Where a taxpayer only files a return of tax base and amount of tax and does not pay the tax, the standard for determining the priority of the secured claim of the tax and the right to collateral security;

As a matter of principle, the special rural development tax that consists of acquisition tax and principal tax is a tax by means of tax return, and as a matter of principle, the tax liability is specifically determined by the taxpayer’s act of setting a tax base and amount of tax and the act of payment is a performance of specific tax obligation confirmed by the report. Thus, in determining the priority order of claims secured by the tax and the special rural development tax on the amount of property derived from sale of property which is the object of the right to collateral security, in determining the priority order of claims secured by the tax and the right to collateral security, even if the person liable to pay taxes only reported the tax base and amount of tax to the tax authority and did not pay the tax at the same time, the priority order should be determined on the basis of the date of each tax return and the date of establishment registration of mortgage pursuant to Article 35(1)3(a) of the Framework Act on National Taxes and

Article 35(1)3(a) of the Framework Act on National Taxes and Article 31(2)3(a) of the Local Tax Act

Supreme Court Decision 96Da3807 delivered on April 12, 1996 (Gong1996Sang, 1215), Supreme Court Decision 96Da40264 delivered on April 11, 1997 (Gong1997Sang, 1531) (Gong1997Sang, 1423)

Seongdong-gu Seoul Metropolitan Government (Attorney Choi Jae-cheon, Counsel for defendant-appellant)

Choung Bank (Attorney Kim Jong-hwan, Counsel for the plaintiff-appellant)

Seoul High Court Decision 98Na29362 delivered on October 1, 1998

The appeal is dismissed. The costs of appeal are assessed against the defendant.

We examine the grounds of appeal.

The special rural development tax based on the acquisition tax and the principal tax is a tax by the method of tax payment, and in principle, the tax liability is determined specifically by the taxpayer’s act of having determined the tax base and the amount of tax and by filing a report (limited to the case where the tax office does not file a report from the taxpayer). The act of payment is the performance of specific tax liability determined by the report (see Supreme Court Decision 96Da3807, Apr. 12, 1996). In determining the priority order of the bonds secured by the tax and the special rural development tax, even if the taxpayer filed a report on the tax base and the amount of tax to the tax authority and did not pay the tax at the same time, the determination shall be made on the basis of the priority order after the date of registration of the establishment of a mortgage compared with the date of each report and the date of registration of the establishment of a mortgage on the date preceding the date of registration.

In this view, the judgment of the court below that since the date of reporting the acquisition tax and special rural development tax of this case is more than the date of the registration of the establishment of the defendant's mortgage, the sales price of the real estate of this case should be collected first than the secured debt of the defendant's right to collateral security, the judgment of the court below is just and it is not acceptable to accept all the grounds of appeal that the tax

Therefore, the appeal is 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.

Justices Chocheon-sung (Presiding Justice)