Early High Court Decision 2016Gu1187 (No. 23, 2016)

When fake petroleum products are manufactured and sold;

In full view of the prosecutor's investigation, court summary order, written statement, etc., it is reasonable to deem that the Plaintiff manufactured and sold fake petroleum products from November 2012. Thus, the instant disposition is lawful.

Objects and rates of taxation under Article 2 of the Traffic, Energy and Environment Tax Act;

2016Guhap22096, revocation of imposition, such as traffic, energy, and environment tax

AA

a) the Director of the Tax Office

May 16, 2017

June 13, 2017

1. Of the instant lawsuit, the part of the claim for the revocation of the imposition of traffic, energy, and environment tax and education tax in January 2014 shall be dismissed.

2. The plaintiff's remaining claims are dismissed.

3. The costs of lawsuit shall be borne by the Plaintiff.

On January 8, 2016, the Defendant imposed the traffic, energy, and environment taxx x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x x 3 x x x x 1 x x x x 3 x x x x x 1 x x 203, and 2013, respectively, the traffic, energy, and environment tax x x x x x x x x x x x x x x x xx x x xx x xx x xx x xx x x x x, 2 13 years.

[tin1] The Plaintiff: (a) deemed that each of the above dispositions was rendered on January 8, 2016 in the application form for change of the purport of and cause for the claim on May 12, 2017; and (b) sought revocation of each of the above dispositions on January 8, 2016. In the event that a correction is made, the initial report or determination would lose its independent existence value by absorbing the initial report or determination into a correction; and (c) as a matter of principle, only an appeal litigation is subject to adjudication regardless of the lapse of the time limit for objection against the initial report or determination (see Supreme Court Decision 2006Du17390, May 14, 2009). As such, the Plaintiff’s correction disposition is not the initial and separate tax disposition, but its substance would have a favorable effect on taxpayers, and thus, the remainder of the disposition of correction is not subject to revocation of each of the original disposition of correction, and thus, is not subject to revocation of one of the remaining parts of the disposition of imposition on education tax (see Supreme Court Decision 2019).

1. Details of the disposition;

A. On June 17, 2014, the Plaintiff: (a) sold a total amount of KRW 412,843,943,670 won by selling light oil and fake petroleum products from November 2012 to April 15, 2014, without being registered with the competent authority as indicated in the attached Table 1’s list; and (b) sold a fake petroleum product with a total of KRW 15 million from November 2012 to April 2014 (hereinafter “instant place of business”); (c) sold a total of KRW 412,846 liters and fake petroleum products at the same time, at the same place; and (d) sold a fake petroleum product with a total of KRW 188,822 liter 249,245,010 by manufacturing fake petroleum products; and (d) received the summary order at around that time and time, and around that time, the Plaintiff was subject to the summary order at issue.

B. On January 8, 2016, the director of the Daegu Regional Tax Office notified the Defendant of the data for taxation of the instant summary order, and accordingly, the Defendant determined and notified the Plaintiff of KRW 102,03,060 (including additional taxes) total of KRW 102,03,060 (including additional taxes) for fake petroleum products manufactured and sold between February 2, 2012 and April 2014 (hereinafter “the Plaintiff”) and KRW 91,57,810 (including additional tax) for fake petroleum products manufactured and sold between April 8, 2012 and KRW 18,822 (hereinafter “the first disposition”).

C. In January 2014 and April 2014, the Plaintiff appealed to the Tax Tribunal on March 11, 2016, with the exception of the imposition of each traffic tax and education tax. However, the Tax Tribunal dismissed the Plaintiff’s request on May 23, 2016.

D. On February 14, 2017, the Defendant notified the Plaintiff of the correction of the traffic tax of KRW 93,473,740 (including additional tax) on fake petroleum products sold between November 2, 2012 and April 2014 and KRW 10,767,620 (including additional tax) on the aggregate of KRW 104,241,360 (including additional tax) and the traffic tax of KRW 104,241,360 on the ground that the period of initial imposition was erroneously specified as a result of confirming the Plaintiff’s transaction statement during the instant lawsuit (hereinafter the aforementioned correction disposition, including the first correction disposition and the first correction disposition of the education tax from November 1, 2012 and January 1, 2013, and each disposition of imposition of the education tax for two years and two hundred one year from December 14, 2014).

[tin2] The reason why the sales volume of fake petroleum products in the corrective disposition above the sales volume of fake petroleum products in the initial disposition is somewhat increased is that the attached crime list of the summary order of this case, which served as the basis for the initial disposition, is calculated by applying the unit price per liter to the total sales amount of KRW 1,320,00,000, and the above corrective disposition was calculated by applying the above unit price to the relevant transaction price in case the defendant verified the Plaintiff’s transaction statement and actually entered the unit price per liter.

Facts without dispute over the basis of recognition, Gap evidence 1 through 3, 12, Eul evidence 1, 2 and 5 (including provisional numbers, hereinafter the same shall apply) and the purport of the whole pleadings.

2. Determination as to the legitimacy of each traffic tax and education tax imposition disposition under paragraph (1) of this Article, and the Defendant’s main defense

A. Determination as to whether the imposition of each traffic tax and education tax under paragraph (1) of this Article is legitimate

1) We examine ex officio the legitimacy of this part of the lawsuit.

Pursuant to Articles 56(2) and (3), 68(1) and 61(1) of the Framework Act on National Taxes, a person who intends to file an administrative litigation against a disposition imposing national taxes shall file an administrative litigation within 90 days from the date on which he/she becomes aware of such disposition and notify the person of the decision.

Meanwhile, a disposition of reduction or correction is not an original return or a separate tax disposition, but an original return or a separate tax disposition, which brings about a change in the tax imposition disposition, and thereby brings about a favorable effect to taxpayers as to partial revocation of the tax amount. Thus, in a case where an appeal is filed against the remaining portion of the final return or a tax imposition disposition, the object of the appeal is the remainder that is not revoked by the decision of correction from among the initial return or a tax imposition disposition, and in such a case, whether the period for filing an appeal is complied with ought to be determined based on the initial disposition of imposition (see, e.g., Supreme Court Decisions 91Nu391, Sept. 13, 191; 2012Du7370, Mar. 13, 2014).

2) As to the instant case, the Defendant, on January 8, 2016, filed an initial disposition of imposition of traffic tax and education tax in January 2014 with the Plaintiff, including the traffic tax and education tax in January 8, 2016, as seen earlier. In full view of the purport of the argument as to the statement in subparagraph 1, the Plaintiff filed an appeal with the Tax Tribunal on March 11, 2016, and filed an appeal with the Plaintiff, claiming that the Plaintiff manufactured and sold fake petroleum products from January 21, 2014 to April 201, 2014, instead of from January 21, 2012, and was dissatisfied with the initial disposition of imposition of traffic tax and education tax, and the Defendant thereafter appealed the Plaintiff on January 14, 2017 and issued a revised notice of imposition of traffic tax and education tax.

3) According to the above facts, it is reasonable to view that the Plaintiff was aware of the imposition of traffic tax and education tax in January 201, 2014, which was requested by the Tax Tribunal on March 11, 2016, at the latest. Accordingly, the Plaintiff did not file a request for review or a request for judgment under the Framework Act on National Taxes until 90 days expire.

4) Therefore, this part of the lawsuit seeking revocation of the above disposition is unlawful as it was brought without going through the procedure of the previous trial.

B. Judgment on the Defendant’s defense prior to the merits

1) Upon submitting an application for amendment of the purport of the claim filed by the Plaintiff on October 28, 2016, the Defendant added to the purport of the claim for revocation of traffic tax and education tax imposition disposition (hereinafter referred to as “tax imposition disposition reverted to August 2013”) in August 2013. This part of the lawsuit added thereto was filed 90 days after the Plaintiff was served with the notice of dismissal decision issued by the Tax Tribunal on May 23, 2016, and the period for filing the lawsuit is excessive, and thus, the Plaintiff’s objection to the merits is unlawful.

2) Although it is unclear whether a party is the subject matter of a lawsuit by itself from the description of the purport of a claim, if the party asserts that the subject matter of a lawsuit is the cause of the claim, the court must question whether the purport of the claim is the same as that of the cause of the claim, and if the purport of the claim is modified and clearly stated as the cause of the claim, it cannot be viewed as a new claim (see Supreme Court Decision 81Nu106, Sept. 28, 1982).

On the other hand, in a case where a legitimate revocation suit against a tax imposition disposition is pending, where there exists a correction or re-decision of correction that changes the original imposition of the same subject matter of taxation, and where there exists a ground for revocation that is alleged to exist in the initial imposition disposition, as in the case of a correction or re-determination of correction, and where the initial imposition is deemed unlawful, the plaintiff may seek for revocation of the correction or re-determination of correction by modifying the purport of the claim without having to go through a separate procedure for the previous trial as to the decision of correction or re-determination, and in such a case, if the initial lawsuit is instituted within the legitimate filing period, it is not necessary to separately determine whether the period of filing a lawsuit against the correction or re-determination of correction is complied with (see Supreme Court Decision 2010Du7796, Nov. 29, 2012).

3) As to the instant case, it is evident that the Plaintiff filed the instant lawsuit on May 23, 2016 by the Tax Tribunal and did not file any claim against the disposition of imposition devolving upon August 10, 2013 among the initial disposition of imposition, even though he/she received the notice of dismissal decision from the Tax Tribunal on May 23, 2016, and only sought revocation from the application for modification of the purport of the claim made on October 28, 2016.

However, in the facts of the cause of the claim in this case, it is evident that the Plaintiff asserted that “the Plaintiff only manufactured and sold fake petroleum products from January 21, 2014 to January 20, 2014, and that there was no fact that he manufactured and sold fake petroleum products from November 2012 to January 20, 2014, and thus, the initial imposition disposition imposed during the above period should be revoked.” In light of the above, it is obvious that the Plaintiff brought a lawsuit in this case with the intent to seek revocation of the initial imposition disposition imposed during the period from August 2012 to January 20, 2014, including the imposition disposition devolving upon August 201, 2013. However, it is reasonable to view that the Plaintiff failed to submit a new application for imposition imposition imposition imposition for the period from August 28, 2016, regardless of whether the Plaintiff filed an amendment to the purport of the claim in this case, and thus, it cannot be deemed that the Defendant filed an amendment to the original imposition disposition within 3 years from August 201.

4) Therefore, the Defendant’s defense prior to the merits is without merit.

3. Judgment on the merits

A. The plaintiff's assertion

The Plaintiff’s manufacturing and selling fake petroleum products at the instant place of business from January 21, 2014 to April 15, 2014. As such, each of the instant dispositions on the ground that the Plaintiff manufactured and sold fake petroleum products during the remainder (from November 21, 2012 to January 20, 2014) excluding the aforementioned period, should be revoked.

B. Relevant statutes

Attached Form 3 is as shown in the relevant statutes.

C. Determination

In full view of the following circumstances, it is reasonable to view that the Plaintiff manufactured and sold fake petroleum products at the instant place of business from November 2012 to January 20, 2014, each of the dispositions in the instant period of taxation is legitimate, and the Plaintiff’s assertion is groundless.

1) The Plaintiff was investigated by the prosecution on November 2012, and led to the confession of the fact that he manufactured and sold fake petroleum products at the instant workplace from around November 201, and the BB, the owner of Daegu OOOOO trucks, was investigated by a witness at the police station, and the Plaintiff heard the lawsuit that the Plaintiff hazards the fake petroleum without permission at the instant workplace on October 2013, 2013, and sought to the effect that the Plaintiff was able to contain fake petroleum from that time, and that the Plaintiff was able to oil by a mobile-sale vehicle.

2) Even in the transaction paper prepared by the Plaintiff, it is indicated that the Plaintiff manufactured and sold fake petroleum products at the instant place of business from November 3, 2012 to April 15, 2014.

3) Based on this, the instant summary order was issued on June 17, 2014, and became final and conclusive around that time by the Plaintiff, as to the crime that the Plaintiff conducted a petroleum sales business without registration at the instant place of business from November 2012 to April 15, 2014, and manufactured and sold fake petroleum products.

4) As to this, the Plaintiff asserts that, in order to sell fake petroleum products, three storage tanks or three mobile-sale vehicles are required. From November 201, 2012 to January 20, 2014, the Plaintiff did not have a storage tank and only two mobile-sale vehicles owned or entered by himself/herself, and thus did not sell fake petroleum products during the said period. However, the Plaintiff’s assertion is difficult to exclude the possibility that he/she manufactured and sold fake petroleum products using another mobile-sale vehicle together with the said two mobile-sale vehicles. BB was subject to the police investigation as seen earlier and stated from October 2013 to his/her dump truck with the Plaintiff’s mobile-sale vehicle. In light of the above, the Plaintiff’s assertion is difficult to accept.

5) From January 21, 2014, the Plaintiff submitted evidence supporting its assertion that he sold fake petroleum products from around January 21, 201, and submitted Gap evidence Nos. 4 to 10. However, as seen earlier, the evidence No. 10-1 (Certificate) prepared to the effect that "after BB was investigated by the police, he/she oiled with portable petroleum products from the time he/she installed a storage tank around January 2014." The evidence submitted by the Plaintiff cannot be excluded from the possibility of being falsely prepared at the Plaintiff’s request in light of the aforementioned inconsistency with the previous statements made by BB police. Furthermore, the remaining evidence submitted by the Plaintiff cannot be excluded from the possibility that he/she manufactured and sold fake petroleum products using only mobile-sale vehicle without a storage tank or the examination of the Plaintiff’s suspect, etc., or it is difficult to admit the possibility that the Plaintiff could have manufactured and sold fake petroleum products without a storage tank, or there is no objective evidence submitted by the Plaintiff merely based on the evidence presented by the Plaintiff.

4. Conclusion

Therefore, the part of imposition of traffic tax and education tax as stated in the Disposition No. 1 of this case is unlawful and dismissed, and the remainder of the plaintiff's claim is dismissed as it is without merit. It is so decided as per Disposition.