Busan High Court Decision 2011Nu2439 ( February 21, 2012)

Cho High Court Decision 2008Da2614 ( December 14, 2009)

Under the tax law, additional tax can be exempted if there is a justifiable reason that it is not attributable to the failure to perform its duties.

Since it is reasonable to view that there is a justifiable reason that the plaintiffs are not guilty of neglecting the obligation to pay traffic tax, etc., it is reasonable to determine that the disposition of this case on imposition of penalty tax in bad faith is illegal.

The additional tax for insincere payment and refund under Article 47-4 of the Framework Act on National Taxes

Article 9 of the Traffic Tax Act; and

2012du23730 Such revocation as traffic tax, etc.

- Highly higher persons

AAA Corporation and one other

also

Appellee

Head of Ulsan District Tax Office et al.

Busan High Court Decision 2011Nu2439 Decided September 21, 2012

June 14, 2013

All appeals are dismissed.

Costs of appeal shall be borne by each party.

The grounds of appeal are examined.

1. As to the plaintiffs' grounds of appeal (Nos. 1 and 2)

Article 106-2 (1) 1 of the former Restriction of Special Taxation Act (amended by Act No. 8146 of Dec. 30, 2006) provides that the special consumption tax, traffic tax, education tax, and driving tax on the portion taken out of a manufacturing place not later than June 30, 2007 shall be exempted under the conditions as prescribed by the Presidential Decree, and Article 113 (2) of the former Restriction of Special Taxation Act (amended by Act No. 8138 of Dec. 30, 2006) provides that where the petroleum products on which the special consumption tax or traffic tax is imposed fall under the tax exemption under the provisions of Article 106-2 of the same Act, the tax amount to be exempted may be refunded, or deducted from the tax amount to be paid or collected, while the procedures for refund or tax credit under the provisions of paragraph (3) shall apply mutatis mutandis to the relevant goods.

In addition, Article 106-2 (1) 1 of the former Restriction of Special Taxation Act (amended by Act No. 8827 of Dec. 31, 2007; hereinafter referred to as the "former Restriction of Special Taxation Act, including the amended Act of Dec. 30, 2006) stipulates that the special consumption tax, traffic, energy, and environment tax, education tax and driving tax on the portion taken out from a manufacturing place by June 30, 2012 shall be exempted under the conditions as prescribed by the Presidential Decree for the petroleum products prescribed by the Presidential Decree to be used for agriculture by farmers as prescribed by the Presidential Decree. Article 113 provides that the special consumption tax or traffic, energy and environment tax may be refunded, paid or collected if the petroleum products on which the special consumption tax or traffic, energy and environment tax is imposed fall under the tax exemption under the provisions of Article 106-2 of the Act, and the procedures for refund or tax credit under the provisions of paragraph (3) shall apply mutatis mutandis to the relevant goods.

Meanwhile, Article 7 (1) of the former Traffic, Energy and Environment Tax Act (amended by Act No. 8138 of Dec. 30, 2006) and Article 7 (1) of the former Traffic, Energy and Environment Tax Act (amended by Act No. 11123 of Dec. 31, 201; hereinafter referred to as the "former Traffic, Energy and Environment Tax Act") provide that "the person liable to pay traffic tax (or traffic, energy and environment tax) shall submit to the head of the tax office having jurisdiction over the manufacturing place by the last day of the following month a return stating the quantity and value of the goods taken out from the manufacturing place and calculated tax amount, the amount of tax without paying the tax, the amount of tax to be deducted, the amount of tax to be refunded, the amount of tax to be paid, and the amount of tax to be paid, etc.," and Article 9 (1) provides that "if a return under the provisions of Article 7 is not submitted or there is an error or omission in the details of a return,

Based on its adopted evidence, the court below acknowledged the fact that the Defendants filed the instant disposition in order to recover the amount of tax by filing a false certificate of tax-free petroleum supply with the Defendants, even though the Plaintiff’s petroleum products carried out to the Geum-gu Oil station, etc. were not actually sold to farmers for agriculture, and thus, cannot be refunded the traffic tax, etc. under Article 106-2(1)1 of the former Restriction of Special Taxation Act because it was not subject to traffic tax exemption under Article 106-2(1)1 of the former Restriction of Special Taxation Act. On the basis of this, the court below determined that Article 9(1) of the former Traffic Tax Act only stipulates the subject of the correction as “tax base and tax amount” and it does not limit the amount of tax according to the tax base, but also states that there are errors or omissions in the contents of the return under Article 7, and thus, the head of competent tax office may correct the correction pursuant to Article 9(1) of the former Traffic Tax Act based on its reasoning. Furthermore, the lower court determined that the instant disposition did not violate the principle of self-responsibility.

In light of the above provisions and relevant legal principles and records, such judgment of the court below is just, and there is no error in the misapprehension of legal principles as to the determination of refund of traffic tax, etc. or the principle of self-responsibility under the Constitution, as otherwise alleged in the ground of appeal. The ground of appeal to this effect

2. As to the Defendants’ grounds of appeal (including all the grounds of appeal Nos. 1, 2, and 3 by the head of Ulsan District Tax Office)

In full view of the circumstances acknowledged by the adopted evidence, the lower court determined that the disposition of the instant case was unlawful, on the ground that it is reasonable to deem the Plaintiffs that there is a justifiable reason to believe that the Plaintiffs could not have caused the failure to pay taxes, such as traffic tax. In light of the relevant legal principles and records, the lower court’s aforementioned determination is justifiable, and there is no error in the misapprehension of the legal principles as to the failure to pay taxes and the legitimate reason for the failure to pay taxes, as otherwise alleged in the ground of appeal, or in violation of the principle of free evaluation of evidence in violation of logical and empirical rules as to the existence or absence of a justifiable reason.

3. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against each party. It is so decided as per Disposition by the assent of all participating Justices on the bench.