Seoul High Court-2013-Nu-32078 (2014.07.01)

2012 Schedules 3138, 2012, 3139, 2012, 3157 ( October 18, 2012)

The filing period under the re-audit decision shall begin from the date the results of re-audit are notified.

Inasmuch as the relevant administrative agency has lawfully conducted a reinvestigation according to the re-audit decision and has specified that it is a subsequent disposition in accordance with the re-audit decision, the period for filing a lawsuit according to the re-audit decision shall be counted from the date on which the results of re-audit are notified. Thus, the lawsuit filed after

Inheritance Tax and Gift Tax Act Article 39 (Donation of Benefits)

2014Du11281 Revocation of Disposition of Imposition of Gift Tax

KimA

BB Head of the Tax Office and 2

Seoul High Court Decision 2013Nu32078 Decided July 1, 2014

July 23, 2015

All appeals are dismissed.

The costs of appeal are assessed against the plaintiffs.

The grounds of appeal are examined.

1. The re-audit decision, which is conducted in practice as a type of a decision on a request for examination or a request for adjudgment, which is a procedure for objection to the disposition imposing tax, takes effect as a decision, by supplementing its contents by a subsequent disposition following a reinvestigation. Therefore, it is reasonable to deem that the period for filing an administrative litigation is calculated from the date when the taxpayer who filed the request for examination or a request for adjudgment receives a subsequent disposition (see Supreme Court en banc Decision 2007Du12514, Jun. 25, 2010)

However, such re-audit determination is common in that it takes the form of re-auditing the matters pointed out in the relevant determination and correcting the tax base and amount of tax according to the results of re-audit or maintaining the initial disposition. As such, in principle, the agency should conduct a re-audit and notify the subsequent disposition according to the results. Provided, That in cases where the main place of business of taxpayers differs from taxpayers or is related to multiple taxpayers who have different jurisdiction, the head of a regional tax office having jurisdiction over the place of tax payment or the head of a regional tax office or the head of a regional tax office having jurisdiction over the place of tax payment may conduct a tax investigation lawfully; and in such cases, it is not different from re-audit according to the determination of re-audit, it is reasonable to view that the relevant administrative agency, other than the agency, can conduct a re-audit in accordance with the legitimate re-audit determination. In light of the scope of re-audit authority and the nature and impact of the subsequent disposition, if the relevant administrative agency has lawfully notified the taxpayer of the result of re-audit and clearly stated that the subsequent disposition is a disposition in accordance with the decision of re-audit.

2. Review of the reasoning of the first instance judgment cited by the lower court and the evidence duly admitted by the lower court reveals the following facts.

A. On October 10, 2007, the plaintiffs participated in the issue of new stocks issued by CCC (hereinafter referred to as "CCC"), a KOSDAQ-listed corporation located in the OOdong, Incheon OOdong, and acquired 44,44 shares; Plaintiff EE acquired 22,22,22 shares; and Plaintiff FF 8,891 shares, respectively; (b) the Board of Audit and Inspection deemed that CCC and 32 persons, including the plaintiffs, including the plaintiffs, were offered new stocks issued to 32 persons following the third party allocation, and notified the NCC of the difference between the acquisition price of new stocks and the appraised price under the Inheritance Tax and Gift Tax Act, the head of the NCC, the head of the tax office having jurisdiction over the location of CCC, by deeming the difference between the acquisition price of new stocks and the appraised price under the Inheritance Tax and Gift Tax Act as the donation of profits arising from capital increase.

C. Accordingly, the NN Head of NN Tax Office: (a) deemed that the Plaintiffs received shares at a low price in the process of issuing new shares; (b) concluded that Plaintiff DD was 00 won; (c) Plaintiff EE was 000 won; and (d) notified the Defendants, who are the head of the tax office having jurisdiction over the place for tax payment of the Plaintiffs, of the taxation data; (b) accordingly, Defendant Y Head of the tax office issued a disposition of this case imposing gift tax of KRW 000 (including additional tax) on Plaintiff D on June 1, 201; (c) Defendant SS Head of the tax office on June 8, 201; and (d) Defendant BB Head of the tax office on March 1, 2011, imposing gift tax of KRW 00 (including additional tax of KRW 00) on Plaintiff F.

D. On December 22, 2011, the Plaintiffs filed an appeal with the Tax Tribunal on each of the instant dispositions, and the Tax Tribunal rendered a decision to re-audit the instant case to the effect that: (a) on December 22, 2011, the Tax Tribunal would re-examine whether the forfeited shares issued in the capital increase with new stocks constitute an allotment under the Securities and Exchange Act; and (b)

E. Accordingly, the NN Head of the NN Tax Office notified the Plaintiffs of the results of re-audit that each of the dispositions of this case is justifiable, and clearly stated that the subsequent disposition in accordance with the re-audit decision of this case was notified, and Plaintiff DD received the notice on March 30, 2012, Plaintiff EE and FF on April 9, 2012.

F. Afterwards, the Plaintiffs filed the instant lawsuit seeking revocation of each of the dispositions of this case on October 18, 2013 by the Tax Tribunal, which was again filed by the Tax Tribunal, on the grounds that the decision to dismiss the appeal on October 18, 2012 was defective.

3. Examining the above facts in light of the legal principles as seen earlier, insofar as the NCC head of the NN Tax Office, which is the head of the NCC having jurisdiction over the location of the NCC, lawfully conducts a reinvestigation according to the re-audit decision of this case and notifies the results to the relevant administrative agency, the filing period under the re-audit decision of this case shall be deemed to run from the date when the Plaintiffs were notified of the results of re-audit by the NN head of the NN Tax Office. Thus, the lawsuit of this case filed after the lapse of 90 days from the time when the Plaintiffs filed a request with the Tax Tribunal after receiving the notification of the results of re-audit from the NNtax official, cannot be deemed otherwise

4. Although the reasoning of the lower judgment is somewhat insufficient, the conclusion that the instant lawsuit was filed after the lapse of the period for filing the lawsuit is justifiable, and contrary to what is alleged in the grounds of appeal, there were no errors by misapprehending the legal principles as to the initial date of filing the lawsuit according to the

5. Therefore, all appeals are 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.