[1] Whether the criteria and procedure for the designation of retailers delegated to this Ordinance of the Ministry of Strategy and Finance under Article 16 (4) of the former Tobacco Business Act and other matters necessary for designation include matters concerning suitability of the place of business (affirmative), and whether Article 7 (1) 1 of the former Enforcement Rule of the Tobacco Business Act deviates from the scope of delegation by the mother law (negative)

[2] Whether Article 7 (1) 1 of the former Enforcement Rule of the Tobacco Business Act violates the freedom of business excessively or violates the principle of equality (negative)

[1] Articles 1, 12(2) and (4), 16(1), and 16(3) (see current Article 16(2)2), and (4) (see current Article 16(3)), 17(1)5, and 17(2)4 (see current Article 17(2)5) of the former Tobacco Business Act (Amended by Act No. 12269, Jan. 21, 2014); Articles 7(1)1 (see current Article 7(1) and (2) of the Enforcement Rule of the Tobacco Business Act (Amended by Ordinance of the Ministry of Strategy and Finance No. 397, Jan. 29, 2014); Articles 7(1)1 (see current Article 7(1) and 11(2) of the former Tobacco Business Act; Articles 75 and 95 of the Constitution / [2] Article 7(1)1(1) and (1) of the former Enforcement Rule of the Tobacco Business Act; Article 7(1) of the Constitution

Plaintiff (Attorney Rental-Pap et al., Counsel for the plaintiff-appellant)

The head of Jongno-gu Seoul Metropolitan Government (Law Firm Erasing, Attorneys Choi Young-sub et al., Counsel for the defendant

Seoul High Court Decision 2013Nu11859 decided November 1, 2013

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

The grounds of appeal are examined.

1. The former Tobacco Business Act (amended by Act No. 12269, Jan. 21, 2014; hereinafter the same) stipulates that no person, other than a retailer, shall sell tobacco to consumers; and a person who intends to engage in tobacco retail business (referring to the business that directly sells to consumers) shall obtain the designation of a retailer from the head of a Si/Gun/Gu having jurisdiction over the location of the place of business (Articles 12(2) and 16(1)); and Article 16(4) of the Enforcement Rule of the former Tobacco Business Act (amended by Ordinance of the Ministry of Strategy and Finance, No. 397, Jan. 29, 2014; hereinafter the “Enforcement Rule of the instant case”) stipulates that a person who intends to be designated as a retailer of tobacco, along with an application form, shall obtain the designation of a retailer from the head of a Si/Gun/Gu (referring to the lawful use of the right of the retailer).

2. A. The purpose of the former Tobacco Business Act is to promote the sound development of the tobacco industry and contribute to the national economy (Article 1). The former Tobacco Business Act regulates all processes of manufacture, production, distribution, and consumption of tobacco in order to realize the State’s duty to protect the lives and bodies of citizens (Article 1). In particular, in the distribution stage of tobacco, administrative agencies intervene and strictly manage the tobacco (see Constitutional Court Order 2012Hun-Ma38, Apr. 30, 2015).

In addition, Article 12 (4) of the former Tobacco Business Act prohibits retailers from selling tobacco to consumers by means of postal sale and electronic transaction. Therefore, consumers are bound to directly visit the retailer's place of business and purchase tobacco. Therefore, the stability and continuity of the retailer's store, which is the place of tobacco sales, can only be considered for the designation of retailers.

In addition, Article 16 (3) of the former Tobacco Business Act provides that the head of a Si/Gun/Gu may not designate a retailer for a person who intends to sell tobacco in a place deemed inappropriate for juveniles to engage in tobacco sales business, such as a place where juveniles can easily access tobacco, and that the head of a Si/Gun/Gu grants discretion in determining whether a person is eligible to be excluded from the designation of a retailer by prescribing the subject excluded from the designation of a retailer as an indefinite concept.

Furthermore, Article 17 (1) 5 of the former Tobacco Business Act provides that "if a retailer fails to file a report of closure or suspension of business for at least 60 days without filing a report of closure or suspension of business," and Article 17 (2) 4 of the former Enforcement Rule of the same Act provides that "if a retailer fails to sell tobacco continuously for 30 days without justifiable grounds," as one of the grounds for business suspension, it is necessary to secure a place to guarantee the continuity of business.

In full view of the legislative purport of the former Tobacco Business Act, and the detailed provisions on the designation and place of business of retailers, administrative agencies should consider whether the place of business of a person who intends to obtain the designation of a retailer is suitable for carrying on a tobacco sales business in determining whether to designate a retailer. Therefore, it is reasonable to interpret that the criteria and procedure for the designation of retailers delegated by Ordinance of the Ministry of Strategy and Finance under Article 16(4) of the former Tobacco Business Act and other matters necessary for the designation include matters concerning the suitability of such place of business.

Therefore, it cannot be deemed that the instant provision deviates from the delegation scope of the parent law on the ground that it was determined that only a legally constructed store pursuant to the relevant statutes, as a store suitable for carrying on tobacco retail business, was entitled to be designated as a tobacco retailer.

B. The applicant for the designation of tobacco retailer who fails to prove the right to use the lawfully constructed store under the instant provision is not designated as a retailer and thus, the freedom of business is restricted. However, considering the following factors: ① the establishment of order in tobacco distribution and the sound development of the tobacco industry, as well as the characteristics of the tobacco industry directly connected to the public health, the legislative purpose of the instant provision that sets the physical requirements for tobacco retail business is justifiable; ② the stability of the tobacco retail business place, the establishment of order in tobacco distribution through securing continuity, and the public interest of ensuring the sound development of the tobacco industry, and ③ the permitting authority under the Building Act may regulate business activities in illegal buildings pursuant to Article 79(2) and (3) of the Building Act, considering the fact that it is difficult to view the instant provision that the right to use the legally constructed store in order to obtain the designation of tobacco retailer is considerably unfair, it cannot be deemed that the instant provision constitutes excessive violation of the freedom of business or violating the principle of equality without reasonable grounds.

C. The court below is just in holding that the provision of this case is valid, and there is no error in the misapprehension of legal principles as to the limit or effect of delegated legislation as alleged in the grounds of appeal.

3. Therefore, the appeal is dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Ki-taik (Presiding Justice)