2025.02.27

2023 (Gyo-Hi) 297

Minshu Vol. 79, No. 2

(Civil Case)Judgment concerning an action filed by a local entity to seek the revocation of the decision of the amount of special allocation tax to be granted thereto, and a legal dispute referred to in Article 3, paragraph (1) of the Courts Act

Case seeking the revocation of the decisions of the amount of special local allocation tax

Judgment of the First Petty Bench, quashed and remanded

Osaka High Court, Judgment of May 10, 2023

An action filed by a local entity to seek the revocation of the decision of the amount of special allocation tax to be granted thereto falls within the scope of legal disputes referred to in Article 3, paragraph (1) of the Courts Act.

Article 15, paragraphs (1) and (2) of the Local Allocation Tax Act; Article 3, paragraph (1) of the Courts Act

The judgment in prior instance is quashed.

The case is remanded to the Osaka High Court.

Concerning Reasons II and III for a petition for acceptance of final appeal stated by the counsel for final appeal, ABE Yasutaka, et al.

1. In this case, the appellant of final appeal, a local entity to which the Minister for Internal Affairs and Communications issued the first and second decisions of the amount of special allocation tax for Fiscal Year 2019 pursuant to the provisions of Article 15, paragraph (2) of the Local Allocation Tax Act, filed an action against the appellee of final appeal to seek the revocation of these decisions.

2. The court of prior instance dismissed this action, determining as summarized below.

A dispute as to whether a local entity is entitled to receive a distribution of local allocation tax from the State pursuant to the provisions of the relevant law should be regarded as a dispute in which the State and the local entity, each acting in their capacity as an administrative body, contend against each other for the purpose of protecting the general public interest in terms of the proper application of laws and regulations, so that all local entities can carry out their administrative duties properly. The action in this case was filed by the appellant, as an administrative body, for the purpose of protecting the general public interest in terms of the proper application of laws and regulations, and cannot be regarded as an action filed for the purpose of protecting and giving relief for the appellant's own property-related rights and interests, and therefore it does not fall within the scope of legal disputes referred to in Article 3, paragraph (1) of the Courts Act.

3. However, the abovementioned determination by the court of prior instance cannot be affirmed, for the following reasons.

(1) A legal dispute referred to in Article 3, paragraph (1) of the Courts Act means a dispute which is related to the existence or nonexistence of specific rights and obligations or a legal relationship between the parties and which can ultimately be solved by applying laws and regulations (see 1976 (O) 749, the judgment of the Third Petty Bench of the Supreme Court of April 7, 1981, Minshu Vol. 35, No. 3, at 443).

(2) Local entities, with legal personality separately from the State, play a broad range of roles in implementing administrative activities in their areas independently and comprehensively (Article 2, item (ii) of the Local Allocation Tax Act; Article 1-2, Article 1-3, paragraphs (1) and (2), and Article 2, paragraphs (1) and (2) of the Local Autonomy Act). Local allocation tax is granted by the State to local entities without imposing conditions on it or restrictions regarding the purpose of using it so that the local entities can carry out their administrative activities equally, with the objective of contributing to the realization of the main purport of local autonomy and enhancing independence of local entities (Article 1, Article 2, item (i), and Article 3, paragraph (2) of the Local Allocation Tax Act). Special allocation tax is a type of such local allocation tax, and the specific amount to be granted as special allocation tax is determined by a decision made by the Minister for Internal Affairs and Communications (Article 4, item (ii), Article 6-2, paragraph (1), Article 15, paragraphs (1) and (2), and Article 16, paragraph (1) of the Local Allocation Tax Act). Accordingly, the legal relationship between the State and a local entity, based on which special allocation tax is to be granted, can be regarded as a specific relationship of a claim and obligation for payment of money that arises from the Minister's decision. Therefore, an action filed by a local entity to seek the revocation of the decision of the amount of special allocation tax to be granted thereto should be regarded as a dispute concerning the existence or nonexistence of specific rights and obligations or legal relationship between the State and the relevant local entity.

In addition, since the decision of the amount of special allocation tax is to be made pursuant to the Local Allocation Tax Act and the ministerial order concerning special allocation tax, this action is regarded as an action that can be solved ultimately by applying laws and regulations.

(3) According to the above, it is appropriate to consider that an action filed by a local entity to seek the revocation of the decision of the amount of special allocation tax to be granted thereto falls within the scope of legal disputes referred to in Article 3, paragraph (1) of the Courts Act.

4. The determination by the court of prior instance that is contrary to the above contains a violation of laws or regulations that has clearly influenced the judgment. The counsel's arguments are well-grounded, and the judgment in prior instance should inevitably be quashed. The case is remanded to the court of prior instance for further examination.

For the reasons stated above, the Court unanimously decides as set forth in the main text of the judgment.

Justice OKA Masaaki

Justice YASUNAMI Ryosuke

Justice SAKAI Toru

Justice MIYAGAWA Mitsuko

Justice NAKAMURA Makoto