Sookoo and Another v Commissioner for the South African Revenue Service and Another (49048/2021) [2025] ZAGPPHC 370 (15 April 2025)

Sookoo and Another v Commissioner for the South African Revenue Service and Another (49048/2021) [2025] ZAGPPHC 370 (15 April 2025)

The court held that the preservation order issued under section 163 of the Tax Administration Act was obtained specifically to secure tax liabilities arising from the April 2020 PPE transaction with Khagiso Afrika. Subsequent assessments confirmed that no tax was owed by the second applicant in respect of that transaction, and the original basis for the preservation order had fallen away. The court rejected SARS's argument that the order could be used to secure unrelated or future tax debts, finding that the scope of a preservation order is confined to the purpose for which it was sought and granted. Any new or different tax liabilities must be pursued through separate applications under...

Citation
[2025] ZAGPPHC 370
Parties
Applicant: Vishen Aqeel Sookoo; Applicant: Spirit of African Market (Pty) Ltd; Respondent: Commissioner for the South African Revenue Service; Respondent: Jacques van Wyk N.O.
Court
North Gauteng High Court, Pretoria
Jurisdiction
South Africa
Judgment Date
15 April 2025
Case Number
49048/2021
Procedural Posture
Declaratory Application / Final Judgment on Declaratory Relief Regarding Preservation Order
Outcome
Declaratory relief granted in favour of the applicants; preservation order declared no longer in force; costs awarded against SARS.
Judges
Janse van Nieuwenhuizen
Legal Topics
Tax Administration Act Section 163, Preservation Order Scope, Declaratory Relief, Tax Debt Definition
Tax Law Civil Procedure Tax Administration Act Section 163 Preservation Order Scope Declaratory Relief Tax Debt Definition

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Parties

Vishen Aqeel Sookoo

Applicant

Spirit of African Market (Pty) Ltd

Applicant

Commissioner for the South African Revenue Service

Respondent

Jacques van Wyk N.O.

Respondent

Procedural Posture

Declaratory Application / Final Judgment on Declaratory Relief Regarding Preservation Order

Legal Issues

  1. 1 Whether the preservation order issued under section 163 of the Tax Administration Act remains in force after the original tax liability has fallen away.
  2. 2 Whether the scope of a preservation order can extend to unrelated tax liabilities discovered after the order was granted.
  3. 3 Whether SARS may rely on a preservation order for future or different tax debts not identified in the original application.

Ratio Decidendi

The court held that the preservation order issued under section 163 of the Tax Administration Act was obtained specifically to secure tax liabilities arising from the April 2020 PPE transaction with Khagiso Afrika. Subsequent assessments confirmed that no tax was owed by the second applicant in respect of that transaction, and the original basis for the preservation order had fallen away. The court rejected SARS's argument that the order could be used to secure unrelated or future tax debts, finding that the scope of a preservation order is confined to the purpose for which it was sought and granted. Any new or different tax liabilities must be pursued through separate applications under...

Court Disposition

Declaratory relief granted in favour of the applicants; preservation order declared no longer in force; costs awarded against SARS.

Orders

  • It is declared that the preservation order issued on 16 January 2023 is no longer in force in relation to the assets of the applicants.
  • The first respondent is ordered to pay the costs of the application including the costs of counsel on scale C.