Requirements for a taxation disposition that misleads the facts of the taxation requirements to be void as a matter of course.

Generally, a taxation disposition made on a person who does not have any legal relation or factual relation (income or act) which is subject to taxation is significant and apparent. However, in a case where there are objective circumstances that could mislead him to believe that it is subject to taxation with respect to any legal relation or factual relation which is not subject to taxation, if it is possible to accurately investigate the factual relation, it cannot be deemed apparent even if the defect is serious, and thus, it cannot be deemed that the illegal taxation disposition that misleads the fact subject to taxation is void as a matter of course.

Article 19 of the Administrative Litigation Act, Article 32-2 (1) of the former Inheritance Tax Act (amended by Act No. 4283, Dec. 31, 1990) (see current Article 43 (1) of the Inheritance Tax and Gift Tax Act)

Supreme Court Decision 95Da20379 delivered on December 20, 1996 (Gong1997Sang, 336) Supreme Court Decision 96Da4250 delivered on March 14, 1997 (Gong1997Sang, 1088), Supreme Court Decision 95Da15735 delivered on May 28, 1997 (Gong1997Ha, 1965), Supreme Court Decision 97Da26432 delivered on October 10, 1997 (Gong197Ha, 3442)

Plaintiff

Korea

Daegu High Court Decision 96Na7008 delivered on June 13, 1997

The judgment below is reversed, and the case is remanded to the Daegu High Court.

The grounds of appeal are examined.

1. According to the reasoning of the judgment below, the court below acknowledged the following facts based on the evidence at the time.

(1) Before the division, 1,285 square meters were originally owned by the Plaintiff. On March 25, 1985, Nonparty 1, 285, 3, including the above Nonparty 1, etc., concluded a sales contract in the future on the above site on March 25, 1985 with the Plaintiff, constructed a new building, paid the price for the sale of the site, and claimed a difference in profits by paying the price for the sale of the site, and discussed the problem of the operation of the above business with Nonparty 3 through Nonparty 2. As a result, the specific contents and the issue of raising construction funds, etc. are discussed later, and first, in order to start the business, 3, including the above Nonparty 1, etc., decided to complete the registration of ownership transfer on the above site, and paid 30,000,000 won to Nonparty 1, 300,0000,000 shares in the purchase and sale, 31,2315,281,2586.

(2) On October 2, 1985, the Plaintiff completed the registration of creation of a mortgage near the above site as the maximum debt amount of KRW 600,000,00,000, the debtor 1 and the mortgagee as the plaintiff. The registration of creation of a mortgage near the above site was cancelled on November 7, 1985, and the Plaintiff rendered a favorable judgment ordering the registration of recovery in the claim for the registration of transfer of ownership, etc. filed against the above non-party 1 and the third party, etc. on December 11, 1985, but the registration of recovery was not made on December 11, 1985, since the cancellation of the registration of creation of a mortgage near the above site by dividing the above site into the area of KRW 385.1 square meters, which was revoked on July 26, 1993, only the registration of recovery was made on July 26, 199.

(3) As the above non-party 3 was detached of his hand from his business operation, the above non-party 1 independently performed the construction from December 1985, and the ownership of the site was in the name of the above non-party 1 and the above non-party 3.

(4) On June 16, 1986, the Plaintiff filed a complaint with three third parties, such as the above non-party 1, etc. as the respondent. ① The respondent shall pay 385,00,000 won to the applicant within six months since the last day of the month the construction of a new building was commenced as the starting day. ② The respondent shall bear capital gains tax due to sales. ③ If the respondent fails to implement paragraph (1), the respondent shall take the procedure for the registration of ownership transfer as to the above two sites, and shall transfer the ownership of the newly constructed building to the applicant, and shall transfer the ownership of the newly constructed building to the applicant, and make a provisional registration to secure its implementation on June 20, 1986 to secure its implementation.

(5) On November 3, 1986, the above non-party 1 had registered the preservation of ownership in the name of three persons, such as the above non-party 1, etc. on the building for which the above non-party 1 raised and constructed funds.

(6) On December 16, 1989, the head of the Seoul Western District Tax Office under the Defendant-based Seoul Western District Tax Office imposed KRW 207,880,70,709 on the above non-party 2, by applying the provisions of Article 32-2 (1) of the former Inheritance Tax Act (amended by Act No. 4283 of Dec. 31, 1990), where the actual owner and the nominal owner are different in the property which requires a registration, etc. for the transfer or exercise of the right, notwithstanding the provisions of Article 14 of the Framework Act on National Taxes, for the reason that the registration of co-ownership of the above non-party 2 was made with respect to one parcel of land and its ground buildings outside the above two sites, and the sum of the gift tax and the defense tax as to one parcel of land and its ground buildings outside the above two sites.

(7) With respect to the gift tax claimed by the Defendant in Seoul Western District Office in the first order of November 21, 1995 among the amount of dividends of KRW 547,334,858, which was commenced on November 21, 1995, KRW 55,812,236 was distributed to the Plaintiff, who is the mortgagee, the mortgagee, and KRW 491,52,622 was distributed to the Plaintiff.

2. Based on the above findings of fact, the court below held that the registration of transfer of ownership was made in the name of Nonparty 1, Nonparty 2, and Nonparty 4 as to the site of this case by purchasing the site of this case from the plaintiff and constructing a new building on that ground, and purchasing it from the plaintiff under a trade agreement to pay the purchase price. The site of this case is owned by the above three persons and it is clear that the above non-party 1 was not entrusted to the non-party 2. However, it cannot be acknowledged that the above non-party 2's co-ownership registration of the above non-party 2 was made through the above non-party 1's title trust and the gift tax was imposed on the above non-party 2 by applying Article 32-2 (1) of the former Inheritance Tax Act. The above disposition of imposition of the gift tax was made through a title trust registration which was clearly recognized as being completed by the title trust registration, and it was a donation that was made by the remaining donation, and therefore there is no significant and wrong dividend as to the non-party 2.

3. In general, a taxation disposition imposed on a person who does not have any legal relation or factual relation (income or act) which is subject to taxation shall be deemed to have a significant and obvious defect. However, in a case where there are objective circumstances that could mislead him to be subject to taxation with respect to any legal relation or factual relation which is not subject to taxation, and where it can only be clarified whether it is subject to taxation or not, if it is possible to accurately investigate the factual relation, it cannot be deemed to have been apparent even if the defect is serious, and thus, it cannot be deemed to have been null and void as a matter of course (see, e.g., Supreme Court Decision 95Da20379, Dec. 20, 196).

However, even according to the facts established by the court below, in order for the above non-party 1 to run the above non-party 3 and the above non-party 2 to run the above construction business, first of all, the above non-party 1 completed the registration of ownership transfer in the name of the above non-party 1 and the above non-party 3 to run the above construction business, but the above non-party 3 independently carried out the construction business, as the non-party 1 suffered losses from a partnership business, while the building permit was held in the above non-party 1 to run the above non-party 3 and the above non-party 1 received the above non-party 1's name from the above non-party 1 to the above non-party 3, the registration of ownership transfer was made in the co-ownership name. Further, the above non-party 2's evidence Nos. 5 (Judgment) and No. 2 (the non-party 2's statement) shown in the record that the above non-party 1 requested the above non-party 1 to become a partner for convenience.

If so, there is sufficient room to regard the co-ownership registration of the above non-party 2 on the above site and building as the co-ownership registration of the above non-party 1 was made by the above non-party 1's title trust. Accordingly, this point can only be clarified only after investigating the facts. Thus, under the premise that the registration of co-ownership by the above non-party 2 on the building site of this case was made by the above non-party 1's title trust, the above non-party 2 applied Article 32-2 (1) of the former Inheritance Tax Act by applying Article 32-2 (1) of the former Inheritance Tax Act and it cannot be deemed that the defect of the tax disposition of this case, which imposed the gift tax, etc. by deeming the above non-party 2

Nevertheless, the lower court’s determination that the instant taxation disposition was null and void on the ground that it was objectively apparent that there was a defect at the time of the instant taxation disposition does not constitute an unlawful act by misapprehending the legal doctrine on the invalidation of the taxation disposition. The grounds for this argument are with merit.

4. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Shin Sung-sung (Presiding Justice)