[1] In a case where a purchaser fails to construct a national housing due to a cause not attributable to the purchaser for the land transferred as a national housing construction site, whether the transfer income tax can be refunded even if there is no explicit provision in the former Tax Reduction and Exemption Control Act (affirmative)

[2] Whether transfer income tax can be refunded even where there is no application for refund of transfer income tax on the construction site of national housing under the former Regulation of Tax Reduction and Exemption Act (negative)

[1] Even if the land was transferred as a site for the construction of national housing, but it was not constructed within the period under Article 62(1) of the former Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 4165 of Dec. 30, 1989) and Article 50(2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12881 of Dec. 30, 1989), the cause is expropriation, urban planning and other legal provisions. If the purchaser cannot be attributable to him, the transfer income tax may be refunded as in the case of the construction of housing, and it is not interpreted differently on the ground that there is no explicit provision.

[2] Article 62(3) of the former Regulation of Tax Reduction and Exemption Act and Article 50(9) of the Enforcement Decree of the same Act stipulate that an application for refund of capital gains tax shall be filed within three months from the date of completion of national housing in order to be refunded pursuant to Article 62(1) of the same Act. If the above provision merely applies for the application period because it is not possible to provide a decoration, barring special circumstances, capital gains tax shall not be refunded.

[1] Article 62 (1) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989) (see current Article 66 (1)), Article 50 (4) (see current Article 63 (6)) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 12881 of Dec. 30, 1989) / [2] Article 62 (3) (see current Article 66 (4)) of the former Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989), Article 50 (9) (see current Article 63 (9)) of the former Enforcement Decree of the Regulation of Tax Reduction and Exemption Act (amended by Presidential Decree No. 1281 of Dec. 30, 1989)

[1] Supreme Court Decision 85Nu597 delivered on January 21, 1986 (Gong1986, 390) Supreme Court Decision 86Nu266 delivered on February 10, 1987 (Gong1987, 460) Supreme Court Decision 87Nu115 delivered on July 21, 1987 (Gong1987, 1411) / [2] Supreme Court Decision 93Nu1177 delivered on January 25, 1994 (Gong194, 851 delivered on November 21, 195) 95Nu10556 delivered on July 8, 197 (Gong196, 103)

Plaintiff (Attorney Lee Im-soo et al., Counsel for plaintiff-appellant)

Korea

Seoul High Court Decision 95Na19777 delivered on June 13, 1997

The part of the lower judgment against the Defendant is reversed, and that part of the case is remanded to the Seoul High Court.

The grounds of appeal are examined.

On the first ground for appeal

Article 62 (1) of the Regulation of Tax Reduction and Exemption Act (amended by Act No. 4165 of Dec. 30, 1989; hereinafter the same) provides that capital gains tax shall be refunded in cases where the land is transferred as a national housing construction site and the national housing is constructed within the prescribed period, Article 50 (2) of the Enforcement Decree of the same Act (amended by Presidential Decree No. 12881 of Dec. 30, 1989; hereinafter the same shall apply) provides that the above period shall be three years from the date of purchase; however, even if the national housing is not constructed within the above period, the reason for expropriation, urban planning and other legal provisions are applicable, and if it is not possible for the purchaser to assume the responsibility, capital gains tax shall be refunded as well as in cases where the housing is constructed, and no other explicit provision is provided (see, e.g., Supreme Court Decisions 85Nu597, Feb. 10, 1987; 86Nu26815, Jul. 15, 1987>

The court below, based on evidence, purchased the land of this case from the non-party from August 8, 198 to October 24 of the same year for the purpose of purchasing and selling a house below national housing size under the Housing Construction Promotion Act, and completed its registration. Meanwhile, the plaintiff agreed to bear the transfer income tax to the non-party on May 31, 1990, and accordingly, paid 68,317,440 won in total by 67,659,340 won and additional 658,080 won to the non-party until May 31, 1990. The plaintiff submitted an application for approval of the housing site development project for the construction of national housing within 3 years from the date of construction of national housing under the Housing Construction Promotion Act to the non-party, and the plaintiff did not have the right to seek the transfer income tax for the housing site development project within 2,00,000 won under the construction plan of the government's national housing site development project. The plaintiff's ground of appeal pointing this out is justified.

On the second ground for appeal

Article 62(3) of the above Act provides that the provisions of paragraph (1) shall apply only to cases where an application is filed under the conditions as prescribed by the Presidential Decree, and Article 50(9) of the above Enforcement Decree provides that an application for refund shall be filed within three months from the completion date of national housing in order to receive a refund of capital gains tax pursuant to Article 62(1) of the Act. In case where the above provision cannot be deemed a simple provision of a decoration and the application period is too excessive, barring special circumstances, capital gains tax shall not be refunded (see Supreme Court Decision 83Nu558, Jun. 12, 1984).

In the case of this case where the national housing cannot be constructed due to expropriation, etc., the application for refund shall be filed within three months from the time of expropriation, etc., and where the application for refund is not filed, it shall not be refunded.

However, according to the records, the plaintiff cannot receive a refund, since there is no application for refund at all, and the decision of the court below that the plaintiff, other than the legal text, is almost impossible to expect that the plaintiff should pay an application for refund along with documents proving the acceptance within three months after land expropriation, or that the Commissioner of the National Tax Service should accept the application for refund on the ground of new rules, etc. based on the contents of reply asked to the Minister of Finance and Economy after the above period of application expires, or after the above period of application exceeds the above period of application, even in cases where there is a express provision, it is difficult to accept the case where there is no express provision in light of the fact that the refund cannot be paid within the prescribed period of time, and therefore it is difficult to accept it more broadly. Accordingly, the decision of the court below is erroneous in the misapprehension

Therefore, the part of the judgment below against the defendant is reversed, and that part of the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices.

Justices Seo Sung-sung (Presiding Justice)