Article 91 (3) of the Regulations on the Management of Liquor Tax shall be null and void without any grounds under the upper statutes and the contents thereof shall be also unfair.

Article 91 (3) of the Regulations on the Management of Liquor Tax shall be null and void without any grounds under the upper law, and the contents thereof shall also be null and void, and the disposition of this case, which was made based on Article 91 (3) of the Regulation on the invalid Management

Article 40 of the Liquor Tax Act: Order to Preserve Liquor Tax

2016Guhap21252 Revocation of Disposition of Revocation of Shipment quantity

○○○ Incorporated Company

Head of △ District Office

November 3, 2017

December 1, 2017

1. The Defendant’s disposition of reducing shipment against the Plaintiff on March 16, 2016 shall be revoked.

2. The costs of the lawsuit are assessed against the defendant.

3. The disposition stated in Paragraph 1 shall be suspended until the judgment of the appellate court of this case is rendered.

The same shall apply to the order.

1. Details of the disposition;

A. On April 27, 1994, the Plaintiff was engaged in the dilution beverage manufacturing business, and obtained a license for alcoholic beverage direct sales outlet from the Defendant on April 27, 1994, to sell alcoholic beverages produced at the Plaintiff’s △△ retail outlet (400,000 No. 000).

B. On July 12, 2010, the Plaintiff entered into a comprehensive transaction agreement with BB distribution (hereinafter “B distribution”) holding a license for alcoholic beverage sales business and supplied alcoholic beverages to BB distribution. The Plaintiff, from around 2013 to around 2014, sold all the products manufactured by the Plaintiff to 6 main entry or 20 main entry to 20 won for the promotion of sales of alcoholic beverage products (hereinafter “instant special sales event”).

C. On February 22, 2016, the Defendant: (a) deemed that the Plaintiff violated Articles 17(3) and 15(1)4 of the Liquor Tax Act by failing to issue a tax invoice to the final consumer or by processing a tax invoice to BB distribution; and (b) issued a disposition suspending a license for alcoholic beverage sales business for one month (from March 10, 2016 to April 9, 2016) to the Plaintiff (hereinafter “instant original disposition”).

D. On February 25, 2016, the Plaintiff filed a lawsuit seeking revocation of the original disposition of this case with theCC District Court 2016Guhap00000, and at the same time filed a lawsuit seeking suspension of the execution of the said disposition with the same court 2016 A000.

E. On March 4, 2016, theCC District Court accepted the Plaintiff’s application and rendered a decision to suspend the execution of the original disposition of this case until the final judgment is rendered in the lawsuit seeking revocation of the license suspension disposition No. 2016Guhap0000.

F. On March 16, 2016, the Defendant notified the Plaintiff of the reduction of 50% of the delivery volume by the date of final and conclusive judgment No. 2016Guhap00000 (hereinafter “instant disposition”) pursuant to Article 91(3) of the Regulations on the Management of Liquor Tax Affairs (National Tax Service Directive No. 2102; hereinafter “instant order”) and Article 3 of the Notice on the Standard of Reduction in Delivery Quantity of Alcoholic Sales Manufacturers, Importers, and Sellers (Notice No. 2015-25 of the National Tax Service Notice No. 2015, hereinafter “the Notice”), on the ground that the Plaintiff received the instant original disposition and received a stay of execution from the court (hereinafter “instant disposition”).

G. On March 18, 2016, the Plaintiff filed an appeal with the Tax Tribunal.

Facts without any dispute, Gap's 2 through 7, the purport of the whole pleadings, and the purport of the whole pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

1) Article 91(3) of the instant directives, etc., which served as the basis for the instant disposition, are able to take an sediment administrative disposition without being delegated by the statutes, and also constitutes a violation of the principle of separation of authority against the court’s decision of stay of execution.

2) In addition, there is no need for public interest that can be achieved through the instant disposition, while the damage suffered by the Plaintiff is enormous, so the instant disposition was deviates from and abused discretion.

(b) Relevant statutes;

It is as shown in the attached Form.

C. Determination

1) Whether Article 91(3) of the instant Directive is invalid

A) The Regulations on the Management of Liquor Tax Affairs (National Tax Service Directive No. 2102) merely provides for general guidelines and corresponding guidelines for the management of liquor tax affairs within the National Tax Service, with the aim of increasing the tax revenues, and thus, there is no legal effect that externally binds the court or the people. However, the National Tax Service may set the guidelines and standards for the overall management of liquor tax affairs only to the extent that it does not violate any statute (see, e.g., Supreme Court Decision 2000Du3849, Jul. 27, 2001). Accordingly, it is examined whether Article 91(3) of the instant Directive did not violate the superior statute.

B) Article 91(3) of the instant Directive provides that a person who received a decision of suspension of license from a court after a disposition of suspension of license for a liquor sales business is imposed shall reduce the quantity of shipments pursuant to the instant notification. Meanwhile, according to Article 40 of the Liquor Tax Act and Articles 45, 47, and 51 of the Enforcement Decree of the same Act, the Commissioner of the National Tax Service, etc. may, if deemed necessary for preserving liquor tax, issue necessary orders to a manufacturer or a vendor of alcoholic beverages in relation to raw materials, storage, transfer, acquisition, transfer, and transfer of alcoholic beverages, etc., such as raw materials, quality, quantity, time, method, and other matters, and shall be limited to the minimum extent necessary for accomplishing its purpose.

C) If a person is subject to a disposition of reduction of delivery volume, a vendor is unable to sell alcoholic beverages and actually brings the same effect as the disposition of suspension of alcoholic beverage sales license. According to the instant notice, the reduction rate has reached 50%, and the period of reduction has to the final and conclusive judgment on the disposition of suspension of license, and thus, it cannot be said that the party’s entry is less than the amount or degree of infringement due to the disposition of reduction of delivery volume. However, the Liquor Tax Act and the Enforcement Decree thereof only stipulate that a necessary order may be issued for the preservation of liquor tax, but do not provide specific standards on the requirements or scope, etc., and if possible, it cannot be deemed that a disposition can be made, such as the instant disposition, in essence, which infringes upon the rights of a vendor of alcoholic beverages pursuant to the liquor tax law. Even if it is possible to do so, such disposition should be made within the minimum extent necessary for accomplishing the purpose of Article 40(2) of the Liquor Tax Act without reasonable discrimination, and it does not constitute a means or right of the party concerned.

D) According to Article 91(3) of the instant Directive, if only the requirements of the court’s suspension of the execution are met, the head of the competent district tax office, etc. may impose a reduction in the quantity of delivery if the disposition of suspension of the execution of alcoholic beverage sales only satisfies the requirements of the court’s suspension of execution. However, even though the court rendered a decision of suspension of execution as it deems urgent to prevent irrecoverable damage due to the execution of the disposition, it is unreasonable to impose a reduction in the quantity of delivery on the sole ground that the disposition of suspension of execution was rendered without any reasonable and reasonable requirements, and does not conform to the purpose of preserving the liquor tax as provided for in Article 40 of the Liquor Tax Act. Moreover, the disposition of reduction in the quantity of delivery constitutes an objection against the suspension of execution. However, it is also inappropriate for the head of the competent tax office, etc. to make the decision of suspension of execution effective

E) Ultimately, Article 91(3) of the instant Directive does not provide a basis for a superior statute, and its content shall be deemed null and void in an unfair manner. The disposition of this case, which was made based on Article 91(3) of the instant Directive, null and void, is also unlawful (see, e.g., Supreme Court Decision 79Nu382, Dec. 23, 1980).

2) Whether the original disposition of this case was unlawful

A) The original disposition of this case, which is the premise for the disposition of this case, is also deemed unlawful for the following reasons. In other words, the defendant issued a tax invoice as if the plaintiff actually sold alcoholic beverages to the household consumer to BB, and in light of the following circumstances, it is reasonable to view that the plaintiff supplied alcoholic beverages to BB distribution other than the household consumer through the instant special sales event and the BB distribution sold alcoholic beverages to the household consumer.

① Article 4 of the General Agreement on the Supply of Alcoholic Beverages prepared by the Plaintiff between BB distribution and BB distribution provides that “the Plaintiff shall supply BB distribution with the product at the ex-factory price, and BB distribution shall be freely determined in accordance with commercial transaction practices, and the Plaintiff may encourage BB distribution at an appropriate level of consumer price, and Article 5(4) of the Agreement provides that “the Plaintiff may request BB distribution to cooperate in sales promotion activities for BB distribution.” Accordingly, the Plaintiff may request BB distribution to cooperate in sales promotion activities by sending a written request for cooperation in sales promotion. Accordingly, there were grounds for the agreement between BB distribution and BB distribution on the implementation of the instant special sales activity with the content of reducing the sales price.

② From the first period to the second period of 2014, BB distribution was supplied with alcoholic beverages equivalent to KRW 406,252,000 in total from the Plaintiff’s insurance sales store in 2013 to the second period of 2014. Meanwhile, by providing household consumers with alcoholic beverages equivalent to KRW 432,784,00 in total, and thereby obtaining profits of KRW 26,532,00 in total during the same period. This also constitutes non-profitable profits if BB distribution did not intervene as a party to a transaction between the Plaintiff and household consumers.

③ In order to receive the sales proceeds of alcoholic beverages, BB received the sales proceeds of alcoholic beverages by receiving credit card payments from household consumers or receiving cash through Plaintiff’s employees, and even if the Plaintiff delivered alcoholic beverages directly to household consumers for convenience, the delivery subject or method of goods cannot be a critical basis for determining the contracting parties. Furthermore, the Plaintiff cannot supply alcoholic beverages to household consumers through a seller of alcoholic beverages such as BB distribution, as a part of active efforts to promote his own products, and it is difficult to deem that the Plaintiff directly supplied alcoholic beverages to household consumers on behalf of BB distribution.

④ If the Plaintiff appears to have supplied liquor to household consumers as alleged by the Defendant, the Plaintiff must issue a tax invoice to each household consumer. On the other hand, the liquor tax amount that the Plaintiff supplied during the taxable period at the store in Cheonggu Office is the total of KRW 406,252,00, while the liquor amount that the Plaintiff supplied to the household consumers is the total of KRW 432,784,000, the supply price between the supplier and the supplier is inconsistent. Furthermore, the tax authority deemed that the purchase tax invoice received from the Plaintiff during the pertinent taxable period was processed through the resolution to rectify the value-added tax on BB distribution, deeming that the purchase tax invoice received from the Plaintiff was processed, and thus, did not deduct the input tax amount received from the Plaintiff out of the total input tax amount of the BB distribution, and on the other hand, it appears that BB distribution was contradictory in recognizing that BB distribution was supplied to the consumers by failing to deduct the total input tax amount.

B) Ultimately, since the Plaintiff issued a tax invoice to BB distribution and did not issue a tax invoice to household consumers, the instant original disposition is unlawful, and the instant disposition based on the premise that the instant original disposition is lawful, and thus, is unlawful.

3. Conclusion

Therefore, the plaintiff's claim is reasonable, and it is so decided as per Disposition. And according to the records of this case, there is no evidence that the execution of the disposition of this case requires urgent measures to prevent irrecoverable damage caused to the plaintiff, and otherwise there is no other evidence that the suspension of execution may cause serious damage to the public welfare. Thus, the execution of this case shall be suspended ex officio until the judgment of the appellate court of this case is rendered.