Commissioner for Inland Revenue v NCR Corporation of South Africa (Pty) Ltd. (5/1988) [1988] ZASCA 5 (10 March 1988)

Commissioner for Inland Revenue v NCR Corporation of South Africa (Pty) Ltd. (5/1988) [1988] ZASCA 5 (10 March 1988)

Section 88 of the Income Tax Act only obliges the Commissioner to pay interest on tax refunds where the assessment is altered as a result of a decision by a court of law on appeal or in conformity with such a decision in the taxpayer's own case. The refunds in question did not result from a court decision or appeal judgment, but from extra-judicial concessions and revised assessments by the Commissioner. Therefore, the respondent was not entitled to interest under section 88. The interpretation advanced by the respondent, which would extend the section's application to any revision following authoritative judgments in other cases, is not supported by the wording or legislative intent of...

Citation
[1988] ZASCA 5
Parties
Appellant: Commissioner for Inland Revenue; Respondent: NCR Corporation of South Africa (Pty) Ltd
Court
Supreme Court of Appeal
Jurisdiction
South Africa
Judgment Date
10 March 1988
Case Number
5/1988
Procedural Posture
Civil Appeal / Appeal From the Witwatersrand Local Division, Challenging Declaratory Orders Regarding Interest on Tax Refunds Under Section 88 of the Income Tax Act.
Outcome
Appeal allowed. The order of the court a quo is set aside and replaced with an order dismissing the application with costs, including the costs of two counsel.
Judges
Corbett, Viljoen, Smalberger, Vivier, Nicholas
Legal Topics
Income Tax Act Section 88, Interest on Tax Refunds, Interpretation of Statutes, Declaratory Orders
Tax Law Civil Procedure Income Tax Act Section 88 Interest on Tax Refunds Interpretation of Statutes Declaratory Orders

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Parties

Commissioner for Inland Revenue

Appellant

NCR Corporation of South Africa (Pty) Ltd

Respondent

Procedural Posture

Civil Appeal / Appeal From the Witwatersrand Local Division, Challenging Declaratory Orders Regarding Interest on Tax Refunds Under Section 88 of the Income Tax Act.

Legal Issues

  1. 1 Whether section 88 of the Income Tax Act obliges the Commissioner to pay interest on tax refunds where assessments are revised without a court decision or appeal judgment.
  2. 2 Whether interest on refunded provisional tax should be calculated from the date of receipt or from the date of assessment.

Ratio Decidendi

Section 88 of the Income Tax Act only obliges the Commissioner to pay interest on tax refunds where the assessment is altered as a result of a decision by a court of law on appeal or in conformity with such a decision in the taxpayer's own case. The refunds in question did not result from a court decision or appeal judgment, but from extra-judicial concessions and revised assessments by the Commissioner. Therefore, the respondent was not entitled to interest under section 88. The interpretation advanced by the respondent, which would extend the section's application to any revision following authoritative judgments in other cases, is not supported by the wording or legislative intent of...

Court Disposition

Appeal allowed. The order of the court a quo is set aside and replaced with an order dismissing the application with costs, including the costs of two counsel.

Orders

  • The application is dismissed with costs, such costs to include the costs of two counsel.