Whether the substance over form principle violates the substance over form principle

The Plaintiff’s taxation on the Plaintiff is not against the substance over form principle, even if the Plaintiff was unaware of the fact that the borrower or the Plaintiff was not a party to the act of using credit cards.

Article 14 (Real Taxation)

1. 원고 조〇〇, 이〇〇의 소를 모두 각하한다.

2. All remaining plaintiffs' claims are dismissed.

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

Value-added tax imposed by the defendant against the plaintiffs shall be revoked in all the attached disposition.

1. Details of the disposition;

A. The Plaintiffs purchased a truck and entered into ○○○○○ (hereinafter referred to as “○○○”) and registered as a general taxable person for a trucking transport business under the name of a branch entry company.

B. On January 13, 2006, the Defendant issued a pre-announcement of taxation to the Plaintiffs, on the grounds that the Plaintiffs were subjected to the deduction of the input tax by using credit card sales slip prepared falsely at the time of filing the return of the value-added tax from January 13, 2002 to January 13, 2004, and to correct and notify the total of 159,341,40 won as stated in the attached disposition (including the additional tax) as well as the value-added tax (including the additional tax) as stated in the attached disposition. Despite the Plaintiffs’ request for pre-assessment review on February 13, 2006, the Defendant corrected and notified the value-added tax as stated in the pre-announcement of taxation against the Plaintiffs on March 1 through 2, 2006 without undergoing the review procedure.

C. Accordingly, the plaintiffs asserted that the pre-assessment review procedure was defective and filed a civil petition. The defendant revoked the disposition of value-added tax imposed on the plaintiffs other than the plaintiff Cho○ and Lee○○, and then notified the correction and notification of the total amount of KRW 145,455,790 on September 1, 2006 through the defective pre-assessment review procedure (including the additional tax) as stated in the attached disposition on September 1 through 26, 2006 (hereinafter the plaintiff Cho○ and Lee○, as well as the disposition of March 2, 2006 against the remaining plaintiffs on September 1 through 26, 2006

D. On October 20, 2006, the Plaintiffs filed a request for a national tax adjudication on October 20, 2006, but the said request was dismissed on December 20, 2006.

[Ground of recognition] Facts without dispute, Gap 35 to 66 evidence, Eul 6 evidence (including each number), the purport of the whole pleadings

2. Whether the lawsuit by the Plaintiff ○○ and ○○ was lawful

According to the provisions of Article 18(1) of the Administrative Litigation Act, Article 56(2) and (3), and Article 68 of the Framework Act on National Taxes, in order to seek revocation of a disposition imposing national tax, an appeal for adjudication or a request for examination as a procedure for the previous trial shall be filed within 90 days from the date of receiving the notice of disposition. If the relevant request for adjudication or request for examination is dismissed, an administrative litigation shall be instituted within 90 days from the date of receiving the notice of disposition. The above plaintiffs filed a request for a national tax adjudication on the disposition imposing national tax on Oct. 20, 206 even after receiving the notice of disposition on Mar. 2, 2006, and 90 days from the date of receiving the notice of disposition. Thus, the above plaintiffs filed a request for a national tax adjudication on the said disposition (i.e., evidence 65 and 666)

3. Whether the instant disposition against the rest of the plaintiffs except the plaintiff Cho ○ and Lee ○○ is legitimate

A. The plaintiffs' assertion

The above plaintiffs paid all the amount of value-added tax to ○○ Company, which was engaged in tax-related business as a tax manager, while managing a branch car, and ○○ was entitled to deduct the input tax amount by using a false credit card sales slip which was recently used by the above plaintiffs, and evaded or embezzled the corresponding value-added tax. Thus, it is practically impossible for the above plaintiffs to manage and supervise the above illegal acts of ○○○ Company, which was exclusively in charge of preparing, submitting, receiving notice, etc., and to verify whether ○○○ actually reported and paid the value-added tax received from the above plaintiffs. Thus, the defendant’s disposition against the above plaintiffs, other than ○○, was unlawful since it violated the principle of substantial taxation.

B. Determination

The statements in Gap evidence Nos. 27, 33, and 34 (including each number) are insufficient to recognize that the above plaintiffs made a false credit card sales slip and embezzled the input tax after unfairly deducting the input tax even though the above plaintiffs paid all the normal value-added tax amount to ○○○○, and there is no other evidence to acknowledge it. Furthermore, even if such fact is acknowledged, the above plaintiffs are business operators who completed business registration as general taxable persons, and the above plaintiffs are liable for the duty to report and pay the value-added tax of this case. Thus, the above plaintiffs' assertion that the disposition of this case violates the principle of substantial taxation is difficult to accept.

3. Conclusion

Therefore, since the lawsuit of this case by the plaintiff Cho ○ and Lee ○○ is unlawful, all of them are dismissed. Since the remaining plaintiffs' claims are without merit, they are dismissed in all of them. It is so decided as per Disposition.