NAEex Co., Ltd. (Law Firm Pacific, Attorneys Gyeong-tae, Counsel for the plaintiff-appellant)

Republic of Korea (Government Law Firm Corporation, Attorneys Soh Ho et al., Counsel for the plaintiff-appellant)

November 8, 2011

1. The defendant shall pay to the plaintiff 3,38,092,016 won with 3.7% interest per annum from June 25, 2011 to November 29, 201, and 20% interest per annum from the next day to the day of complete payment.

2. The plaintiff's remaining claims are dismissed.

3. 1/20 of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

4. Paragraph 1 can be provisionally executed.

First, the defendant shall pay to the plaintiff 3,39,852,888 won with 3.7% interest per annum from June 25, 2011 to the delivery date of a copy of the complaint of this case, and 20% interest per annum from the next day to the day of complete payment.

Preliminaryly, the defendant shall pay to the plaintiff 3,884,619,610 won with 5% interest per annum from June 25, 2011 to the delivery date of a duplicate of the complaint of this case, and 20% interest per annum from the next day to the day of full payment (the plaintiff claims unjust enrichment under the Framework Act on National Taxes as the primary claim, and as the conjunctive claim under the Civil Act, the plaintiff claims for unjust enrichment under the Civil Act, but this is a matter of the law as to the basis of the defendant's responsibility for return of unjust enrichment, which is not related to the primary claim. Thus, the order of the conjunctive claim is not issued to the extent that the primary claim is not related to the primary claim. However, the plaintiff's primary claim and the conjunctive claim are considered both as the plaintiff's primary claim and the conjunctive claim.)

1. Basic facts

(a) The plaintiff's revaluation of assets and payment of revaluation tax;

On May 19, 1967, the Plaintiff was an unlisted corporation engaged in the manufacture of petroleum and petrochemicals, export and import business, etc. including crude oil, natural gas, ELP, etc., on October 1, 1990, and conducted a revaluation of assets on the premise of stock listing pursuant to Article 52-2 of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4285 of Dec. 31, 1990), and reported and paid (hereinafter referred to as “assessment tax”) on December 6, 1990 with the revaluation of assets.

B. The Plaintiff’s revocation of asset re-evaluation and the Defendant’s refund and additional payment on refund

On December 30, 2003, the Plaintiff revoked the asset revaluation on December 30, 2003, and reported and paid corporate tax on income for each business year. On April 16, 2004, the head of the regional tax office deemed the revaluation spread as a voluntary evaluation marginal profit under the Corporate Tax Act, and notified the Plaintiff of 156,843,073,190, including corporate tax, etc. in the business year from 1990 to 1999, by including it in the gross income for the business year from 1990 to 156,843,073,190. Upon ex officio cancelling the imposition of the revaluation tax, the Plaintiff paid KRW 12,513,027,680 of the national tax refund corresponding to the revaluation tax paid by the Plaintiff and the refund amount to the Plaintiff as of April 29, 2004, including the refund amount of KRW 15,35,490,890,8857,757

C. Collection and disposition of an amount equivalent to partial additional dues on refund, and the Plaintiff’s payment.

1) The Ministry of Finance and Economy rendered authoritative interpretation on March 22, 2006 to the effect that additional dues (15,311,945,54 won excluding KRW 43,546 won excluding those falling under April 1, 2004, and April 29, 2004) corresponding to the period from March 31, 2004, which was the deadline for the payment of corporate tax from the date following the date of listing the assets revaluation tax, among the additional dues under the above sub-paragraph (b) that was paid to the Plaintiff under the Rules of the Ministry of Finance and Economy (Tax Policy-363) of the Ministry of Finance and Economy (Tax Policy-3, May 19, 2006) shall be recovered to the National Treasury. Accordingly, in order to recover the pertinent additional dues on May 19, 2006, the head of the regional tax office notified the Plaintiff of the aforementioned additional dues,35,409,890 won, 1505 won (hereinafter referred to as “instant”).

2) On May 30, 2006, the Plaintiff paid the full amount of the instant collection money in accordance with the above collection disposition.

D. Revocation of collection disposition and return of the defendant following such revocation

1) The Plaintiff filed a lawsuit seeking the revocation of the above collection disposition. The Seoul Administrative Court, the first instance court, revoked only KRW 138,143,823 of the above collection disposition (Seoul Administrative Court Decision 2007Guhap30598), but the second instance Seoul High Court revoked all the above collection disposition on the ground that the initial date of calculating additional dues should be deemed national tax payment as stipulated in Article 52 subparagraph 1 of the Framework Act on National Taxes (Seoul High Court Decision 2008Nu25601), and the above decision became final and conclusive by the Seoul High Court (Supreme Court Decision 2009Du4050) after December 31, 2003 (Supreme Court Decision 2009Du4050).

2) On February 18, 2009, the Defendant returned KRW 138,143,820 out of the instant money to the Plaintiff pursuant to the purport of the judgment of the first instance court. On June 24, 2011, after the date of the final judgment of the Supreme Court, the Defendant returned KRW 15,173,801,730 of the instant money collectible (= KRW 15,311,945,50 - 138,143,820).

[Ground of recognition] Facts without dispute, Gap evidence 1 to Gap evidence 2-3, the purport of the whole pleadings

2. Relevant provisions;

(a) The basis of the national tax refund;

Article 51 (Appropriation and Refund of National Tax Refund)

(1) If there is any amount paid in error or tax amount to be refunded under the tax-related Acts (where there is any amount of tax to be deducted from the amount of tax refundable under the tax-related Acts, referring to the remaining amount after deduction) among the amount paid by a taxpayer as a national tax, provisional payment or disposition fee for arrears, the head of a tax office shall immediately determine such amount of erroneous payment, excess payment or tax amount as a refund of national tax. In such cases, any

Article 52 (Additional Payment of National Taxes)

Where the head of a tax office appropriates or pays a national tax refund pursuant to the provisions of Article 51, he/she shall add an amount calculated according to the interest rate prescribed by Presidential Decree (hereinafter referred to as "additional refund on refund of national taxes") to the national tax refund in consideration of the period from the day following the day specified in the following subparagraphs until the day when appropriated or determined for payment, and the deposit interest rate of financial institutions. In this case, in the application of the provisions of subparagraph 1, the amount paid by interim prepayment or withholding pursuant to the tax

1. National tax refund due to erroneous or double payment, or cancellation or correction of a return or assessment forming the basis of the relevant payment: The date of the relevant payment: Provided, That if the national taxes are paid in two or more installments, it shall be the date of last payment, but if the national tax refund exceeds the amount of last payment, it shall be each due date of national taxes computed retroactively in the order of due dates until it reaches such due amount;

(b) interest rate applicable to additional dues on refund;

"Interest rate prescribed by Presidential Decree" in the main sentence of Article 52 of the Framework Act on National Taxes means the interest rate prescribed by Ordinance of the Ministry of Strategy and Finance taking into account the average deposit interest rate for one-year term deposits in commercial banks (Article 30 (2) of the Enforcement Decree of the Framework Act on National Taxes), and the interest rate prescribed and publicly notified by the Minister of Strategy and Finance taking into account the average interest rate for one-year term deposits in financial institutions having their main office in Seoul Special Metropolitan City, which are financial institutions authorized to engage in banking business under the Banking Act until April 10, 2011 (amended by Ordinance of the Ministry of Strategy and Finance No. 205, Apr. 11, 2011). From April 11, 2011, the rate is applied (Article 13-2 of the Enforcement Rule of the Framework Act on National Taxes). The interest rate publicly notified by the Minister of Strategy

The interest rate for the application period of the Table contained in the main sentence of May 1, 2006 to October 14, 2007, 11.5 to October 15, 2007 to April 30, 2009 from May 1, 2009 to March 31, 2010, 9.3/100,000 per annum from April 11, 201 to April 11, 2011 to 37/1,000 per annum.

3. The parties' assertion

A. Summary of the plaintiff's assertion

In the first place, the instant money collectible by the Defendant to the Plaintiff is “national tax refund” as stipulated in Article 51 of the Framework Act on National Taxes, and where the national tax refund is returned to the taxpayer, additional dues should be paid pursuant to Article 52 of the same Act. The Defendant only returned the amount equivalent to the instant money to the Plaintiff. The amount returned was first appropriated for additional dues in accordance with the legal principles as to appropriation of performance, and the Plaintiff did not pay additional dues from June 25, 201 to KRW 3,339,852,88 of the instant money, and from June 25, 2011. Thus, the Plaintiff demanded the Defendant to refund the said amount payable.

Preliminaryly, Article 52 of the Framework Act on National Taxes, which is a special provision on the scope of return of unjust enrichment under the Civil Act, is not applicable, since the instant money collectible is not a “national tax refund” under Article 51 of the Framework Act on National Taxes, the Defendant is obligated to return the interest calculated at the rate of 5% per annum as stipulated in the Civil Act, along with the instant money collectible, to unjust enrichment.

B. Summary of the defendant's assertion

In light of the provisions of Article 51 of the Framework Act on National Taxes, which defines the national tax refund as "amount overpaid or erroneously paid out of the amount paid as national tax, additional dues, or disposition fees for arrears," as the substance of the refund tax corresponding to the amount of revaluation tax is revoked, the amount of the refund money returned to the Plaintiff is "additional refund of national taxes" calculated in addition to the amount of the refund tax corresponding to the amount of revaluation tax, and in view of the provisions of Article 51 of the Framework Act on National Taxes, which defines the refund tax as "amount overpaid or erroneously paid out of the amount paid as national tax, additional dues, or disposition fees for arrears," and it is clear that

In addition, since Article 52 of the Framework Act on National Taxes, which is a special provision of unjust enrichment under the Civil Act, excludes the payment of interest under the provision of unjust enrichment, the plaintiff's conjunctive assertion seeking payment of interest under the Civil Act is without merit, and even if the provision of unjust enrichment under the Civil Act applies, the defendant is a bona fide beneficiary who takes the disposition of collection of the instant money to be collected based on authoritative interpretation, which is the established rule of the Ministry of Finance and Economy, so the plaintiff's conjunctive assertion

4. Determination

A. The main part of the main claim

1) A tax refund constitutes unjust enrichment received or held by the State without any legal cause even though the tax liability had not existed from the beginning or has ceased to exist thereafter, and additional dues on refund amount has the nature of legal interest as a statutory interest on such unjust enrichment. In this case, the provisions of tax law on the scope of return of unjust enrichment under Article 748 of the Civil Act on the scope of return of unjust enrichment have the nature of a special rule as to the scope of return of unjust enrichment under Article 748 of the Civil Act. Thus, additional dues on refund amount is finalized by the initial date and proportion of each provision on the additional dues, regardless of good faith or bad faith of the State (see, e.g., Supreme Court Decision 2009Da1180

2) The Defendant paid revaluation tax already paid to the Plaintiff pursuant to Article 51 of the Framework Act on National Taxes. At the time of payment of national tax refund, the Defendant paid additional dues to the Plaintiff pursuant to Article 52 of the Framework Act on National Taxes and Article 30(2) of the Enforcement Decree of the same Act. However, the Defendant collected most of the additional dues on the ground that the initial date of payment of additional dues was mistakenly calculated. Accordingly, the amount of the additional dues collected from the Plaintiff was paid as the instant dues. The head of the tax office’s disposition of collection of the instant dues is without merit in the determination of the national tax refund (including the determination of the national tax refund) of the national tax refund law and the refund of the amount already appropriated or paid as the refund of the amount of additional dues under Article 51(8) of the Framework Act on National Taxes, which provides that the provisions of the National Tax Collection Act’s notification, demand and disposition of arrears shall apply mutatis mutandis to the Defendant, regardless of the fact that there is no provision on the refund of the additional dues under Article 51(2) of the Framework Act.

3) Next, the fact that the Defendant paid the Plaintiff a sum of KRW 138,143,820 on February 18, 2009, and KRW 15,173,801,730 on June 24, 201, and only the amount equivalent to the instant amount was refunded. As seen earlier, the Defendant paid the refund amount (the instant amount to be paid) to the Plaintiff and the total amount short of paying the refund amount to the Plaintiff. Accordingly, the amount of the shortage should first be appropriated for the additional refund corresponding to the interest on the refund amount (see Supreme Court Decision 2001Da60767, Jan. 11, 202, etc.).

With respect to KRW 15,311,945,50, which is the money collectible in this case, KRW 15,31 (1,91,945,50), from May 31, 2006 to February 18, 2009, the following day of the Plaintiff’s first payment date of the money collectible in this case (i.e., KRW 1,918,142,731 (i., May 31, 2006 to October 14, 207; KRW 883,958,6.6 won for additional dues of KRW 11.5% per day from May 31, 2006 to October 14, 207; KRW 13.7.1,034,184,184,197; KRW 138,319,481; KRW 197,194; KRW 184,3197,197).

As to the instant money collectible from February 19, 209 to June 24, 201, the Defendant’s 1,419,949,285 (i.e., the instant money collectible from February 19, 2009 to April 30, 13.7: 148,939,94.4 won for additional charges of KRW 148,939,94.4 won for additional charges of KRW 13.7% per day from February 19, 2009 to April 30, 209; KRW 149,97.4 won for additional charges of KRW 93,97.19,000 per day from May 1, 2009 to March 31, 2010; KRW 477,463,6363.6 won for additional charges of KRW 19,57,196,000 per day from March 31, 2010.

4) Therefore, the Defendant is obligated to pay to the Plaintiff the interest or delay damages calculated at the rate of 3,38,092,01 per annum as stipulated in Article 13-2 of the Enforcement Rule of the Framework Act on National Taxes from June 25, 201 to November 29, 201, which is deemed reasonable for the Defendant to dispute on the existence and scope of the obligation to pay to the Plaintiff the interest or delay damages calculated at the rate of 20% per annum as stipulated in the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the next day to the day of full payment.

B. Preliminary assertion

As seen earlier, the provision on the additional payment of the Framework Act on National Taxes, which is a special provision on unjust enrichment under the Civil Act, can be applied mutatis mutandis to the refund of the instant money. Thus, it is difficult to view that the provision on unjust enrichment under the Civil Act can be applied to the refund of the instant money. Therefore, the Plaintiff’s conjunctive assertion on this part

5. Conclusion

Therefore, the plaintiff's claim of this case is justified within the above scope of recognition, and the remainder is dismissed as it is without merit. It is so decided as per Disposition.

Judges Han-chul (Presiding Judge)

1) Article 2 Subparag. 1 of the Framework Act on National Taxes provides that “national taxes” refers to taxes imposed by the State, which include the following: income tax, corporate tax, inheritance tax, gift tax, individual consumption tax, liquor tax, stamp tax, securities transaction tax, education tax, special tax for rural development, and comprehensive real estate holding tax.

(2) Article 2 subparag. 5 of the Framework Act on National Taxes provides that if national taxes are not paid by the due date, the amount to be collected in addition to the notified tax amount under the National Tax Collection Act and the amount to be collected in addition to such amount if not paid by the due date after the due date.

3) Article 2 subparag. 6 of the Framework Act on National Taxes refers to expenses incurred in the seizure, custody, transport and sale (including fees if the sale is conducted by an agent) of any property under the provisions of the National Tax Collection Act concerning the disposition on default.

4) The term “amount of refund” refers to the difference in a case where the amount of tax paid prior to the final determination of the amount of tax due to the tax accounting technology exceeds the final determined amount of tax. For example, input tax exceeding the output tax amount under the Value-Added Tax Act, and the amount of tax withheld from the global income tax exceeding the amount of tax credit, etc.