The imposition of penalty tax is legitimate because of poor management and issuance of a written order for release of tax-free oil to persons other than fishermen.

The issuance of a delivery order to a person other than the fishermen due to the failure to verify the relevant documentary evidence, such as failure to verify the relevant documentary evidence, and the issuance of a delivery order to the persons other than the fishermen, and there is no justifiable reason to believe that there is no reason to believe that there

Value-added tax, etc. on petroleum products for farming, forestry, fishery and coastal passenger ships under Article 106-2 of the Restriction of Special Taxation Act;

2015Guhap5614 Revocation of Disposition of Imposition of Value-Added Tax, etc.

○○○○ Cooperatives and 6 others

00. Head of tax office

May 23, 2018

July 11, 2018

1. All of the plaintiffs' claims are dismissed.

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

Cheong-gu Office

Each disposition imposing additional tax as stated in the attached Table 1 that the defendant imposed on the plaintiffs shall be revoked.

1. Details of the disposition;

A. The Plaintiffs are non-profit corporations established under theo Industry Cooperatives Act (Article 1 and Article 4 of theo Industry Cooperatives Act; hereinafter referred to as the “SS”) and the Restriction of Special Taxation Act, which are exempt from value-added tax, etc. as petroleum products for fishery use by fishermen under the Restriction of Special Taxation Act, with the aim of improving their status and strengthening their competitiveness based on their independent cooperative organizations, thereby contributing to enhancing the quality of life for fishermen and fishery product processors and contributing to the balanced development of the national economy.

(b) A suspicion of illegal distribution of tax-free petroleum, as a result of planning and inspection on tax-free petroleum for fisheries;

On September 2013, SS, located within the jurisdiction of the head of the national tax office including the Defendant, inspected the management status of tax-free petroleum and the suspicion of illegal circulation, and ordered SS to collect additional tax on the reduced or exempted tax amount in accordance with relevant provisions, such as Article 106-2(11) of the former Restriction of Special Taxation Act (amended by Act No. 11133, Dec. 31, 201; hereinafter the same shall apply) in the event that S is found to have illegally issued or mistakenly issued tax-free petroleum purchase card or delivery order (hereinafter referred to as "purchase card, etc.") or wrong issuance of tax-free petroleum.

C. Accordingly, during the period from September 16, 2013 to December 4, 2013, the Defendant conducted an inspection of the supply and management of duty-free petroleum for fishing (subject year: from January 1, 2008 to December 31, 2012) for the Plaintiffs’ fishermen pursuant to the “Plan on Data Processing of Illegal Distribution of Tax-Free Petroleum for Fishing,” and confirmed that the Plaintiffs issued a delivery order to the fishermen who left or died abroad, and issued a delivery order to the abandoned vessels, and the details are as follows.

D. Since then, the Defendant imposed the additional tax on the Plaintiffs, each of the listed in the separate sheet No. 1, which is equivalent to 20% of the amount of traffic, energy and environment tax, education tax, and value-added tax reduced or exempted by the Plaintiffs pursuant to Article 106-2(11)2 of the former Restriction of Special Taxation Act (hereinafter “instant provision on imposition of additional tax”), on the grounds that the issuance of the tax-free petroleum purchase card, etc. was insolvent (hereinafter “each of the instant dispositions”).

E. The Plaintiffs appealed and tried to the Tax Tribunal, but the Tax Tribunal dismissed the claims on July 29, 2014.

Facts that there is no dispute for recognition, each entry of Gap's 1 through 5 (if there is a number, including each number; hereinafter the same shall apply), and the purport of the whole pleadings.

2. The plaintiffs' assertion

A. As to the interpretation of the provision on the imposition of additional tax in this case

Unlike the general provision on the imposition of penalty tax, the provision on the imposition of penalty tax of this case, unlike the provision on the imposition of penalty tax as a sanction on taxpayer's failure to cooperate in tax payment, if the public responsibility for the management of tax-free oil is granted to SS and the penalty tax is imposed as a responsibility or sanction for poor management. In light of its legislative intent, strict interpretation of the provision is required, and in the case of fishermen, the penalty tax shall be collected only when exempted oil is used for purposes other than fishery pursuant to Article 106-2 (9) of the former Restriction of Special Taxation Act. In order to impose penalty tax pursuant to the provision on additional tax of this case to the plaintiffs, the defendant erred in the purchase card, etc. of tax-free oil or issued the tax-free oil purchase card, etc. to persons other than fishermen for purposes other than fishery because the tax-free oil supplied by the plaintiffs was used for the fishery business, and thus, the defect in the procedure of issuing the tax-free oil purchase card, etc. can not be applied to each disposition of this case.

B. The assertion that the management failure does not constitute "management failure"

Under the tax law, penalty taxes may not be imposed if there is a justifiable reason not to mislead the Plaintiffs into neglecting their duties. The Plaintiffs confirmed the power of delegation of fishermen, identification cards, etc. pursuant to the relevant provisions, such as the former Guidelines for Oil Supply Business (amended by Act No. 1140, Oct. 5, 2012; hereinafter “Business Guidelines”), and issued the tax-free petroleum purchase card, etc. attached thereto. The tax-free petroleum released therefrom was actually used for both fishing purposes. Therefore, it cannot be said that there was a poor management prescribed in the Additional Tax Imposition Regulations, and even if not, it cannot be said that there was a justifiable reason not to mislead the Plaintiffs into neglecting their duties. Accordingly, each disposition of this case is unlawful in this respect.

3. Systems and details of tax-free regulations;

(a) The legal system (attached Form 2, referring to "relevant statutes");

For the purpose of supporting the economic stability of agricultural and fishing villages, the special provisions on the exemption of traffic tax, etc. were newly enacted on December 29, 200 by the Restriction of Special Taxation Act (amended by Act No. 6297, Dec. 29, 2000), and the special provisions on the exemption of traffic tax, etc. were newly established under Article 106-2 of the Restriction of Special Taxation Act (amended by Act No. 6538, Dec. 29, 2001). According to the delegation of the Restriction of Special Taxation Act, the special provisions on the application of value-added tax and zero-rate tax exemption, etc. (hereinafter referred to as "special provisions") were enacted on the machinery and materials and petroleum for agriculture, livestock, forestry, and fishing as prescribed by the Presidential Decree (amended by Presidential Decree No. 24369, Feb. 15, 2013). Article 27 of the special provisions again delegate the details to the National Tax Service, such as the procedure for supplying tax-free oil and the application procedure for refund.

In addition, the old Ministry for Food, Agriculture, Forestry and Fisheries (former Ministry of Maritime Affairs and Fisheries) designated as a supervisory agency of the tax-free petroleum system pursuant to Article 26 of the Special Cases Concerning the Provision of the former Guidelines for the Supply of Tax-Free Petroleum for Fishing (amended by Ordinance of the Ministry for Food, Agriculture, Forestry and Fisheries No. 355, Feb. 25, 2013; hereinafter referred to as the "Guidelines for Supply Management") was enacted, respectively, and SS designated as a tax-free petroleum management agency pursuant to Article 4 of the Guidelines for Supply Management.

(b) Tax-free oil supplied;

With respect to petroleum products supplied through an association, which is a agency for managing tax-free petroleum such as the plaintiffs, to be used by a person engaged in the fishery or fishery products, and the business for the operation of a fishing ground and a building site on the Korean Standard Industrial Classification publicly notified by the Commissioner of the Statistics Korea, the value-added tax, etc. shall be exempted (Article 106-2 (1) 1 of the former Restriction of Special Taxation Act, Articles 106-2 (3) and 14 (1) 1 (a) of the Special Cases of Special Taxation Act and Article 15 (1) 1 (a) of the Special Cases of Special Cases

(c) An overview of the procedures for tax-free supply to fishermen;

Procedures to be supplied to fishermen by duty-free oil under relevant Acts and subordinate statutes, such as the Gu Restriction of Special Taxation Act, shall be indicated as follows:

In other words, if SS, such as the plaintiffs, enters into a tax-free supply contract with oil oil, oil refineries shall supply petroleum to the oil reservoir on taxation basis, and oil reservoir shall be supplied to the oil reservoir of SS, direct oil stations, and supply gas stations on tax-free grounds.S first issues a fishing delivery order to the fishermen, and the fishermen shall be supplied with tax-free oil by presenting the delivery order to the oil reservoir of SS, direct oil stations, or supply stations.

(d) Application for delivery instructions and procedures for issuance thereof;

(1) Application and issuance procedures, such as delivery instructions, in accordance with relevant provisions;

According to Article 106-2(3) and (4) of the former Restriction of Special Taxation Act and Article 16-2(2) of the special provisions of Article 106-2(3) of the same Act, in order for fishermen to be supplied tax-free oil, they shall report the status of possession of vessels and facilities, fishery management, and obtain a delivery order from SS after reporting as prescribed by Presidential Decree, and if there are any changes in the details of the report due to the acquisition or transfer of vessels and facilities or the death of fishermen, etc., the changes shall be reported within 30 days from the date of occurrence of such reasons. S shall issue a delivery order in consideration of the status of possession of vessels and facilities of fishermen, etc., and the scale of fishery management, etc., and may request administrative agencies, etc. to provide death data, etc. in order to efficiently perform tax-free oil management duties pursuant to

According to Article 15-3 (3) and (5) of the Special Cases, where a farmer files a report or modification report pursuant to Article 106-2 (3) of the former Restriction of Special Taxation Act, the report or modification report publicly notified by the Commissioner of the National Tax Service shall be made, and in cases of a newly purchased vessel, documents (ship registration certificate or fishery permit certificate) evidencing the purchase shall be attached, and the SS certificate shall be confirmed and sealed. According to Article 15-3 (4) of the Special Cases, upon receipt of the report or modification report or notification of the cancellation and modification of the vessel from the local government, the SS certificate shall verify the details thereof and enter them in the Tax-Free Oil Management Book, and shall, if necessary, directly verify and state whether the vessel is used, type, size, type of use, engine number, time measuring instrument,

In addition, Article 20 (2) of the Special Cases Concerning SS provides that S may issue a delivery order after receiving documents from fishermen to verify whether a fishery business is operated recently, as prescribed by the Ordinance of the Ministry for Food, Agriculture, Forestry and Fisheries, and Article 15 of the Rules on Supply Management provides that "1. A copy of sales documents, such as sales of wholesale, retail, and brokers, shipping volume, etc., which can prove the fact of sale of fishery products, and a report on vessel entry and departure under Article 15 of the Rules on Ship Safety."

2) Procedures for issuing tax-free petroleum purchase cards, etc.

Article 106-2 (4) of the former Restriction of Special Taxation Act provides that farmers and fishermen who intend to be supplied with duty-free petroleum shall be issued with a purchase card or order for delivery of duty-free petroleum prescribed by Presidential Decree from a cooperative, which is a management agency of duty-free petroleum, and accordingly, Article 16 of the special provisions classify farmers and fishermen subject to the issuance of a "certificate for purchase of duty-free petroleum" into those subject to the "certificate for delivery", and fishermen in this case shall be provided with duty-free oil only in accordance with the order for delivery (or right for purchase) under Article 16 (2)

Meanwhile, the Plaintiffs, using the “tax-free petroleum supply card1” as prescribed in the business guidelines, managed the annual supply quota and fishermen subject to the supply of tax-free petroleum (Article 17 of the Business Guidelines). The fishermen, when applying for the issuance of the tax-free petroleum supply card, shall report the possession of vessels, etc. and English facts pursuant to Articles 20 through 22 of the Business Guidelines and submit relevant documentary evidence. The Plaintiffs prepared a tax-free petroleum management ledger on the status of fishermen’s vessels and facilities and English facts, and the fishermen are in charge of the duty-free oil and the fishermen subject to tax-free petroleum supply by submitting such tax-free petroleum supply card whenever they request the issuance of the delivery order and issuing the delivery order. Unlike the “tax-free petroleum purchase card” stipulated in Article 106-2 of the Restriction of Special Taxation Act and Article 16 subparag. 1 of the Special Provisions, the said card alone does not have a function to purchase and settle tax-free petroleum.

(e) sanctions on the use of duty-free oil;

(i) sanctions against fishermen of the head of the competent tax office;

The head of the competent tax office shall, where a fisherman uses petroleum supplied in accordance with the order for release issued under Article 106-2 (4) of the former Restriction of Special Taxation Act for any purpose other than the fishery (Article 106-2 (9) of the former Restriction of Special Taxation Act), where a person other than a fisherman is issued an order for shipment under paragraph (4) or a person other than a fisherman takes over tax-free oil supplied through the order for shipment or the order for release from the fisherman (Article 106-2 (12) of the former Restriction of Special Taxation Act), additionally collect penalty tax on the reduced or exempted tax

(ii) sanctions against SS by the head of the competent tax office;

The head of the competent tax office shall, where the agency responsible for managing tax-free petroleum issues a delivery order by fraud or other improper means, or where the provisions on the imposition of penalty tax in this case are prescribed, collect penalty tax in accordance with such provisions (Article 106(11) of the Restriction of Special Taxation

(iii) sanctions against S fishermen;

(1) In cases where a fisherman makes a false report or fails to make a change report under Article 106-2 (3) of the former Restriction of Special Taxation Act; (2) in cases where he/she transfers to another person the delivery order issued under paragraph (4) of the same Article; and (3) in cases where a reason for additional tax reduction or exemption arises under paragraph (9) of the same Article, the fishermen concerned shall not use tax-free petroleum for two years from the date the management agency of tax-free petroleum becomes aware of the fact (where he/she fails to pay the additional tax amount under Article 106-2 (9) of the former Restriction of Special Taxation Act by the date the two years have elapsed, by the payment date) (Article 106-2 (10) of the former Restriction of Special Taxation Act); and the management agency of tax-free petroleum is aware of the occurrence of reasons prescribed in Article 106-2 (9), (11) and (12) of the former Restriction of Special Taxation Act, immediately suspend the issuance and use of the tax-free petroleum purchase card, etc.

4. Whether each of the dispositions of this case is legitimate

A. Determination on the assertion on the interpretation of the provision on imposition of additional tax of this case

Comprehensively taking account of the structure and contents of the provisions on the duty-free oil and the following circumstances revealed in full view of the aforementioned evidence, the provision on the imposition of the penalty tax in this case is reasonable to deem that the purpose of the legislation is to issue a written order for shipment to a person who fails to meet the requirements for issuing the written order for shipment, or to eliminate the possession of illegal distribution that may arise in the course of issuing the written order for shipment in violation of the relevant procedures, and it is not for the collection of penalty tax on the reduced or exempted tax amount on

Therefore, in the case where the plaintiffs issued the order of release to fishermen or issued the order of release to persons other than fishermen by wrong management, such as failure to verify evidentiary documents, etc., the defendant can collect additional tax from the plaintiffs in accordance with the provision of the Additional Tax Imposition, and whether the duty-free oil supplied in accordance with the order of delivery issued as above has been actually illegally distributed is not considered as a taxation requirement. Accordingly, this part of the plaintiffs' assertion is without merit.

① Under the language and text, the provision on imposition of additional tax of this case was only two taxation requirements such as “management poorness, such as failure to confirm the relevant documentary evidence,” and accordingly, “inform the delivery order to the fishermen or issuance the delivery order to the persons other than the fishermen,” which are “the issuance of the delivery order.” Under the principle of no taxation without the law, the interpretation of tax laws and regulations is strictly interpreted in accordance with the statutory text, barring special circumstances, and it is not allowed to expand or analogically interpret without reasonable grounds (see, e.g., Supreme Court en banc Decision 2000Du7131, Mar. 15, 2001). Therefore, the expanded interpretation of the provision on imposition of additional tax of this case, including “the supply of tax-free oil under the relevant delivery order was illegally distributed”, is contrary to the principle of no taxation without the law.

② Under Article 106-2 of the former Restriction of Special Taxation Act, the tax-free oil system provided for in Article 106-2 of the same Act supports fishermen’s increase in income by reducing or exempting value-added tax, etc. on petroleum products supplied for the purpose of using fishing machinery, vessels, and facilities, while increasing fishery productivity by facilitating the distribution of fishery machinery, vessels, and facilities, and at the same time preparing for the shortage of fishing village labor capacity (see Constitutional Court Order 2009HunBa171, Dec. 28, 2010). Therefore, it is necessary to thoroughly manage the supply, use, etc. of duty-free oil in order to achieve the above legislative purpose after the establishment of the system for

③ Accordingly, the former Restriction of Special Taxation Act designates the Plaintiffs whose members are fishermen as tax-free petroleum management organizations; the authority to request the administrative agencies, etc. to issue the order of delivery; and to request the fishermen’s death data in order to properly perform their duties; and also grants the right to suspend the issuance and use of the order of delivery to the fishermen when the grounds for additional collection under Article 106-2(9), (11), and (12) of the former Restriction of Special Taxation Act accrue. The Plaintiffs shall faithfully exercise such authority in accordance with the relevant provisions, such as the former Restriction of Special Taxation Act. In order to prevent the distribution or use of the duty-free oil in advance in violation of the relevant provisions, such as the former Restriction of Special Taxation Act, and to establish a transparent order in distribution and use of tax-free oil, the means for which the Plaintiffs would be subject to sanctions when the Plaintiffs did not exercise or exercise such authority properly in violation of the relevant provisions, such as the former Restriction of Special Taxation Act, and thus, the legislative intent of Article 106-2(11) of the former Restriction of Special Taxation Act is included.

④ If a duty-free oil supplied to fishermen, etc. is deemed to be illegally distributed, in light of the fact that it is difficult to confirm whether the already supplied duty-free oil was unlawfully distributed or not, it would be very difficult to impose sanctions even if a duty-free oil management agency, such as the plaintiffs, issued a delivery order in violation of the procedures stipulated in the relevant Acts and subordinate statutes, and thus, it would be difficult to sufficiently achieve the legislative intent of the instant provision on the imposition of penalty.

B. Determination as to the assertion that it does not constitute "management poor"

1) Relevant legal principles

Generally, in a lawsuit seeking the revocation of a disposition imposing taxes, the burden of proving the facts of taxation is against the person liable to impose taxes. However, in a case where it is revealed that the facts of taxation can be inferred in light of the empirical rule in the specific litigation process, the other party cannot be readily concluded that the pertinent disposition imposing taxes are unlawful dispositions lacking the taxation requirements (see, e.g., Supreme Court Decisions 2002Du6392, Nov. 13, 2002; 2006Du13831, May 29, 2008). Furthermore, in order to facilitate the exercise of a disposition imposing taxes and the realization of a tax claim, additional taxes under tax laws are imposed as administrative sanctions imposed pursuant to the individual tax law, such as a taxpayer’s intentional intent or negligence, but it is unreasonable for the person liable to pay taxes to be unaware of the duty, and thus it cannot be readily determined that there is a justifiable reason to impose taxes on the party concerned (see, e.g., Supreme Court Decision 2007Du13675, supra.).

2) Determination

Considering the aforementioned evidence, the relevant statutes and the overall purport of the statements and arguments set forth in Gap evidence Nos. 11 and 12, it is reasonable to view that the plaintiffs, as the management agency of duty-free petroleum, issued a delivery order without properly verifying the identity or legitimate delegation of authority, actual operational facts, etc. of the issuing party, thereby falling under the case where the fishermen wrong a delivery order or issued a delivery order to the fishermen other than the fishermen due to insufficient management, such as failing to verify relevant documentary evidence under Article 106-2 (11) 2 of the former Restriction of Special Taxation Act. Accordingly, the plaintiffs' above assertion cannot be accepted.

(A) Parts of fishermen departing from overseas or deceased fishermen;

There is no general rule that fishermen may be provided with duty-free oil by entrusting other persons with procedures for issuing written orders for delivery: Provided, That Article 18 of the Guidelines for Supply and Management established by the Minister for Food, Agriculture, Forestry and Fisheries to whom partial tax-free oil supply procedures or follow-up management affairs are delegated pursuant to Articles 20(2) and 26(1) of the Special Cases concerning the Restriction of Special Taxation Act shall be provided with duty-free oil to a person to be supplied pursuant to the Acts and subordinate statutes: Provided, That the association may allow the delegation of authority to another person only if the representative of SSeconomic guidance, such as fishermen in remote areas, is determined to be inevitable; accordingly, Article 23 of the Guidelines for Business prepared with detailed guidelines necessary for the performance of other duties of supplying duty-free petroleum for fisheries and approved by the Minister for Food, Agriculture, Forestry and Fisheries shall not be assigned to or delegated to a person for duty-free oil card held by the owner of a fishing vessel (the owner of a fishing vessel subject to the issuance of a oil card may be delegated to a captain of an oil card or authority to take over the vessel within the permitted period of one fishing vessel:

As above, the business guidelines that set up exceptions to the ‘the principle of acquiring tax-free petroleum himself/herself' prescribed by the law stipulate strict procedures for identification and verification of delegated documents by means of devices to prevent the illegal outflow of tax-free petroleum thereby.

Article 35 of the Business Guidelines shall be prescribed in Article 35, when a fisher presents his/her oil card to prevent unlawful outflow (paragraph 1 of paragraph (1)), he/she shall issue an order for release only after he/she obtains approval from the person in charge of receipt of the order for delivery, and shall issue him/herself to the fishermen subject to the issuance of the relevant oil card, and shall attach his/her identification card to the back of the "written order for delivery for prompt submission" (it may be omitted, if the photograph is registered in the purchase business information system and printed in the written order for delivery) after verifying the identity thereof: Provided, That in cases falling under Article 23 and it is deemed inevitable to supply it, the Association shall submit the letter of delegation (within 3 months), documents (family relation certificates, etc.) attesting that the person is the spouse or lineal ascendant or descendant of the person entrusted with the issuance of the order for delivery only after checking his/her identification card, and the Association shall do so on the back of the "written order for delivery for delivery and delivery of oil (in cases where such photograph is registered in the purchase information system and sale of fishery products)".

On the other hand, Article 106-2 (20) of the former Restriction of Special Taxation Act provides that "the agency responsible for the management of tax-free petroleum may request the administrative agencies to provide death and removal data for the efficient management of tax-free petroleum, and the administrative agencies so requested shall submit the data requested to the agency for tax-free petroleum unless there is any justifiable reason."

According to the provisions of the aforementioned relevant Acts and subordinate statutes, the delivery order in the supply and demand of tax-free petroleum for fishing constitutes a certificate that grants the power to take over oil, and this is, in principle, required to be issued by fishermen themselves. However, in accordance with the supply management guidelines and exceptional delegation provisions prescribed in the business guidelines, only the authorized person with certain status may obtain a delivery order upon delegation from fishermen. As such, it is extremely exceptionally permissible for the authorized person to receive the delivery order. In addition, when the association issuing the delivery order, the procedure for verifying whether the authorized person himself/herself or the delegated document is issued is an essential element of the management of tax-free petroleum in order to prevent illegal distribution of tax-free petroleum due to transfer of the delivery order. Accordingly, the Plaintiffs, who are the tax-free petroleum management agency, should issue the delivery order after checking whether the fishery person himself/herself or whether the pertinent delegated person

However, in this case, the plaintiffs submitted a letter of delegation on part of the delivery order as data confirming the legitimate delegation relationship, and in most cases, documents confirming the identity of the delegated person without stating the relation with the delegating person or the delegation period.

A. In several cases where a mandatory’s identification card was submitted, it is confirmed that the date of issuance of the identification card or the date of change of address was later than the date of delegation. Moreover, the aforementioned evidentiary documents, vessel entry report, etc. submitted by the Plaintiffs are issued at the time when the Defendant inspected the Plaintiffs regarding duty-free oil or around October 2013, or around 2017 during the instant lawsuit. Ultimately, it is difficult to deem that the Plaintiffs appropriately confirmed whether the other party is the principal at the time of issuance of the delivery order, whether the other party is legitimate delegation, and whether the recent operation prescribed in the business guidelines is being carried out.

B) Part on the closed vessel

The owner of a fishing vessel or the owner of a certain vessel shall register the fishing vessel in the fishing vessel register in accordance with Article 13 of the former Fishing Vessels Act (amended by Act No. 11690, Mar. 23, 2013; hereinafter the same shall apply). If a registered fishing vessel is unable to be used as a fishing vessel due to its loss, sinking, scrapping, aging, damage, etc., he/she shall apply for the cancellation of such registration within 30 days (Article 19(1) of the former Fishing Vessels Act). The owner of a fishing vessel whose registration has been cancelled shall remove the fishing vessel license plate attached to the fishing vessel without delay and return it to the competent administrative agency (Article 19(3) of the former Fishing Vessels Act).

As seen earlier, in order to verify the status of fishermen’s vessel possession and English details, the Plaintiffs shall obtain a vessel registration certificate, etc., a copy of sales documents, such as sales volume, shipping volume, and a vessel entry report, etc. to verify the status of possession of the relevant vessel. (Article 106-2(3) and (4) of the former Restriction of Special Taxation Act; Article 15-3(3) and (5) of the Rules on Supply Management; Article 106-2(18) of the former Restriction of Special Taxation Act provides that the Plaintiffs shall be granted the authority to issue and suspend the use of the vessel when they become aware of the occurrence of the causes, such as the amount of tax reduction or exemption under Article 106-2(9), (11) and (12) of the former Restriction of Special Taxation Act, and the Plaintiffs shall submit a vessel entry report, etc. to verify the actual use of the vessel by the last day of the month. In addition, the Plaintiffs shall not be obliged to submit the vessel entry inspection report, and if the Plaintiffs were capable of using the vessel during the last half year.

However, in light of the frequency, period, etc. in which Plaintiff AAS, SBBS,CCS, DDS, and FFS issued each shipment order to a closed vessel, the above Plaintiffs did not comply with the procedures prescribed in the above relevant statutes, and confirmed each of the above documents when issuing the first supply card of free petroleum (Article 21(1) of the Business Guidelines), and thereafter, fishermen presented the supply card of free petroleum issued by these procedures without verifying the status of possession of vessels, etc. or the English language of the pertinent vessel, or without neglecting the confirmation thereof.

Even if the fishermen did not report the closure of the vessel and the plaintiffs did not know such fact, the plaintiffs were regularly submitted the above documents from fishermen, and when issuing the delivery order, the plaintiffs could verify the legal requirements and determine whether the vessels were actually operated.

Nevertheless, if fishermen, etc. were to receive tax-free oil from the Plaintiffs after the registration of the vessel was cancelled, it would be presumed that the Plaintiffs issued the delivery order by neglecting their duty to verify relevant documents.

5. Conclusion

Therefore, the plaintiffs' claim against the defendant is dismissed in its entirety on the ground that it is without merit.

It is so decided as per Disposition.