U Taxpayer v Commissioner For The South African Revenue Service (IT 24502) [2023] ZATC 7 (2 June 2023)

U Taxpayer v Commissioner For The South African Revenue Service (IT 24502) [2023] ZATC 7 (2 June 2023)

The court found that the applicant's arguments regarding the interpretation of SARS' pleading and the obligation to make compensating adjustments were without merit. The relevant paragraphs in the rule 31 statement must be read in context and as a whole, and the introduction of 'separately and together' does not constitute a novation or impermissible broadening of SARS' case. The applicant's reliance on ex post facto explanations and affidavit evidence was rejected as inadmissible for legal interpretation. The court held that the Commissioner is not obliged to make compensating adjustments unless satisfied they are necessary and appropriate, and the applicant lacks locus standi to...

Citation
[2023] ZATC 7
Parties
Applicant: U Taxpayer; Respondent: Commissioner For The South African Revenue Service
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
2 June 2023
Case Number
IT 24502
Procedural Posture
Interlocutory Application / Opposed Application for Legality Review in Limine Prior to Pending Tax Appeal
Outcome
Application dismissed with costs on the scale as between party and party, including costs of two counsel where so employed.
Judges
J I Cloete
Legal Topics
General Anti Avoidance Rules, Secondary Tax on Companies, Compensating Adjustments, Pleading and Striking Out, Locus Standi
Tax Law Civil Procedure General Anti Avoidance Rules Secondary Tax on Companies Compensating Adjustments Pleading and Striking Out Locus Standi

Case Brief

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Parties

U Taxpayer

Applicant

Commissioner For The South African Revenue Service

Respondent

Procedural Posture

Interlocutory Application / Opposed Application for Legality Review in Limine Prior to Pending Tax Appeal

Legal Issues

  1. 1 Whether the applicant is entitled to a separate, advance determination of three legal issues as part of his pending tax appeal.
  2. 2 Whether the Commissioner was obliged to make compensating adjustments under section 80B(2) of the Income Tax Act and whether failure to do so renders the assessment invalid.
  3. 3 Whether the applicant's interpretation of SARS' pleading is sustainable and whether the application for amendment or collateral challenge should be granted.

Ratio Decidendi

The court found that the applicant's arguments regarding the interpretation of SARS' pleading and the obligation to make compensating adjustments were without merit. The relevant paragraphs in the rule 31 statement must be read in context and as a whole, and the introduction of 'separately and together' does not constitute a novation or impermissible broadening of SARS' case. The applicant's reliance on ex post facto explanations and affidavit evidence was rejected as inadmissible for legal interpretation. The court held that the Commissioner is not obliged to make compensating adjustments unless satisfied they are necessary and appropriate, and the applicant lacks locus standi to...

Court Disposition

Application dismissed with costs on the scale as between party and party, including costs of two counsel where so employed.

Orders

  • The application is dismissed with costs on the scale as between party and party, including the costs of two counsel where so employed.