CZY (In Liquidation) v Commission for the South African Revenue Service (IT 45997) [2024] ZATC 4; 87 SATC 255 (27 February 2024)

CZY (In Liquidation) v Commission for the South African Revenue Service (IT 45997) [2024] ZATC 4; 87 SATC 255 (27 February 2024)

The court found that the applicant provided a reasonable and justified explanation for the delay in delivering the rule 36(6) notice, given the volume and technical nature of the discovered documents and the need to consult with liquidators and former employees. The court held that, on a prima facie basis, at least one category of documents sought was relevant to the issues in dispute, specifically those relating to the decision to impose understatement penalties. The applicant acted bona fide, and there was no evidence of intentional non-compliance or prejudice to SARS. The interests of justice required that condonation be granted so that relevant documents could be produced and the...

Citation
[2024] ZATC 4
Parties
Applicant: CZY (In liquidation); Respondent: Commissioner for the South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
27 February 2024
Case Number
IT 45997
Procedural Posture
Condonation Application / Application for Condonation of Late Filing of Rule 36(6) Notice Prior to Tax Appeal Hearing
Outcome
Condonation for the late delivery of the applicant's rule 36(6) notice is granted. Costs are reserved.
Judges
Ingrid Opperman
Legal Topics
Condonation, Tax Discovery, Understatement Penalty, Section 24c Allowance, Tax Administration Act, Interest on Tax
Tax Law Civil Procedure Condonation Tax Discovery Understatement Penalty Section 24c Allowance Tax Administration Act Interest on Tax

Case Brief

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Parties

CZY (In liquidation)

Applicant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Condonation Application / Application for Condonation of Late Filing of Rule 36(6) Notice Prior to Tax Appeal Hearing

Legal Issues

  1. 1 Whether the applicant's late delivery of the rule 36(6) notice should be condoned.
  2. 2 Whether the documents sought in the rule 36(6) notice are relevant to the issues in dispute in the tax appeal.
  3. 3 Whether the applicant provided a sufficient explanation for the delay in filing the rule 36(6) notice.

Ratio Decidendi

The court found that the applicant provided a reasonable and justified explanation for the delay in delivering the rule 36(6) notice, given the volume and technical nature of the discovered documents and the need to consult with liquidators and former employees. The court held that, on a prima facie basis, at least one category of documents sought was relevant to the issues in dispute, specifically those relating to the decision to impose understatement penalties. The applicant acted bona fide, and there was no evidence of intentional non-compliance or prejudice to SARS. The interests of justice required that condonation be granted so that relevant documents could be produced and the...

Court Disposition

Condonation for the late delivery of the applicant's rule 36(6) notice is granted. Costs are reserved.

Orders

  • The late delivery of the Applicant’s notice in terms of rule 36(6) of the Rules promulgated under section 103 of the Tax Administration Act 28 of 2011 is condoned.
  • Costs are reserved.