Nondabula v Commissioner: SARS and Another (4062/2016) [2017] ZAECMHC 21; 2018 (3) SA 541 (ECM); 79 SATC 333 (27 June 2017)

Nondabula v Commissioner: SARS and Another (4062/2016) [2017] ZAECMHC 21; 2018 (3) SA 541 (ECM); 79 SATC 333 (27 June 2017)

The court found that SARS, as an organ of state, is bound by the principle of legality and must comply strictly with the provisions of the Tax Administration Act. SARS failed to provide the applicant with the required notice of assessment and grounds for the additional assessment as mandated by section 96. The issuance of the Third Party Notice under section 179, without prior compliance with section 96, was unlawful and unconstitutional. The court emphasized that SARS's conduct disregarded statutory requirements and constitutional values of accountability and transparency, resulting in arbitrary and prejudicial action against the applicant.

Citation
[2017] ZAECMHC 21
Parties
Applicant: Vuyisile Zamindlela Nondabula; Respondent: Commissioner: SARS; Respondent: Another
Court
Eastern Cape High Court, Mthatha
Jurisdiction
South Africa
Judgment Date
27 June 2017
Case Number
4062/2016
Procedural Posture
Urgent Application / Final Determination of Application for Interdict Pending Tax Objection
Outcome
Application granted; Rule Nisi confirmed in respect of paragraphs 3 and 4 of the Notice of Motion; costs awarded against the first respondent.
Judges
Jolwana
Legal Topics
Tax Administration Act, Additional Assessment, Third Party Notice, Doctrine of Legality, Constitutional Values
Tax Law Administrative Law Tax Administration Act Additional Assessment Third Party Notice Doctrine of Legality Constitutional Values

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Parties

Vuyisile Zamindlela Nondabula

Applicant

Commissioner: SARS

Respondent

Another

Respondent

Procedural Posture

Urgent Application / Final Determination of Application for Interdict Pending Tax Objection

Legal Issues

  1. 1 Whether the first respondent lawfully invoked section 179 of the Tax Administration Act to issue a Third Party Notice before complying with section 96.
  2. 2 Whether the applicant was provided with adequate information and grounds for the additional tax assessment as required by section 96 of the Act.
  3. 3 Whether the conduct of the first respondent was consistent with the doctrine of legality and constitutional principles.

Ratio Decidendi

The court found that SARS, as an organ of state, is bound by the principle of legality and must comply strictly with the provisions of the Tax Administration Act. SARS failed to provide the applicant with the required notice of assessment and grounds for the additional assessment as mandated by section 96. The issuance of the Third Party Notice under section 179, without prior compliance with section 96, was unlawful and unconstitutional. The court emphasized that SARS's conduct disregarded statutory requirements and constitutional values of accountability and transparency, resulting in arbitrary and prejudicial action against the applicant.

Court Disposition

Application granted; Rule Nisi confirmed in respect of paragraphs 3 and 4 of the Notice of Motion; costs awarded against the first respondent.

Orders

  • The Rule Nisi issued by this Court is confirmed in respect of paragraphs 3 and 4 of the Notice of Motion.
  • The first respondent is ordered to pay costs.