Plaintiff (Law Firm Rate, Attorneys Kang Sung-sung et al., Counsel for the plaintiff-appellant)

The head of Yangcheon Tax Office

April 24, 2007

Seoul Administrative Court Decision 2006Guhap11484 decided Oct. 13, 2006

1. Revocation of a judgment of the first instance;

2. Value-added tax imposed on the Plaintiff on April 1, 2005, value-added tax amounting to 8,927,030 won for the first term of 2,949,170 won for the second term, the first term portion of 4,828,590 won for the second term, the second term portion of 2,546,830 won for the second term of 2001, the first term portion of 1,024,75 for the first term of 203

The imposition of KRW 0 shall be revoked.

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

The same shall apply to the order.

1. Details of the disposition;

A. Nonparty 1 is a business operator who registered his/her business in the name of Nonparty 2, who is the wife, and registered his/her business in the name of “○○○○○”, and was engaged in transportation brokerage, etc. in Gangwon-do on December 31, 2002.

B. While ○○○○ did not transport the goods to Nonparty 3 and 4, the head of the Geumcheon District Tax Office submitted a written confirmation from Nonparty 1 that “the Plaintiff did not issue a tax invoice to Nonparty 3, etc. because ○○○ did not issue a tax invoice by introducing it to ○○○,” and notified the Defendant of the taxation data that the Plaintiff did not report the sales of the goods despite having received the delivery of the goods to Nonparty 3 and 4.

C. Accordingly, on April 1, 2005, the Defendant imposed and notified the Plaintiff of value-added tax equivalent to the sum of KRW 105,930,000 for the first term portion, KRW 15,020 for the second term portion, KRW 25,780,00 for the second term portion, KRW 14,30,00 for the second term portion, and KRW 7,400 for the first term portion in 2003, KRW 105,930,00 for the first term portion in 200 (hereinafter “instant disposition”).

D. On June 29, 2005, the plaintiff appealed against the defendant on June 29, 2005, and the defendant made a decision on July 27, 2005 to the effect that the plaintiff's assertion is reasonable, and thus, it should re-examine the actual transaction and correct the tax base and tax amount according to the result (hereinafter "the re-audit decision of this case"), and notified the head of the Geumcheon District Tax Office of this decision, and on July 29, 2005, the decision of the court below reached the plaintiff.

E. Meanwhile, the head of the Geumcheon District Tax Office, upon notification of the re-audit decision by the defendant, conducted a re-audit from September 6, 2005 to October 21, 2005, determined that the initial decision was justifiable and notified the defendant on October 18, 2005. On October 24, 2005, the defendant notified the plaintiff that the initial decision was justifiable.

F. Accordingly, the Plaintiff filed a request for review with the National Tax Service on October 28, 2005. The National Tax Service rendered a decision to dismiss the request on December 29, 2005 on the ground that the Plaintiff’s request for review was filed against the Plaintiff on July 29, 2005, which was the 90-day period for filing a request for review from July 29, 2005, when the Plaintiff was notified of the decision of reinvestigation.

G. Accordingly, the Plaintiff filed the instant lawsuit on March 20, 2006.

[Ground of recognition] Unsatisfy, Gap evidence 1 to 5, Eul evidence 2

2. Determination on this safety defense

A. The defendant's assertion

The re-audit decision of this case is purporting to make a re-audit of the plaintiff's claim and to revoke the original disposition of value-added tax against the plaintiff according to the decision, not to purport of cancelling the original disposition of the re-audit decision of this case, and there is no disposition in accordance with the re-audit decision of this case. Thus, where the plaintiff is dissatisfied with the re-audit decision of this case, he shall file a petition for adjudication, etc. within the lawful objection period from the date of receiving the notice of the re-audit decision of this case, and seek cancellation of the initial disposition of this case. Since the plaintiff was dismissed on July 29, 2005 by filing a request for review with the National Tax Service on October 28, 2005, which was already over ninety days from the date of receiving the notice of

(b) Markets:

(1) Generally, a correction disposition is a disposition that gives favorable effect to taxpayers, such as partial revocation of tax amount, by changing the original disposition of imposition, not by the initial disposition of imposition and separate taxation. Thus, in a case where the remaining part of the decision of correction remains illegal as it is not yet revoked, the object of an appeal litigation shall be the remaining part of the original disposition of imposition and the decision of correction shall not be revoked by the decision of correction, and in this case, whether the decision of correction is not a subject of an appeal litigation, and it shall be determined on the basis of the initial disposition (see Supreme Court Decision 98Du3211, May 26, 1998, etc.).

(2) Therefore, in full view of the purport of the argument in Gap evidence No. 4, the plaintiff asserted that "the disposition authority imposed the value-added tax on the plaintiff only with the non-party 1's confirmation document without any accurate basis for the specification of transactions, etc." in the objection procedure, and the defendant accepted the plaintiff's assertion and made a reinvestigation decision on July 27, 2005 that "it is deemed that the plaintiff's assertion is well-grounded, so it is necessary to re-examine the actual transaction and correct the amount of taxation table and the amount of tax according to the result," and then notify the plaintiff of the result of re-audit that the initial disposition is justifiable around October 24, 2005, and the plaintiff filed a national tax appeal on October 28, 2005 with respect to the disposition of this case.

(3) According to the above facts, since it is impossible for the plaintiff to know what decision was made by the disposition agency in the future according to the reinvestigation decision, the decision of reinvestigation itself alone is bound to withhold the decision as to the plaintiff's achievement of the plaintiff's purpose of litigation. In order to determine whether to object to the disposition in this case, the decision can be made only after the disposition was made according to the result of reinvestigation. Thus, if the decision of reinvestigation was made in the procedure for raising an objection that is expected to be partially cancelled or corrected, the decision of reinvestigation should be based on the date of the decision of reinvestigation as to whether the legitimate period of request for reexamination is complied with as to the remaining part, as in this case, under the premise that the plaintiff's main agent is well-grounded, the decision of reinvestigation made on October 24, 2005, on which the defendant notified

(4) Therefore, the plaintiff can make a request for review to the National Tax Service within 90 days from the date of receiving the notice of the results of reexamination. Thus, the plaintiff's request for review filed on October 28, 2005 was filed within the above period, and thus, the decision to dismiss the request for review by the National Tax Service on the ground of the excess of the period of request for review is unlawful. Thus, the defendant's above assertion

3. Whether the disposition is lawful;

(a) Facts of recognition;

(1) From April 1, 1998 to February 12, 2001, the Plaintiff registered the business with the trade name “Maisung”, and from July 1, 2003 to December 31, 2004, as the “△△△△△△”, and as the branch owner, did not make any business registration between February 13, 2001 and June 30, 2003. However, from March 1, 2001 to September 2002, the Plaintiff was working as the freight truck driver from Nonparty 5 Company from March 2001 to September 202.

(2) On June 18, 2004, Nonparty 1, upon undergoing the above tax investigation, prepared a written confirmation to the effect that he arranged the transportation to the Plaintiff, etc. and paid the payment (hereinafter “instant written confirmation”) accompanied by the monthly statement stating the details of the transportation arrangement to 12 branch owners including the Plaintiff, etc.

(3) On June 23, 2005, after undergoing a tax investigation, Nonparty 1 prepared a written confirmation with respect to the Plaintiff on June 23, 2005 that the part related to the Plaintiff was mistakenly written. The instant confirmation document prepared at the time of the first instance court’s appearance as a witness and testimony at the time of the tax investigation was based on the ○○○○○○’s operation. While Nonparty 1 prepared the part related to the Plaintiff’s transport of freight in the instant confirmation document, the portion related to the Plaintiff’s arbitrary entry of Nonparty 1, including the Plaintiff, etc., known to Nonparty 1, in the course of his tax investigation, is excessive, and it is different from the actual part or amount. ② At the time of the tax investigation, Nonparty 1 submitted to the Defendant an operation log based on the instant confirmation document, and ③ the introduction of the freight to the Plaintiff is proved to be around early 203.

[Ground of recognition] Evidence No. 2-1 to 3, Evidence No. 9-2, Evidence No. 12, Evidence No. 2, Evidence No. 5-1 to 4, Evidence No. 6, Evidence No. 1 to Non-party No. 1 of the first instance trial, and the purport of the whole pleadings

(b) Markets:

(1) Therefore, the tax authority shall investigate and determine the tax base and amount of tax in case of failure to report value-added tax, and in such a case, Article 21(2) of the Value-Added Tax Act provides that “where the tax base and amount of tax are determined or corrected for each taxable period pursuant to the provisions of paragraph (1), the head of the competent district tax office having jurisdiction over the place of business, the head of the competent regional tax office having jurisdiction over the place of business, or the Commissioner of the National Tax Service shall be based on tax invoices,

(2) The only ground for the disposition of this case is the confirmation document of this case. In light of the above facts, ① Nonparty 1 testified that the part of the confirmation document of this case against the Plaintiff was prepared differently from the fact in the process of reducing the 11 ton of freight truck transport portion in accordance with the tax invoice. ② The Plaintiff was working as the truck driving number of the non-party 5 corporation during the taxable period imposed on the Plaintiff, and was not a party owner. The Plaintiff was also a party owner after the registration of the business from July 1, 2003 to the △△△△△△. The introduction of the freight to the Plaintiff was made around July 2003. ③ Even if the confirmation document of this case was prepared on the basis of the ○○○○'s driving log, the above confirmation document of this case was made to the Plaintiff, not the submission document of the confirmation document of this case, and thus, the disposition of this case should be confirmed differently from the taxation procedure of this case.

4. Conclusion

Therefore, the plaintiff's claim is justified, and the judgment of the court of first instance is unfair with different conclusions, so the plaintiff's appeal is accepted, and the judgment of the court of first instance is revoked, and it is so decided as per Disposition with the cancellation of the disposition of this case.

Judges Jeong Jong-ok (Presiding Judge)