1990.01.18

1986 (Gyo-Tsu) 138

Minshu Vol. 44, No. 1

Judgment concerning the extent of the matters regarding which the fixed asset valuation review committee must take measures to notify a person requesting a review as the valuation basis, etc. in the case where the committee conducts a review of the person's objection to the registered price of his/her land through oral hearings

Case seeking revocation of a decision of review of fixed asset tax

Judgment of the First Petty Bench, quashed and remanded

Osaka High Court, Judgment of June 26, 1986

1. In the case where a person files a request for review of the registered price of his/her land and the fixed asset valuation review committee conducts a review through oral hearings, the committee is required to take measures to notify the person requesting a review of the basis, etc. for valuation of the land to the reasonable extent found necessary for the person to specify the grounds for objection and make allegations, but it is not required to take further measures to enable the person to learn matters such as the assessed values of land in other districts with similar conditions so that the person can compare the assessed value of his/her land with the assessed values of other land.

2. In the case where the fixed asset valuation review committee conducts oral hearings, even when the committee adopts the results of the surveys it conducted by its own authority separately from oral hearings as the basis for its judgment and dismisses the request for review, the committee is not required to follow a procedure to bring up the results of the surveys in oral hearings.

Article 432, paragraph (1) and Article 433 of the Local Tax Act



Local Tax Act



Article 432,paragraph (1)

(1)If a taxpayer of fixed asset tax has an objection to any of the matters registered in the fixed asset tax ledger (excluding the matters registered in the land register or building register and the matters concerning the price, etc. that the prefectural governor or the Minister of Home Affairs has determined or revised, and gave a notice thereof to the municipal mayor pursuant to the provisions of Article 389, paragraph (1), Article 417, paragraph (2) or Article 743, paragraph (1) or paragraph (2)) with regard to the fixed assets subject to the fixed asset tax payable thereby for the relevant year, the taxpayer may file a request for review with the fixed asset valuation review committee in writing within the period extending from the first day of the public inspection period referred to in Article 415, paragraph (1) (including the case referred to in Article 419, paragraph (3)) until ten days after the last day of the public inspection period, or within 30 days after the day on which the taxpayer receives the notice referred to in Article 417, paragraph (1); provided, however, that with regard to the price of the land or building that is deemed to have been registered in the land tax ledger, etc. or building tax ledger, etc. pursuant to the provisions of Article 411, paragraph (2) among those fixed assets, a request for review may not be filed, except when petitioning that the provisions of the proviso to paragraph (2), the proviso to paragraph (3) or the proviso to paragraph (5) of Article 349 should be applied to the land or building due to the existence of the circumstances set forth in paragraph (2), item (i) of the same Article.



Article 433

(1) If the fixed asset valuation review committee receives a request for review set forth in paragraph (1) of the preceding Article, the committee must immediately conduct a survey, oral hearings and any other fact-finding review as it considers necessary, and make a review decision within 30 days from the day on which it receives the request.

(2) If an application is filed by the person requesting a review in the case referred to in the preceding paragraph, oral hearings must be conducted, except when there are any special circumstances.

(3) When conducting oral hearings in the cases referred to in the preceding two paragraphs, the fixed asset valuation review committee may ask the person requesting a review, the municipal mayor, a fixed asset valuator and any other interested persons to attend and testify at the hearings.

(4) The fixed asset valuation review committee must prepare records concerning the proceedings and review decision as prescribed by ordinance of the relevant municipality.

(5) The fixed asset valuation review committee must preserve the materials collected pursuant to the provisions of Article 430 or the records referred to in the preceding paragraph and make them available for inspection by the interested persons.

(6) Review through oral hearings must be open to the public.

(7) The provisions of Article 26, Article 27, Article 29, Article 30, Article 33, Article 36, Article 37, Article 39, Article 40, paragraphs (1) and (2), Article 42, paragraphs (1) to (3), and Article 44 of the Administrative Complaint Review Act apply mutatis mutandis to the review decision referred to in paragraph (1).

(8) If the fixed asset valuation review committee makes the decision under the provisions of paragraph (1), it must notify the person requesting a review and the municipal mayor of that decision within ten days from the day on which the decision is made. In this case, if the decision has not been made by the time limit referred to in the same paragraph, it may be deemed that a decision to dismiss the request for review has been made.

The judgment in prior instance is quashed.

This case is remanded to the Osaka High Court.

Concerning Reasons I and II for a final appeal stated by the counsels for final appeal

I. The facts lawfully determined by the court of prior instance are as follows.

1. The appellee is the owner of the land lots indicated in the list of articles attached to the judgment in first instance (hereinafter referred to as the "Land" collectively). With regard to the price of the Land, which was to serve as the tax base for the fixed asset tax to be imposed on the Land for FY1982 (the base year), the mayor of Yamatokoriyama City determined the price of the land lot indicated in (1) of the same list to be 1,661,400 yen and the price of the land lot indicated in (2) of the same list to be 1,464,400 yen. The mayor registered these prices in the fixed asset tax ledger, and made this ledger available for inspection by the interested persons for the period from April 5 to 25, 1982.

2. On April 30, 1982, the appellee filed a request for review with the appellant, expressing his/her objection to the price of the Land registered as mentioned above, and filed an application for oral hearings, demanding: (1) that Yamatokoriyama City (hereinafter referred to as the "city") should clarify the reason why the rate of increase in the assessed value of the Land was set at 153%, while the rate of increase in the assessed value of the reference building lot in the city was set at 124%; and (2) that the city should present materials that can be used for comparing the valuation of the Land and the valuation of other land lots.

3. On May 19, 1982, the appellant held oral hearings of this case. On the day of the hearings, a municipal official in charge of tax affairs explained as follows: (1) the land category of the Land was recognized as a building lot, and the value of the Land was assessed based on the Fixed Asset Valuation Standards (Public Notice of the Ministry of Home Affairs No. 158 of December 25, 1963), and, in particular, by applying the "valuation method for other building lots" provided in Chapter 1 "Land," Section 3 "Building Lots" of these standards; (2) the land category of [a] District where the Land is located had been changed from rice field, etc. to building lot following the housing land development work conducted in 1981, and hence, the Land was subject to valuation as a building lot for the first time, and [a] District is an ordinary residential district according to the categorization by land use; (3) upon the revaluation for FY1982, the land lot located at [c]-[d], [b] Town, was designated as the standard building lot in [a] District (hereinafter referred to as the "Standard Building Lot"), and the valuation score of the Land was determined in comparison with another land lot located in [e]-[f], [b] Town, which had conditions similar to those of the Standard Building Lot (hereinafter referred to as the "land at [g]"), and based on other materials such as the appraisal value given by a real estate appraiser and the assessed value for the calculation of inheritance tax, as well as the ratio of the assessed value of the Standard Building Lot to these values, the actual selling price, and the distance to the nearby transportation facilities; (4) the valuation score of the Standard Building Lot is 17,100 points per square meters; (5) the price of the Land was determined by giving points with the rate of comparison with the Standard Building Lot being set at 1.0 (17,100 points per square meters) and setting the price per point at 1 yen. In response to the appellee's demand mentioned in 2(1) above, the municipal official answered that [a] District had been categorized as cropland, etc. in FY1979 (the previous base year) and was newly categorized as a building lot this year, and the price of the Land in this district was determined in comparison with the land at [g] that had similar conditions, as a result of which the rate of increase reached 153%. In response to the appellee's demand mentioned in 2(2) above, the municipal official answered that materials other than those concerning [a] District cannot be disclosed. After that, the appellant asked the appellee's opinion, and then concluded the oral hearings.

4. On May 20, 1982, the appellant conducted, separately from oral hearings, a field survey on [a] District, the land at [g], which had been used for comparison when assessing the value of the Standard Building Lot, and five other locations in the city which had similar conditions, and then received from the municipal official in charge of tax affairs the explanation regarding the actual sale, the appraisal value given by a real estate appraiser, the assessed value for the calculation of inheritance tax, and other materials regarding the land lots at these locations, as well as the method and procedure for giving points based on these materials. Afterward, in the morning on May 26, 1982, the appellant held a meeting between the appellee and the appellant's members at the request of the appellee, and on this occasion, the appellant told the appellee that a field survey had been conducted on May 20, and asked for the appellee's opinion. At this meeting, the appellee requested the appellant to present materials concerning the valuations of the relevant land lots in the city, but the appellant refused to present the requested materials, stating that it was not found to be necessary to disclose the assessed values of building lots in other districts. In the afternoon on May 26, the appellant received from the municipal official in charge of tax affairs the additional explanation of the same matters as above for each district in the city and conducted a field survey on 14 locations in the city. The appellant did not provide the appellee with an opportunity to attend the field surveys on either occasion, and did not follow the procedure to bring up the results of the field surveys, etc. in the oral hearings.

5. On May 29, 1982, the appellant held a committee meeting and made a decision to dismiss the appellee's request for review of this case (hereinafter referred to as the "Decision").

II. Given the facts mentioned above, the court of prior instance determined as follows. Throughout the oral hearings, the appellant did not clarify the valuation procedure and method, and the valuation basis in particular, to the extent reasonably necessary for the appellee to specify the grounds for objection with the assessed value of the Land, and the appellant also did not take any measures to clarify the assessed values of other land lots within the range reasonably necessary to make comparisons with the assessed values of building lots owned by other taxpayers, such as the standard building lot in a district with similar conditions, and moreover, the appellant did not bring up during the oral hearings any materials collected or results of the surveys conducted by its own authority separately from the oral hearings. Thus, the appellant should inevitably be deemed to have failed to follow the procedure in a manner that the appellee could have submitted appropriate allegations and evidence, and therefore, the oral hearings of this case were defective due to lack of objectivity and fairness in the basis and procedure for judgment and should be held to be illegal. The court of prior instance further determined that such defect is a defect of serious nature that could affect the essential purpose of the special system under which the Local Tax Act (hereinafter referred to as the "Act") adopts adversary proceedings to deal with matters in controversy between the parties, by having the fixed asset valuation review committee, a third party body independent from the municipal mayor (hereinafter referred to as the "committee"), conduct oral hearings, while providing the person requesting a review of the appropriateness of the assessed value with an opportunity to submit allegations and evidence through oral hearings, thereby demanding objectivity and fairness in the basis and procedure for judgment and ultimately protecting the rights of taxpayers. In conclusion, the court of prior instance ruled that the Decision made by the appellant is illegal and should inevitably be revoked.

III. However, the determination of the court of prior instance mentioned above cannot be upheld for the following reasons.

According to the Act, the price of fixed assets, which is to serve as the tax base for fixed asset tax, is determined by the municipal mayor based on the valuation made by a fixed asset valuator (Article 410), and then is registered in the fixed asset tax ledger (Article 411, paragraph (1)). If a taxpayer of fixed asset tax has an objection to the price registered in the fixed asset tax ledger with regard to the fixed assets subject to the fixed asset tax payable thereby for the relevant year (hereinafter referred to as the "registered price"), the taxpayer may file a request for review with the committee (Article 432, paragraph (1)). If the committee receives such request for review, it must immediately conduct a survey, oral hearings and any other fact-finding review as it considers necessary, and make a review decision within 30 days from the day on which it receives the request (Article 433, paragraph (1)). If an application is filed by the person requesting a review, oral hearings must be conducted, except when there are any special circumstances (paragraph (2) of the same Article), and in this case, the committee may ask the person requesting a review, the municipal mayor, a fixed asset valuator and any other interested persons to attend and testify at the hearings (paragraph (3) of the same Article), and the oral hearings must be open to the public (paragraph (6) of the same Article). The Act thus adopts the system in which a review of a taxpayer's objection to the registered price of his/her fixed assets is conducted by the committee, a third party body independent from the municipal mayor who is responsible for valuation and taxation. This may be because by having the committee conduct a review as a body in a neutral position with regard to the appropriateness of the assessed value of fixed assets, the Act intends to assure the objective rationality of the valuations of fixed assets and protect the rights of taxpayers, and also has the expectation of the proper imposition of fixed asset tax. In addition, it may also be understood that the system of oral hearings is adopted in order to provide the person requesting a review of the appropriateness of the assessed value of fixed assets with an opportunity to submit allegations and evidence, with a view to ensuring the objectivity and fairness in the basis and procedure for the committee's judgment. Assuming the above, although the oral hearings under the Act must be conducted in line with the aforementioned purpose of the system, they form only part of the administrative remedy proceedings designed to give remedy for the rights of taxpayers by a simple and speedy method, and needless to say, the formality of oral proceedings in the strict meaning as applied in civil procedure is not required for the oral hearings under the Act.

From this viewpoint, the Court examines whether there is any illegal aspect in the oral hearings of this case.

The first question is whether there is any illegal aspect in the measures taken to notify the person requesting a review of matters such as the basis for valuation of the relevant building lot. The valuation of a building lot is made by a specialized technical method and procedure in accordance with the provisions of Article 388 and the following Articles of the Act and the Fixed Asset Valuation Standards. For example, the "valuation method for other building lots" provided in the Fixed Asset Valuation Standards is applied in the following procedure: (1) establishing a district with similar conditions for each district where building lots which are generally considered to have similar conditions are located; (2) selecting a standard building lot that is deemed to be a standard one among the building lots along the roads in each district with similar conditions in terms of the depth and frontage, shape, and other factors, and assessing its fair market value and giving points; (3) and giving points to each building lot in the district with similar conditions in comparison with the points given to the standard building lot. Even when a taxpayer has an objection to the assessed value of the building lot that he/she owns upon learning of it by inspecting the fixed asset tax ledger, it is often the case that the taxpayer has little chance to know about the valuation procedure, method, basis, etc. necessary for specifying the grounds for objection. Therefore, it is understood that when a request for review is filed with regard to the registered price of a building lot, the committee is required to take measures, for the purpose of the system of oral hearings and from the perspective of equity, to notify the person requesting a review of the valuation procedure, method, basis, etc. to the reasonable extent as found necessary for the person to specify the grounds for objection and make allegations. However, it should be said that the committee is not required to take further measures to enable the person requesting a review to learn materials such as the assessed values of building lots in other districts with similar conditions so that the person can compare the assessed value of his/her building lot with the assessed values of building lots owned by other taxpayers and examine whether the valuation is fair. According to Article 341, item (v) of the Act, the price of fixed assets, which is to serve as the tax base for fixed asset tax, means a fair market price, and the review of an objection to the registered price of a building lot should be conducted by examining whether the registered price of the building lot stays below its fair market price. The Act provides that the Minister of Home Affairs must establish and publicize the Fixed Asset Valuation Standards (Article 388, paragraph (1)), and that the municipal mayor must determine the price of fixed assets in accordance with the Fixed Asset Valuation Standards (Article 403, paragraph (1)). Furthermore, according to the Fixed Asset Valuation Standards, the municipal mayor must select a reference building lot from among the standard building lots in respective districts of the municipality in order to ensure the balance in valuation, and when assessing the fair market price of each standard building lot, the balance with the valuation of the reference building lot and the balance with the valuations of other standard building lots should be taken into comprehensive consideration. Thus, it seems that the Act aims to ensure the balance in the valuations of building lots in the whole area of each municipality by applying common, uniform valuation standards while making necessary adjustments, and intends to eliminate any imbalance in the valuations which may arise due to differences between individual valuators, through the proper implementation of the Act and the Fixed Asset Valuation Standards. Accordingly, in order to find whether the valuation of a specific building lot is contrary to the principle of equity, it is sufficient to examine whether the value of the subject building lot is assessed properly in accordance with the Fixed Asset Valuation Standards and whether there is any imbalance between the valuation of the standard building lot, which is used for comparison in assessing the value of the subject building lot, and the valuation of the reference building lot, and make determination based on such examination. In that case, there seems to be no procedural requirement due to which any measures should be taken to enable the person requesting a review to learn materials such as the assessed values of other building lots in district with similar conditions. According to the facts determined by the court of prior instance as mentioned above, on the date for oral hearings of this case, the municipal official in charge of tax affairs provided an explanation with regard to the price of the Standard Building Lot, the points given to it, the outline of the valuation method and procedure, the rate of comparison between the Land and the Standard Building Lot, and the price per point in valuation, and what is more, the appellee had known the price of the city's reference building lot before filing the request for review of this case. Thus, it can be found that the facts as found necessary for the appellee to specify the grounds for objection and make allegations had been clarified to the reasonable extent. Consequently, it should be determined that there is no illegal aspect in the measures taken by the appellant in this respect.

The next question is whether there is any illegal aspect in the handling of the results of the field surveys, etc. In the first place, even in the case where the committee conducts oral hearings, it is not precluded from conducting fact-finding surveys by its own authority separately from oral hearings (Article 433, paragraph (1) of the Act), and it is not required by law to provide the person requesting a review with an opportunity to attend such surveys. Furthermore, the committee must prepare records concerning the proceedings and review decision as prescribed by ordinance of the relevant municipality and make the materials collected pursuant to the provisions of Article 430 of the Act or the records thus prepared available for inspection by the interested persons (Article 433, paragraphs (4) and (5) of the Act; Articles 7 to 9 of the Yamatokoriyama City Ordinance on the Fixed Asset Valuation Review Committee (Yamatokoriyama City Ordinance No. 2 of 1963). The person requesting a review can inspect the abovementioned materials and the records concerning fact-finding surveys prepared in accordance with the abovementioned ordinance and can submit counterarguments and evidence on these matters. Hence, it should be considered that even when the committee adopts the results of the surveys conducted and the materials collected separately from oral hearings as the basis for its judgment and dismisses the request for review, it is not required to follow a procedure such as bringing up the results of the surveys, etc. in oral hearings. The facts determined by the court of prior instance as mentioned above suggest that the appellant used part of the results of the field surveys conducted separately from oral hearings as the basis for its judgment. On May 26, 1982, following the field survey conducted on May 20, the appellant held a meeting between the appellee and the appellant's members at the request of the appellee, and on this occasion, the appellant told the appellee that a field survey had been conducted on May 20, and asked for the appellee's opinion, but did not bring up the results of this survey, etc. in oral hearings. In light of the explanation given above, it is clear that there is no illegal aspect in this manner of handling the results of the field surveys, etc.

IV. The court of prior instance determined that there was a serious defect in the oral hearings of this case to the extent that was found contrary to the purpose of the Act that requires oral hearings, and that the Decision should be revoked because of this defect. For the reasons stated above, it must be said that such determination of the court of prior instance is illegal due to the errors in the interpretation and application of laws and regulations, and such illegality obviously affects the judgment. The counsels' arguments are well-grounded, and without needing to examine their arguments on other points, the judgment in prior instance should inevitably be quashed.

Since it is necessary to have this case further examined in terms of whether there is any other illegal aspect in the Decision due to which the Decision should be revoked, the Court remands the case to the court of prior instance.

Accordingly, in accordance with Article 7 of the Administrative Case Litigation Act and Article 407, paragraph (1) of the Code of Civil Procedure, the Court unanimously decides as set forth in the main text of the judgment.

Justice OHORI Seiichi

Justice TSUNODA Reijiro

Justice OUCHI Tsuneo

Justice SATO Tetsuro

Justice YOTSUYA Iwao