Medtronic International Trading SARL v Commissioner for the South African Revenue Service (33400/2019) [2021] ZAGPPHC 134; 83 SATC 281 (15 February 2021)

Medtronic International Trading SARL v Commissioner for the South African Revenue Service (33400/2019) [2021] ZAGPPHC 134; 83 SATC 281 (15 February 2021)

The court held that the provisions of Chapter 16, Part B, sections 225 to 233 of the Tax Administration Act do not prohibit a taxpayer from requesting remission of interest under section 39(7)(a) of the VAT Act, even after a VDP agreement has been concluded. The VDP agreement is binding as to penalties and interest,...

Source-derived case information.

Citation
[2021] ZAGPPHC 134
Parties
Applicant: Medtronic International Trading S.A.R.L; Respondent: Commissioner for the South African Revenue Service
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
15 February 2021
Case Number
33400/2019
Procedural Posture
Review Application / Judgment on Review and Declaratory Relief
Outcome
Application granted. The respondent's decisions refusing to consider the applicant's request for remission of interest are reviewed and set aside. SARS is ordered to consider, adjudicate, and decide on the applicant's request for remission of interest under section 39(7)(a) of the VAT Act.
Judges
Hughes
Legal Topics
Voluntary Disclosure Programme, Remission of Interest, Promotion of Administrative Justice Act, Vat Act Section 39 7, Tax Administration Act Section 229, Judicial Review
Tax Law Administrative Law Voluntary Disclosure Programme Remission of Interest Promotion of Administrative Justice Act Vat Act Section 39 7 Tax Administration Act Section 229 Judicial Review

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Parties

Medtronic International Trading S.A.R.L

Applicant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Review Application / Judgment on Review and Declaratory Relief

Legal Issues

  1. 1 Whether the Tax Administration Act's voluntary disclosure programme provisions prohibit a request for remission of interest under section 39(7)(a) of the VAT Act after a VDP agreement has been concluded.
  2. 2 Whether SARS has a statutory duty to consider, adjudicate and decide on a request for remission of interest under section 39(7)(a) of the VAT Act, notwithstanding a prior VDP agreement.
  3. 3 Whether the respondent's refusal to consider the applicant's request for remission of interest constitutes a reviewable error of law under PAJA.

Ratio Decidendi

The court held that the provisions of Chapter 16, Part B, sections 225 to 233 of the Tax Administration Act do not prohibit a taxpayer from requesting remission of interest under section 39(7)(a) of the VAT Act, even after a VDP agreement has been concluded. The VDP agreement is binding as to penalties and interest, but the relevant statutes and explanatory notes do not expressly exclude the possibility of remission requests. SARS retains a statutory duty to consider, adjudicate, and decide on such requests. The respondent's refusal to consider the applicant's request was based on a material error of law and is reviewable under PAJA. The impugned decisions were set aside and remitted to...

Court Disposition

Application granted. The respondent's decisions refusing to consider the applicant's request for remission of interest are reviewed and set aside. SARS is ordered to consider, adjudicate, and decide on the applicant's request for remission of interest under section 39(7)(a) of the VAT Act.

Orders

  • It is declared that the Tax Administration Act's voluntary disclosure programme provisions do not prohibit a request for remission of interest under section 39(7) of the VAT Act, notwithstanding a VDP agreement.
  • The respondent's decisions dated 1 November 2018 and 13 March 2019 refusing to consider the applicant's request for remission of interest are reviewed and set aside.