AB CC v Commission for the South African Revenue Service (13492) [2017] ZATC 9 (1 March 2017)

AB CC v Commission for the South African Revenue Service (13492) [2017] ZATC 9 (1 March 2017)

The court held that the 2007 STC assessment issued to AB CC had become prescribed because more than five years had elapsed from the date the STC return and payment were due (31 March 2007) to the date of assessment (19 November 2012). The Commissioner failed to raise fraud, misrepresentation, or non-disclosure in its original assessment or subsequent correspondence, and its attempt to amend the grounds of assessment at the hearing was dismissed as prejudicial and untimely. The obligation to submit a STC return and make payment is distinct from the income tax return, and prescription runs from the date the STC return is due. The Commissioner cannot rely on section 99(2) to extend the...

Citation
[2017] ZATC 9
Parties
Appellant: AB CC; Respondent: Commissioner for the South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
1 March 2017
Case Number
13492
Procedural Posture
Tax Appeal / Appeal Before the Tax Court
Outcome
Appeal upheld; the 2007 STC assessment is prescribed and set aside.
Judges
Jansen
Legal Topics
Secondary Tax on Companies, Prescription of Tax Assessment, Self Assessment, Non Disclosure, Income Tax Act, Tax Administration Act
Tax Law Secondary Tax on Companies Prescription of Tax Assessment Self Assessment Non Disclosure Income Tax Act Tax Administration Act

Case Brief

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Parties

AB CC

Appellant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Tax Appeal / Appeal Before the Tax Court

Legal Issues

  1. 1 Whether the 2007 secondary tax on companies (STC) assessment issued to AB CC had become prescribed under section 99(1) of the Tax Administration Act.
  2. 2 Whether the Commissioner for SARS was entitled to amend its grounds of assessment to plead fraud, misrepresentation, or non-disclosure after conceding the merits.
  3. 3 Whether the failure to submit a STC return or discrepancies in financial statements constituted grounds for extending the prescription period under section 99(2) of the Tax Administration Act.

Ratio Decidendi

The court held that the 2007 STC assessment issued to AB CC had become prescribed because more than five years had elapsed from the date the STC return and payment were due (31 March 2007) to the date of assessment (19 November 2012). The Commissioner failed to raise fraud, misrepresentation, or non-disclosure in its original assessment or subsequent correspondence, and its attempt to amend the grounds of assessment at the hearing was dismissed as prejudicial and untimely. The obligation to submit a STC return and make payment is distinct from the income tax return, and prescription runs from the date the STC return is due. The Commissioner cannot rely on section 99(2) to extend the...

Court Disposition

Appeal upheld; the 2007 STC assessment is prescribed and set aside.

Orders

  • The 2007 assessment has become prescribed and is set aside.
  • The 2007 assessment is remitted to the respondent to be revised to zero.