Charles Velkes Mail Order 1973 (Pty) Ltd v Commissioner for Inland Revenue (306/85) [1987] ZASCA 40; [1987] 2 All SA 275 (A) (12 May 1987)

Charles Velkes Mail Order 1973 (Pty) Ltd v Commissioner for Inland Revenue (306/85) [1987] ZASCA 40; [1987] 2 All SA 275 (A) (12 May 1987)

The court held that the appellant failed to prove that the distribution of catalogues constituted sales within the meaning of section 5(1)(a) of the Sales Tax Act. There was insufficient evidence of acceptance or intention to acquire ownership by the recipients, and the catalogues were unsolicited advertising material. The court found that the catalogues were used by the appellant in its enterprise, falling under section 5(1)(h)(i), and that tax was correctly calculated on their cost. The exemption for exported goods did not apply, as there was no sale involved in the distribution abroad. The appeal was dismissed, and the assessment confirmed.

Citation
[1987] ZASCA 40
Parties
Appellant: Charles Velkes Mail Order 1973 (Pty) Ltd; Respondent: Commissioner for Inland Revenue
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
12 May 1987
Case Number
306/85
Procedural Posture
Civil Appeal / Appeal From Cape Income Tax Special Court
Outcome
Appeal dismissed with costs, including costs of two counsel.
Judges
Corbett, Hoexter, Nestadt, Nicholas, Steyn
Legal Topics
Sales Tax Act 103 of 1978, Taxable Value Determination, Definition of Sale, Vendor Liability, Exemption for Exported Goods
Tax Law Commercial and Corporate Sales Tax Act 103 of 1978 Taxable Value Determination Definition of Sale Vendor Liability Exemption for Exported Goods

Case Brief

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Parties

Charles Velkes Mail Order 1973 (Pty) Ltd

Appellant

Commissioner for Inland Revenue

Respondent

Procedural Posture

Civil Appeal / Appeal From Cape Income Tax Special Court

Legal Issues

  1. 1 Whether the distribution of catalogues by the appellant constituted sales of goods within the meaning of section 5(1)(a) of the Sales Tax Act 103 of 1978.
  2. 2 Whether the appellant is liable for sales tax on catalogues distributed both within and outside the Republic, and if so, on what value.
  3. 3 Whether the exemption for exported goods under section 6(1)(a)(i) applies to catalogues sent abroad.

Ratio Decidendi

The court held that the appellant failed to prove that the distribution of catalogues constituted sales within the meaning of section 5(1)(a) of the Sales Tax Act. There was insufficient evidence of acceptance or intention to acquire ownership by the recipients, and the catalogues were unsolicited advertising material. The court found that the catalogues were used by the appellant in its enterprise, falling under section 5(1)(h)(i), and that tax was correctly calculated on their cost. The exemption for exported goods did not apply, as there was no sale involved in the distribution abroad. The appeal was dismissed, and the assessment confirmed.

Court Disposition

Appeal dismissed with costs, including costs of two counsel.

Orders

  • The appeal is dismissed.
  • The appellant is ordered to pay the respondent's costs, including those of two counsel.