Marshall and Others v Commission for the South Africa Revenue Service (CCT208/17) [2018] ZACC 11; 2018 (7) BCLR 830 (CC); 2019 (6) SA 246 (CC); 80 SATC 400 (25 April 2018)

Marshall and Others v Commission for the South Africa Revenue Service (CCT208/17) [2018] ZACC 11; 2018 (7) BCLR 830 (CC); 2019 (6) SA 246 (CC); 80 SATC 400 (25 April 2018)

The Constitutional Court held that while evidence of consistent administrative interpretation may be relevant in marginal cases, it should not override the court’s duty to independently and objectively interpret legislation in accordance with constitutional principles. The Supreme Court of Appeal correctly interpreted the relevant sections of the Value Added Tax Act, finding that the Trust is liable for VAT on actual services supplied to provincial departments, and that subsidies received as a welfare organisation are subject to zero rating. The application for leave to appeal was dismissed due to poor prospects of success and lack of prejudice to the respondent, with condonation granted...

Citation
[2018] ZACC 11
Parties
Applicant: Alan George Marshall N.O.; Applicant: Rene Pieter De Wet N.O.; Applicant: Knowledge Lwazi Mboyi N.O.; Applicant: John Andrew De Blaquiere Martin N.O.; Applicant: Ray Siphosomhle Sithembile Msengana N.O.; Applicant: Kovin Shunmugan Naidoo N.O.; Applicant: Samson Makhudu Gulube N.O.; Respondent: Commissioner for the South African Revenue Service
Court
Constitutional Court
Jurisdiction
South Africa
Judgment Date
25 April 2018
Case Number
CCT208/17
Procedural Posture
Leave to Appeal / Application for Leave to Appeal to the Constitutional Court From the Supreme Court of Appeal
Outcome
Application for leave to appeal dismissed; condonation for late filing granted; no costs order.
Judges
Mogoeng, Zondo, Cameron, Froneman, Jafta, Kathree Setiloane, Kollapen, Madlanga, Mhlantla, Theron, Zondi
Legal Topics
Value Added Tax Act, Statutory Interpretation, Judicial Deference, Contra Fiscum Rule, Fair Hearing Rights
Tax Law Constitutional Law Value Added Tax Act Statutory Interpretation Judicial Deference Contra Fiscum Rule Fair Hearing Rights

Case Brief

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Parties

Alan George Marshall N.O.

Applicant

Rene Pieter De Wet N.O.

Applicant

Knowledge Lwazi Mboyi N.O.

Applicant

John Andrew De Blaquiere Martin N.O.

Applicant

Ray Siphosomhle Sithembile Msengana N.O.

Applicant

Kovin Shunmugan Naidoo N.O.

Applicant

Samson Makhudu Gulube N.O.

Applicant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Leave to Appeal / Application for Leave to Appeal to the Constitutional Court From the Supreme Court of Appeal

Legal Issues

  1. 1 Whether a court may consider or defer to an administrative body’s interpretation of legislation, such as SARS Interpretation Notes, in statutory interpretation.
  2. 2 Whether the Supreme Court of Appeal correctly interpreted sections 8(5) and 11(2)(n) of the Value Added Tax Act regarding VAT liability for welfare organisations.
  3. 3 Whether reliance on administrative interpretation offends constitutional rights to equality and fair hearing.

Ratio Decidendi

The Constitutional Court held that while evidence of consistent administrative interpretation may be relevant in marginal cases, it should not override the court’s duty to independently and objectively interpret legislation in accordance with constitutional principles. The Supreme Court of Appeal correctly interpreted the relevant sections of the Value Added Tax Act, finding that the Trust is liable for VAT on actual services supplied to provincial departments, and that subsidies received as a welfare organisation are subject to zero rating. The application for leave to appeal was dismissed due to poor prospects of success and lack of prejudice to the respondent, with condonation granted...

Court Disposition

Application for leave to appeal dismissed; condonation for late filing granted; no costs order.

Orders

  • Condonation is granted for the late filing of the application for leave to appeal.
  • The application for leave to appeal is dismissed.