Lueven Metals (Pty) Ltd v Commissioner for the South African Revenue Service (31356/2021) [2022] ZAGPPHC 325; 84 SATC 447 (19 May 2022)

Lueven Metals (Pty) Ltd v Commissioner for the South African Revenue Service (31356/2021) [2022] ZAGPPHC 325; 84 SATC 447 (19 May 2022)

The court held that section 11(1)(f) of the VAT Act requires that gold supplied to the South African Reserve Bank, the South African Mint Company, or any registered bank must not have undergone any manufacturing process other than the refining thereof or the manufacture or production of the prescribed unwrought forms. Gold that has previously been refined and manufactured into other products, such as jewellery or coins, and is subsequently re-refined and manufactured into bars or other forms, does not qualify for zero-rating. The applicant's interpretation would require excising statutory language and lead to insensible or absurd results, contrary to established principles of statutory...

Citation
[2022] ZAGPPHC 325
Parties
Applicant: Lueven Metals (Pty) Ltd; Respondent: Commissioner for the South African Revenue Service
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
19 May 2022
Case Number
31356/2021
Procedural Posture
Review Application / Judgment
Outcome
Application dismissed with costs, including costs of senior and junior counsel.
Judges
N Davis
Legal Topics
Value Added Tax, Zero Rating, Statutory Interpretation, Manufacturing Processes, Declaratory Relief
Tax Law Civil Procedure Value Added Tax Zero Rating Statutory Interpretation Manufacturing Processes Declaratory Relief

Case Brief

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Parties

Lueven Metals (Pty) Ltd

Applicant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Review Application / Judgment

Legal Issues

  1. 1 Whether gold supplied by the applicant, which has undergone prior refining and manufacturing processes, qualifies for zero-rating under section 11(1)(f) of the VAT Act.
  2. 2 Whether the phrase 'which has not undergone any manufacturing process other than the refining thereof or the manufacture or production of such bars, blank coins, ingots, buttons, wire, plate, granules or solution' excludes re-refined or previously manufactured gold from zero-rating.
  3. 3 Whether SARS's interpretation of section 11(1)(f) is correct and binding.

Ratio Decidendi

The court held that section 11(1)(f) of the VAT Act requires that gold supplied to the South African Reserve Bank, the South African Mint Company, or any registered bank must not have undergone any manufacturing process other than the refining thereof or the manufacture or production of the prescribed unwrought forms. Gold that has previously been refined and manufactured into other products, such as jewellery or coins, and is subsequently re-refined and manufactured into bars or other forms, does not qualify for zero-rating. The applicant's interpretation would require excising statutory language and lead to insensible or absurd results, contrary to established principles of statutory...

Court Disposition

Application dismissed with costs, including costs of senior and junior counsel.

Orders

  • The application is dismissed with costs, including costs of senior and junior counsel.