ABC Trading CC v Commissioner of the South African Revenue Services (1712) [2020] ZATC 6; 83 SATC 60 (29 April 2020)

ABC Trading CC v Commissioner of the South African Revenue Services (1712) [2020] ZATC 6; 83 SATC 60 (29 April 2020)

The court found that ABC Trading CC provided credible and corroborated evidence, including transaction documents, photographs, and witness testimony, demonstrating that supplies were made by X Gold and Z Gold during the VAT period. The process of purchasing, smelting, and selling gold bars was meticulously documented, and payments were made to suppliers via cash-in-transit companies or cash, consistent with industry practice. SARS failed to produce positive evidence contradicting ABC Trading's version and did not properly investigate the circumstances of the suppliers, relying instead on superficial site inspections and hearsay. The court held that SARS's grounds for disallowing the input...

Citation
[2020] ZATC 6
Parties
Appellant: ABC Trading CC; Respondent: Commissioner of the South African Revenue Services
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
29 April 2020
Case Number
VAT 1712
Procedural Posture
Tax Appeal / Final Judgment
Outcome
Appeal upheld. Assessments for the VAT periods in dispute are altered to reduce additional assessments to zero and remit penalties and interest. Costs awarded against SARS.
Judges
Windell, S. Makda, L. Luvono
Legal Topics
Input Vat Deduction, Burden of Proof, Recipient Generated Invoices, Second Hand Goods Act, Understatement Penalty
Tax Law Civil Procedure Input Vat Deduction Burden of Proof Recipient Generated Invoices Second Hand Goods Act Understatement Penalty

Case Brief

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Parties

ABC Trading CC

Appellant

Commissioner of the South African Revenue Services

Respondent

Procedural Posture

Tax Appeal / Final Judgment

Legal Issues

  1. 1 Whether ABC Trading CC is entitled to claim input VAT in respect of supplies allegedly made by X Gold and Z Gold during the VAT period.
  2. 2 Whether the invoices issued to ABC Trading CC by X Gold and Z Gold are valid in terms of section 20 of the VAT Act.
  3. 3 Whether ABC Trading CC discharged the onus of proving that supplies were made by X Gold and Z Gold.

Ratio Decidendi

The court found that ABC Trading CC provided credible and corroborated evidence, including transaction documents, photographs, and witness testimony, demonstrating that supplies were made by X Gold and Z Gold during the VAT period. The process of purchasing, smelting, and selling gold bars was meticulously documented, and payments were made to suppliers via cash-in-transit companies or cash, consistent with industry practice. SARS failed to produce positive evidence contradicting ABC Trading's version and did not properly investigate the circumstances of the suppliers, relying instead on superficial site inspections and hearsay. The court held that SARS's grounds for disallowing the input...

Court Disposition

Appeal upheld. Assessments for the VAT periods in dispute are altered to reduce additional assessments to zero and remit penalties and interest. Costs awarded against SARS.

Orders

  • The appeal in respect of the VAT periods 2014/08, 2014/09, 2014/10, 2014/11, 2014/12, 2015/01, 2015/02, 2015/03 is upheld.
  • The assessments for the VAT periods 2014/08, 2014/09, 2014/10, 2014/11, 2014/12, 2015/01, 2015/02, 2015/03 are altered by reducing each additional assessment to R0 and remitting the understatement penalty and accrued interest in its entirety.