- The Tax Court of South Africa, Cape Town Ι
Commissioner for the South African Revenue Service v FP (Pty)
Ltd Ι Case NOs. 25330, 25331 and 25256 (1 October
2021)
- The Commissioner for the South African Revenue Service ("SARS" or the "Applicant") applied to the Tax Court in terms of rule 30 of the Uniform Rules of Court for an order setting aside, as an irregular step, a legality review brought by FP (Pty) Ltd ("Respondent" or the "Taxpayer") in appeal proceedings already pending in the Tax Court.
- The Applicant contended that the Taxpayer's legality review was both procedurally defective and irregular, since it cannot be brought in terms of the Tax Administration Act, 28 of 2011 ("TAA") and the rules promulgated thereunder.
- The Respondent opposed the application on the grounds that: (1) the Applicant improperly relied on uniform rule 30, which is directed at procedural irregularities, and should instead have raised a point of law in terms of uniform rule 6(d)(iii); (2) the Tax Court is not precluded from entertaining a legality review by the TAA and its rules; and (3) there is nothing improper or irregular for a review to be launched on motion in an appeal pending before the Tax Court.
- The Tax Court had to determine whether:
- the Applicant correctly invoked uniform rule 30;
- the Applicant had demonstrated prejudice; and
- the Tax Court should exercise its discretion to set aside the irregular step.
- The Tax Court considered, inter alia:
- uniform rule 30;
- rule 42 of the rules promulgated under section103 of the TAA;
- the interpretation and application of uniform rule 30 in SA Metropolitan Lewensversekeringsmaatskappy Bpk v Louw NO 1981 (4) SA 329 (O) at 333G-H;
- section 117(1) of the TAA;
- the interpretation of section 105 of the TAA in Absa Bank Ltd and Another v CSARS.
- The Tax Court held that the Taxpayer's review application to the Tax Court, when there was already an appeal pending before it, constituted an irregular step. In this regard, the Tax Court noted that even if one assumes that the Taxpayer had no procedural control over the referral of the appeal to the Tax Court, it remained open to it (and still does) to approach the High Court for leave to institute a review application in that court, while simultaneously seeking a stay of the appeal proceedings pending the determination of the review.
- The Tax Court further held, although not set out in specific terms in the relevant papers, that the prejudice to the Applicant lies in the Taxpayer potentially being permitted by the Tax Court to run parallel litigation in the Tax Court where it is not legally entitled to do so. The prejudice was thus selfevident. The same considerations militate persuasively against allowing the irregular step to stand.
- The Tax Court set aside the Respondent's review application.
- Find a copy of the judgment here.
- The High Court of South Africa, Pretoria Ι
Arena Holdings(Pty) Ltd t/a Financial Mail and Others V CSARS and
Others (88359/2019) [2021] ZAGPPHC (16 November 2021)
- The applicant, Financial Mail, sought access to the tax records of former President, Mr Zuma, on the basis that evidence in the public domain and not denied or controverted by the taxpayer in question indicated that he was not tax compliant during his presidency.
- Taxpayer confidentiality is primarily provided for in section 35 of the Promotion of Access to Information Act 2 of 2000 ("PAIA") and section 69 of the TAA
- The Financial Mail contended that their rights of access to information guaranteed in section 32 of the Constitution and in PAIA, as well as the obligation on the media to impart information which is in the public interest, as guaranteed in section 16 of the Constitution, should not be limited by the blanket ban on disclosure of taxpayer information, which in turn may be protected by a taxpayer's privacy rights in section 14 of the Constitution.
- The court considered sections 25(2); 45 to 66; 69(1); 234(d); 200 to 205; and 227 to 231 of the TAA, as well as sections 11; 34(1); 35(1); 46; 74; 78(2)(a) of PAIA, and sections 14; 16(1); 32 and 36 of the Constitution.
- It was held that the blanket prohibitions against disclosure of a taxpayer's information in section 35 of PAIA and section 69 of the TAA limit the rights access to information provided for in section 32 of the Constitution and that such limitation is not justifiable in terms of section 36 of the Constitution, and moreover that a "reading- in" of the "public interest override" provisions otherwise contained in section 46 of PAIA is both justifiable and competent.
- The court declared sections 36 and 45 of PAIA, and sections 67 and 69 of the TAA to be unconstitutional and invalid to the extent that they preclude access to tax records by a person other than the taxpayer. The order was consequently referred to the Constitutional Court to be confirmed.
- The following interim orders were granted regarding the
"reading-in" and disclosure of records:
- Section 46 of PAIA shall be read as if the phrase "35(1)" appeared immediately after the phrase "section 34(1)" contained therein.
- Section 69(2) of the TAA shall be read as if it contained an additional sub-section (bA) after existing sub-section (b), which provides:
- "(bA) where access has been granted for the disclosure of the information in terms of the Promotion of Access to Information Act".
- Section 67(4) of the TAA shall be read as if the phrase "unless the information has been received in terms of the Promotion of Access to Information Act" appeared immediately before the full stop.
- Find a copy of the judgment here.
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