Busan District Court 201Guhap3884 ( December 16, 2011)

Since the merger cannot be deemed null and void, the notice of designation of joint and several tax liability due to the merger is legitimate.

In the case of a merger of a company, if the effect of a merger takes effect through the registration of merger, the validity can not be asserted except for a lawsuit for nullification of merger. Thus, even if the merger was reported by the violation of the contract or illegal methods, the above merger cannot be deemed null and void, and the designation of the initial joint and several tax liability is legitimate.

Article 25 of the Framework Act on National Taxes

2012Nu270 Revocation of Disposition of Imposing Value-Added Tax, etc.

AAAAAE Ltd.

The director of Busan District Office

Busan District Court Decision 201Guhap3884 Decided December 16, 2011

June 14, 2013

July 5, 2013

1. The plaintiff's appeal is dismissed.

2. 30% of the total litigation costs shall be borne by the Plaintiff, and the remainder 70% by the Defendant, respectively.

1. Purport of claim

A. The primary purport of the claim

(1) On April 19, 201, the Defendant confirmed that: (a) for the Plaintiff on April 201, 201, notice of the designation of a joint and several tax obligor for the information and communications construction work part of BBB construction; and (b) for the Plaintiff on April 20, 201, notice of payment of KRW 000, additional tax of KRW 000, additional tax of KRW 000, increased tax of KRW 000, additional tax of KRW 000, additional tax of KRW 000, and increased tax of KRW 000, and KRW 000, increased tax of KRW 1, 2009 is each null and void.

[Plaintiffs sought confirmation of invalidity of the notice of payment of each value-added tax, each corporate tax and its additional tax listed in the attached Table in the first instance court in relation to the above paragraph 2, but the Defendant’s disposition of correction to cancel or reduce the above value-added tax and corporate tax ex officio at the trial.]

B. Preliminary purport of claim

The defendant's notification of designation of the above joint and several tax obligor to the plaintiff, each added value set forth in the attached Table, and the notification of payment of corporate tax and its additional dues shall be revoked.

2. Purport of appeal

In the judgment of the first instance court, the part concerning the primary claim is revoked. The defendant confirms that each disposition in the primary claim made by the defendant against the plaintiff is invalid (the purport of the appeal was reduced within the extent of the appeal by reducing the purport of the claim as above in the first instance trial).

1. Details of the disposition;

A. On July 22, 2009, the Plaintiff entered into a merger agreement with BBB Construction Co., Ltd. (hereinafter “BB Telecommunications”) under which the part of the information and communications construction project for BB is divided and merged with the Plaintiff, and completed the merger registration on August 24, 2009 after obtaining approval at the temporary shareholders’ meeting on the same day (hereinafter “instant merger after division”).

B. On August 28, 2009, the Plaintiff and BB communications after the instant merger after the instant merger had reported corporate merger to the Do governor of the Gyeongnam-do under the Information and Communication Construction Business Act, and on September 4, 2009, the said report was accepted.

C. On April 19, 2011, the Defendant notified the Plaintiff of the designation of each of the value-added tax, corporate tax, and its additional dues imposed on BB telecommunications prior to the instant merger through division or for which tax liability was established pursuant to Article 25(2) of the former Framework Act on National Taxes (amended by Act No. 911, Jan. 1, 201; hereinafter referred to as the “former Framework Act on National Taxes”). On April 20, 201, the Defendant notified the Plaintiff to pay it to the Plaintiff on April 20, 201.

D. However, on January 2012, when the instant lawsuit was pending, the Defendant submitted a list of total tax invoices of KRW 000 and total tax invoices of KRW 000,000 by seller as if there was no transaction of goods or services with seven companies, such as OOE Co., Ltd. when BB communications filed a value-added tax return from the first to the second half of 2008 as a result of the investigation into trade order with BB during the instant lawsuit.

E. Accordingly, on March 9, 2012, the Defendant cancelled or reduced each value-added tax and corporate tax listed in the separate sheet, and the remaining value-added tax and additional dues therefrom are as listed in the following table (hereinafter the Defendant’s notification of the designation of joint and several tax obligor as of April 19, 201 to the Plaintiff, and the Defendant’s notification of payment notice as of April 20, 201, and the remaining value-added tax and its additional dues as of April 20, 201 are collectively referred to as the “instant disposition”).

[Ground of recognition] The non-satched facts, Gap evidence 1, 2, 6, and 7, and Eul evidence 1 through 8 (including each number, hereinafter the same shall apply), and the purport of the whole pleadings

2. Scope of the deliberation of the political party;

At the first instance court, the Plaintiff filed an appeal against the Defendant, and filed confirmation of the invalidity of the notice of payment of each value-added tax and corporate tax as indicated in the separate sheet on April 20, 201 with respect to the Plaintiff’s joint and several tax obligor on April 19, 201, and sought confirmation of invalidity of the notice of payment of each value-added tax and corporate tax as indicated in the separate sheet on April 20, 201, and sought revocation of the said notice of payment, and the first instance court dismissed the conjunctive claim. Accordingly, the Plaintiff filed an appeal against the conjunctive claim without filing an appeal, and sought confirmation of invalidity of the instant disposition by reducing the purport of the claim, and the scope of the trial at the first instance court is limited to the primary claim

3. Judgment as to the main claim

A. The plaintiff's assertion

1) First, the instant merger after division did not take effect due to contractual breach or corporate merger report by illegal means as follows, and the instant disposition premised on the validity of the instant merger after division was serious and apparent defects.

① BB not only did not deliver financial statements, such as a comparison table and a list of assets, to ascertain the current status of claims and debts at the time of the instant merger by split, but also did not report the settlement of accounts in 2008, and did not deliver or transfer investment certificates to Information and Communications Mutual Aid Association or the above claims to the Plaintiff, and violated the instant merger agreement by split and merger, such as hiding the report even before the said merger by split and merger, even though it reported the closure of the general

② In addition, BB communications submitted a false lease agreement in reporting the merger under the Information and Communications Construction Business Act, and the Plaintiff’s capital stock falls short of the registration standards under the Information and Communications Business Act, but made a false subcontract agreement in the name of the Plaintiff and made a false report on corporate merger by unlawful means such as creating external appearance that seems to meet

2) Next, BB communications, in collusion with the above companies even though they did not have actually supplied goods or services to six companies, such as OO video companies, issued false sales tax invoices in total 00 won in 2007, and 000 won in total in the second period of 2008, as in collusion with the above companies, and issued false sales tax invoices, and the liability for the payment of value-added tax on the corresponding portion was not constituted from the beginning, and the disposition of this case that notified the Plaintiff of the payment of value-added tax was serious and apparent.

3) Lastly, the value-added tax imposed on OO communications or for which tax liability was established prior to the instant merger through division was fully paid thereafter, and the Plaintiff’s joint and several tax liability terminated, and the Defendant’s correction on March 9, 2012 was made even though the Plaintiff’s joint and several tax liability did not exist, and is serious and obvious.

B. Relevant statutes

Paper in the Appendix

C. Determination

1) Determination on the first argument

In the case of a merger of a company, the validity of the merger shall not be asserted except for the lawsuit for nullification of the merger where the merger takes effect through the registration of the merger. However, even according to the Plaintiff’s assertion, the Plaintiff completed the merger registration through the merger agreement with BB and the resolution of the general meeting of shareholders for approval of the merger. On the other hand, it cannot be found at all that the merger of this case was invalidated by the lawsuit for nullification of the merger. Therefore, the above merger cannot be deemed null and void even if the merger of this case was reported by the breach of the contract or illegal means as alleged by the Plaintiff, and the Plaintiff’s assertion on this part is without merit

2) Determination on the second argument

As seen earlier, the Defendant discovered that BB filed a value-added tax return from the first to the second period of 2007, when it had not traded goods or services with OO stock companies, etc., and discovered the fact that BB submitted a list of total tax invoices and the list of total tax invoices by customer and by seller as if there was a normal transaction, and cancelled or reduced each value-added tax and corporate tax on the attached sheet ex officio on March 9, 2012. Furthermore, the entries in the attached Table Nos. 9 through 13 and 15 through 17 alone reveal the fact that the Defendant submitted a false list of total tax invoices and already canceled or reduced value-added tax and corporate tax, and there is no other evidence to acknowledge that BBB issued a false list of tax invoices without a real transaction. Accordingly, the instant disposition cannot be deemed to have been notified of a joint payment of value-added tax on the false list of tax invoices, and this part of the Plaintiff’s assertion is without merit.

3) Judgment on the third argument

Since the correction of reduction is partly canceled of the initial disposition, the object of the lawsuit is the remainder after reduction of the initial disposition. In this case, the object of the confirmation of invalidation is the defendant's joint and several tax obligor's notification as of April 19, 201 to the plaintiff, and the notification of the designation of the joint and several tax obligor as of March 9, 201 and the notification of the payment notice as of April 20, 201 with respect to the value-added tax as of March 9, 201 and its additional dues, and the defect should be determined as of the above disposal timing. On this premise, the value-added tax imposed or established with respect to the communication prior to the merger or division and division of this case is the defendant who has been paid all the above value-added tax, and the above disposition cannot be seen as retroactively null and void because it is not recognized that the above value-added tax was fully paid before the disposition, and it is not recognized that the above disposition was terminated, and the purport of Gap evidence 16, and the above disposition cannot be asserted as to the whole evidence 19.

4. Conclusion

Therefore, the plaintiff's primary claim is dismissed as it is without merit, and the judgment of the court of first instance is just as it is concluded, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.