[edit] Supreme Court Decision 2000Da18547 delivered on June 12, 2001 [Unjust Enrichment]
【Main Issue】
Whether a tax official may, upon making refund payment of the charges on the excess ownership of the housing site which subsequently proved to have been overpaid or erroneously paid, refuse to pay the interest accrued on such refund amount prescribed in Paragraph 4, Article 32 of the Enforcement Decree of the Ceiling on the Ownership of Housing Sites Act (the COHSA), on the ground that the Enforcement Decree promulgated thereunder has become invalid due to the Constitutional Court's decision holding the former COHSA unconstitutional (negative)
【Summary of Decision】
In principle, in the event that an underlying statute is held unconstitutional by the Constitutional Court, the rules and regulations promulgated under such statute thereby become invalid and ineffective. However, in making refund payment of the charges on the excess ownership of the housing site which subsequently proved to have been an overpayment or erroneous payment of tax, if the tax authorities were to refuse to pay accrued interest payment for the refund of national taxes prescribed in Paragraph 2, Article 30 of the former Enforcement Decree of the Framework Act on National Taxes(amended by the Presidential Decree No. 17036 of December 9, 2000) and recognized in Paragraph 4, Article 32 of the Enforcement Decree of the COHSA (repealed by the Presidential Decree No. 15899 of September 25, 1998) on the ground that the Enforcement Decree of the COHSA became invalid due to the Constitutional Court's decision holding the former COHSA(repealed by the Act, Law No. 5571 of September 19, 1998) unconstitutional, such refusal will result in a more egregious transgression from the constitutional order than the state prior to the decision holding the statute unconstitutional. Therefore, in making refund of previously paid charges on the excess ownership of the housing site due to the subsequent revocation of the disposition imposing such charges as the underlying statute has been held unconstitutional, the accrued interest payment on the refund amount should be made by applying through analogy the provisions of Article 52 of the former Framework Act on National Taxes pertaining to the accrued interest payment on the refund of the overpaid or erroneously paid charges(amended by the Act, Law No. 6303 of December 29, 2000) and Paragraphs 1 and 2, Article 30 of the former Enforcement Decree of the Framework Act on National Taxes(amended by the Presidential Decree No. 17036 of December 9, 2000).
【Reference Provisions】 Paragraph 2 of Article 47 of the Constitutional Court Act, Paragraph 3, Article 27 of the former Ceilings on the Ownership of Housing Sites Act (repealed by the Act, Law No. 5571 of September 19, 1998), Paragraph 4, Article 32 of the Enforcement Decree of the Ceilings on the Ownership of Housing Sites Act(repealed by the Presidential Decree No. 15899 of September 25, 1998), Article 52 of the former Framework Act on National Taxes(amended by the Act, Law No. 6303 of December 9, 2000), Paragraphs 1 and 2, Article 30 of the former Enforcement Decree of the Framework Act on National Taxes(amended by the Presidential Decree No. 17036 of December 9, 2000).
Article 47 of the Constitutional Court Act (Effect of Decision of Unconstitutionality) (1) <omitted>
(2) Any law or provisions thereof decided as unconstitutional shall become invalid from the date on which the decision is made: provided, however, that the law or provisions thereof relating to any penalty shall become invalid retroactively.
(3)~(4) <omitted>
Article 27 of the former Ceilings on the Ownership of Housing Sites Act(repealed by the Act, Law No. 5571 of September 19, 1998) (Imposition and Collection) (1)~(2) <omitted>
(3) Any necessary matters regarding imposition and collection of charges shall be determined by the Presidential Decree.
Article 32 of the Enforcement Decree of the former Ceilings on the Ownership of Housing Sites Act(repealed by the Presidential Decree No. 15899 of September 25, 1998) (Imposition and Collection) (1)~(3) <omitted>
(4) Where the Ministry of Construction and Transportation has become aware of any charges erroneously paid or has to make refund payment of the charges according to the result of an administrative trial as referred to in Article 37 of the Act, it shall pay accrued interest payment on the refund under Paragraph 2, Article 30 of the Enforcement Decree of the Framework Act on National Taxes which is to be calculated for the period from the payment date of such charges to the date on which such refund actually occurs.
(5) <omitted>
Article 52 of the former Framework Act on National Taxes(amended by the Act, Law No. 6303 of December 29, 2000) (Additional Refund of National Tax). When the chief of a tax office appropriates or pays a national tax for refund under Article 51 of the Act, he or she shall add to the national tax refund the amount calculated according to the interest rate as may be prescribed by the Presidential Decree for the period between the day next to the below enumerated days and the day of appropriation or decision on payment, and the interest rate of the deposits in the financial institutions (hereinafter referred to as the "additional national tax refund"):
1. For a national tax refund payable due to rectification or cancellation of the tax return or imposition forming the base of the relevant payments after an erroneous or double payment, or a payment, the day of relevant payment: provided, however, that if the national tax refund was paid in two or more installments, it shall be the last day of payment, but if the national refund exceeds the final payment, it shall be each due date of national tax refund computed retroactively in the order of due dates until it reaches such amount
2. For a national tax refund payable by regular determination procedures under the relevant tax law, such regular determination date: provided, however, that if the national tax refund was paid in two or more installments, the proviso of Subparagraph 1 above shall apply mutatis mutandis
3. For a national tax refund payable by any reduction of or exemption from the national tax which was duly and lawfully paid to the tax authorities, the date of determination
4. <repealed>
5. For a national tax refund owing to the amendment of a law after lawful payment, the enforcement date of the law
6. In making refund payment based upon the tax return amount to be refunded under the Income Tax Act, the Corporate Tax Act, the Value-Added Tax Act, the Special Consumption Tax Act, the Liquor Tax Act or the Traffic Tax Act, 30 days after the filing date of such tax return (if such filing date falls on the date before the statutory tax return date, it shall be from the statutory return date) have passed: provided, however, that for a tax amount to be refunded by a decision or that of rectification resulting from failing to make returns of the tax amount to be refunded or making a wrong return, when 30 days have elapsed after the date of decision or decision of rectification
Article 30 of the former Enforcement Decree of the Framework Act on National Taxes (amended by the Presidential Decree No. 17036 of December 9, 2000) (Determination of Additional Payment on National Tax Refund) (1) Where the chief of a tax office appropriates or refunds the national tax refund according to the provisions of Article 51 of the Act, he or she shall determine the accrued interest payment on the refund of national tax as prescribed in Article 52 of the Act.
(2) Interest rate of accrued interest payment on the refund of national tax under paragraph (1) shall be calculated on a daily basis at the rate of 0.03 won per every 100 won.
(3) <omitted>
【Reference Case】 Supreme Court Decision 96Da52359 delivered on April 10, 1998 (Gong1998Sang, 1267)
【Plaintiff-Appellant】 Lee Pil-woo.
【Defendant-Appellee】 The Republic of Korea.
【Court of First Instance】 Seoul District Court Judgment 96Gahap79114 delivered on October 29, 1999.
【Court of Second Instance】 Seoul Hight Court Judgment 99Na62960 delivered on March 8, 2000.
【Disposition】 The judgment of the court below shall be reversed, and the case shall be remanded to Seoul High Court.
【Reasoning】 1. The court below found, in rendering its judgment, that: the Mayor of Kangnam-Gu District Office in Seoul, pursuant to the Ceiling on the Ownership of Housing Sites Act(repealed by the Act, Law No. 5571 of September 19, 1998; hereinafter referred to as the COHSA), imposed charges on the plaintiff for his excess ownership of the housing site as defined by the COHSA in the amount of 271,378,450 won on August 31, 1996 ("the 1st Disposition") and 97,926,750 won on August 27, 1997 ("the 2nd Disposition"; the 1st and the 2nd Dispositions will be collectively referred to as the Disposition), respectively; the plaintiff paid the charges on the excess ownership of housing site for the 1st Disposition on October 28, 1996 and for the 2nd Disposition on October 31, 1997, respectively and such payments devolved to the national treasury; the plaintiff subsequently filed administrative lawsuits, seeking the revocation of the 1st Disposition for the amount in excess of 52,478,705 won and the 2nd Disposition in its entirety; the Constitutional Court, on April 29, 1999, rendered its decision holding the entire provisions of the COHSA in violation of Constitution and subsequently the Supreme Court, on June 25, 1999, reversed the judgment of the court below which dismissed the plaintiff's appeal for the revocation of the 1st Disposition on the ground that the Disposition should be deemed as unlawful due to the lack of legal basis, while it rendered its judgment directing the revocation of the 1st Disposition with respect to the charges paid in excess of 52,478,705 won; and the Seoul Administrative Court rendered its judgment revoking the 2nd Disposition on July 7, 1999 and such judgment became final and conclusive on July 29, 1999. Based on the foregoing facts, the court below held that, since the COHSA and its Enforcement Decree (repealed by the Presidential Decree No. 15899 of September 25, 1998 and hereinafter referred to as the Enforcement Decree) became invalid according to the Constitutional Court's decision holding the COHSA unconstitutional, Paragraph 4, Article 32 of the Enforcement Decree could not apply here which required a competent tax office to pay accrued interest payment for the refund of the charges on excess ownership of the housing site subsequently proved to have been overpaid or erroneously paid for the period from the date of payment until the actual date of refund under Paragraph 2, Article 30 of the former Enforcement Decree of the Framework Act on National Taxes(amended by the Presidential Decree No. 17036 of December 9, 2000 and the same shall apply hereinbelow). The court below further held that, since the amount obtained by unjust enrichment which should be refunded in case of a revocation of the imposition of charges on excess ownership of housing site should be determined by the applicable provisions of the Civil Code and the defendant was deemed to have become aware that the benefit equivalent to the amount of charges on excess ownership of housing site lacked the legal basis from the date on which the court ruling revoking the Disposition became final and conclusive, the defendant should make refund of such charges on the plaintiff's excess ownership of the housing site, together with the additional interest that accrued thereon at the rate of 5% per annum under the Civil Code for the period after the date on which the judgment revoking the Disposition became final and conclusive.
2. A. The Constitutional Court's decision holding a statute unconstitutional has a binding effect on the case involving the parties who filed a motion to review the constitutionality of such statute with the Constitutional Court, the case involving the parties who filed a petition to the Constitutional Court or filed an application for motion to adjudicate with the competent court concerning the constitutionality of such statute similar thereto prior to the Constitutional Court's decision holding the statute unconstitutional, any litigation involving such statute or some of its provisions pending before a competent court and any other lawsuits which, after the decision of unconstitutionality, have been instituted for the foregoing grounds as indicated above. (See Supreme Court Decision 92Da12377 delivered on January 15, 1993.) Further, it should be noted that in the event that an underlying statute has been held unconstitutional by the Constitutional Court, the rules and regulations promulgated under such statute, in principle, also become invalid and ineffective. (See Supreme Court Decision 96Da52359 delivered on April 10, 1998.)
B. However, the Constitutional Court's decision holding the COHSA unconstitutional in its entirety pursuant to the proviso of Article 45 of the Constitutional Court Act was due to the unconstitutionality of the following specific provisions within the COHSA with the unconstitutionality and resulting nullification thereof the COHSA in its entirety could not be implemented and enforced: Subparagraph 1, Paragraph 1, Article 7 of the COHSA which set the upper limit on the ownership of the housing site; Paragraphs 1 and 2, Article 2 of the Addendum to the COHSA(inserted by the Act, Law No. 4174 of December 30, 1989) which failed to give full consideration of the property right and the reliance of the housing site owners who already had ownership interest in certain housing site prior to the implementation of the COHSA; Paragraph 24, Article 1 of the COHSA which provided for the continuous imposition of high-rate charges on excess ownership of the housing site with no temporal limits for imposing such charges; Subparagraphs 1 and 2, Article 19 of the COHSA which were underlying provisions for the imposition of the charges on excess ownership of housing site(in this case, these provisions were held unconstitutional to such extent that they allowed the imposition of such charges even after there was an offer to purchase the relevant housing site). Notably, those specific provisions pertaining to the subsequent relief procedures for the charges on excess housing site ownership subsequently proved to have been overpaid or erroneously paid were not held to be unconstitutional. In addition, if a person who obtained a court judgment revoking the disposition to impose the charges on excess housing site ownership, upon refund of such overpaid or erroneously paid charges, were not to receive accrued interest payment under the provisions of Paragraph 2, Article 30 of the Enforcement Decree of the Framework Act on National Taxes merely on the ground that the provisions of Paragraph 4, Article 32 of the Enforcement Decree should become invalid and ineffective according to the Constitutional Court's decision holding the COHSA unconstitutional, the failure of the competent government authorities to pay such accrued interest payment would result in a violation of the purpose of protecting, through subsequent relief procedures, the property right of the person who overpaid or erroneously paid the charges on the excess housing site ownership, ultimately causing more damages to such person than the state prior to the Constitutional Court's decision holding the COHSA unconstitutional. On the other hand, where a person first paid the charges on the excess housing site ownership to avoid a surcharge or increased surcharge which might have been imposed upon default in payment of such charges with justifiable reliance that he or she would subsequently receive the accrued interest payment on the refund upon obtaining a Court Decision revoking the disposition imposing such charges on the excess housing site ownership, non-payment of such addition payment on the refund would breach the payer's justifiable reliance and further violate the principle of equity creating an imbalance between those who received accrued interest payment on the refund of their overpaid or erroneously paid public charges which they became entitled to after the revocation of the disposition of imposition prior to the Constitutional Court's decision that held the COHSA unconstitutional, on the one hand, and, on the other hand, those who, at the outset, did not pay the charges on the excess housing site ownership and subsequently obtained a favorable court ruling revoking the disposition to impose such charges, in dispute against its effect. Furthermore, if the defendant were not to make the accrued interest payment on the refund which should necessarily made notwithstanding the revocation of a wrong imposition of the charges on excess housing site ownership, the defendant would consequently obtain an unjust reflex benefit thereby. In principle, the provisions on the national tax may not be applicable mutatis mutandis or by analogy to the public charges since the public charges and the national tax are different in nature. However, the refund of overpaid or erroneously paid national taxes and the refund of the charges on excess ownership of the housing site are similar in that both of such refunds represent the return of money that was imposed and collected, and then retained without due cause, by the governmental agency having superior public power. Besides, Paragraph 4, Article 32 of the Enforcement Decree already required that the competent tax office make accrued interest payment on the refund under Paragraph 2, Article 30 of the Enforcement Decree of the Framework Act on National Taxes to be calculated for the period from the payment date of such charges to the date of the refund. Therefore, there is no reasonable ground to differentiate the scope of the refunds in the two cases.
C. In light of the foregoing, in making refund payment of the charges on the excess ownership of the housing site subsequently proved to have been an overpayment or erroneous payment of tax, if the tax authorities were not to make accrued interest payment for the refund of national taxes prescribed in Paragraph 2, Article 30 of the former Enforcement Decree of the Framework Act on National Taxes on the ground that the Constitutional Court held the COHSA unconstitutional, such non-payment will result in a more egregious deviation from the constitutional order than the state prior to the Constitutional Court's decision holding the COHSA unconstitutional. Therefore, the provisions of Article 52 of the former Framework Act on National Taxes (amended by the Act, Law No. 6303 of December 29, 2000) pertaining to the accrued interest payment on the refund of the overpaid or erroneously paid charges and Paragraphs 1 and 2, Article 30 of the former Enforcement Decree of the Framework Act on National Taxes should apply, by analogy, in this case. (See Supreme Court Decision 96Da52359 delivered on April 10, 1998.)
D. The court below did err in interpreting the legal principles concerning the provisions on accrued interest payment on the refund analogically applicable to the refund of the overpaid or erroneously paid charges on excess housing site ownership, when it held that the scope of the refund payable (e.g. the amount obtained by unjust enrichment) due to the revocation of the disposition imposing the charges should be determined pursuant to the relevant provisions of the Civil Code, solely on the ground that Paragraph 4, Article 32 of the COHSA became invalid and ineffective due to the Constitutional Court's decision that held the COHSA unconstitutional. Accordingly, the appeal on this ground has merit.
3. Accordingly, we hereby reverse the judgment of the court below without discussing the remaining grounds for appeal and remand this case to the court below. It is so ordered per Disposition.
Justices Bae Ki-won (Presiding Justice)
Suh Sung (Justice in charge)
Yoo Ji-dam
Park Jae-yoon
- This is a legal document in the public domain according to Korean Copyright Law.
