Taxpayer v Commissioner for the South African Revenue Services (VAT2063) [2019] ZATC 2; 82 SATC 271 (15 November 2019)

Taxpayer v Commissioner for the South African Revenue Services (VAT2063) [2019] ZATC 2; 82 SATC 271 (15 November 2019)

The Tax Court found that it had jurisdiction to hear the appeal, as a refusal to approve retrospective application of an apportionment method falls within the ambit of section 32(1)(a)(iv) of the VAT Act. The Court held that the statutory limitation in proviso (iii) to section 17(1) of the VAT Act precludes SARS from approving retrospective application of an alternative apportionment method beyond the year of assessment in which the application was made. The appellant's application for retrospective approval of the TCB method for the period 1 February 2014 to 29 February 2016 was therefore lawfully refused by SARS. The Court interpreted the relevant statutory provisions in accordance with...

Citation
[2019] ZATC 2
Parties
Appellant: THE TAXPAYER; Respondent: COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE
Court
Tax Court
Jurisdiction
South Africa
Judgment Date
15 November 2019
Case Number
VAT2063
Procedural Posture
Tax Appeal / Appeal Against SARS Refusal to Approve Retrospective Application of TCB Apportionment Method
Outcome
The appeal is dismissed.
Judges
K M Savage
Legal Topics
Vat Apportionment, Private Binding Ruling, Retrospective Application, Binding General Ruling 16, Input Tax Deduction
Tax Law Vat Apportionment Private Binding Ruling Retrospective Application Binding General Ruling 16 Input Tax Deduction

Case Brief

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Parties

THE TAXPAYER

Appellant

COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE

Respondent

Procedural Posture

Tax Appeal / Appeal Against SARS Refusal to Approve Retrospective Application of TCB Apportionment Method

Legal Issues

  1. 1 Whether SARS was precluded by law from approving the use of the Transaction Count Based (TCB) method for VAT apportionment retrospectively for the period 1 February 2014 to 29 February 2016.
  2. 2 Whether the Tax Court had jurisdiction to hear the appeal regarding SARS's refusal to approve retrospective application of the TCB method.
  3. 3 Whether the statutory limitation on retrospective application of an alternative apportionment method under section 17(1) and proviso (iii) of the VAT Act applies.

Ratio Decidendi

The Tax Court found that it had jurisdiction to hear the appeal, as a refusal to approve retrospective application of an apportionment method falls within the ambit of section 32(1)(a)(iv) of the VAT Act. The Court held that the statutory limitation in proviso (iii) to section 17(1) of the VAT Act precludes SARS from approving retrospective application of an alternative apportionment method beyond the year of assessment in which the application was made. The appellant's application for retrospective approval of the TCB method for the period 1 February 2014 to 29 February 2016 was therefore lawfully refused by SARS. The Court interpreted the relevant statutory provisions in accordance with...

Court Disposition

The appeal is dismissed.

Orders

  • The appeal is dismissed.
  • The costs of the application before Binns-Ward J are to be borne by the respondent on the scale as between party and party.