[1] Purport of the provisions of Article 30(3) of the former Installation and Utilization of Sports Facilities Act, and whether a successful bidder of a golf course prior to completion succeeds to the approval of the project plan that was obtained by the previous owner as a matter of course (negative)

[2] The case affirming the judgment below holding that in a case where Gap company, which purchased the above site from the above successful bidder, acquired the golf course business with the remaining site from the person who obtained the original approval of the business plan, while the construction of the golf course was conducted at least 70% after the approval of the business plan for the golf course, the above acquisition price of the business right is included in the above acquisition price

[1] The purport of Article 30(3) of the former Installation and Utilization of Sports Facilities Act (amended by Act No. 6907 of May 29, 2003; hereinafter “former Sports Facilities Act”) is to interpret that where a person who has obtained approval of a business plan succeeds to the rights, obligations, and membership under the approval of the person who has obtained approval of the business plan, such as the transferee, heir, and the corporation after the merger, in case where the site of a golf course, which is an essential facility before completion, is decided by the execution of collateral security right, the human and material organization of the sports facility before completion of construction of the sports facility remains in the existing business plan because it is divided without the intention of the person who has obtained approval of the business plan, and thus, it is reasonable to interpret that a person who has obtained approval of a business plan remains entitled to succeed to the ownership of the sports facility before completion of construction of the sports facility business plan as a matter of course as a matter of course to succeed to the ownership of the site of the previous golf course in the business plan.

[2] Where most land on a golf course site was awarded to a third party while the construction of the golf course was conducted more than 70% after the approval of the project plan for the golf course, and the company Gap, which purchased the above golf course site from the successful bidder, entered into a contract to succeed to the obligation to return membership payments to the members of the existing golf course and obligations related to the construction of the golf course with the remaining site, the case affirming the judgment below holding that although the business right fees such as the approval of the business plan are not specified in the contract for the transfer and takeover of the golf course, the amount calculated by subtracting the standard market price of the remaining site from the obligations succeeded to by the company Gap is the business right acquisition

[1] Articles 12 and 30(3) (see current Article 27(3)) of the former Installation and Utilization of Sports Facilities Act (Amended by Act No. 6907, May 29, 2003); / [2] Article 22-2(1) of the former Framework Act on National Taxes (Amended by Act No. 9911, Jan. 1, 2010); Article 82 (see current Article 147 of the Framework Act on Local Taxes) of the former Local Tax Act (Amended by Act No. 1021, Mar. 31, 2010); Articles 12 and 30 (see current Article 27(3) of the former Installation and Utilization of Sports Facilities Act) of the former Installation and Utilization of Sports Facilities Act (Amended by Act No. 6907, May 29, 2003); Article 238(3) of the former Installation and Utilization of Sports Facilities Act (Amended by Act No. 370, Mar. 37, 2005)

[1] Supreme Court Decision 2005Da49836 Decided June 29, 2006

Cheongong Co., Ltd. (Law Firm Jeonwon et al., Counsel for the defendant-appellant)

Agu Gun (Law Firm Sejong, Attorneys Lee Jong-se et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2008Nu17679 decided November 5, 2008

All appeals are dismissed. The costs of appeal are assessed against each party.

1. The plaintiff's grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

Article 22-2(1) of the former Framework Act on National Taxes (amended by Act No. 9911, Jan. 1, 2010; hereinafter the same) provides that “Any correction that increases the amount of tax initially finalized under the provisions of tax-related Acts shall not affect the rights and obligations under this Act or tax-related Acts concerning the amount of tax initially finalized.”

In full view of the language and text of the above provision and the purport of the main legislative purport thereof, even if a corrective disposition is taken to increase or decrease, any objection against the amount of duty initially reported or determined due to the lapse of the objection period, etc., if a corrective disposition to increase or decrease has taken place, the original return or determination should lose its independent existence value by absorbing the corrective disposition, and in principle, only the corrective disposition would be subject to appeal litigation regardless of the lapse of the objection period against the initial return or decision, and a taxpayer may also assert an illegal cause as to the initial return or decision in the appeal litigation (see Supreme Court Decision 2006Du17390, May 14, 2009). However, a taxpayer may not seek cancellation of the tax amount already reported or determined, and may seek cancellation of the increased tax amount by the corrective disposition to the extent of the

Meanwhile, Article 82 of the former Local Tax Act (wholly amended by Act No. 10221, Mar. 31, 2010; hereinafter the same) provides that “Except as otherwise provided for in this Act and other Acts and subordinate statutes, the Framework Act on National Taxes and the National Tax Collection Act shall apply mutatis mutandis to the imposition and collection of local taxes.” Since “the imposition of local taxes” referred to in this context is related to the determination of liability to pay taxes, Article 22-2(1) of the former Framework Act on National Taxes which regulates the determination of the initial disposition in relation to the determination of liability to pay taxes is related to the determination of liability to pay taxes, and Article 22-2(1) of the former Framework Act on National Taxes, which does not have any separate provision corresponding to Article 22-2(1) of the former Framework Act on National Taxes, it is reasonable

According to the reasoning of the judgment below, the court below determined that the part of the lawsuit of this case seeking revocation of the increase in tax amount is unlawful, since it is apparent in the record that the plaintiff filed a lawsuit within 90 days from July 31, 2004, which was the date of original disposition, or did not go through the procedure of filing an objection, request for examination, etc. under the Local Tax Act, and that there was a correction disposition by the defendant on June 10, 2005.

In light of the above provisions, legal principles, and records, the judgment of the court below is just, and there is no error in the misapprehension of legal principles as to Article 22-2 (1) of the former Framework Act on National Taxes and Article 82 of the former Local Tax Act.

2. The defendant's grounds of appeal are examined.

The purport of Article 30(3) of the former Installation and Utilization of Sports Facilities Act (amended by Act No. 6907 of May 29, 2003; hereinafter “former Sports Facilities Act”) is to interpret that where a person who has obtained approval of a business plan succeeds to a business transfer, death, or merger with respect to a sports facility before completion of the business plan prior to the report and registration of the sports facility business by completing construction works, the transferee, heir, or corporation after the merger succeeds to the status of the person who has obtained approval of the business plan prior to the completion of the business plan pursuant to Article 12 of the same Act. In a case where the site of a golf course, which is an essential facility prior to the completion of the construction of a sports facility, is at the execution of mortgage, the human and physical organization of the sports facility before completion of the construction of the sports facility remains as it is for the person who has obtained the existing approval of the business plan, and thus, the person who has received the approval of a business plan prior to the completion of the construction plan shall succeed to the site of the golf course (see 2060.).

(1) According to the reasoning of the judgment below, the court below found that ○○○○○○, Inc. (hereinafter “○○○○○”) decided to conduct the instant golf course development project on a scale of 1 to 27 holes from Gyeonggi-gun ( Address 1 omitted), 200 to 70, 270, 300, 700, 46, 70, 198, 206, 70, 500, 206, 70, 196, 206, 70, 50, 70, 70, 700, 196, 50, 706, 70, 196, 206, 206, 70, 50,000, 70,000,000,000 won and 50,000,000,000 won and 50,000,07,00 won.

Based on the above factual basis, the lower court determined that the disposition to rectify the instant increase or decrease was unlawful, since it is inevitable to regard the remainder exceeding the officially announced land price as the cost of acquisition of goodwill, inasmuch as it is practically impossible to distinguish between the proceeds of the instant land No. 2 and the proceeds of the instant business from the business plan and the approval of the business plan for a golf course, it is essential to acquire legal status, such as the approval of a business plan, through a separate contract, in order for the Plaintiff, who is the transferee of the instant land No. 1, to normally operate a golf course. However, even though the cost of the business right, such as the approval of a business plan, is not specified in the contract for the transfer of business, the acquisition price of the instant land, but the cost

In light of the above legal principles and records, the judgment of the court below is just and acceptable, and there is no error in the misapprehension of legal principles or omission of judgment as to the property value or deemed acquisition of business rights, such as approval of business plans, as otherwise alleged in the

3. Conclusion

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

Justices Park Si-hwan (Presiding Justice)