Whether the defect in the prior notice of the imposition of a fine for negligence falls under the invalidation of a fine for negligence because it is serious.

In a case where there are objective circumstances to mislead the person to be subject to taxation as to the legal relations or factual relations which are not subject to taxation, if it can only be clarified by accurately investigating the factual relations, it cannot be deemed null and void merely because it cannot be deemed to be apparent even if the defect is serious.

Seoul Central District Court 2016 Gohap53098 Undue gains

○ Kim

Korea

March 16, 2017

March 28, 2017

1. The plaintiff's claim is dismissed.

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

Cheong-gu Office

The defendant shall pay to the plaintiff 253,949,300 won with 5% interest per annum from February 16, 2016 to June 2, 2016, and 15% interest per annum from the next day to the day of full payment.

1. Basic facts

A. The Plaintiff’s lending of money to the maximum XX

1) Around 2010, the Plaintiff lent KRW 300 million operating fund to the maximumest operator of the Seoul AA Hospital (hereinafter “instant hospital”) in Songpa-gu Seoul (hereinafter “instant hospital”).

2) Even if the maximum amount is not a medical personnel, he/she was convicted of committing a crime of violation of the Medical Service Act, etc. that committed the establishment and operation of the instant hospital using the OY’s medical license, and the said judgment became final and conclusive (Seoul Eastern District Court Decision 2013No00, Jun. 12, 2013; Supreme Court Decision 2013No00, Nov. 22, 2013).

3) On or around December 2014, the head of the sericultural office under the Defendant’s control conducted a tax investigation on the instant hospital. As a result, the Plaintiff deemed joint and several liability taxpayers as joint and several businessmen of the instant hospital, and the Plaintiff, including the Plaintiff, imposed value-added tax, additional tax thereon, and fines for negligence on non-issuance of cash receipts.

(b) Grounds for imposition and cancellation of value-added tax on the plaintiff by the head of the sericultural tax office.

1) On March 6, 2015, the head of the sericultural Tax Office issued a joint and several tax obligor designation and notice to the Plaintiff on the aggregate of KRW 118,954,550 for the amount of value-added tax in arrears at the instant hospital (= KRW 15,273,890 for the second term of 2010 + KRW 47,71,720 for the first term of 201 + KRW 46,79,570 for the second term of 2011 + KRW 46,79,570 for the second term of 201 + KRW 9,169,370 for the first term of 2012).

2) On April 27, 2015, the Plaintiff filed an objection with the head of sericultural Tax Office on April 27, 2015, but was dismissed on June 15, 2015, and filed an appeal with the Tax Tribunal on September 10, 2015.

3) On January 25, 2016, the Tax Tribunal rendered a decision to revoke the designation of a joint and several tax obligor and the disposition of payment notice as prescribed in paragraph (1) on the grounds that the creditor who leased the maximum amount of KRW 300 million to the Plaintiff and that it is difficult to view the Plaintiff as a joint business proprietor of the instant hospital.

4) On February 16, 2016, in order to collect the delinquent amount of value-added tax as stated in the foregoing Paragraph (1) above, the director of the sericultural Tax Office released the attachment on the Plaintiff’s real estate and notified the Plaintiff thereof.

C. Imposition of fines for negligence on the Plaintiff and payment of fines for negligence on the Plaintiff

1) On the other hand, on January 12, 2015, the head of the sericultural Tax Office notified the Plaintiff of the opinion on the administrative fine in writing or orally until January 31, 2015 and notified the Plaintiff that the amount of the administrative fine will be reduced by 20% when he/she voluntarily pays the administrative fine within the said period, with respect to the act of violating the Punishment of Tax Evaders Act by failing to issue the cash receipts of the instant hospital.

2) On January 29, 2015, the Plaintiff paid a fine for negligence of KRW 253,949,300 (hereinafter referred to as “instant fine for negligence”) which is the reduced or exempted amount following the prior notice of imposition of the fine for negligence under the foregoing paragraph (1).

3) On March 5, 2015, the Plaintiff filed an objection to the instant decision on the imposition of the fine for negligence with Seoul Central District Court Decision 2015 and 1644, and the said court dismissed the Plaintiff’s objection on the ground that the Plaintiff cannot file an objection against the instant decision on the imposition of the fine for negligence on April 11, 2016, on the ground that the imposition and collection procedure of the fine for negligence was completed by voluntarily paying the reduced fine for negligence as stated in the foregoing paragraph (2).

(d) Relevant statutes;

The Acts and subordinate statutes relating to the instant case are as follows:

[Violation of Public Order]

Article 16 (Prior Notice, Submission of Opinions, etc.)

(1) When an administrative agency intends to impose a fine for negligence on a violation of public order, it shall notify the parties (including an employer, etc. under Article 11 (2); hereinafter the same shall apply) of the matters prescribed by Presidential Decree in advance and provide them with an opportunity to present their opinions within a specified period of at least ten days. In such cases, if no opinion

(2) Parties to a dispute may state their opinions or submit necessary materials to an administrative agency within the deadline prescribed by Presidential Decree.

Article 17 (Imposition of Fine for Negligence)

(1) After completing the procedure for submitting opinions under Article 16, an administrative agency shall impose an administrative fine in writing (including an electronic document if the parties consent thereto; hereafter the same shall apply in this Article).

Article 18 (Reduction of Administrative Fines for Voluntary Contributors)

(1) If a party intends to voluntarily pay an administrative fine within the deadline for presenting his/her opinion under Article 16, the administrative agency may reduce the administrative fine, as prescribed by Presidential Decree.

(2) Where a party pays a fine for negligence reduced pursuant to paragraph (1), the procedures for imposing and collecting fines for the relevant violation of public order shall be terminated.

Article 20 (Objections)

(1) Any party who is dissatisfied with the imposition of an administrative fine may file an objection in writing with the relevant administrative agency within 60 days from the date on which he/she is notified of the imposition of the administrative fine.

(2) Where an objection is filed under paragraph (1), the imposition of a fine for negligence by an administrative agency shall become void.

Article 21 (Notification to Court)

(1) An administrative agency in receipt of an objection under Article 20 (1) shall notify the competent court of the fact, along with its opinion thereon and documentary evidence, within 14 days from the date of receipt of the objection (hereinafter referred to as "

Article 31 (Interrogation, etc.)

(1) The court shall hold a hearing to hear the statements of the parties.

Article 36 (Judgment)

(1) Judgment on fines for negligence shall be rendered by ruling, stating the grounds therefor.

[Punishment of Tax Evaders Act]

Article 15 (Violation of Obligations to Issue Cash Receipts)

(1) Any person who breaches his/her duty under Article 162-3 (4) of the Income Tax Act and Article 117-2 (4) of the Corporate Tax Act shall be punished by a fine for negligence equivalent to 50/100 of the transaction amount for which receipts of cash have not been issued: Provided, That this shall not apply where the relevant transaction is subject to insurance benefits under the

【former Income Tax Act (amended by Act No. 11146, Feb. 1, 2012; hereinafter “ Income Tax Act”)】

Article 162-3 (Obligation to join Cash Receipt Merchants and to Issue Cash Receipt Merchants)

(1) A business operator who mainly supplies goods or services to consumers who are not business operators and meets the requirements prescribed by Presidential Decree in consideration of the type, scale, etc. of business shall become a Cash Receipt merchant by installing Cash Receipt Issuing Devices within three months from the date meeting such requirements

(4) Notwithstanding paragraph (3), where the business operator who runs the type of business prescribed by Presidential Decree and has become a Cash Receipt merchant, supplies goods or services, the transaction amount of which exceeds 300,000 won per transaction (including the value-added tax) and receives the price in cash, he/she shall issue Cash Receipt, as prescribed by Presidential Decree, notwithstanding the provisions of paragraph

Facts that there is no dispute for recognition, Gap evidence 1 through 9, and Eul evidence 2

(2) The purpose of the entire pleading, including the number

2. Determination on this safety defense

The defendant argues that the lawsuit of this case is an administrative fine imposition by the head of the diving Tax Office under the defendant's control, and it cannot be asserted as a civil lawsuit in light of the purport of the provision of the reduction and exemption system of administrative fines during the procedure for raising an objection and the period for submitting opinions on the imposition of administrative fines under the Regulation of Violations of Public Order.

However, if a voluntary payment of a fine for negligence is made within the deadline for submitting the opinion under Article 18 of the Act on the Regulation of Violations of Public Order, the procedure for the imposition and collection of the fine for negligence is not prescribed separately in the above Act (the plaintiff received a decision to dismiss the fine for negligence from the court on the above ground). According to the provisions of Articles 16 through 36 of the Act on the Regulation of Violations of Public Order, the party dissatisfied with the imposition of the fine for negligence by the administrative agency may file an objection in writing with the administrative agency within 60 days after receiving the notice of the imposition of the fine for negligence. The administrative agency in receipt of the objection shall notify the competent court within 14 days after receiving the objection, and the court shall decide the decision to decide the fine for negligence by making a decision with the reason after hearing the party's statement by opening the hearing date and hearing the party's opinion. Thus, the propriety of the imposition of the fine for negligence to which the Act on the Regulation of Violations of Public Order applies shall be determined only through the procedure under the Act on the Regulation of Violations of Public Order.

3. Judgment on the merits

A. The parties' assertion

1) Plaintiff

The disposition of the fine for negligence of this case (prior notice) that the chief of the sericultural Tax Office under the Defendant deemed the Plaintiff as joint business operators and joint taxpayers of the instant hospital is null and void since there exists a serious and obvious defect due to the lack of legal grounds. The Plaintiff paid KRW 253,949,300 to the Defendant according to the disposition of the fine for negligence of this case null and void (prior notice). The Defendant, as unjust enrichment, is obligated to return the above money and the damages

2) Defendant

① Since the Defendant received the instant administrative fine from the Plaintiff according to the requirements set forth in the Act on the Regulation of Violations of Public Order and the prior notice of the imposition of the instant administrative fine, there exists an objective circumstance that the head of the sericultural Tax Office misleads the Plaintiff as a joint business proprietor of the instant hospital, and thus, it cannot be deemed that the defect in the disposition imposing the administrative fine of this case (prior notice) is serious and clear and void as it does not necessarily mean that the Defendant received the administrative fine of this case under the Punishment of Tax Evaders Act and the Income Tax Act (see, e.g., it is reasonable to see that the Plaintiff was a joint business proprietor

② The Plaintiff voluntarily paid a reduced administrative fine even though he/she could be dissatisfied with the prior notice of the imposition of the administrative fine of this case through the procedures for raising an objection. As such, the Plaintiff cannot file a claim for refund because it constitutes a non-debt repayment under Article 742 of

B. Determination

1) In civil litigation, when a certain administrative disposition becomes a preliminary question, it may be judged and judged on the premise that the administrative disposition is null and void (see, e.g., Supreme Court Decision 2009Da90092, Apr. 8, 2010). In order for the administrative disposition to be null and void as a matter of course, it is insufficient to say that there is an illegal cause, and that the defect is a serious violation of the important part of the laws and regulations, and it is objectively obvious that the defect is objectively obvious. In determining whether the defect is significant and obvious, the purpose, meaning, function, etc. of the relevant laws and regulations should be examined from a perspective of purpose and rational consideration of the specificity of the specific case itself (see Supreme Court en banc Decision 94Nu4615, Jul. 11, 1995).

On the other hand, in a case where there are objective reasons to believe that certain legal relations or facts which are not subject to taxation are subject to taxation, and where it is clear whether it is subject to taxation can only be accurately examined, it cannot be said that it is apparent even if the defect is serious, and thus, it cannot be deemed that the illegal taxation disposition, which misleads the fact of taxation requirements, is null and void as a matter of course (see, e.g., Supreme Court Decisions 88Nu1210, Jul. 11, 1989; 2001Du7268, Sept. 4, 2002). It is reasonable to view that it is equally applied to the disposition of imposition of the administrative fine (prior notice) of this case imposed under the Income Tax Act and the Punishment of Tax Evaders Act.

2) Validity of the disposition imposing the fine for negligence of this case (prior notice)

Based on the above legal principle, comprehensively taking account of the following circumstances, as to whether there is a serious and apparent defect in the disposition (prior notice) imposing the fine for negligence in this case by the head of the sericultural Tax Office, and the evidence and the evidence No. 1 as seen earlier, comprehensively taking into account the overall purport of the pleadings, the head of the sericultural Tax Office could have verified the fact that the Plaintiff was not the maximum partner of the hospital in this case, but the Plaintiff was the creditor of the loan, taking into account the objective circumstances that make the Plaintiff mistake as joint business operators of the hospital in this case.

① On August 24, 2010, the Plaintiff assumed office as the representative director of BB consulting Co., Ltd., a corporation’s representative director, and had the said corporation account spent the opening cost of the instant hospital. On August 12, 2010, the Plaintiff concluded a lease agreement with the lessor on the building of the instant hospital and remitted the lease deposit.

② The Plaintiff opened three financial accounts, including one bank account (00-000- 00000) and the Plaintiff’s bank account under the name of the Plaintiff for the purpose of having the maximum amount of the instant hospital use the instant hospital’s operating account.

③ Around October 2010, the Plaintiff, as the representative director of BB consulting Co., Ltd., drafted a contract on the allocation of operating profits of the instant hospital with the maximum XY and ZZ, and upon the request of the maximum XX, prepared the agreement on the operation of the instant hospital with the lowest X Z in early 2011.

④ According to the revenue settlement data of the instant hospital (import/expenses), the Plaintiff received 35% of the revenue of the instant hospital from around November 201 to around January 201, and entered that 40% of the revenue was distributed from February 201 to around December 201. The Plaintiff received part of the revenue of the instant hospital every month during the remainder of the period excluding around June 201 and around August 2011. From around May 201, the Plaintiff received part of the revenue of the instant hospital during the remainder of the period excluding around December 2011 and around August 2011.

⑤ From the opening date of the instant hospital to May 2012, the Plaintiff entered the instant hospital and performed part of the receipt and disbursement work.

Therefore, inasmuch as the defect in the imposition of the fine for negligence in this case (prior notice) cannot be seen as apparently apparent, the imposition of the fine for negligence by the head of the sericultural Tax Office, which misleads the facts constituting the premise for the imposition of the fine for negligence, cannot

4. Conclusion

Therefore, the plaintiff's claim for return of unjust enrichment of this case, which is premised on the fact that the disposition of the fine for negligence of this case (prior notice) is null and void as a matter of course, is without merit, and it is dismissed. It is so decided