Plaintiff (Attorney Yoon-chul et al., Counsel for plaintiff-appellant)

Head of Jinju Tax Office

May 18, 2007

Changwon District Court Decision 2006Guhap314 Decided September 14, 2006

1. The plaintiff's appeal is dismissed.

2. The costs of appeal shall be borne by the Plaintiff.

The judgment of the first instance shall be revoked. The defendant's disposition rejecting the refund of value-added tax of KRW 103,258,181 against the plaintiff on September 30, 2005 shall be revoked.

1. Details of the disposition;

The following facts are either not disputed between the parties, or acknowledged in full view of the purport of the entire pleadings in Gap evidence 1, Gap evidence 4, Gap evidence 6, Gap evidence 7, Gap evidence 14, and Eul evidence 3-1.

A. The Plaintiff, who is engaged in real estate sales business, etc. with the trade name of “(name omitted)”, has contracted the construction work of the new neighborhood living facilities on the ground of Kugsan-si Funeral Co., Ltd. (hereinafter “New CD Construction”) for the construction work on the ground of Kugsan-si, Kugsan-si (hereinafter “New CD Construction”), and completed the completion inspection on September 21, 2004 and completed the registration of the preservation of ownership for the above neighborhood living facilities on September 21, 2004.

B. On the other hand, on July 29, 2005, the Plaintiff filed an application for correction of the tax base and tax amount along with the tax invoice (the supply price of KRW 1,032,581,818, value-added tax, KRW 103,258,182; hereinafter “instant tax invoice”) that the construction of new CD was issued on September 16, 2004, by asserting that the input tax deduction for the remainder of the construction price was omitted at the time of the return of the value-added tax for the second term amount of the value-added tax for the Defendant on July 29, 2004. The Defendant issued a notice of rejection of the Plaintiff’s application for correction on the grounds that the tax invoice was not issued within the taxable period to which the time of supply belongs, and that the input tax amount on the invoice is not subject to the deduction (hereinafter “instant disposition”).

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The plaintiff was issued a tax invoice on September 16, 2004, which was within the taxable period to which the time of supply for the above neighborhood living facilities belongs from the new CD Construction, but lost the tax invoice. The plaintiff omitted in the return of value-added tax on February 2004 due to the plaintiff's lack of knowledge of the loss, and thereafter confirmed that the tax invoice for the supplier's custody was the same as the original on the tax invoice for the supplier's custody, and filed the above request for correction. Thus, the plaintiff was not correct to receive the tax invoice within the taxable period to which the time of supply for the above neighborhood living facilities belongs from the new CD Construction. Thus, the disposition of this case based on the different premise is unlawful.

B. Relevant statutes

The entries in the attached Table-related statutes are as follows.

C. Determination

Article 9 (2) of the Value-Added Tax Act (amended by Act No. 7876 of March 24, 2006; hereinafter referred to as the "Act") provides that "the time when the service is supplied shall be the time when the service is supplied or goods, facilities, or rights are used", and Article 16 (1) provides that "where an entrepreneur registered as a taxpayer supplies goods or services, a invoice stating the following matters (hereinafter referred to as "tax invoice") may be delivered to the person who is supplied under the conditions as prescribed by the Presidential Decree at the time prescribed in Article 9: Provided, That the time of delivery may vary in cases as prescribed by the Presidential Decree; Article 17 (2) provides that "the time of supply shall not be deducted from the output tax amount falling under any of the following subparagraphs; where the tax invoice under Article 16 (1) and (3) is not delivered; or where the whole or part of the items to be entered under Article 16 (1) 1 through 4 of the Enforcement Decree of the Act are not entered differently from the fact of supply provided;

In light of the above-mentioned relevant laws and regulations, the plaintiff should be issued a tax invoice between July 1, 2004 and December 31, 2004, which is the taxable period to which the new construction of the above neighborhood living facilities belongs, to obtain an input tax deduction based on the issue tax invoice. As alleged by the plaintiff, as to whether the plaintiff had received the tax invoice from the new CD Construction on September 16, 2004, the issue from the above taxable period, as alleged by the plaintiff, shall be as follows: (a) evidence No. 5, No. 8, No. 13, No. 15, and No. 15, the testimony of the witness No. 1, No. 2, and the inquiry results on the new construction CD Co., Ltd. of the court of first instance, and there is not sufficient evidence to acknowledge that the plaintiff had not delivered the tax invoice to the plaintiff, and (b) there is no other evidence to acknowledge that the plaintiff did not issue the tax invoice to the plaintiff within the whole taxable period.

Therefore, the plaintiff's assertion on the premise that the plaintiff was issued a tax invoice from the new CD Construction in the above taxable period is without merit.

3. Conclusion

Therefore, the plaintiff's claim is dismissed as it is without merit, and the judgment of the court of first instance is just, and the plaintiff's appeal is dismissed as it is without merit. It is so decided as per Disposition.

Judges Park Jong-jin (Presiding Judge)