ABC Trust v Commissioner for the South African Revenue Service (00052/2018) [2019] ZATC 15; 82 SATC 264 (3 May 2019)

ABC Trust v Commissioner for the South African Revenue Service (00052/2018) [2019] ZATC 15; 82 SATC 264 (3 May 2019)

The court held that SARS is required under Rule 6 to provide reasons that enable the taxpayer to formulate an objection to an additional assessment, including reasons addressing the causal link between the alleged nondisclosure and the failure to assess the full amount of tax chargeable. While SARS' finalisation of audit letter implied causation, it did not expressly traverse it. However, SARS subsequently clarified its position on causation in its answering affidavit. The parties agreed that the combination of the audit letter and the answering affidavit constituted sufficient reasons. As a result, the court declared that SARS had complied with its duty to provide reasons, and the...

Citation
[2019] ZATC 15
Parties
Appellant: ABC Trust; Respondent: Commissioner for the South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
3 May 2019
Case Number
00052/2018
Procedural Posture
Review Application / Application for Reasons Under Rule 6 to Formulate Objection to Additional Assessment
Outcome
Application granted in part; declaratory order issued confirming sufficiency of SARS' reasons; costs awarded to applicant.
Judges
Unterhalter
Legal Topics
Tax Administration Act, Additional Assessment, Nondisclosure of Material Facts, Duty to Give Reasons
Tax Law Civil Procedure Tax Administration Act Additional Assessment Nondisclosure of Material Facts Duty to Give Reasons

Case Brief

Summary, issues, holding and outcome

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Parties

ABC Trust

Appellant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Review Application / Application for Reasons Under Rule 6 to Formulate Objection to Additional Assessment

Legal Issues

  1. 1 Whether SARS provided sufficient reasons under Rule 6 to enable the applicant to formulate an objection to the additional assessment for the 2012 year.
  2. 2 Whether the additional assessment issued by SARS more than three years after the original assessment was competent under section 99(2)(a) of the Tax Administration Act.
  3. 3 Whether SARS' reasons adequately address the causal link between the alleged nondisclosure and the failure to assess the full amount of tax chargeable.

Ratio Decidendi

The court held that SARS is required under Rule 6 to provide reasons that enable the taxpayer to formulate an objection to an additional assessment, including reasons addressing the causal link between the alleged nondisclosure and the failure to assess the full amount of tax chargeable. While SARS' finalisation of audit letter implied causation, it did not expressly traverse it. However, SARS subsequently clarified its position on causation in its answering affidavit. The parties agreed that the combination of the audit letter and the answering affidavit constituted sufficient reasons. As a result, the court declared that SARS had complied with its duty to provide reasons, and the...

Court Disposition

Application granted in part; declaratory order issued confirming sufficiency of SARS' reasons; costs awarded to applicant.

Orders

  • It is declared that paragraphs 1.1.1 and 2.3 of SARS' finalisation of audit letter dated 6 March 2018, read with paragraphs 32 and 33 of SARS' answering affidavit, constitute reasons in compliance with Rule 6 sufficient to enable the applicant to formulate an objection to the additional assessment for the 2012 year...
  • Respondent is directed to pay the costs.