2005. The defendant made the disposition of this case against the plaintiff on March 7, 2006 where the above appeal is pending.

However, the Supreme Court ruled that the notification of change in income amount, such as the disposition in this case, is not an independent administrative disposition subject to appeal litigation, and held that the notification of change in income amount is an administrative disposition subject to appeal litigation independently by modifying the previous decisions in the en banc Decision 2000Du1878 Decided April 20, 206 (hereinafter “the Supreme Court decision in this case”) and the notification of change in income amount constitutes an administrative disposition subject to appeal litigation independently.

The plaintiff becomes aware of the circumstances that can file a revocation suit against the disposition of this case due to the amendment of the above Supreme Court precedents, and filed an appeal against the disposition of this case with the National Tax Tribunal on June 12, 2006, and accordingly, the existing appeal against the disposition of this case should no longer be maintained, and the National Tax Tribunal voluntarily withdrawn the appeal in accordance with the recommendation of the National Tax Tribunal.

Therefore, the Plaintiff filed an appeal against the instant tax withholding disposition and the instant disposition was made in the past with the purport of sharing basic facts with the instant tax withholding disposition. The details of objection to the instant tax withholding disposition were also disclosed as a bonus to Nonparty 1, in addition to the appeal against the instant tax withholding disposition, and the Plaintiff could not file an appeal against the instant disposition as the subject of the litigation until the Supreme Court decision became final and conclusive, and the Plaintiff could not file an appeal against the instant disposition with the subject of the litigation. On the other hand, the Plaintiff filed an appeal against the instant disposition with the knowledge of the changed precedents by the Supreme Court decision, and the previous appeal against the instant tax withholding disposition was withdrawn upon the recommendation of the National Tax Tribunal. In light of the fact that the previous appeal against the instant tax withholding disposition was no longer required, and thus, the Plaintiff’s appeal against the instant disposition was unlawful merely on the ground that the appeal was filed seven days after the period of 90 days elapsed, making it unreasonable to deem the instant lawsuit to be unlawful, making it unreasonable to deem

Therefore, it is reasonable to view that the lawsuit of this case was lawfully conducted by a request for a trial on the instant disposition, which is the basis of the pertinent disposition, basic facts, and the grounds of objection, or that the 90-day period for a request for a trial on the instant disposition is calculated from the date of the pronouncement of the Supreme Court's judgment that practically enables the objection.

(B) Determination

1) Whether the date of adjudication of the Supreme Court of this case can be the starting date of the period for requesting a trial on the disposition of this case

Article 68(1) of the Framework Act on National Taxes refers to the date on which the existence of the relevant disposition is known through a notice, public notice, or any other means, and it does not refer specifically to the date of determining whether the relevant administrative disposition is illegal (see Supreme Court Decision 90Nu6521 delivered on June 28, 191, regarding the interpretation of "the date on which the person becomes aware of the existence of the disposition, etc." under Article 20(1) of the Administrative Litigation Act).

The Supreme Court’s previous position that the notification of change in income amount, such as the instant disposition, is not considered as an independent administrative disposition that can be regarded as the subject of litigation, and it does not change the above position on the ground that the Supreme Court’s decision after the instant disposition was rendered and recognized as a disposition only when it reaches the Supreme Court’s decision.

Therefore, it is reasonable to view that the initial date of the period for requesting a trial on the disposition of this case is March 7, 2006, regardless of whether the notice of change in the amount of income constitutes an administrative disposition subject to dispute, such as a request for a trial, and whether it is modified by the Supreme Court precedents.

2) Whether it can be deemed that the previous trial procedure on the instant disposition was lawfully followed by a request for a trial on the instant disposition for withholding tax.

The fact that the plaintiff filed a request for a trial on the disposition of withholding the tax in this case and withdrawn it is not a dispute between the parties.

As above, insofar as the Plaintiff did not undergo a decision by withdrawing the request for a judgment on the instant tax withholding disposition, it is not necessary to review whether the instant tax withholding disposition and the Plaintiff’s grounds for objection to the instant tax withholding disposition are common in relation to the basic facts and the Plaintiff’s grounds for objection to the instant tax withholding disposition, and thus, the instant request for a judgment on the instant tax withholding disposition satisfies all the requirements of the pre-trial procedure of “request for a trial and its decision” under Article 56(2) of the Framework Act on National Taxes.

3) Whether a request for a trial on the instant disposition can be justified for an excessive period of time

According to Articles 6(1), 61(1) and (4), and 81 of the Framework Act on National Taxes, and Article 2(1) of the former Enforcement Decree of the Framework Act on National Taxes (amended by Presidential Decree No. 20622, Feb. 22, 2008), where a claimant cannot file a request for a trial within 90 days from the date of receipt of notice of disposition due to a natural disaster, natural disaster, etc., he/she may file a request for trial within 14 days from the date of extinguishment of such cause.

However, the notification date of the disposition of this case is March 7, 2006 and the decision date of the Supreme Court was April 20, 2006, and the decision date of this case remains 45 days until June 5, 2006, which is the expiration date of the judgment period of 90 days for the disposition of this case, and the plaintiff's request for a trial on the disposition of this case is based on the testimony of non-party 2 of the first instance trial witness of this case as well as the plaintiff's person who was delegated with the plaintiff's tax keeping service and was represented by the plaintiff's request for a trial on the disposition of this case, even before the decision of this case is made, it is difficult to find grounds to recognize that the plaintiff had already become aware of the contents of the decision of this case around May 206, which is the expiration date of the judgment period of this case, and even before the decision of the Supreme Court of this case is declared, the National Tax Tribunal has already recognized the administrative disposition nature of the notification of change in income amount and dealt with it.

4) Sub-determination

Therefore, the plaintiff's assertion does not seem to have any mother or is without merit.

3. Conclusion

Thus, the lawsuit of this case is dismissed as it does not meet the requirements of the previous trial procedure and is inappropriate. However, since the judgment of the first instance is unfair with different conclusions, the judgment of the first instance is revoked and the lawsuit of this case is dismissed as it is so decided as per Disposition.

[Attachment Form 5]

Judges Yoon Jin-man (Presiding Judge) Kim Jong-hee