Seoul High Court 2013Nu12463 (Law No. 19, 2014)

The disposition of this case is legitimate, since the plaintiff knew or was negligent in not knowing it.

As the representative of the Plaintiff had been aware of the supply structure and distribution route of the closed consent, the actual condition of transactions on the data, and the risk of the transaction for a long time, he did not verify the transportation route of the closed consent supplied by the Plaintiff, the payment details of transportation expenses, and the payment details of purchase price. The fact that the representative of the Plaintiff did not confirm or manage the name, etc. of the driver who caused the closure of the operation, was aware of

Article 17 of the Value-Added Tax Act

2014du5538 Disposition revocation of Disposition of Imposition of Value-Added Tax

AABS Co., Ltd.

Head of Guro Tax Office

Seoul High Court Decision 2013Nu12463 Decided February 19, 2014

August 20, 2014

The appeal is dismissed.

The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. As to the ground of appeal on a false tax invoice

In cases where an entrepreneur who actually supplies and a supplier on a tax invoice are different, the tax invoice is established in the Supreme Court’s established case that the person who actually supplies goods or services falls under the “tax invoice entered differently from the fact” as provided by Article 17(2)1-2 of the former Value-Added Tax Act (amended by Act No. 9268 of Dec. 26, 2008) and falls under the “tax invoice entered differently from the fact” and, barring any special circumstance where there is no negligence on the part of the supplier, the input tax amount pursuant to the relevant tax invoice is not deducted from the output tax amount, unless there is any negligence on the part of the supplier. In addition, the supplier means the person who actually performs the transaction of supplying goods or services to the person who is not the supplier (see, e.g., Supreme Court Decision 96Da48930, 48947, Mar. 28, 197).

In light of the circumstances as indicated in its holding, the lower court determined that all of the tax invoices of this case involving a limited-liability company, a scooby-traps company, and a limited-liability company for new scoops constituted a “tax invoice different from the facts stated differently by the actual supplier and the supplier on the tax invoice.”

In light of the above legal principles and records, the above determination by the court below is just, and contrary to the allegations in the grounds of appeal, there were no errors of misapprehending the legal principles regarding the burden of proof of a tax invoice or tax lawsuit, or exceeding the bounds of free evaluation of evidence

2. As to the ground of appeal on the trading party with good faith and negligence

The lower court, based on the judgment of the first instance court, rejected the Plaintiff’s bona fide and negligent assertion on the ground that the Plaintiff could have known that the name of each of the suppliers of the instant tax invoices was different from the fact, and that there was no negligence due to the Plaintiff’s failure to know the fact, and rather, in light of the circumstances in its reasoning recognized by adoption evidence, the Plaintiff could have known that each of the instant tax invoices was either aware of or paid due attention to the fact.

In light of the relevant legal principles and records, the above judgment of the court below is just and acceptable. Contrary to the allegations in the grounds of appeal, there were no errors by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules, or by misapprehending the legal principles on the "party involved in good faith and negligence"

3. As to the ground of appeal as to the establishment of taxation requirement requirement principle

As seen earlier, the established precedents of the Supreme Court exclude business operators who are bona fide and without fault from the list of input tax deduction under the legal provisions of this case. This interpretation is intended not to apply sanctions to those who are not responsible in consideration of the fact that the legal provisions of this case have the nature of sanctions.

In light of the attitude of such precedents and the legislative intent of the legal provision of this case, even if it is difficult for a taxpayer to anticipate the subject matter of the legal provision of this case or it is difficult to view that an administrative agency grants arbitrary and discriminatory possibility of applying the law, and even if there is a need for interpretation of good faith and negligence, the need for interpretation and application of such law is a matter that is essentially within all the provisions of the law, and it is not in violation of the principle of clarity of taxation requirements (see Constitutional Court Order 2012Hun-Ba195, May 30, 2013).

Therefore, we cannot accept the allegation in the grounds of appeal that the legal provision of this case violates the principle of clarity of taxation requirements on different premises.

4. Conclusion

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