Peri Formwork Scaffolding Engineering (Pty) Ltd v Commissioner for the South African Revenue Service (A67/2020) [2021] ZAWCHC 165; 84 SATC 91 (23 August 2021)

Peri Formwork Scaffolding Engineering (Pty) Ltd v Commissioner for the South African Revenue Service (A67/2020) [2021] ZAWCHC 165; 84 SATC 91 (23 August 2021)

The court held that the computation of the statutory period for payment of employees' tax is governed by the clear provisions of the Tax Administration Act, specifically section 244, which requires payment on the last business day before a weekend or public holiday. The statutory method under the Interpretation Act does not apply where the tax statutes are unambiguous. The penalty imposed by SARS is mandatory under section 213 of the Tax Administration Act, and the degree of lateness is irrelevant to its application. However, the court found that the appellant had demonstrated reasonable grounds for the late payment, having acted promptly to remedy the deficiency and maintained a clean...

Citation
[2021] ZAWCHC 165
Parties
Appellant: Peri Formwork Scaffolding Engineering (Pty) Ltd; Respondent: Commissioner for the South African Revenue Service
Court
Western Cape High Court, Cape Town
Jurisdiction
South Africa
Judgment Date
23 August 2021
Case Number
A67/2020
Procedural Posture
Civil Appeal / Appeal From Tax Court
Outcome
Appeal upheld; penalty set aside.
Judges
DS Kusevitsky, NC Erasmus, ET Steyn
Legal Topics
Income Tax Act, Tax Administration Act, Computation of Time, Penalty Remission, Statutory Interpretation
Tax Law Civil Procedure Income Tax Act Tax Administration Act Computation of Time Penalty Remission Statutory Interpretation

Case Brief

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Parties

Peri Formwork Scaffolding Engineering (Pty) Ltd

Appellant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Civil Appeal / Appeal From Tax Court

Legal Issues

  1. 1 Whether the computation of the statutory period for payment of employees' tax should be determined by the statutory method under the Interpretation Act or by the provisions of the Tax Administration Act.
  2. 2 Whether the penalty imposed for late payment was correctly applied and whether reasonable grounds existed for remission under section 217(3) of the Tax Administration Act.
  3. 3 Whether the relationship between SARS and the employer is fiduciary in nature, affecting the obligations regarding PAYE payments.

Ratio Decidendi

The court held that the computation of the statutory period for payment of employees' tax is governed by the clear provisions of the Tax Administration Act, specifically section 244, which requires payment on the last business day before a weekend or public holiday. The statutory method under the Interpretation Act does not apply where the tax statutes are unambiguous. The penalty imposed by SARS is mandatory under section 213 of the Tax Administration Act, and the degree of lateness is irrelevant to its application. However, the court found that the appellant had demonstrated reasonable grounds for the late payment, having acted promptly to remedy the deficiency and maintained a clean...

Court Disposition

Appeal upheld; penalty set aside.

Orders

  • The appeal is upheld.
  • The penalty imposed by SARS is set aside.