Sasol Oil (Pty) Ltd v Commissioner for the South African Revenue Service (17583/2012) [2012] ZAGPPHC 312 (30 November 2012)

Sasol Oil (Pty) Ltd v Commissioner for the South African Revenue Service (17583/2012) [2012] ZAGPPHC 312 (30 November 2012)

The court found that the respondent's inclusion of the second ground of assessment in the Rule 10 statement constituted a new and different basis for holding the applicant liable for tax, which was not permitted outside the prescribed period unless the statutory requirements of fraud, misrepresentation, or non-disclosure were met. The respondent was precluded by section 79(1) of the Income Tax Act from raising the second ground, as the extension agreement only allowed additional assessments restricted to specific issues and did not permit a change in the factual or legal basis for assessment. The court further held that the inclusion of the second ground did not constitute administrative...

Citation
[2012] ZAGPPHC 312
Parties
Applicant: Sasol Oil (Pty) Ltd; Respondent: Commissioner for the South African Revenue Service
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
30 November 2012
Case Number
17583/2012
Procedural Posture
Review Application / Judgment
Outcome
Application granted; the respondent's second ground of assessment is set aside as unlawful.
Judges
A.M.L. Phatudi
Legal Topics
Income Tax Act, Controlled Foreign Company, Assessment Prescription, General Deduction Formula, Administrative Action, Principle of Legality
Tax Law Civil Procedure Income Tax Act Controlled Foreign Company Assessment Prescription General Deduction Formula Administrative Action Principle of Legality

Case Brief

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Parties

Sasol Oil (Pty) Ltd

Applicant

Commissioner for the South African Revenue Service

Respondent

Procedural Posture

Review Application / Judgment

Legal Issues

  1. 1 Whether the respondent was lawfully entitled to raise the second ground of assessment outside the prescribed period.
  2. 2 Whether the inclusion of the second ground in the Rule 10 statement constitutes administrative action under PAJA.
  3. 3 Whether the respondent's conduct contravened the constitutional principle of legality.

Ratio Decidendi

The court found that the respondent's inclusion of the second ground of assessment in the Rule 10 statement constituted a new and different basis for holding the applicant liable for tax, which was not permitted outside the prescribed period unless the statutory requirements of fraud, misrepresentation, or non-disclosure were met. The respondent was precluded by section 79(1) of the Income Tax Act from raising the second ground, as the extension agreement only allowed additional assessments restricted to specific issues and did not permit a change in the factual or legal basis for assessment. The court further held that the inclusion of the second ground did not constitute administrative...

Court Disposition

Application granted; the respondent's second ground of assessment is set aside as unlawful.

Orders

  • The respondent's second ground of assessment raised and relied on in Rule 10 statement dated 2 December 2011 is set aside as being in conflict with the constitutional principle of legality.
  • The respondent is ordered to pay the applicant's costs of this application, including the costs of two counsel.