[1] Whether the revised individual land price becomes effective retroactively to the basic date (affirmative)

[2] The case holding that the corrected officially assessed individual land price is not unreasonable

[3] The purpose of the system of tax credit for the expected return on a transfer income, and whether a tax payer may receive the tax credit for the expected return on a transfer income if he/she could have known the exact amount of the transfer income tax (affirmative)

[4] The case holding that, in case where a taxpayer paid a lump-sum return based on the officially assessed individual land price, and then the officially assessed individual land price was determined, a substantial portion of the tax credit for the preliminary return should be deducted if the taxpayer made the preliminary return based on the corrected individual land price

[1] If the decision of correction was publicly announced because the individual land price (which was amended by the Public Notice of Values and Appraisal of Lands, etc. Act No. 5108, Dec. 29, 1995; which was enforced on June 29, 1996) was obvious error in the land price calculation, the individual land price originally publicly announced shall lose its effect, and a new individual land price which was corrected shall take effect retroactively to the basic date, and it shall not be deemed that it violates the principle of trust and good faith or the principle of trust protection by cancelling the illegal decision of individual land price based on Article 12-3 of the Guidelines for the Joint Investigation of Land Price, etc. and determining new individual land price.

[2] The case holding that the corrected officially assessed individual land price is not unreasonable

[3] The purpose of the tax credit system for the expected return on the transfer income is to compensate for the amount equivalent to the interest accrued from advance payment and to promote the convenience and efficiency of collection by encouraging voluntary payment. Thus, if the taxpayer is deemed to be a taxpayer, the tax credit system for the expected return on the transfer income as above can legally guarantee the taxpayer an opportunity to receive the tax credit by voluntarily paying with the expected return on the transfer income. Thus, even if the taxpayer fails to pay the transfer income tax, it is unreasonable under the social norms to expect the taxpayer to pay the transfer income tax at the time of the expected return on the transfer income, and if the taxpayer could have known the exact amount of the transfer income tax, it is reasonable to apply the tax credit system for the expected return on the transfer income to the taxpayer, if there are special circumstances to deem that the taxpayer voluntarily paid the tax amount.

[4] The case holding that, in a case where a taxpayer voluntarily pays a return on the profits accruing from the transfer of a land and the amount of the transfer income tax based on the individual land price, if the individual land price was corrected and the revised individual land price was notified from the beginning, a considerable portion of the amount of the tax credit for the preliminary return should be deducted on the basis of the corrected individual land price.

[1] Article 99(1) of the Income Tax Act, Article 164(9) of the Enforcement Decree of the same Act / [2] Article 99(1) of the Income Tax Act / [3] Articles 95(2) and 105(1) of the Income Tax Act / [4] Articles 95(2) and 105(1) of the Income Tax Act

[1] Supreme Court Decision 93Nu15588 delivered on October 7, 1994 (Gong1994Ha, 3010), Supreme Court Decision 95Nu6311 delivered on September 15, 1995 (Gong1995Ha, 3430) / [3] Supreme Court Decision 96Nu7816 delivered on December 20, 1996 (Gong197Sang, 439)

Park Jae-min (Attorney Kim Jae-chul, Counsel for the plaintiff-appellant)

Head of Yongsan Tax Office

1. The Defendant’s disposition of imposition of capital gains tax of KRW 267,007,640 against the Plaintiff on May 1, 1997 that exceeds KRW 258,817,110 shall be revoked.

2. The plaintiff's remaining claims are dismissed.

3. Ten minutes of the lawsuit shall be borne by the plaintiff, and the remainder shall be borne by the defendant.

The Defendant’s disposition of imposition of capital gains tax of KRW 267,007,640 against the Plaintiff on May 1, 1997 that exceeds KRW 185,102,40 shall be revoked.

1. Details of the disposition;

A. The following facts may be acknowledged according to Gap evidence Nos. 1, 3, 5, Eul evidence Nos. 1 to 3, 5, and Eul evidence Nos. 4-1 and 2:

(1) On September 5, 1995, the Plaintiff transferred the land site 218.2 square meters (hereinafter “the instant building”) and its ground building 654.4 square meters owned by the Plaintiff on April 5, 1995, and on the 25th of the same month, the Plaintiff paid KRW 185,102,40,00 of capital gains tax by applying the officially assessed land price (gold 2,670,000 per square meter) publicly announced at the time as the standard market price at the time of the instant land as the standard market price at the time of the instant land, and on June 28, 1996, on the grounds that the publicly assessed land price of the instant land in 195 was erroneously determined due to a mistake in land characteristics, the Plaintiff publicly notified the decision to correct it as KRW 3,580,000 per square meter.

(2) Accordingly, on May 1, 1997, the Defendant calculated capital gains tax amounting to KRW 282,96,980 on the land of this case by applying the corrected officially assessed individual land price as above, and then imposed an additional imposition of KRW 97,894,580 after deducting the capital gains tax paid by the Plaintiff, but imposed an additional imposition of KRW 97,894,580 on the land of this case, among the capital gains tax imposed and notified as above, the amount on which a return or an erroneous payment for arrears was imposed and notified is unreasonable, according to the decision of the Commissioner of the National Tax Service on July 25, 1997 by reducing the capital gains tax amount to KRW 15,989,340 on August 11 of the same year, according to the decision of the Commissioner of the National Tax Service as of July 25, 1997, and made a decision to reduce the said additional

B. Therefore, the instant disposition is KRW 267,007,640 of the transfer income tax as of May 1, 1997, and the Plaintiff seeks to revoke the amount exceeding the amount of the said voluntary payment, i.e., the reduced amount of the additional tax, i.e., KRW 81,905,240 of the reduced amount of the tax imposed.

2. Whether the disposition is lawful;

A. The plaintiff's assertion

The plaintiff's assertion is as follows.

First, the disposition of this case is imposed by applying the revised officially assessed individual land price after the expiration of the period of determination of the transfer income tax. This is against the purport of Article 99(1) of the Income Tax Act (amended provisions of Article 60 of the previous Act, proviso of Article 1(1) of the Addenda, hereinafter the same shall apply) and Article 164(9) of the Enforcement Decree of the same Act (Enforcement from January 1, 1995 to January 1, 1995 under the proviso of Article 1 of Addenda, hereinafter the same shall apply) which is the standard market price of land in applying the officially assessed individual land price which is the standard market price of the land before the new notice of the standard market price, if it is acquired or transferred before the new notice of the standard market price, the correction of the officially assessed individual land price is to correct the error of the administrative agency, thus imposing the transfer income tax by applying the revised officially assessed individual land price to the parties concerned less trusted at the time of transfer. Thus, this is against the principle of trust and good faith of the people.

Second, the officially assessed individual land price of this case in 195, which was the basis for the disposition of this case, is 3,850,000 won per square meter, and the officially assessed individual land price of 13 land of this case, which had similar characteristics of land, is 2,70,000 won per square meter, and the officially assessed individual land price of this case is 350,000 won per square meter, Jungcheon-dong, Busan, which is also 350,000 won. In addition, the increase rate of the officially assessed individual land price of each land of this case in 195, Jungcheon-dong, Busan, 350, excluding the land of this case is -0.86%, average -13%, and -15.63% increase rate of the land of this case, the officially assessed individual land price of this case is more 27.86% or increased than that of 194. Thus, the determination of the officially assessed individual land price of this case is unlawful.

Third, the instant disposition was imposed retroactively by applying the corrected officially assessed individual land price after the expiration of the final return period, and was deprived of the opportunity for the Plaintiff to receive the tax credit for the expected return on the profits accrued from the transfer of property under Article 98(1) of the Act (wholly amended by Act No. 4803 of Dec. 22, 1994 and enforced from January 1, 1996; hereinafter the same shall apply). Thus, the instant disposition was unlawful for the instant disposition on the tax credit amount that the Plaintiff would have received if the Plaintiff paid the expected profits accrued from the transfer of property.

B. Judgment on the Plaintiff’s first argument

(1) The determination of the price of individual land constitutes an administrative disposition. The disposition agency which originally made an administrative disposition can, in principle, cancel it ex officio without any other legal basis if there is a defect in the act, and it is not possible to cancel it ex officio even after the statutory objection period for the administrative disposition expires. Thus, the disposition agency can cancel it ex officio if there is an obvious error in the calculation of the individual land price for the land (see Supreme Court Decision 95Nu6311 delivered on September 15, 1995). According to Article 12-3 of the Guidelines for the Joint Examination of Land Price (see Supreme Court Decision 95Nu631 delivered on September 15, 1995), if there is an obvious error in the calculation of the land price, such as error in the land characteristics or error in the calculation of the land price, the head of the Si/Gun/Gu may decide it without deliberation of the local land appraisal committee, and if there is an obvious error in the calculation of the land price, the new price of the land can be cancelled after the new decision of the correction of the price of individual land price of Article 98.

(2) In full view of Gap evidence Nos. 7-1 through 12, Eul evidence Nos. 6, Eul evidence Nos. 8-1 through 3, Eul evidence No. 9-1 and Eul evidence Nos. 9-2, and the whole purport of the pleading as a result of the fact inquiry conducted on July 31, 1998 to the North Korean head of this court, the following facts can be acknowledged.

(A) According to the land characteristics survey table, the land of this case is adjacent to the opening roads and gold streets between the land of the same 349 area, which is the land of the same 350 o-dong, Seocheon-dong, Busan. According to the road condition of the land characteristics survey table, the above opening roads are the length less than 8 meters wide which is possible for automobiles to pass, and the gold channel is extended from 191 to 25 meters wide (luminous as wide as or wider than 25 meters). However, due to the reduction of the road width due to the subway construction, it is evaluated as the middle road (road whose width is 12m to 25m).

(B) The head of North Korea: (a) determined and publicly announced the officially assessed land price of the instant land in 1995 as KRW 2,670,000 per square meter in 195; (b) found that there was an error in investigating the land characteristics of the instant land; and (b) revised the officially assessed land price of the instant land to KRW 3,580,000 per square meter by applying the changed land characteristics on June 28, 1996, by applying the changed land characteristics to the land price of the instant land to KRW 3,580,000 per square meter in terms of the road condition of the instant land.

(3) According to the above facts, the head of Busan Northern District Office revoked the original individual land price determination in 1995 of the land of this case, and lawfully corrected the new individual land price. Thus, such decision of correction is contrary to the presumption of the individual land price and the stability in the application of the tax law, as alleged by the plaintiff, and it cannot be deemed that it constitutes a violation of the principle of trust and good faith and the principle of trust protection, and it constitutes an infringement on the people's property rights guaranteed by the Constitution. In addition, if the decision of correction of the individual land price was publicly announced, the original individual land price publicly announced becomes null and void, and the new individual land price publicly announced becomes null and void retroactively from the basic land price determination date. Thus, the decision of correction of the individual land price cannot be deemed to violate the provisions of Article 99 (1) of the Income Tax Act and Article

C. Judgment on the second argument by the plaintiff

(1) We examine whether the decision of correction of the officially assessed individual land price in 1995 on the land of this case was significantly unreasonable, and therefore, we examine whether the decision of correction of the officially assessed individual land price of this case is considerably unreasonable or not.

(2) According to Gap evidence Nos. 6-1 to 10, 8-1 to 34, when comparing the officially assessed land price of the neighboring land of this case in 1995, the officially assessed land price of this case among the land of 44, 350-12, Busan Jung-gu, is the highest rate of 27.86%, and the officially assessed land price of the same 350-13, which is the same as the land of this case, was lower than 15.63%, on the other hand, according to the purport of the oral argument No. 7-1 and No. 8-1, the officially assessed land price of this case was 24 out of the above 444, and the officially assessed land price of this case was 30-4,000,000,000,0000 per 30-7,000,000,0000 won per 30-3,000,000 won.

(3) According to the above facts, although the increase rate of the officially assessed land price in 1995 of the land of this case was relatively higher than that of the neighboring land, among neighboring land, the officially assessed land price of the same 353-3 land, which appears to have similar characteristics to the land of this case, is rather higher than that of the land of this case, the officially assessed land price of this case does not seem to be remarkably unreasonable, and the officially assessed land price of the same 350-12 land adjacent to the land of this case is much lower than that of the actual land, as seen earlier, since the error of the land survey of this case was set much lower than that of the land of this case, the officially assessed land price of the same 350-12 land adjacent to the land of this case is deemed to be inappropriate to be considered as consideration in determining the propriety of the decision of the officially assessed land price of this case. Accordingly, the plaintiff's above assertion is without merit

D. Judgment on the third argument of the plaintiff

(1) According to Article 105(1) of the Act (amended provisions of Article 95(1) of the Act, proviso of Article 1(1) of the Addenda, and Article 95(2) of the Act (amended by Act No. 4803 of Dec. 22, 1994) (amended by Act No. 4803 of Jan. 1, 1996), a resident who transfers land or a building must make a "transfer value" on the transfer margin within two months from the last day of the month in which the transfer date belongs, and Article 98(1) of the Act provides that when he makes a voluntary payment with the transfer value, he shall deduct an amount equivalent to 10/100 of the tax amount to be paid from the calculated tax amount (hereinafter referred to as "tax credit on the transfer margin").

The purpose of the tax credit system on the accrued profits accruing from the erroneous return on transfer is to compensate for the amount equivalent to the interest accrued from the advance payment and to promote the convenience and efficiency of collection by encouraging voluntary payment (see Supreme Court Decision 96Nu7816, Dec. 20, 1996). However, if we look at the taxpayer's point of view, the tax credit system on the accrued profits on transfer should be legally guaranteeing the taxpayer the opportunity to receive the tax credit by voluntarily paying with the return on transfer income as well as the return on transfer income. Thus, even if the taxpayer fails to pay the transfer income tax, it is unreasonable in terms of social norms to expect the taxpayer to pay the transfer income tax at the time of the return on transfer income, and if there are special circumstances to deem that the taxpayer voluntarily paid the transfer income tax if the taxpayer could have known the correct amount, it is reasonable to apply the tax credit system on the accrued profits on transfer income to the taxpayer.

(2) As seen earlier, on September 5, 1995, the Plaintiff transferred the instant land and its ground buildings, and on September 25, 1995, upon applying KRW 2,670,00 per square meter (i.e., the officially assessed individual land price) at the time of the instant land, and paid KRW 185,102,40 to the Plaintiff at the same time as the transfer income tax was paid on June 26, 1996 on the ground that the officially assessed individual land price in 1995 of the instant land was erroneously determined due to a mistake in land characteristics, the Plaintiff announced the correction of the tax amount at KRW 3,580,00 per square meter at the time of transfer of the instant land. In light of the fact that the Plaintiff was publicly notified on September 5, 1995, the Plaintiff should have to pay the transfer income tax after the scheduled individual land price was publicly notified on the basis of the officially assessed individual land price before the previous decision of correction, and the Plaintiff should have to be voluntarily paid the transfer income tax on the instant land price.

(3) Furthermore, according to the statement in subparagraph 1 and subparagraph 4-1 and 2 of the evidence Nos. 4-2 about a significant portion of the amount of the tax credit for the preliminary return payment to be deducted, the calculated tax amount based on the revised individual land price of 287,574,575 is 28,757,457 won per 10/100, and the amount of the tax credit for the preliminary return payment is 20,56,93 won per 10/100, while the Plaintiff voluntarily pays the capital gains tax pursuant to the individual land price of 195 prior to the decision of September 25, 1995, it can be recognized that the amount of the tax credit for the preliminary return payment has already been deducted from the amount of the tax credit for the said preliminary return payment is 8,190,524 won (28,757,457 won-20,56,933 won).

(4) Therefore, at KRW 267,07,640, the portion exceeding KRW 258,817,10 (267,007, 640-8, 524 won =258,817,116 won, or the portion exceeding 10 won under Article 1(1) of the National Treasury Fractional Calculation Act, which was obtained by deducting the portion of the tax credit for preliminary return which was prohibited from being deducted due to the determination of the publicly assessed individual land price of the instant land. Thus, the Plaintiff’s above assertion pointing this out is with merit.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the scope of the above recognition, and the remaining claim is dismissed as it is without merit. It is so decided as per Disposition.

Judges Gu-Appellee (Presiding Judge)