The revocation of a license for alcoholic beverage sales by an entrepreneur who violates the duty to issue a tax invoice is legitimate.

Although alcoholic beverages are supplied over several occasions from the 13.2' 16.1' 16.1', a false tax invoice is issued as if they were supplied without the actual supply of alcoholic beverages, and the license for sales of alcoholic beverages to an entrepreneur whose amount of violation of the duty to issue the tax invoice exceeds 100/1,000 of the total sales of alcoholic beverages is legitimate.

Article 15 (Suspension, etc. of Sale of Alcoholic Beverages)

2017Guhap21762 Demanding revocation of a license for comprehensive alcoholic beverage wholesale business

AAAA

BB Director of the Tax Office

December 7, 2018

January 11, 2019

1. The plaintiff's claim is dismissed.

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

According to Gap evidence No. 5, the date of disposition is recognized not only as of May 31, 2017, but also as of May 12, 2017.

1. Details of the disposition;

A. On April 23, 1982, the Plaintiff obtained a comprehensive liquor wholesale license from the Defendant for sale of all alcoholic beverages except for general consignment and spirits, and runs a liquor sales business at a Aa City Aaro Aaro Aaro Aaro.

B. The Defendant, while granting a comprehensive license for the wholesale business of alcoholic beverages to the Plaintiff, issued a condition that the matters to be observed when selling alcoholic beverages to a non-licensed seller shall be revoked.

C. B. From September 6, 2016 to November 14, 2011, the Director of the Regional Tax Office tracking and investigating the Plaintiff’s distribution process of alcoholic beverages in the second period (i.e., July 1 to December 31, 2012; hereinafter the same shall apply) or first period (i.e., January 1 to June 30, 2016; hereinafter the same shall apply) of 2013, and notified the Defendant of the results thereof.

The Plaintiff violated the duty to issue tax invoices for each taxable period from the second period to the first period of the year 2013, as follows, and the amount of violation is at least 358/1,000 of the average total sales amount of alcoholic beverages, and is at least 10/1,000.

1) Excessive issuance of tax invoices

① In fact, the Plaintiff issued an excessive tax invoice of KRW 19 million for the supply price to 43 companies, including ccccccccccc, even though it did not supply alcoholic beverages in the first period of 2016. ② The Plaintiff, during the first period of 2016, issued tax invoices to 13 companies, including ddddddd', which are customers of DD, even though it supplied alcoholic beverages to ddd', etc., the Plaintiff supplied the said 13 companies with the said tax invoices. ③ From the second period of 2013 to the first period of 2016, the Plaintiff actually supplied e30 companies, including e, “Ee”, which are customers of eE, even if it supplied alcoholic beverages to E, issued the said 30 billion tax invoices to e, and issued the tax invoices to ex200,000 won (the supply price of ex20,000 won).

① In relation to ① the details of excessive issuance of tax invoices, the Plaintiff confirmed that the total amount of alcoholic beverage sales from the second to the first half of 2013 2016 x0 x0 million x0,000 won, which is an excessive issue amount, had been issued at the same time determined as an amount of insufficient issuance. ② In relation to the details of excessive issuance of tax invoices ② the Plaintiff did not issue to DD, which is a wholesale business operator without licenses during the first half of 2016 ; ③ in relation to the details of excessive issuance of tax invoices, the Plaintiff did not issue a tax invoice equivalent to KRW x0,000 x0 x0 to EE from the second to the first half of 2016 203 2016 . The Plaintiff sold alcoholic beverages to a sales business operator without licenses as follows.

1) From February 2016 to May 201, the Plaintiff sold alcoholic beverages equivalent to x and x0,000 won to DD, a non-licensed vendor. 2) From July 2015 to June 2016, the Plaintiff sold alcoholic beverages equivalent to x0,000 won to FF (ff) which exclusively obtained a license for retail business of alcoholic beverages from July 2015 to June 2016. D. Based on the aforementioned findings, the Defendant notified the Plaintiff that the amount of violation of the duty to issue tax invoices exceeds 10/1,00 of the total sales amount of alcoholic beverages, and that the Plaintiff violated the conditions of the license by selling alcoholic beverages to a non-licensed vendor, thereby comprehensively notifying the Plaintiff of the revocation of the license for wholesale business as of May 31, 2017 (hereinafter “instant disposition”).

E. On June 14, 2017, the Plaintiff dissatisfied with the instant disposition, filed an objection with the commissioner of a regional tax office bbb. However, on June 30, 2017, the objection was dismissed.

Accordingly, the Plaintiff re-appealed to the Commissioner of the National Tax Service on July 19, 2017, but the request for examination was dismissed on November 30, 2017.

In other words, the Plaintiff filed a request with the Tax Tribunal on January 3, 2018, but the said request was dismissed on December 10, 2018 (Provided, That the Tax Tribunal determined that the said request was unlawful as it filed after the lapse of the period for request on its grounds. The facts that there is no dispute with recognition, and the purport of the entire pleadings.

2. Whether the instant disposition is lawful

A. The plaintiff's assertion

The instant disposition shall be revoked as it is illegal because it constitutes a case where discretion is exceeded or it is abused for the following reasons.

1) The Plaintiff did not sell alcoholic beverages to DoD, a non-licensed wholesaler of alcoholic beverages, and only sold alcoholic beverages directly to the customers through DoD.

Therefore, the Plaintiff did not issue a tax invoice equivalent to KRW xx0, to DD in the first taxable period of 2016, and cannot be deemed to have issued an excessive tax invoice equivalent to KRW x0,00 to DD’s transaction partners.

2) In the first taxable period of 2016, the Plaintiff issued an excessive tax invoice equivalent to x0 million won of the value of supply at the supply in the first taxable period of 2016, and during that period, did not issue a tax invoice even after supplying alcoholic beverages equivalent to x00 million to x0.

3) FF is not a seller of alcoholic beverages who obtained a license for retail business of alcoholic beverages, and thus, the Plaintiff cannot be deemed to have sold alcoholic beverages to a non-licensed vendor.

4) The Plaintiff acknowledged the fact that the Plaintiff issued a tax invoice equivalent to the sum of supply values of x0 million x,xx0,000 to EE on 36 occasions from the second to the first taxable period of 2016 from the second to the second taxable period of 2013, without supplying alcoholic beverages equivalent to the sum of supply values of x,xx0,000 won, ② without supplying alcoholic beverages to ggggggs, etc. during the same period, the Plaintiff issued a tax invoice equivalent to the sum of supply values of x,xx0,000 won (the Plaintiff’s complaint asserted that EE is not limited to the Plaintiff’s employees, but is not a non-licensed alcoholic beverage dealer. However, the Plaintiff acknowledged the fact that EE is a non-licensed alcoholic beverage dealer, such as a criminal judgment already finalized in the preparatory document submitted on April 16, 2018). However, the Plaintiff cannot recognize the grounds for disposition on the portion exceeding the above scope.

5) Ultimately, in full view of the following: (a) the Plaintiff violated the duty to issue a tax invoice from the second to the first period of 2013 in 2016, the Plaintiff’s actual violation of the duty to issue a tax invoice is merely KRW x0,000,000,000 total sales amount; (b) even if the Plaintiff issued a false tax invoice, the Plaintiff did not commit an evasion of the law, such as omitting the supply volume of alcoholic beverages; (c) there was no omission or evasion of taxes by the Plaintiff or its related business operators in such process; and (d) the Plaintiff paid the value-added tax, corporate tax, wage and salary tax, and administrative fine, etc., the instant disposition was considerably larger than the Defendant’s public interest, and thus, violated the principle of proportionality.

B. Relevant statutes

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

C. Determination

1) According to Article 15(2)2 of the Liquor Tax Act (amended by Act No. 15228, Dec. 19, 2017; hereinafter the same), where a licensee of alcoholic beverages violates his/her duty to issue a tax invoice under Article 10(1), (2), or (3) of the Punishment of Tax Evaders Act by taxable period under Article 5(1) of the Value-Added Tax Act, the head of the competent tax office shall revoke the license if the amount of the licensee’s violation exceeds 10/1,00 of the total sales of alcoholic beverages (referring to the total purchases of alcoholic beverages where the total purchases of alcoholic beverages are larger than the total sales of alcoholic beverages).

In addition, according to Article 10(1)1 and (3)1 of the Punishment of Tax Evaders Act (amended by Act No. 16108, Dec. 31, 2018; hereinafter the same shall apply), where a person obligated to prepare and issue a tax invoice (including a pre-tax invoice; hereinafter the same shall apply) under the Value-Added Tax Act fails to issue a tax invoice or issues a false tax invoice, he/she shall be punished by imprisonment with labor for not more than one year or by a fine not exceeding twice the amount calculated by applying the tax rate of value-added tax to the value of supply; and (2) Any person who issues or issues a tax invoice under the Value-Added Tax Act without being supplied with or being supplied with goods or services shall be punished by imprisonment with labor for not more than three years, or by a fine not exceeding three times the amount of supply or tax invoice entered in such tax invoice or invoice, a list of total tax invoices by customer, and a list of total tax invoices by customer

(ii) the facts of recognition

The following facts may be acknowledged in light of the absence of dispute between the parties or the full purport of the entry of the evidence and the whole pleadings as set forth in subparagraph 14:

A) During the 2015 taxable period, the Plaintiff’s gross sales amount of x0 million x,xxx, among 100 comprehensive liquor wholesalers located in n/m regions, the sales order thereof falls under 14. The Plaintiff filed a value-added tax return with the Defendant from the second period to the first period of 2016, as indicated below, and the sales amount among them is xx0 x,xx only x only.

B) On January 19, 2018, the Plaintiff and its representative director, were convicted of a fine of KRW 10 million for a crime committed in violation of Article 18, Article 10(1)1, and Article 10(3)1 of the Punishment of Tax Evaders Act (hereinafter “relevant criminal judgment”) and a fine of KRW 10 million for a year of imprisonment, 1 year of suspended execution, 2 years of suspended execution, and 100 million for a fine (hereinafter “relevant criminal judgment”).

1. GG;

(a) No person liable to prepare and issue a tax invoice under the provisions of the Value-Added Tax Act shall issue it;

GGG supplied the EE, aaro aaro aaro on July 31, 2013, to EE, a non-licensed alcoholic beverage wholesaler, and did not issue a tax invoice from that time until June 30, 2016, while supplying alcoholic beverages equivalent to x, x, x, xx, xx, and x, from that time to June 30, 2016, supplied alcoholic beverages equivalent to 36 times in total.

(b) No person who fails to supply or is supplied with goods or services falsely issuing tax invoices shall issue a tax invoice under the Value-Added Tax Act;

On July 31, 2013, GG supplied alcoholic beverages equivalent to X,x, andx members to “Oo” on the above office: (a) although there was no fact that the value of supply was falsely stated and issued a tax invoice stating the tax invoice of X,x, andx members; (b) from that time until June 30, 2016, the total value of supply over 3,068 times from that time until June 30, 2016, the GG issued a tax invoice by falsely stating the transactions equivalent to X,x,x, andx won.

2. GGG, the representative director of the Plaintiff, issued a tax invoice under the Value-Added Tax Act without issuing the said tax invoice as to the Plaintiff’s business or supplying goods or services at the date and place specified in the said paragraph (1).

C) The above judgment became final and conclusive after the lapse of the appeal period.

3) Determination on issues

A) In full view of the relevant provisions as seen earlier, in the event that there are grounds for violation of each subparagraph of Article 15(2) of the Liquor Tax Act, the head of the competent tax office must necessarily revoke the license for alcoholic beverage sales business and not give discretion to decide whether to revoke the license (see, e.g., Supreme Court Decision 91Nu12684, Aug. 14, 1992).

Therefore, in cases falling under any of the subparagraphs of Article 15 (2) of the Liquor Tax Act, an administrative disposition revoking a liquor sales business license is interpreted as a binding act in which discretion is not recognized to the defendant.

Ultimately, whether the instant disposition is legitimate can only be determined by determining whether there is a ground falling under each subparagraph of Article 15(2) of the Liquor Tax Act to the Plaintiff.

B) Comprehensively taking account of the facts acknowledged as above and the following circumstances revealed in the argument of this case, the Plaintiff violated the duty to issue a tax invoice under Articles 10(1)1 and 10(3)1 of the Punishment of Tax Evaders Act by taxation period under Article 5(1) of the Value-Added Tax Act, and the amount of the violation is more than 10/1,000 of the total sales amount of alcoholic beverages.

Therefore, the Defendant ought to revoke a comprehensive liquor wholesale business license to the Plaintiff pursuant to Article 15(2) of the Liquor Tax Act. Ultimately, the instant disposition is lawful without any need to further examine the remainder of the arguments, such as whether the Plaintiff sold liquor to a non-licensed vendor, or whether it deviates from or abused discretionary power. According to the final and conclusive criminal judgment, the Plaintiff violated Article 10(1)1 of the Punishment of Tax Evaders Act by failing to issue a tax invoice, even though the Plaintiff supplied EE 36 times in total, including the total supply value of x, x, x, x, x00 won, and thereby constituting a violation of Article 10(1)1 of the Punishment of Tax Evaders Act (see, e.g., Supreme Court Decision 2013Du1600, Oct. 1, 2016). 200, the Plaintiff already issued a tax invoice of KRW 100,000,000,000,000,000 won or more.

Article 22(1) of the former Enforcement Decree of the former Enforcement Decree of the former Enforcement Decree of the Act on the Protection of Alcoholic Beverages, Etc. (amended by the Presidential Decree No. 20135, Jan. 1, 2016; hereinafter “former Enforcement Decree of the Act on the Protection of Alcoholic Beverages”); and hereinafter “former Enforcement Decree of the Act on the Protection of Alcoholic Beverages, Etc.” (amended by the Presidential Decree No. 2010, Jan. 1, 2016); and hereinafter “former Enforcement Decree of the Act on the Protection of Alcoholic Beverages, etc.” (amended by the Presidential Decree No. 20110, Jan. 1, 2016).

3. Conclusion

Therefore, the plaintiff's claim is without merit, and it is so decided as per Disposition.