Guide on Tax Dispute Resolution
Guide on Tax Dispute Resolution
This document is a general guide dealing with the reso- lution of tax disputes in South Africa.
It is an introductory guide and does not deal with all the legal detail associated with dispute resolution.
It should therefore not be used as a legal reference.
The guide is based on the tax legislation as at 3O NOVEMBER 2004
Should you require additional information you may:
Contact your own advisors
Contact your local SARS branch office
Visit the “Dispute Resolution” webpage at http:// www.sars.gov.za/dr/
Prepared by:
SARS Law Administration: Litigation Section January 2005
Update Information
Date of 1st issue: 30 May 2003
Date of last update: 30 November 2004 Updated by: SARS Law Administration:
Litigation Section
The updating of this guide is done by the SARS Law Administration: Litigation Section
For any commentary or input for purposes of updates please contact the editor:
Catinka Smit
Tel: (012) 422 5132
Fax: (012) 422 4035
Email: csmit@sars.gov.za
Contents
Introduction 1
Glossary 1
Background to the ‘new rules’ 3
The request for reasons for an assessment (section 107A rules) 3
The objection and appeal procedure against an assessment (section 107A rules) 3
Alternative dispute resolution (section 107A rules) 4
The conduct and hearing of appeals before the Tax Court & Board (section107A rules) 4
Settlement circumstances (section 88A-H of Income Tax Act) 4
Application to other taxes 5
Tax Disputes 5
When & how does a tax dispute arise? 5
When may a taxpayer lodge a complaint about a tax dispute at the SARS Service
Monitoring Office (SSMO)? 5
Reasons for an assessment 6
When & how do I request reasons for an assessment? 6
When will reasons be adequate? 6
What are the remedies where inadequate reasons are given? 6
May reasons also be requested in terms of the Promotion of Administrative Justice Act? 6
Objections 6
When may I object to an assessment? 6
How do I object to an assessment? 9
When will my objection be invalid? 9
Request for further information by SARS 9
What must SARS do with my objection? 10
What happens if SARS does not deal with my objection within the prescribed time period? 10
What may I do if SARS disallows my objection or alters the assessment in a manner that does not satisfy me? 10
Do I need to pay the amount of tax in dispute? 10
Refunds & Reduced Assessments 11
Must I object to an assessment which I am dissatisfied with? 11
When do I request a reduced assessment as opposed to lodging an objection? 12
When am I entitled to a refund? 12
Alternative Dispute Resolution 13
What happens after I lodged an appeal? 13
What is Alternative Dispute Resolution (“ADR”) and how does it work? 13
Access to ADR 14
Terms and agreement on ADR 14
Period of dispute resolution 14
The facilitator 14
Proceedings 14
Reservation of rights 14
Agreement or Settlement 14
Settlements 15
When and in what circumstances may a tax dispute be “settled”? 15
Circumstances under which it will be inappropriate to settle 15
Circumstances under which it will be appropriate to settle 15
What are the reporting requirements for settlements? 16
Appeals to the Tax Board 16
What is the Tax Board? 16
When does the Tax Board deal with my appeal? 16
Who convenes the Tax Board? 17
What happens before the Board? 17
What if the outcome of the appeal before the Tax Board is dissatisfactory? 17
Appeals to the Tax Court 17
11.1. When does the Tax Court deal with my appeal?
17
11.2. What happens before my appeal is enrolled in the Tax Court?
18
Stage 1: Limitation of Issues
18
Stage 2: Discovery
19
Stage 3: Pre-Trial Conference
19
Stage 4: Enrolment
29
Stage 5: Subpoena of witnesses & documentary preparation
20
11.3. What happens during the hearing of my appeal before the Tax Court?
21
11.4. When may a Tax Court make an order for costs?
22
11.5. What happens after the hearing of my appeal before the Tax Court?
22
11.6. How do I appeal against the judgment by the Tax Court?
22
12. Extension of time periods, condonation and non-compliance with rules
23
12.1. How does extension of prescribed periods work?
23
12.2. How does condonation of non-compliance with the rules work?
23
12.3. How may non-compliance with the rules be challenged?
23
13. New rules: Transitional arrangements
24
13.1. What are the transitional arrangements (Part C of the section 107A rules)?
24
13.2. Assessments before 1 April 2003
24
13.3. Objections before 1 April 2003
24
13.4. Appeals before 1 April 2003
24
14. Application on notice to Tax Court
25
14.1. How does an application on notice work (Part B of the section
107A rules)?
25
14.2. What must the applicant who brings an application on notice do? 25
14.3. What must the respondent who wishes to oppose the application on notice do? 25
Annexures
Flowchart - Dispute Resolution 27
Table – Time Periods in Dispute resolution 28
Rules in terms of section 107A ITA 30
Settlement circumstances in terms of section 88A-H ITA 47
ADR1 50
Example: Power of Attorney 54
ADR2 55
SARS Interpretation Note 15 59
Legislative extracts 64
Example: Notice of Motion 75
Example: Notice of intention to oppose 76
Example: Founding/Opposing/ Replying/ Replicating Affidavit 77
Update Note 78
Introduction
The Income Tax Act, 1962, provides for specific procedures in order to resolve a tax dispute.
On 1 April 2003 new dispute resolution rules commenced with regard to:
The request for reasons for an assessment (section 107A rules);
The objection and appeal procedure against an assessment (section 107A rules);
Alternative dispute resolution (section 107A rules)
The conduct and hearing of appeals before the Tax Court and Board(section 107A rules);
Settlement circumstances (section 88A-H of the Income Tax Act).
Initially, the settlement circumstances were issued in terms of regulations under section 107B of the Income Tax Act, and applied with effect from 1 April 2003. These regulations have now been repealed and the settlement of dispute provisions have now been incorpo- rated into Part IIIA of Chapter III of the Income Tax Act in the form of sections 88A-H, which new sections apply to all settlements on or after 22 December 2003.
These rules and settlement circumstances can be broadly described as the “new tax dispute resolution rules”. A chart demonstrating the flow of the new rules is attached as Annexure A. The new rules were published for general comment on the SARS website during the period 1 to 29 November 2002. Extensive commentary was received and quite a number thereof were incorporated into the final rules. The SARS Service Monitoring Office (“SSMO”), launched on the 3rd of October 2002, and the new tax dispute resolution process were introduced to improve service delivery to taxpayers and tax professionals. The two initiatives will respectively enhance service delivery to taxpayers in respect of administrative processes and procedural difficulties (relative to the SSMO), on the one hand, as well as disagreements in respect of substantive matters (relative to the new rules), on the other hand.
Glossary
ADR
Alternative Dispute Resolution.
ADR1
This is the prescribed form which must be completed by a person who is aggrieved by an assessment and wishes to object thereto. It is attached as Annexure E.
ADR2
This is the prescribed form which must be completed by a person who is aggrieved by the disallowance of his/her objection or the alteration of his/her objection, and who wishes to appeal to the Tax Board or Tax Court against such disallowance or alteration. It is attached as Annexure G.
Clerk of the Tax Board
The Tax Board is administered by a clerk of the board, who is a SARS officer at the SARS Branch Office responsible for the administra- tion of the Board in that area. The contact details of the clerk of the Board for each office can be found on the “Dispute Resolution” webpage at http://www/sars.gov.za/dr.
Commissioner
Is the Commissioner for the South African Revenue Service (SARS). Any reference in this guide to a decision taken by “SARS” would be a decision that the Commissioner or a SARS officer may take in terms of the relevant tax act.
Date of assessment
In relation to any assessment, means the date specified in the notice of the assessment as the due date or, where a due date is not so specified, the date of the notice of assessment.
Day
Any reference to ‘day’ in this guide means a business day. A business day is any day other than a Saturday, Sunday or Public Holiday. For purposes of the s107A rules, all the days between 16 December of a year and 15 January of the following year, must be excluded in calculating the days of any period contemplated in the s107A rules.
Deliver
In terms of rule 1 of the section 107A rules, ‘deliver’ means-
handing the relevant document to the relevant person;
sending the relevant document to the relevant person by registered post;
telefaxing the relevant document to the relevant person;
transmitting the relevant document to the relevant person by electronic means; or
any other means of service authorised by the Court consisting of the President of the Court sitting alone:
However, in the case of paragraphs (c) and (d), the original signed document must also be handed to the relevant person or sent by registered post to that person within ten days of it being so telefaxed or transmitted by electronic means.
Exceptional Circumstances
This concept is not defined in the Income Tax Act, but it is accepted law that when an Act refers to ‘exceptional circumstances’ it contemplates something out of the ordinary and of an unusual nature. The South African Constitutional Court has held that the law- giver cannot be expected to prescribe that which is inherently incapable of delineation - if something can be imagined and outlined in advance, it is probably because it is not exceptional.
ITA
The Income Tax Act, 1962 (Act No. 58 of 1962).
New Rules
Are the rules issued by the Minister of Finance in terms section 107A of the Income Tax Act, which rules commenced on 1 April 2003. It is attached as Annexure C.
Practice Generally Prevailing
The ‘practice generally prevailing’ at the time, is the practice known to and applied by the Commissioner personally or, in view of his powers of delegation, through a duly delegated division at the SARS Head Office. A ‘practice generally prevailing’ is therefore one that has been expressly authorized by the Commissioner (personally or through the delegated Head Office Division) and is being applied throughout the country - it cannot be said that a practice that has its origin in a branch office of SARS falls within the concept of a ‘practice generally prevailing’.
Since 30 November 2001, the Law Administration Division of SARS Head Office has commenced with the issue of Interpretation Notes, published on the SARS website. The purpose of the Interpretation Notes is to provide guidelines to SARS employees and taxpayers regarding the interpretation and application of the provisions of the various laws administered by SARS. These Notes and general rulings to be issued in terms of the proposed new rulings system, will ultimately replace all the existing Practice Notes before 30 November 2001, to the extent that they relate to the interpretation of the various laws. The Interpretation Notes will be amended in line with policy developments and changes in the legislation.
Reasonable Grounds
The ordinary dictionary meaning of “reasonable” is “having sound judgement; moderate; ready to listen to reason; not absurd; within the limits of reason; not greatly less or more than might be expected; tolerable, fair” (Concise Oxford Dictionary).
Essentially, for a decision to be reasonable the Commissioner is required to consider all relevant matters. The Constitutional Court has held that there is no absolute standard of reasonableness – what is “reasonable” would depend on the particular circumstances of each case.
Registrar of the Tax Court
The Registrar of the Tax Court is appointed by the Commissioner in terms of section 83(20) of the Income Tax Act, and includes any other person authorised to act in the place of the Registrar. The Registrar administers the placing and hearing of tax appeals before the Tax Court. The contact details of the Registrar can be found on the Dispute Resolution webpage at http://www.sars.gov.za/dr
SSMO
The SARS Service Monitoring Office, or SARS SMO, is a special office operating independently of SARS branch offices. The SARS SMO facilitates the resolution of complaints of a procedural nature (i.e. complaints about the manner in which a taxpayer or a matter is being dealt with by SARS). The SARS SMO reports directly to the Commissioner and provides regular reports to the Minister of Finance.
SARS
Is the South African Revenue Service as established in terms of the South African Revenue Service Act, 1997 (Act No. 34 of 1997). Settlement Circumstances/Provisions
Initially, the regulations issued in terms of section 107B of the Income Tax Act enabled the Minister of Finance to prescribe the circum- stances under which SARS may settle a dispute between SARS and a taxpayer, where the settlement would be to the best advantage of the state. With effect from 22 December 2003, however, the settlement circumstances have been incorporated as a new Part in the Income Tax Act, i.e. Part IIIA of Chapter III (sections 88A-H). The settlement provisions are attached as Annexure D.
Taxpayer
For purposes of the Income Tax Act, a taxpayer is any person chargeable with any tax leviable under this Act and includes every person required by this Act to furnish any return. However, for purposes of this guide, any reference would include a person involved in a tax dispute with SARS in terms of any of the other Acts in respect of which the new rules and settlement regulations apply (see par 3.6).
Tax Board
Is the Tax Board established by section 83A of the Income Tax Act. The Tax Board consists of an advocate or attorney as chairperson and may deal with tax appeals where the amount of tax involved is less than R100 000. This amount has been increased to R200 000 in respect of appeals noted on or after 1 January 2005.
Tax Court
Is the Tax Court established by the President of the Republic in terms of section 83(3) of the Income Tax Act. It is a court of record and the presiding officer is a judge or an acting judge of the High Court, assisted by an accountant and a representative from the commercial community.
Terms of ADR
The terms governing the alternative dispute resolution proceedings are set out on the reverse side of the prescribed ADR2 notice of appeal form. ADR will only take place if the taxpayer accepts these terms.
Background to the ‘new rules’
The request for reasons for an assessment (section 107A rules)
The new rules provide that reasons for an assessment may be requested. Where a taxpayer requests such reasons, the taxpayer may object to the assessment after receipt of the reasons, unless he or she is informed by SARS that adequate reasons have already been provided. The reasons will enable the taxpayer to properly understand the basis of the assessment and assist in the formulation of the grounds to object thereto.
Reasons for an assessment may be requested in terms of rule 3 in respect of an assessment issued after 1 April 2003.
The objection and appeal procedure against an assessment (section 107A rules)
Before the introduction of the new rules, a taxpayer who was aggrieved with an assessment had the right to object to the assess- ment. In the event of SARS disallowing such objection, the taxpayer also had the right to lodge an appeal to the ‘Special Board’ or the ‘Special Court for Income Tax Appeals’ against such disallowance of the objection if he or she was still dissatisfied. These provisions were, however, reviewed to improve the process.
The reason for the review of the objection and appeal procedures is that there has been numerous complaints from taxpayers that tax disputes take extended periods of time to be resolved. A particular area of concern was that the period between the lodging of the objection by the taxpayer and the time it takes for the objection to be allowed or disallowed was too long. The new rules are much more formalistic and driven by time limits within which a matter must be attended to once an objection has been lodged.
The provisions in the various tax laws relating to objections and appeals were amended by the Second Revenue Laws Amendment Act, 2001. These amendments came into operation on 1 April 2003 by proclamation in the Gazette.
The enabling provisions prescribing the procedures to be observed in lodging an objection and noting an appeal and the procedures to be followed in the Tax Court are contained in the Income Tax Act. In this regard, section 107A of the Income Tax Act enables the Minister of Finance to make rules after consultation with the Minister of Justice and Constitutional Development to prescribe these issues.
The rules issued in terms of section 107A apply with effect from 1 April 2003 in respect of all assessments issued, objections lodged or
appeals noted on or after that date. However, in terms of transitional arrangements contained in Part C of the section 107A rules, ob- jections and appeals lodged before 1 April 2003 may in certain circumstances be dealt with in terms of the new rules. This will normally happen in circumstances where the taxpayer and SARS agree that certain of the new rules will apply from an agreed date onwards.
Alternative dispute resolution (section 107A rules)
The new rules introduced alternative dispute resolution procedures (“ADR”) and settlement regulations to allow for the resolution of tax disputes outside the litigation arena. This is a new procedure creating a structure with the necessary checks and balances within which disputes may be resolved or settled. In the past, SARS could settle disputes, but without such specific structures. Such settlements may continue to happen outside the ADR structure. The ADR process will be less formal and expensive than the court process and will allow for disputes to be resolved within a much shorter period. It was introduced in pursuance of enhancing SARS’ client services by introducing a more cost effective remedy (ADR) for resolving tax disputes.
Rule 7 of the new rules issued in terms of section 107A of the Income Tax Act, makes provision for alternative dispute resolution (ADR) procedures after an appeal by a taxpayer is noted.
The conduct and hearing of appeals before the Tax Board and Tax Court (section 107A rules)
Under the new rules, the Special Board and the Special Court have been retained, but are now known as the Tax Board and the Tax Court respectively. Previously, the procedures followed in the Special Court were to a large extent based on those followed in the Magistrates’ Court. There were, however, a number of shortcomings in the provisions, especially with regard to discovery of docu- ments and properly defining the issues in dispute before a case is heard. The new rules provide that the High Court rules will mainly apply in the Tax Court.
The provisions in the various tax laws relating to the hearing of an appeal before the Special Board and the Special Court were similarly amended by the Second Revenue Laws Amendment Act, 2001, which amendments came into operation on 1 April 2003.
Rules 8 – 29 of Part A, Part B and Part C of the rules issued in terms of section 107A of the Income Tax Act, apply to the hearing of appeals by the Tax Board or the Tax Court.
The new provisions inter alia deal with:
The manner in which an appeal is placed before and heard by the Tax Board;
Where an appeal is to be heard by the Tax Court, certain pre-trial proceedings including the identification of the issues in dispute, discovery of documents, pre-trial conferences, the subpoena of witnesses and experts and the preparation of the dossier and documentary evidence;
The conduct of the appeal before the Tax Court, including the placement of the case, postponement, withdrawal, the court procedure, taxation of costs and the procurement of the record of the hearing before the Tax Court in the event of an intended appeal to the High Court or the Supreme Court of Appeal.
Settlement circumstances (sections 88A-H provisions)
By law SARS is not entitled to forego any tax which a taxpayer is legally liable to pay. Sections 88A-H of the Income Tax Act, however, prescribe the circumstances under which SARS may settle a dispute between SARS and a taxpayer, where the settlement would be to the best advantage of the state. Initially, the settlement circumstances were issued in terms of regulations under section 107B of the Income Tax Act, and applied with effect from 1 April 2003. These regulations have now been repealed and the settlement of dispute provisions have now been incorporated into Part IIIA of Chapter III of the Income Tax Act in the form of sections 88A-H, which new sections apply to all settlements on or after 22 December 2003.
These settlement circumstances were inserted in the Income Tax Act in line with the approach that more emphasis should be placed on resolving disputes otherwise than by way of litigation. In this regard, more flexibility was required to enable SARS to settle a matter. It must be emphasised that the basic rule still remains that SARS must enforce all legislation administered by SARS and is obliged to assess and collect all amounts due to the State. There are, however, certain circumstances which justify that the basic rule be tempered for purposes of good management of the tax system and where it would be to the best advantage of the State. This is an internationally recognised principle.
The purpose of sections 88A-H is not to prescribe the process for settlement. It is an enabling provision which enables SARS to settle
a dispute which is to the benefit of the State, provided the matter is appropriate for settlement having regard to the prescribed circum- stances. A dispute may be settled at any time, and is not limited for use only in the ADR process.
During ADR in terms of rule 7 of the section 107A rules, the parties may settle a tax dispute in terms of the settlement circumstances where they were unable to reach agreement on the interpretation and application of the relevant tax law.
For purposes of the settlement of a tax dispute, the Commissioner personally or any person specifically designated by the Commis- sioner for this purpose, must be of the opinion that the matter is appropriate for settlement having regard to the settlement circum- stances issued in terms of sections 88A-H.
Application to other taxes
Various other tax Acts administered by the Commissioner were also amended to provide that the objection and appeal procedures and rules relating thereto and the settlement circumstances as contained in the Income Tax Act, will also apply to any dispute in terms of those Acts.
These Acts include the
Transfer Duty Act, 1949 (Act No. 40 of 1949);
Estate Duty Act, 1955 (Act No 45 of 1955);
Stamp Duties Act, 1968 (Act No. 77 of 1968);
Value-Added Tax Act, 1991 (Act No. 89 of 1991);
Tax on Retirement Funds Act (Act 38 of 1996);
Uncertificated Securities Tax Act, 1998 (Act No. 31 of 1998);
Skills Development Levies Act (Act No 9 of 1999);
Unemployment Insurance Contributions Act (Act No. 4 of 2002).
The Customs and Excise Act, 1964, contains its own provisions relating to dispute resolution.
Tax Disputes
When and how does a tax dispute arise?
An assessment is defined in the Income Tax Act and is served on a taxpayer in a manner regulated in section 106(2) of the Income Tax Act. Any taxpayer who is aggrieved by an assessment in which that taxpayer has an interest may object to that assessment. A taxpayer may also object to any decision of SARS which is in terms of the relevant Act, subject to objection and appeal.
Once a taxpayer has objected to an assessment or a decision subject to objection and appeal, a dispute will exist between the tax- payer and SARS. The dispute will arise in the sense that there may be a disagreement on the interpretation of either the relevant facts involved or the law applicable thereto, or of both the facts and the law.
When may a taxpayer lodge a complaint about a tax dispute at the SARS Service Monitoring Office (SSMO)?
Any taxpayer who is dissatisfied with the manner in which his or her objection and/or appeal are being dealt with may lodge a com- plaint with the SSMO. Although the SSMO will not be able to deal with the substance or merits of the objection, it may investigate the manner in which it is being dealt with. The SSMO therefore facilitates the resolution of complaints of a procedural nature.
A taxpayer, who is dissatisfied with the amount of an assessment and/or the basis of any inclusion and/or exclusion of an amount, may lodge an objection against the assessment with the relevant SARS Branch Office.
More details about the SSMO are available on the SARS website at http://www.sars.gov.za./smo
Reasons for an assessment
When and how do I request reasons for an assessment?
In terms of rule 3, any taxpayer who is aggrieved by any assessment may request SARS to furnish reasons for the assessment. This must be done in writing and delivered to the SARS office where the assessment was issued, within 30 days after the date of the assessment. A taxpayer may request SARS to extend the 30 days period within which reasons may be requested. If SARS is satisfied that reason- able grounds exist for the delay in complying with the 30 day period, the first 30 day period may be extended with a maximum of another 30 day period. If SARS refuses to extend the period as requested, the taxpayer may apply by application on notice to the Tax Court for an order granting such extension.
Where SARS is of the opinion that adequate reasons have already been provided, SARS must, within 30 days after receipt of the notice wherein reasons were requested, notify the taxpayer thereof in writing. The notice must refer to the documents wherein such adequate reasons were provided.
There is no prescribed form that must be used for requesting reasons. The written notice must, however, specify the address at which the tax- payer will accept notice and delivery of such reasons and all documents in terms of the proceedings contemplated in rule 26 (see par 11).
When will reasons be adequate?
The concept “adequate reasons” is not defined in the Income Tax Act or other tax act.
The Supreme Court of Appeal has stated that “adequate reasons” requires the decision-maker to explain his decision in a way which will enable a person aggrieved to say, in effect: “Even though I may not agree with it, I now understand why the decision went against me”. The aggrieved person, ideally, should be in a position to decide whether that decision is worth challenging.
What are the remedies where inadequate reasons are given?
Where a taxpayer is of the view that adequate reasons for the assessment were not provided and are able to demonstrate this on good cause shown, the taxpayer may apply in terms of rule 26 to the Tax Court for an order:
Remitting the matter for reconsideration by SARS;
With or without directions to SARS to provide such reasons as in the opinion of the Court are adequate.
The application on notice procedure is explained below in par 14.
May reasons also be requested in terms of the Promotion of Administrative Justice Act?
A taxpayer may choose whether to request reasons in terms of rule 3 of the section 107A rules, or to request reasons for the assess- ment in terms of section 5 of the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000 – the (“AJA”)) where the taxpayer is of the view that the assessment materially and adversely affected his or her rights.
However, where a taxpayer has already been provided with adequate reasons, whether in terms of rule 3, the AJA or otherwise, a taxpayer will not be able to request reasons in respect of the same assessment or decision again, for the simple reason that the taxpayer has already been furnished with adequate reasons.
In respect of an assessment, the main difference between the two mechanisms for requesting reasons is that where a taxpayer requests reasons in terms of the AJA, and not in terms of rule 3, the taxpayer must still lodge an objection within 30 days of the date of the assess- ment unless SARS extends the period.
In contrast, where reasons are requested in terms of rule 3 of the section 107A rules, the taxpayer need only object to the assessment within 30 days after receipt of the reasons, unless the taxpayer is informed by SARS that adequate reasons have already been provided.
Objections
When may I object to an assessment?
A taxpayer who is aggrieved by an assessment, or by any decision of SARS which is in terms of the relevant Act subject to objection and appeal (see for example section 3(4) of the Income Tax Act), may object to the assessment or decision in terms of rule 4. This must be done within 30 days after the date of the assessment.
The ‘date of assessment’ in the Income Tax Act is defined as “...the date specified in the notice of such assessment as the due date or, where a due date is not so specified, the date of such notice”.
The notice of assessment (IT34) normally has 3 dates on it, i.e.
Date of processing the assessment
Due date (Afrikaans “Verval Datum”)
Second Date (Afrikaans “Tweede Datum”)
The date for purposes of calculating the 30 day period within which a taxpayer must object is, according to Note 12 to the IT34, the “due date” and not the “second date”. An objection must therefore be filed within 30 business days of the “due date”. This will not coincide with the second date - the second date is normally 30 calendar days after the due date.
The “second date” is generally the date by which the tax must be paid to avoid the levying of interest. If outstanding tax is not paid by the second date, interest will run from the due date.
In the above example, the objection must be filed within 30 days after 2003-11-03 (“due date”) i.e. 2003-12-15. The tax due must be paid before/on 2003-11-28 (‘’the second date”).
For example:
Date:
2003-09-29
Due date:
2003-11-03
Second Date:
2003-11-28
Please note that where an assessment has a “date of assessment” on the assessment form, as well as a due date and a second date, the 30 day period must still be calculated with reference to the due date, in accordance with the definition of “date of assessment” in the Income Tax Act, The “date of the notice” or “date of assessment” only applies where there is no “due date” on the notice.
Where a taxpayer did not request reasons in terms of rule 3, the objection (in the prescribed form ADR1) must be delivered to the SARS address specified in the assessment for this purpose, within the prescribed 30 day period.
Where a taxpayer requested reasons in terms of rule 3, the objection must be delivered to the SARS address specified in the assess- ment for this purpose, within 30 days after the date of :-
the notice by SARS that adequate reasons have been provided, or
the date that reasons were furnished by SARS, as the case may be.
The 30 day period within which an objection must be lodged, may be extended by SARS for a further 30 days in terms of section 81(2) of the Income Tax Act where SARS is satisfied that reasonable grounds exist for the delay in lodging the objection. In terms of the proviso to section 81(2), the period for the lodging of an objection may not be extended -
beyond 60 days of the date of assessment, notice by SARS, or date that reasons were furnished – as the case may be - unless exceptional circumstances exist which gave rise to the delay;
where more than 3 years have lapsed from the date of the assessment; or
where the grounds for the objection are based wholly or mainly on any change in practice generally prevailing, that was applicable on the date of the assessment in dispute.
The objection process and timeframes can be illustrated as follows:
Have you lodged an objection against the assessment within 30 days from the date of the assessment in the prescribed format?
No
Is your objection based wholly or mainly on any change in “practice generally prevailing” that applied on the date of the assessment?
Yes
Yes
Your objection is in time and will be considered.
Your late objection may not be condoned nor may extension be granted. Your assessment is therefore final.
No
Have you lodged your objection within 60 days from the date of the assessment?
No Yes
Have you lodged your objection within 3 years from the date of the assessment?
Have you submitted reasonable grounds for not objecting within 30 days from the date of the assessment?
Yes
If the grounds for late sub- mission are acceptable, your late objection will be condoned and your objec- tion will be considered.
No Yes No
Your late objection may not be condoned nor may extension be granted.
Your assessment is there- fore final.
Do exceptional circum- stances exist for not submitting your objection within 60 days from the date of the assessment?
Your late objection may not be condoned nor may extension be granted. Your assess- ment is therefore final.
No Yes
Your late objection may not be condoned nor may extension be granted. Your assessment is therefore final.
If the circumstances are considered excep- tional, your late objection will be condoned and your objection will be considered.
Any decision by SARS not to condone a late objection is subject to objection and appeal in terms of section 81(3) of the Income Tax Act. For further guidance on this issue, see SARS Interpretation Note 15, attached as Annexure H.
An objection which, for example, contains no grounds for the objection or, if it is lodged late, offers no explanation for its late lodge- ment, will be deficient to the extent that it will in effect not be a valid objection.
How do I object to an assessment?
The objection must be in the prescribed form, the ADR 1. This form must be completed as comprehensively as possible, and must include detailed grounds on which the objection is founded with supporting documentation where necessary.
It must be signed by the taxpayer. Where the taxpayer is unable to personally sign the objection, the person signing on behalf of the taxpayer must state in an annexure to the objection:-
the reason why the taxpayer is unable to sign the objection;
that he or she has the necessary power of attorney to sign on behalf of the taxpayer; and
that the taxpayer is aware of the objection and agrees with the grounds thereof.
When will my objection be invalid?
In terms of rule 5, where an objection does not comply with any of the requirements listed below, SARS may inform the taxpayer by notice within 60 days that it is not accepted as a valid objection:
It must be in the prescribed form with the information requested in the form completed;
It must specify in detail the grounds upon which the objection is made;
It must specify an address where the taxpayer will accept notice and delivery of the SARS’ decision in respect of such objection; and
It must be signed by the taxpayer.
However, the taxpayer may within ten days of a notice by SARS that the objection is considered to be invalid, submit an amended objection. Where the amended objection complies with the requirements for a valid objection, SARS will treat it as such.
Where the taxpayer has failed to deliver the objection at the address specified in the assessment for this purpose, the document de- livered in terms of rule 4 will be deemed to be invalid.
The taxpayer may, where the taxpayer is able to demonstrate on good cause shown that the objection deemed to be invalid by SARS should be accepted as valid, make application on notice to the Tax Court, in terms of rule 26 (see par 14), for an order declaring that the objection must be accepted as valid.
Request for further information by SARS
Upon receipt of a valid objection, SARS must consider the objection and the grounds upon which it was made.
Where the taxpayer has not furnished all the information, documents or things required to decide on the objection, SARS will notify the taxpayer accordingly and request him or her in writing in terms of rule 5 to deliver the information or documents as specified in that notice. SARS must do this within 60 days after receipt of the objection, and the taxpayer in turn must deliver the requested information or documents within 60 days after the date of the notice by SARS requesting the information. It must be delivered at the place and the manner as may be specified by SARS.
A taxpayer may, within the 60 day period during which he or she must provide the information, request SARS to extend this 60 days period. The extension by SARS may not be more than 30 days. Where SARS is satisfied that the taxpayer has submitted reasonable grounds for the inability to deliver the requested information, documents or things, the extension may be granted. If SARS refuses to extend the period as requested, the taxpayer may make application on notice to the Tax Court in terms of rule 26 for an order granting such extension where the taxpayer is able to demonstrate on good cause shown why the extension should be granted (see par 13).
Where a taxpayer fails to provide information requested by SARS for purposes of considering the objection, SARS may apply to the Tax Court in terms of rule 26 for an order that the taxpayer complies with this request. If the Tax Court so orders and the taxpayer does not comply with this order, SARS may apply to the Tax Court for an order that the assessment, against which the taxpayer has objected, is confirmed. In such a case the assessment shall become final and conclusive.
What must SARS do with my objection?
SARS must after receipt of the objection, or the information requested in the manner described above, deal with the objection in any of the following ways:
Alter the assessment in terms of section 81(4) of the Income Tax Act;
Disallow the objection in terms of section 81(4) of the Income Tax Act;
Reduce the assessment in accordance with section 79A of the Income Tax Act; or
Withdraw the assessment in accordance with section 79B of the Income Tax Act.
SARS must notify the taxpayer of its decision in writing:
in the case where SARS requested further information, within 60 days after receipt of that information; or
in any other case, within 90 days after the date of receipt of the taxpayer’s objection.
However, where SARS requires more time to deal with the objection due to exceptional circumstances, the complexity of the matter or the principle or the amount involved, SARS may extend the above 60 day period by another 60 days, or the above 90 days period by another 90 days. SARS must, before expiry of the initial 60 or 90 periods, whichever is applicable, inform the taxpayer accordingly.
What happens if SARS does not deal with my objection within the prescribed time period?
In terms of rule 26, the taxpayer may make application on notice to the Tax Court (in the manner prescribed in Part B of the rules) for an order that SARS must deal with the objection within such time as the Court deems appropriate. Where SARS fails to comply with such an order made, the Court may, upon application on notice by taxpayer, make an order that the objection be allowed and that SARS must alter the assessment in accordance with the objection. The Tax Court may also make any other order as the Court deems appropriate, including a cost order.
What may I do if SARS disallows my objection or alters the assessment in a manner that does not satisfy me?
Any taxpayer entitled to object to an assessment and who is dissatisfied with the final decision of SARS in respect of the objection, may appeal against that decision.
A taxpayer who wishes to appeal must complete the prescribed form (ADR2) and deliver it to the SARS office that dealt with the objec- tion or the address stated by SARS for this purpose in the notice of disallowance.
The notice of appeal must comply with the following requirements:
It must be in the prescribed form ADR2 with the information requested in the form completed;
It must be signed by the taxpayer or his or her representative;
The taxpayer must indicate in respect of which of the grounds specified in his or her objection he or she is appealing;
It must be delivered within 30 days after the date of the notice informing him or her of the decision of SARS in respect of the objection.
The 30 day period within which an appeal must be noted (see rule 6(2)), may be extended by SARS where it is satisfied that reasonable grounds exist for the delay in lodging the objection. Any decision by SARS in this regard is subject to objection and appeal in terms of section 83(1A) of the Income Tax Act.
In the notice of appeal, the taxpayer may indicate that he or she wishes to make use of the ADR procedures contemplated in rule 7, should these procedures be available.
Do I need to pay the amount of tax in dispute?
The obligation to pay any assessment amount arises with the issue of the assessment.
In terms of the ‘pay now, argue later’ rule (the constitutionality of which was upheld by the Constitutional Court in the Metcash case), the obligation to pay the assessment amount is not suspended by any objection or appeal against the assessment, unless the tax-
payer requests the Commissioner to exercise his or her discretion to suspend payment pending the finalisation of any objection and/or appeal, and such request is granted.
It should also be borne in mind that the primary purpose of giving the taxpayer notice of the assessment is not for him or her to object or to appeal against the assessment, but to inform the taxpayer of his/her tax liability for purposes of the payment thereof.
The way the assessment system works, is that the taxpayer is assessed by SARS and then told what his or her outstanding tax li- ability or amount refundable is. The assessment includes a date by which payment must be effected. The taxpayer has an obligation to pay the assessment within the specified period. This period may be shorter than the standard 30 days where, for example, there is a danger that the taxpayer may dissipate or dispose of his/her assets to avoid his/her tax obligation.
Examples of circumstances where the Commissioner may, depending on the particular facts of each case, exercise his discretion to suspend payment of a disputed amount are:
Where payment of the whole amount at issue would cause grave and serious hardship which could not be reversed if the tax payer were to succeed in his appeal, and the circumstances of the case give rise to reasonable doubt;
Other relevant circumstances, for instance certainty that the amount at issue would be paid were the appeal to fail.
(See Media Release 27 of 2000).
If SARS, pursuant to a suspension request, refuses such request, its decision may be taken on review to the High Court. If the taxpayer does not pay within the period specified in his/her assessment and does not ask SARS to suspend payment, SARS may take collec- tion steps. If SARS grants a suspension of the payment of a disputed amount, interest will still continue to be levied in terms of section 89 of the Income Tax Act on a monthly basis as from the due date of the assessment.
In the event that a taxpayer succeeds in his or her appeal, the taxpayer must be refunded with interest. The interest is payable in terms of section 88 of the Income Tax Act and is calculated from the date proved to the satisfaction of SARS as the date upon which the disputed payment was received.
Refunds & reduced assessments
Must I always object to an assessment which I am dissatisfied with?
No. There is a difference between an assessment which is the subject of a substantive dispute and just an error in assessment.
Assessment
Substantive Dispute:
e.g. Entitlement to deduction disputed
Error in assessment:
Not disputed by SARS
Objection required i.t.o.
s 81 ITA / rule 4
No objection required
Reduced Assessment
s 102 Refund:
If TP success- ful with dispute
s 102 Refund:
Where over- payment by TP
When do I request a reduced assessment as opposed to lodging an objection?
A formal objection need not be filed if there are certain errors in the assessment as contemplated in section 79A of the Income Tax Act.
In terms of section 79A of the Income Tax Act, the Commissioner may, even if no objection has been lodged or appeal noted in terms of the Income Tax Act, reduce an assessment—
to rectify any processing error made in issuing that assessment (e.g. a loss was captured as a profit); or
where an amount was taken into account by the Commissioner which should not have been taken into account (e.g. taxpayer declared income as R10 000 instead of R100); or
where an amount which should have been taken into account was not so taken into account by the Commissioner (e.g. taxpayer did not claim admissible deductions such as medical expenses and retirement annuity fund contributions, etc).
In the case of (b) and (c) above, the relevant assessment must have been issued by SARS based on information provided in the taxpayer’s return.
The Commissioner may not reduce an assessment under section 79A in the following circumstances -
after the expiration of three years from the date of that assessment; or
if the amount was assessed in terms of an assessment accepted by the taxpayer and which was made in accordance with the practice generally prevailing at the date of that assessment.
The intention of the new section 79A in the Income Tax Act was essentially to enable SARS to alter an assessment to rectify process- ing errors and return completion errors. Section 79A enables SARS to reduce an assessment to rectify these errors even where no objection has been lodged against that assessment.
For purposes of an error contemplated in section 79A, a taxpayer need not file an objection. The procedure to obtain a reduced as- sessment would be that the taxpayer furnishes full details of such an error or claim to the Commissioner, preferably in writing, together with any necessary documentation or proof.
Before relying on section 79A, a taxpayer of course needs to be sure he or she is dealing with a processing or return completion error. If in actual fact he or she should have lodged a substantive objection (ADR1) he or she may be out of time as a result of first requesting a reduced assessment. Thus, if in doubt, file an objection by way of an ADR1. SARS will automatically deal with the ADR 1 in terms of section 79A if this is appropriate.
Section 79A cannot, for example, be invoked in respect of the imposition of additional tax (“penalties”) by SARS (for example additional tax imposed in terms of section 76). Additional tax is not income as defined in the Income Tax Act – it is a tax imposed in addition to the tax chargeable in respect of a taxpayer’s taxable income and is calculated with reference to such amount of tax.
When am I entitled to a refund?
A taxpayer would be entitled to a refund in terms of section 102(1) of the Income Tax Act pursuant to:
A successful appeal in terms of section 88.
A reduced assessment in terms of section 79A.
An objection to an assessment that has been conceded by SARS in terms of section 81(4).
An amount paid in respect of an assessment that exceeds the tax assessed (overpayment).
An amount paid that exceeds the amount or tax properly chargeable under the Income Tax Act such as Donations Tax and Secondary Tax on Companies.
A refund in terms of section 102(1) in the above circumstances must be distinguished from a refund in respect of the overpayment of PAYE and provisional tax provided for in par 28 of the Fourth Schedule to the Income Tax Act.
In the event that a taxpayer has objected against an assessment and is successful with his or her subsequent appeal, the taxpayer is entitled to a refund in terms of section 88 read with section 102(1) of the Income Tax Act, where he or she has paid the amount of tax in dispute.
Where an assessment has been reduced in terms of section 79A of the Income Tax Act, and there has been an overpayment of tax as a result of the preceding erroneous assessment, a taxpayer is entitled to a refund on terms of section 102(1).
Generally, a refund may be claimed where, in respect of any assessment, a taxpayer has paid more than the amount so assessed or, in any other case, the amount properly chargeable under the Income Tax Act (“the excess amount”).
However, a taxpayer cannot claim a refund in terms of section 102(1) of the Income Tax Act where the basis of such a claim is disputed by SARS – in such event the taxpayer must pursue his or her right to object and appeal.
A taxpayer will not be able to claim a refund in the following circumstances:
The “excess amount” was paid by the taxpayer in accordance with the practice generally prevailing at the date of the payment; or
The refund is claimed by the taxpayer after a period of three years after the end of that year of assessment, in the case where—
the amount constitutes an amount of employees’ tax deducted or withheld during any year of assessment from the remunera tion of the taxpayer;
that person’s income for that year of assessment consisted solely of remuneration as defined in the Fourth Schedule to the Income Tax Act; and
that person was not required under any provision of the Income Tax Act to furnish a return of income for that year of assess ment and did not render such a return during the period of three years since the end of that year of assessment; or
In any other case, after a period of three years from the date of the official receipt acknowledging such payment or, where more than one such payment was made, the date of the official receipt acknowledging the latest of such payments.
Where no objection is made to any assessment or where an objection has been allowed in full or withdrawn, the assessment or altered assessment, will be final and conclusive (section 81(5) of the Income Tax Act).
If a taxpayer fails to lodge and/or proceed with an appeal to the Tax Court after the rejection of an objection to an assessment, the assessment will similarly be final and conclusive. An application for a refund in terms of section 102(1) will therefore not be possible, as there was not “an overpayment of tax” as contemplated in section 102(1) as a result of such finality.
The Commissioner may set off against any amount of tax, additional tax, duty, levy, charge, interest or penalty which the taxpayer has failed to pay, any refund payable to the taxpayer in terms of section 102(1) of the Income Tax Act.
Alternative Dispute Resolution
What happens after I lodged an appeal?
The appeal may be referred to:
Alternative Dispute Resolution (“ADR”) at either the SARS Branch Office or SARS Head Office level;
The Tax Board (administered at SARS Branch Office level); and/or
The Tax Court (administered at SARS Head Office level).
What is Alternative Dispute Resolution (“ADR”) and how does it work?
The new rules introduce alternative dispute resolution procedures (“ADR”) to allow for the resolution of tax disputes outside the liti- gation arena. This is a new procedure creating a structure with the necessary checks and balances within which disputes may be resolved or settled.
During ADR, a facilitator will facilitate the discussions between the taxpayer and SARS. The parties may first try to reach an agree- ment whereby either SARS or the taxpayer accepts, either in whole or in part, the other party’s interpretation of the facts or the law applicable to those facts or both. Where SARS and the taxpayer are unable to reach such an agreement, and the Commissioner or any person designated by the Commissioner under the settlement provisions, is of the opinion that the circumstances of the matter comply with the requirements contemplated in those regulations, the parties may attempt to settle the matter in accordance with those regulations within the ADR process.
Rule 7 of the new rules issued in terms of section 107A of the Income Tax Act, makes provision for ADR after an appeal by a taxpayer is noted. The ADR process is summarised below.
Access to ADR
ADR can be initiated by either the taxpayer or SARS. Where the taxpayer requests ADR in his or her notice of appeal, SARS must inform the taxpayer by notice within 20 days of receipt of the notice of appeal whether it is of the opinion that the matter is appropriate for ADR and may be resolved by way of the ADR procedures.
Terms and agreement on ADR
The terms governing the alternative dispute resolution proceedings are set out on the reverse side of the prescribed ADR2 notice of appeal form. ADR will only take place if the taxpayer accepts these terms. This acceptance is effected when the taxpayer indicates on the ADR2 form that he or she wishes to make use of the ADR procedures contemplated in rule 7, should these procedures be available.
Period of dispute resolution
The ADR process must be concluded within 90 days, or such further period as SARS may agree to.
The period within which the ADR proceedings is conducted commences 20 days after the date of receipt by SARS of the notice of appeal, and ends on the date of termination of the proceedings in the manner provided for in the terms governing the ADR procedures. This ADR period interrupts the periods applicable for purposes of the procedures contemplated in rules 8 to 29. Rule 8 deals with the hearing of the tax appeal by the Tax Board and rules 9 – 29 with the hearing of the tax appeal by the Tax Court (see par 10).
The facilitator
SARS will appoint a facilitator who will, in the normal course, be an appropriately qualified officer of SARS and will be bound by a Code of Conduct. The facilitator’s objective is to seek a fair, equitable and legal resolution of the dispute between the taxpayer and SARS. At the conclusion of the ADR process the facilitator must record the terms of any agreement or settlement. If no agreement or settle- ment is reached, that must also be recorded.
The facilitator has the authority to summarily terminate the ADR process without prior notice if, for example:
any party fails to attend the ADR meeting or to carry out a request by the facilitator;
where the facilitator is of the opinion that the dispute cannot be resolved; or
for any other appropriate reason.
Proceedings
The ADR proceedings will be conducted in accordance with the terms set out on the ADR2 form. The taxpayer must be personally present during the proceedings. The facilitator, in exceptional circumstances, may allow the taxpayer or his or her representative tax- payer to be represented in their absence by a representative of their choice.
Reservation of Rights
The ADR proceedings will be without prejudice. Essentially, this means that the ADR proceedings are not one of record, and any representation made or document tendered in the course of the proceedings may not (barring certain exceptions) be tendered in any subsequent proceedings as evidence by any other party.
Should SARS or the taxpayer not be amenable to the proposed settlement or agreement, the matter may still proceed to the Tax Board or Tax Court.
Agreement or Settlement: Issue of assessment to give effect
During ADR, as explained above, the parties must first try to reach an agreement on the interpretation and application of the relevant tax law. If they fail to reach agreement to resolve the matter in terms of the ordinary provisions of the Act, they may attempt to settle the matter under the settlement provisions.
Therefore, subject to compliance with SARS’ policies and internal corporate governance requirements in this regard, the outcome of successful ADR may be either -
Agreement on a basis to resolve in terms of the ordinary provisions; or a
Settlement in terms of the settlement provisions which will also be formalised by way of a settlement agreement.
Where an agreement or a settlement is concluded, SARS must issue an assessment to give effect to that agreement or settlement, as the case may be, within a period of 60 days after the date of the conclusion thereof.
Settlements
When and under what circumstances may a tax dispute be “settled”?
The purpose of sections 88A-H is not to prescribe the process for settlement. It is an enabling provision which enables SARS to settle a dispute which is to the benefit of the State, if the matter is appropriate for settlement having regard to the circumstances of the mat- ter. A dispute may be settled at any time, and the settlement provisions are not limited for use only during the ADR process.
Alternative Dispute Resolution (“ADR”) in terms of rule 7 of the section 107A rules, on the other hand, is a process to resolve disputes during which the settlement provisions may be applied in an attempt to settle the matter. These settlement provisions may only be applied if the circumstances of the matter comply with these regulations.
The settlement provisions therefore provide guidelines as to the circumstances when it would be appropriate and when it would be inappropriate to settle.
Circumstances under which it will be inappropriate to settle
The settlement provisions provide guidelines as to the circumstances whereunder it will be inappropriate to settle a matter, for exam- pleæ
if in the opinion of SARS, the action on the part of the taxpayer which relates to the dispute, constitutes tax evasion or fraud (with a let out that such matters may be settled where one of the circumstances under which it would be appropriate to settle exists);
the settlement would be contrary to the law or a clearly established practice of SARS on the matter, and no exceptional circum stances exist to justify a departure from the law or practice;
it is in the public interest to have judicial clarification of the issue and the case is suitable for this purpose;
the pursuit of the matter through the courts will significantly promote compliance and the case is suitable for this purpose; or
the taxpayer has not complied with the provisions of any Act administered by SARS and SARS is of the opinion that the non- compliance is of a serious nature.
Circumstances under which it will be appropriate to settle
The settlement provisions provide that where it will be to the best advantage of the state, a matter may be settled in whole or in part, on a basis that is fair and equitable to both the taxpayer and SARS.
In settling a matter, SARS must have regard to a number of factors, including
whether that settlement would be in the interest of good management of the tax system, overall fairness and the best use of SARS’ resources;
the cost of litigation in comparison to the possible benefits with reference to:
1 the prospects of success in a court;
the prospects of the collection of the amounts due; and
the costs associated with collection.
whether there are any—
complex factual or quantum issues in contention; or
evidentiary difficulties,
which are sufficient to make the case problematic in outcome or unsuitable for resolution through the alternative dispute resolution procedures or the courts;
a situation where a participant or a group of participants in a tax avoidance arrangement has accepted SARS’ position in the dispute, in which case the settlement may be negotiated in an appropriate manner required to unwind existing structures and arrangements; or
whether the settlement of the dispute will promote compliance by the taxpayer or a group of taxpayers or a section of the public in a cost-effective way.
What are the reporting requirements for settlements?
Sections 88A-H also provide for certain reporting requirements in terms of which SARS must report on an annual basis to the Minister of Finance and the Auditor-General on settlements reached.
This report must be in a format which does not disclose the identity of the taxpayer and contain details of the number of disputes settled or part settled, the amount of revenue forgone and the estimated amount of savings in costs of litigation, which must be re- flected in respect of main classes of taxpayers.
Appeal to the Tax Board
What is the Tax Board?
The Tax Board is established in terms of the Income Tax Act and consists of an advocate or attorney as chairperson. Such advocate or attorney is appointed to a panel of suitable advocates or attorneys by the Minister of Finance in consultation with the Judge-Presi- dent of the relevant Provincial Division. The appointment of such advocates and attorneys are for a term of 5 years but the person’s appointment may be terminated by the Minister where warranted.
If the Chairperson, the Commissioner or the taxpayer considers it necessary, an accountant or a representative of the commercial community may co-chair the Tax Board.
The Commissioner determines the places for the hearing of appeals by the Tax Board and an appeal will be heard by the Board situ- ated closest to the taxpayer’s residence, unless the taxpayer and SARS agrees that the appeal be heard at another place.
The Tax Board is administered by a clerk of the board, who is a SARS officer at the SARS Branch Office responsible for the admin- istration of the Tax Board in that area.
When does the Tax Board deal with my appeal?
If ADR is not pursued or is unsuccessful the taxpayer’s appeal will continue to be dealt with in accordance with the normal appeal procedure.
The appeal will first be heard by the Tax Board where:
The amount of tax (i.e. excluding interest and penalties) involved does not exceed a fixed amount (R200 000);
The Commissioner and the appellant agree thereto; or
No objection to the jurisdiction of the Board to hear the appeal is made at or before the commencement of the hearing of the appeal.
Where, in view of the grounds of the dispute or legal principles involved, the Commissioner or the Chairperson is of the opinion that the appeal should rather be heard by the Tax Court, the matter will referred to SARS Head Office (Law Administration: Litigation) for this purpose. The hearing before the Tax Court will then start afresh.
In terms of rule 8, the appeal must be placed before the Tax Board within 40 days after:
The ADR process was terminated, or
Where there was no ADR, after receipt of the notice of appeal by SARS (ADR2).
A taxpayer will be informed by the clerk of the Board of the time and place of the hearing at least 21 days before the hearing of the appeal by the Tax Board.
Who convenes the Tax Board?
The clerk acts as convenor of the Board, and will inter alia prepare and furnish, within 30 days before the date of hearing of the appeal, the members of the Board and the taxpayer with a bundle or ‘dossier’ consisting of:
The assessment against which the appeal has been lodged;
The notice of objection and appeal;
The relevant return of income;
Any correspondence between SARS and the taxpayer; and
Any other relevant documents.
What happens before the Board?
The procedure before the Tax Board is generally inexpensive and informal. The taxpayer, in the case of a natural person who has the capacity to act, may appear in person or in any other case, be represented by his representative taxpayer. The taxpayer or his representative taxpayer may be represented by a legal or other representative only with the permission of the Chairperson. SARS will normally be represented by an officer from the SARS Branch Office concerned. In the normal course, strict compliance with the rules of evidence is not required. Both the taxpayer and SARS may submit documents etc. as evidence.
The Chairperson will hear the case and make a ruling, which decision must be given within 30 days after the hearing of the case. The clerk must furnish the Commissioner and the taxpayer with a copy of the Board’s decision within ten days of the receipt of the decision from the chairperson.
What if the outcome of the appeal before the Tax Board is dissatisfactory?
If the taxpayer or SARS does not accept the ruling it may request that the appeal be referred to the Tax Court in terms of section 83A(13) of the Income Tax Act:
If the taxpayer wishes to pursue the appeal to the Tax Court, he or she must notify the clerk of the Tax Board within 30 days of receiving the decision of the Chairperson.
Where the Commissioner is not satisfied with the decision of the Board, he or she may decide to refer the appeal to the Tax Court and must notify the taxpayer thereof within 30 days.
The appeal will then be referred to SARS Head Office (Law Administration: Litigation) and will thereafter be dealt with in accordance with rules 9 – 29 of Part A of the section 107A rules (see par 10).
The appeal will be heard afresh by the Tax Court. Where the decision of the Tax Board is substantially confirmed, however, the Tax Court may order costs against the party who did not accept the outcome of the Tax Board’s decision.
Appeal to the Tax Court
When does the Tax Court deal with my appeal?
If ADR is not pursued or is unsuccessful, the taxpayer may pursue his or her appeal to the Tax Court.
The Tax Court will hear all cases where the tax involved exceeds the amount of R200 000 and cases where important tax principles are involved. This is a formal court process and the taxpayer can represent him or herself or can be represented in court by a legal representative, or any other person with the necessary power of attorney signed by the taxpayer concerned.
The Tax Court will be presided over by the President (a judge or acting judge of the High Court) together with two assessors to assist the judge (an accounting member and a person from the business community). In some instances a valuer or mining engineer may also assist the judge.
The Judge President of the Provincial Division of the High Court having jurisdiction in the area where the Tax Court to hear the appeal is situated, may, where:
the amount which is the subject of the dispute exceeds R50 million; or
the Commissioner and the appellant agree thereto and have jointly applied to that Judge President,
direct that the tax court hearing that appeal shall consist of three judges or acting judges of the High Court (section 83(4B) of the Income Tax Act).
What happens before my appeal is enrolled in the Tax Court?
The appeal goes through several pre-hearing stages, which are set out in rules 9 – 29 of the section 107A rules.
Stage 1: Limitation of issues
Limitation of issues in dispute Meeting (rule 9)
Where the parties agree, a meeting may be arranged by SARS with the taxpayer in an attempt to limit the issues in dispute for pur- poses of the anticipated litigation.
This meeting must be arranged within 90 days after:
The notice of appeal,
The date of termination of ADR, or
The date of the notice wherein the Tax Board decision was not accepted, where applicable.
SARS must prepare and deliver to the taxpayer the minutes of the meeting within 15 days after the meeting.
Statement of grounds of assessment (rule 10)
This rule obliges SARS to deliver to the taxpayer a statement of the grounds of assessment within 60 days of the date of the limitation of issues meeting. Where such meeting was not held, the statement must be delivered within 90 days after the date of termination of ADR or the notice of appeal.
The statement must set out -
a clear and concise statement of the grounds upon which the objection was dismissed, and
the material facts and legal grounds upon which SARS relies for such dismissal.
Statement of grounds of appeal (rule 11)
This rule obliges the taxpayer (appellant) within 60 days after delivery of the statement of the grounds of assessment, to deliver to SARS a statement of the grounds of appeal.
The statement must set out -
a clear and concise statement of the grounds upon which the appellant appeals;
the material facts and legal grounds upon which the appellant relies for such appeal, and
which of the facts and legal grounds alleged in the statement of the grounds of assessment are admitted and which of those facts and legal grounds are denied.
Issues in appeal (rule 12)
This rule provides that the issues in any appeal to the Tax Court will be those defined in the statement of the grounds of assessment read with the statement of the grounds of appeal.
Amendments of statement of grounds of assessment or statement of grounds of appeal (rule 13)
This rule provides that SARS and the appellant may agree in writing to the amendment of the statement of grounds of assessment or grounds of appeal. In case of no agreement the Tax Court may on application on written notice grant leave to amend such statements, subject to such orders for postponement and costs as the Tax Court deems appropriate.
Stage 2: Discovery
Discovery of documents, information or things (rule 14)
Discovery relates to the preparation for a trial and the procuring of evidence for purposes of such trial. In civil proceedings discovery is normally utilised after the close of pleadings, when discovery may be sought of documents or information relevant to the crystallised issues. Discovery ensures that the trial takes place with fairness to each side, and with sufficient information being placed before the court to avoid surprises (i.e. “trial by ambush”) during the hearing of the appeal.
In the hearing of appeals before the Tax Court, “close of pleadings” would occur after receipt of the statement of grounds of appeal from the taxpayer in terms of rule 11. The crystallised issues in the appeal to the Tax Court will be those issues defined in the statement of the grounds of assessment read with the statement of the grounds of appeal.
Rule 14 provides for the discovery on request by either the appellant and/or SARS of documents or information relevant to the crys- tallised issues in the appeal, within 20 days after the delivery by the taxpayer of his or her statement of grounds of appeal in terms of rule 11.
Any party to whom a notice to discover has been delivered, must make discovery on oath of all documents or information relating to any matter in the appeal within 40 days after delivery by the other party of the discovery notice.
In such discovery affidavit he or she must specify separately documents or information:
in his or her possession or control, or that of his or her agent;
which were previously in his or her possession or control, or that of his or her agent, but which is no longer so in his or her possession or control or that of his or her agent; and
the documents, information or things in respect of which he or she has a valid objection to produce.
The production or inspection of the requested documents or information takes place at a venue and in a manner as agreed between the parties.
Any document or information not disclosed may not be used for any purpose at the appeal by the party who is obliged but failed to disclose it, unless the Tax Court grants leave to do so. The other party, however, may use such document or information.
Stage 3: Pre-trial Conference
Rule 16 provides for a pre-trial conference that must be held within 60 days after the delivery of the last discovery notices in terms of rule
14. Where there was no discovery, it must be held within 60 days after receipt by SARS of the taxpayer’s statement of grounds of appeal in terms of rule 11.
During this conference, held at an agreed venue, SARS and the taxpayer must attempt to reach consensus on the evidentiary issues listed in rule 16. After the conclusion of the pre-trial conference, SARS must deliver a minute of the conference within ten days of the conclusion of the pre-trial. Where the taxpayer, however, does not agree with the content of the minute, he or she must deliver his or her own minute to SARS within ten days of the date of the delivery of the minute by SARS.
Stage 4: Enrolment
Date of hearing (rule 17)
After delivery of the pre-trial conference minute in terms of rule 16, the Commissioner must arrange a date for the hearing of the appeal and inform the Registrar accordingly. The Registrar of the Tax Court must deliver to the taxpayer and to the Commissioner a written notice of the time and place appointed for the hearing of the appeal at least 40 days before the hearing of the appeal, or such shortened period as may be agreed between the parties.
Places at which Court sits (rule 19)
The Judge President or President of the Division of the High Court by arrangement with the Registrar determines the place and the times of the sittings of the Tax Court. Every appeal must be heard and determined by the Tax Court in the area which is nearest to the residence or principal place of business of the appellant. SARS may, however, request the Judge President or President of the High Court having jurisdiction in any other area that the appeal be heard by a Tax Court in such other area.
Currently, the Tax Court sits in Pretoria, Johannesburg, Durban, Cape Town, Bloemfontein and Kimberley.
Withdrawal or concession of appeal (rule 23)
The appeal may, at any time before it has been set down for hearing, be withdrawn by the taxpayer or conceded by SARS. After set down, the party conceding or withdrawing the appeal may consent to pay costs, failing which the other party may apply to the Tax Court for an order for costs.
Postponement or removal of case from the roll (rule 24)
An appeal may be postponed or removed from the roll by agreement. If opposed, an application by a party to postpone or remove a case from the roll may be made to the Tax Court.
Stage 5: Subpoena of witnesses and documentary preparation
Subpoenas (rule 21)
In terms of this rule, subpoenas may be issued by the Registrar at the request of either party or by the direction of the Tax Court. The subpoena may require the person summoned to produce any book, document, information or thing which may be in the person’s possession or under his or her control.
Where a person has been subpoenaed and fails without reasonable cause to attend or to give evidence or to produce the required book, document, information or thing, or fails to remain in attendance throughout the proceedings, the President of the court may, in terms of section 84 of the Income Tax Act:
impose upon the witness person a fine or in default of payment imprisonment for a period not exceeding three months; or
issue a warrant for the apprehension of that person.
Notice of expert witness (rule 15)
This rule provides for prior notice of an expert witness to be called by any party not less than 30 days before the hearing of the ap- peal. A summary of such expert’s opinion and his or her reasons must be delivered not less than 20 days before the hearing of the appeal.
If the party wishing to call an expert witness does not comply with the above, such witness may not testify at the hearing unless the Tax Court allows it.
Witness fees (rule 28)
A witness in any proceedings in the Tax Court is entitled to be paid in accordance with the tariff of allowances prescribed by the Min- ister of Justice and Constitutional Development and published in terms of section 42 of the Supreme Court Act, 1959 (Act No. 59 of 1959), by notice in the Gazette.
Dossier (rule 18)
This rule prescribes the documents to be included in the dossier and the dates of delivery thereof (30 days before the date of the hear- ing) to the taxpayer and the Registrar.
The dossier must include, where applicable:
all returns by the appellant relevant to the year of assessment in issue;
all assessments relevant to the issues in appeal;
the notice requesting the Commissioner to furnish reasons for the assessment;
the Commissioner’s notice (that reasons have been previously provided) or the reasons;
the objection to the assessment;
the notice of appeal;
the minutes of the meeting to limit the issues in dispute;
the statement of the grounds of assessment;
the statement of grounds of appeal contemplated; and
any order by the Court in terms of rule 13 (amendment of statements) or 26 or both.
Pagination of documents (rule 25)
All documents filed with the Tax Court must be paginated and arranged in chronological order as far as possible.
What happens during the hearing of my appeal before the Tax Court?
It should be borne in mind that an appeal under the Income Tax Act is not the equivalent of an appeal in the strict sense of the word. It is not the same as an appeal which is heard in the High Court where a judgment by a lower court is taken on ‘appeal’. An appeal of the latter kind is limited to the evidence which had been before the court of first instance, and which, on the facts at any rate, is therefore limited to the four corners of the record of proceedings in the court of first instance. What comes before the Tax Court is not such an appeal. Despite in the Income Tax Act being called an appeal, it is in fact a rehearing, which means that both the taxpayer and the Commissioner are fully entitled to place before it, by way of evidence, any further information that they might feel is relevant to the issues in dispute.
The sittings of the Tax Court may not be public, and the court may at any time on the application of the taxpayer exclude all or any persons whomsoever whose attendance is not necessary for the hearing (section 83(11) of the Income Tax Act).
In most tax appeals before the Tax Court, the burden of proof would be on the taxpayer. Essentially, the main justification for placing the onus of proof on the taxpayer in tax appeals, is that matters concerning the tax position taken by a taxpayer are normally primarily within the knowledge and power of the taxpayer and originate with him or her. In several instances, however, it has been held in case law that SARS bears a rebuttal onus. This essentially means evidence to prove that the evidence submitted on behalf of the taxpayer is wrong.
In terms of section 82 of the Income Tax Act, the decision of SARS will not be reversed or altered by the Tax Court unless it is shown by the taxpayer that the decision is wrong. What is required from the taxpayer to discharge this onus, is firm evidence that satisfies a court, upon a balance of probability, that the taxpayer is entitled to the exemption, non-liability, deduction, rebate, allowance or set-off, disregarding or exclusion of any amount claimed by the taxpayer in his or her appeal.
In terms of section 37 of the Value Added Tax Act, 1991 (Act No. 89 of 1991), the burden of proof that any supply or importation is:
exempt from or not liable to any tax chargeable; or
is subject to tax at the rate of zero per cent; or
that any value upon which tax is chargeable or any amount of tax chargeable is subject to any deduction or set-off; or
that any amount should be deducted as input tax,
will be upon the person claiming such exemption, non-liability, rate of zero per cent, deduction or set-off.
In terms of rule 22, if the taxpayer or the Commissioner, or anyone authorised to appear on their behalf, does not appear before the Court at the time and place appointed for the hearing of an appeal, the Court may, upon the request of the party who is present, finalise the appeal in any of the following manners (as contemplated in section 83(13) of the Income Tax Act):
in the case of any assessment under appeal, order such assessment to be amended, reduced or confirmed, or may if it thinks fit refer the assessment back to the Commissioner for further investigation and assessment;
in the case of any appeal against the amount of the additional tax imposed under section 76(1) of the Income Tax Act, reduce, confirm or increase the amount of the additional charge so imposed; or
in the case of any other decision of the Commissioner which is subject to appeal, confirm or amend such decision.
Where, however any question of law arises, the Court may call upon the party present for argument in support of the assessment (Commissioner) or objection (taxpayer) before giving its decision.
In short the taxpayer on the date of hearing will commence the proceedings by presenting his case to the Tax Court by way of leading evidence or by tendering a statement of facts on which the taxpayer relies. Where oral testimony is tendered by the taxpayer the rep- resentative of the Commissioner will be allowed the opportunity to cross examine such witnesses. At the conclusion of the taxpayer’s case, the Commissioner’s representative will likewise be given the opportunity to present the case for the Commissioner and the tax- payer will be afforded the opportunity to cross examine any witnesses who testifies on behalf of the Commissioner.
Both parties will, after all the evidence has been heard by the Tax Court, be afforded an opportunity to present oral argument. There- after the Court will decide on the issues in dispute or reserve judgment until a later date to enable it to consider all the evidence and arguments presented to court.
The President of the Tax Court may indicate which judgments ought to be published for general information. However, it may only be
published in a form that does not reveal the identity of the taxpayer (section 83(19) of the Income Tax Act).
Save as is otherwise provided in rules 9 - 29, the rules issued in terms of section 43 of the Supreme Court Act, 1959 (Act No. 59 of 1959), will apply in respect of the general practice and procedure of the Tax Court in so far as such rules are applicable (rule 20).
When may a Tax Court make a costs order?
The Tax Court may grant an order for costs in favour of any aggrieved party, where such party applies therefore, where:
the claim of the Commissioner is held to be unreasonable;
the grounds of appeal of the appellant are held to be frivolous;
the decision of the tax board contemplated in section 83A is substantially confirmed;
the hearing of the appeal is postponed at the request of one of the parties; or
the appeal has been withdrawn or conceded by one of the parties after a date of hearing has been allocated by the Registrar. (See section 83(17) of the Income Tax Act).
Such costs must be determined in accordance with the fees prescribed by the rules of the High Court. The Registrar may either per- form the functions and duties of a taxing master or appoint any person to act as taxing master (rule 27).
`
What happens after the hearing of my appeal before the Tax Court?
Where the Tax Court has reserved its judgment, the Registrar will inform all parties as to the time and place when the Court will deliver its judgment.
The Tax Court can in its judgment either:
confirm the assessment,
refer the matter back to SARS for further investigation; or
order SARS to set the assessment aside and to issue a new assessment in line with the judgment of the Court.
Any party who feels aggrieved by the judgment can thereafter appeal to a full bench of the High Court or the Supreme Court of Appeal against the judgment in terms of section 86A of the Income Tax Act.
How do I appeal against the judgment by the Tax Court?
In terms of section 86A of the Income Tax Act, the taxpayer or the Commissioner may appeal against any decision of the Tax Court. A party who intends to lodge an appeal must deliver a notice of his intention to lodge an appeal to the Registrar and the opposing party (or his attorney of record), within 21 days after the date of the written notice from the Registrar notifying the parties of the Tax Court’s decision.
A party who lodges an intention to appeal must in such notice indicate whether he or she wishes to appeal directly to the Supreme Court of Appeal or, if not, in which division of the High Court the Appellant wishes the appeal to be heard and whether the appeal is against the whole or against a specific part of the judgment only. For purposes of a direct appeal to the Supreme Court of Appeal, the President of the Tax Court (i.e. the presiding judge) must grant leave to appeal.
Given the fact that an appeal to the High Court or Supreme Court of Appeal are very formalistic, it would be advisable to seek legal assistance from an attorney for purposes of pursuing such an appeal.
Fees are payable for the transcripts to the Registrar where a notice of intention to appeal under section 86A(3) of the Income Tax Act against a decision of the Tax Court has been filed and a transcript of the evidence is required.
Extension of time periods, condonation and non-compliance with rules
How does extension of prescribed periods work?
Rule 26 provides for the following:
Where SARS refuses to grant an extension within which reasons for an assessment may be requested (rule 3) or within which information must be provided (rule 5), the taxpayer may apply to the Tax Court for an order extending the period as requested by the taxpayer.
The taxpayer and SARS can by agreement agree to extend the following periods:
The period (60 days) within which SARS may inform the taxpayer that the objection is not accepted as valid, and period (10 days) within which a taxpayer may submit an amended objection ;
The period (60 days) within which SARS must request the taxpayer to provide further information for purposes of considering the objection, and the period (60 or 90 days) within which the taxpayer must provide the information;
The period (60/90 or 120/180 days) within which SARS must deal with the objection; and
Any of the periods for purposes of the litigation of the appeal contemplated in rules 8 – 18.
Where either the taxpayer or SARS does not agree to the extension, the party seeking the extension may apply to the Tax Court by application on notice for an order extending any period prescribed by rules 5 and 8 – 18 on such terms as the Tax
Court deems appropriate. The Tax Court may issue such an order even where the application for extension is made after expiry of the relevant period.
How does condonation of non-compliance with the rules work?
Rule 26 provides that the Tax Court may upon application on notice and on good cause shown, condone any non-compliance with these rules. This rule essentially ensures that a defaulting party can approach the Tax Court for condonation even before an application based on such default is brought against such defaulting party by the other party.
How may non-compliance with the rules be challenged?
Rule 26 makes provision for general relief and specific relief regarding non-compliance:
General relief:
Where either party fails to comply with any requirement contained in the rules the Tax Court may, upon application on notice by the other party, order the defaulting party to comply with that requirement within such time as the Court deems appropriate.
Specific relief:
Where SARS, upon receipt of request for reasons, is of the view that adequate reasons have been provided (rule 3(2)), the taxpayer may apply to the Tax Court for an order remitting the matter for reconsideration by SARS with or without directions to provide such reasons as in the opinion of the Tax Court are adequate.
Where SARS provides reasons (rule 3(3)) but the taxpayer is of the view that the reasons are not adequate, the taxpayer may apply to the Tax Court for an order remitting the matter for reconsideration by SARS with or without directions to provide such reasons as in the opinion of the Tax Court are adequate.
Where SARS deems an objection invalid, the taxpayer may apply to the Tax Court for an order declaring that any objection deemed to be invalid by SARS (in terms of rule 5(1)) shall be valid.
Where the defaulting party fails to comply with an order made in terms of rule 26(1) or 26(5), the Tax Court may, upon application on notice by the other partyæ
where the defaulting party is the taxpayer, make an order that the assessment against which the taxpayer has objected is confirmed, in which case the assessment shall be final and conclusive;
where the defaulting party is SARS, make an order that the objection is allowed and that SARS must alter the assessment in accordance with the objection; or
make such other order, including an order as to costs, as the Tax Court deems appropriate.
New rules: Transitional arrangements
What is the transitional arrangement (Part C of the section 107A rules)?
The new dispute resolution rules apply with effect from 1 April 2003 in respect of all assessments issued, objections lodged or appeals noted on or after that date. However, in an attempt to accommodate objections and appeals noted before 1 April 2003, the new rules contain certain transitional arrangements.
Assessments before 1 April 2003
The following transitional arrangements will apply:
Where no objection against that assessment has been lodged before 1 April 2003, the taxpayer may request reasons in terms of rule 3 where the request for reasons is delivered to SARS after 1 April 2003 and within 30 days after the date of assessment.
Example:
If the due date of an assessment was 3 March 2003, a taxpayer would have had until 15 April 2003 within which to request reasons in terms of rule 3.
Where no objection against that assessment has been lodged before 1 April 2003, the taxpayer may request reasons in terms of rule 3 where the request for reasons is delivered to SARS after 1 April 2003 and within 60 days if SARS had agreed to an extension.
Example:
If the due date of the assessment was 3 March 2003, a taxpayer would have until 2 June 2003 within which to request reasons in terms of rule 3.
Where the period of 30 days, within which an objection had to be lodged in terms of legislation in place before 1 April 2003, was extended by SARS upon request by the taxpayer and the last day of the extension is after 1 April 2003, the objection must comply with rule 4 and SARS’s decision regarding the objection must be in accordance with rule 5, i.e. must be dealt with within the prescribed time periods.
Example:
The due date of an assessment was 3 February 2003, but the objection period was extended until 2 April 2003. If the taxpayer objected on or after 2 April 2003, rule 4 – 29 will apply in respect of such objection.
Objections before 1 April 2003
The following transitional arrangements will apply:
The taxpayer may request that SARS deals with the objection in the manner contemplated in rule 5 i.e. SARS must deal with the objection in a time bound manner. Where SARS refuses this request the taxpayer may apply by application on notice to the Tax Court for an order granting such extension. If SARS agrees, rule 5 onwards will apply in respect of the objection;
The taxpayer may request that the ADR procedures contemplated in rule 7 be applicable in respect of the dispute, and SARS must consider that request in accordance with rule 7; or
SARS may approach the taxpayer to obtain his or her agreement that the ADR procedures contemplated in rule 7 be applicable in respect of the dispute.
Appeals before 1 April 2003
The following transitional arrangements will apply:
Where the appeal has not been set down for hearing by either the Tax Board or in the Tax Court:
The taxpayer may request that the ADR procedures contemplated in rule 7 be applicable in respect of the dispute, and SARS must consider that request in accordance with rule 7;
SARS may approach the taxpayer to obtain his or her agreement that the ADR procedures contemplated in rule 7 be appli cable in respect of the dispute;
The taxpayer and SARS may agree (either may initiate) that all of the litigation procedures contemplated in rules 8 to 29 be applicable in respect of the appeal with effect from an agreed date on which either the limitation of issues meeting must be held or the statement of grounds of assessment must be delivered; or
Where no agreement as contemplated above was reached, the appeal must be placed by SARS before the Tax Court in the manner contemplated in rule 17 as soon as is reasonably possible; and thereafter dealt with in the manner contemplated in rules 18 to 29 of Part A and Part B, to the extent applicable.
Where the appeal has been set down for hearing by either the Tax Board or the Tax Court but not yet heard by the Board or the Court, rules 8 and 18 to 29 of Part A and Part B, to the extent applicable, must apply in respect of that appeal.
Where the appeal is part-heard before the Board or in the Tax Court, rules 8, 19(1) and 20 to 29 of Part A and Part B, to the extent applicable, must apply in respect of that appeal.
Application on notice to Tax Court
How does an application on notice work (Part B of the section 107A rules)?
A party who wishes to bring an application by notice under rule 26 to the Tax Court must do so by way of notice of motion. The party bringing the application is called the applicant and the opposing party the respondent. Briefly the process involves the applicant set- ting out in a document the required relief sought together with his founding affidavit(s) and supporting documentation on which his/her case is based. The respondent is then granted an opportunity to reply to the allegations of the applicant by way of lodging his/her own affidavit(s) wherein he/she must address the allegations of the applicant (answering affidavit). The applicant is then afforded a final opportunity to reply (replying affidavit) to the issues raised in the respondent’s affidavit whereafter the matter is enrolled for hearing of argument.
It is important that great care is taken in drawing up the affidavit(s) to ensure that all the issues in dispute are covered because the facts and allegations contained in the affidavit(s) replaces the oral evidence that is normally presented at a trial and a party will only in highly exceptional circumstances be afforded an opportunity to place additional facts, not covered in the original affidavit(s), before the Tax Court.
What must the applicant who brings an application on notice do?
The following is a short concise summary of the process of an application on notice in terms of Part B of the section 107A rules, and the essential steps the applicant must take:-
The applicant must serve copies of the notice of motion together with his/her founding affidavit and the annexures thereto on the Registrar as well as on the respondent.
In his notice of motion the applicant must indicate an address at which he/she will accept notice and delivery of all documents;
Indicate a date, not less than ten days after delivery of the notice of motion to the respondent, by which the respondent is required to inform the applicant whether he or she intends to oppose the application;
State that if no notice of intention to oppose the application is received by the date mentioned above the matter will be set down for hearing on the first available opportunity which date may not be less than 15 days after serving the notice of motion on the respondent;
If the respondent does not notify the applicant of his intention to oppose the application, the applicant may request the Registrar to enrol the matter for hearing;
If a notice of intention to oppose the application is received, the applicant may, where no answering affidavit is filed, within five days after the expiry of the period in which the respondent is required to file his answering affidavit apply to the Registrar to enrol the matter for hearing;
Where an opposing affidavit is filed by the respondent, the applicant must, if he or she deems it necessary, deliver a replying affidavit to the respondent and the Registrar within ten days after receipt of the opposing affidavit of the respondent;
Where the respondent has filed an replicating affidavit to the applicant’s replying affidavit, the applicant with leave of the Court may file a further affidavit;
Where the applicant enrols the matter for hearing, he or she must notify the respondent of the date of the hearing as soon as such date is allocated by the Registrar.
What must the respondent who wishes to oppose an application on notice do?
The following is a short concise summary of the process of an application on notice in terms of Part B of the section 107A rules, and the essential steps the respondent must take:-
The respondent, if he or she wishes to oppose the granting of the order sought by the applicant, must:
Within the period stated in the notice, notify the applicant as well as the Registrar in writing that he or she intends to oppose the application;
In his or her notice of intention to oppose the application provide an address at which he or she will accept delivery of documentation;
Within 15 days of notifying the applicant of his or her intention to oppose the application deliver his or her answering affidavit to the applicant and the Registrar, together with the relevant documentation, in reply to the allegations and facts put forward by the applicant in his or her founding affidavit;
Where the applicant has filed an replying affidavit, the respondent with leave of the Tax Court may file a further or replicating affidavit;
The respondent may where the applicant has failed to enrol the matter apply to the Registrar to have the matter enrolled for hearing;
Where the respondent enrols the matter for hearing, he or she must notify the applicant of the date of the hearing as soon as such date is allocated by the Registrar.
Examples of the document to be used in the above process are attached as Annexures J - L.
Annexure A - Flowchart - Dispute Resolution
30 days + 30 days extension
Rule 3: Taxpayer (TP) requests
Assessment/ Decision
30 days (unless condonation)
Rule 4: Objection
60 days
Further info by CSARS
reasons for assessment/desicion
60 days + 45 days let out
30 days after reason gives
SARS gives reasons
90 days + 90 days let out
R5: Objection altered/disallowed
30 days + condotion
60 days + 60 days let out
TP must supply further info
Notice of ADR by CSARS within 20 days + finalise wthin 90 days or as agreed by CSARS
R6: Notice of appeal + can request ADR
TP accepts reasons
- no objection
TP does not accepts reasons
Agreement/
R7: ADR
No Agreement/
60 days of Notice of Appeal / Failed ADR
R8: Tax Board
(if<R200 000)
Litigate
R8:Tax Court
R14: Discovery of documents by both parties
60 days
Settlement
R11: Statement of Grounds of Appeal by TP
Settlement
60 days
TP/SARS
accepts outcome
TP/SARS
not satisfied
60 days after minutes or after appeal notice /
Meet within 90 days of Notice of Appeal / Failed ADR
R9:Limitation of issues
Optional - excl. by agreement
Within 15 days on as agreed
60 days after discovery
R10: Statement of grounds of assessment by SARS
Failed ADR
Meeting
“Minutes”
Dispute Resolution | 27
R19-29:
R16:
Pre-trial
Agreement
Settlement
10 days after Pre-trial
Pre-trial minutes: by TP to CSARS & Registrar
40 days before trial
R17: Matter placed inTax Court: by Registrar upon reciept of pre-trial minutes
30 days before trial
R18: Dossier
30/20 days before trial
R15: Expert notice & summary
Tax Court
Higher Courts
ANNEXURE B – Time Periods in Dispute Resolution
Process Time Period Extension Rule Section
Reason
Request by TP
30
30
3(1)
-
SARS Notice: Reasons already provided
30
-
3(2)
-
Reasons by SARS
60
45
3(3)
-
Objection
Lodging by TP
30
*30
4(e)
81(2)
SARS Notice: Invalid objection
60
By agreement
/Tax Court
5(1)(a) & 26
-
Amended objection by TP
10
By agreement
/Tax Court
5(1)(b)
-
Request for further information by SARS
60
By agreement
/Tax Court
5(2)(a)
-
Provision of requested information by TP
60
30 + By agree-
ment /Tax Court
5(2)(b) & 26
-
SARS decision on objection: After further info
60
60 + By agree-
ment /Tax Court
5(3)-(4) & 26
81(4)
SARS decision on objection: After lodging of objec-
tion
90
90+ By agree-
ment /Tax Court
5(3)-(4) & 26
81(4)
Appeal – Notice by TP
30
**unlimited
6(2)
83(1A)
ADR
Initiated by TP in ADR2: Notice by SARS matter ap-
propriate
20
By agreement
7(1)(a)
-
Initiated by SARS: Notice by SARS seeking consent
by TP
10
By agreement
7(1)(a)
-
Period: ADR finalised (after notice of appeal)
90
By agreement
7(3)(c)
-
Assessment by SARS after successful ADR
60
By agreement
7(7)(c)
-
Tax Board
Notice of set down by SARS: after ADR/notice appeal
40
By agreement/Tax
Court
8(2) & 26
-
Days before hearing (within which notice of set down
be given)
30
By agreement/Tax
Court
**8(2) & 26
83A(7)((b)
Period within which Chairperson must give decision
after hearing to clerk
30
By agreement/Tax
Court
8(3)(a) & 26
83A(10)(b)
Period within which clerk of Board must notify TP &
SARS of decision
10
By agreement/Tax
Court
8(3)(b) & 26
83A(10)(b)
Period within which TP or SARS must give notice of
dissatisfaction with Chairperson’s decision
30
-
-
83A(13)
Tax Court
Limitation Meeting (after ADR2/ADR/Tax Board)
90
By agreement/Tax
Court
9(1)
-
Minutes of limitation meeting by SARS (after meeting
concluded)
15
By agreement/Tax
Court
9(2) & 26
-
Statement: Grounds of assessment (after minutes of
Limitation Meeting)
60
60 + By agree-
ment/Tax Court
10(1)(a) & 26
-
Statement: Grounds of assessment (after appeal
notice/ADR/Board notice)
90
90 + By agree-
ment/Tax Court
10(1)(b) & 26
-
Statement Grounds of appeal (by TP)
60
By agreement/Tax
Court
11(1) & 26
-
Discovery
Notice to discover (after delivery statement of
grounds of appeal)
20
By agreement/ax
Court
14(1) & 26
-
Discovery by party requested to discover
40
By agreement/
Tax Court
14(2) & 26
-
Notice: further discovery (after making discovery)
10
By agreement/
Tax Court
14(3) & 26
-
Pre-Trial
Meeting (after final discovery or statement: grounds
of appeal where no discovery)
60
By agreement/Tax
Court
16(1) & 26
-
Minutes of pre-trial (by SARS)
10
By agreement/Tax
Court
16(4) & 26
-
Placing of appeal & dossier & expert witnesses
By SARS after delivery of pre-trial minutes
-
-
17(1)
-
Notice by Registrar of time & place of hearing – pe-
riod before hearing
40
By agreement/Tax
Court
17(2) & 26
-
Dossier by SARS – period before hearing
30
By agreement/Tax
Court
18 & 26
-
Notice of expert witness to other party – period
before hearing
30
By agreement/Tax
Court
15 & 26
-
Summary of expert witness’ opinions to other party
– period before hearing
20
By agreement/Tax
Court
15 & 26
-
* For an extension longer than 30 days, the taxpayer will have to demonstrate exceptional circumstances. Limited to 60 days.
**Although the period for which such extension may be granted is unlimited, SARS will require motivation for the period requested by the taxpayer.
ANNEXURE C – Rules in terms of section 107A ITA
RULES PROMULGATED UNDER SECTION 107A OF THE INCOME TAX ACT, 1962 (ACT NO. 58 OF 1962), PRESCRIBING THE PROCEDURES TO BE OBSERVED IN LODGING OBJECTIONS AND NOTING APPEALS AGAINST ASSESSMENTS, PRO- CEDURES FOR ALTERNATIVE DISPUTE RESOLUTION AND THE CONDUCT AND HEARING OF APPEALS BEFORE A TAX COURT
The Minister of Finance has under section 107A of the Income Tax Act, 1962 (Act No. 58 of 1962), after consultation with the Minister for Justice and Constitutional Development, made the rules in the Schedule prescribing the procedures to be observed in lodging objections and noting appeals against assessments, the procedures for alternative dispute resolution and the conduct and hearing of appeals before a Tax Court.
These rules apply with effect from 1 April 2003 in respect of all assessments issued, objections lodged or appeals noted on or after that date.
Part B of the Regulations contained in Government Notice R.105 in Gazette No. 1011 of 22 January 1965, is hereby repealed to the extent that these rules in terms of Part C apply in respect of any objection or appeal.
T. A. MANUEL, MP MINISTER OF FINANCE SCHEDULE
INDEX
Part A:
Objections, Appeals and Alternative Dispute Resolution
Rule 1. Definitions
Rule 2. Office of the Registrar Rule 3. Reasons for assessment Rule 4. Objection
Rule 5. Commissioner’s decision Rule 6. Notice of appeal
Rule 7. Alternative Dispute Resolution Rule 8. Appeal to Board or Court Rule 9. Limitation of issues in dispute
Rule 10. Statement of grounds of assessment Rule 11. Statement of grounds of appeal
Rule 12. Issues in appeal
Rule 13. Amendments of grounds of assessment or grounds of appeal Rule 14. Discovery of documents, information or things
Rule 15. Notice of expert witness Rule 16. Pre-trial conference Rule 17. Date of hearing
Rule 18. Dossier
Rule 19. Places at which Court sits
Rule 20. Procedures not covered by the Act and Rules Rule 21. Subpoenas
Rule 22. Procedures in Court
Rule 23. Withdrawal or concession of appeal
Rule 24. Postponement or removal of case from the roll Rule 25. Pagination of documents
Rule 26. Extension of prescribed periods, condonation and non-compliance Rule 27. Costs
Rule 28. Witness fees
Rule 29. Fees payable for transcripts
Part B:
Application on Notice
Rule B1. Definitions
Rule B2. Application of Part B
Rule B3. Notice of motion and founding affidavit
Rule B4. Delivery of notice of motion and founding affidavit Rule B5. Address and due date
Rule B6. Set down for hearing where no intention to oppose Rule B7. Notice of intention to oppose and answering affidavit Rule B8. Replying affidavit
Rule B9. Set down for hearing where no answering affidavit Rule B10. Application for date of hearing
Rule B11. Application for set down by respondent
Part C:
Transitional Arrangements
Rule C1. Definitions
Rule C2. Assessments issued before effective date Rule C3. Objections lodged before effective date Rule C4. Appeal noted before effective date
Schedules:
Schedule A: Terms of alternative dispute resolution
Schedule B: Code of conduct for facilitator
RULES PRESCRIBING THE PROCEDURES TO BE OBSERVED IN LODGING OBJECTIONS AND NOTING APPEALS AGAINST ASSESSMENTS, THE PROCEDURES FOR ALTERNATIVE DISPUTE RESOLUTION AND THE CONDUCT AND HEARING OF AP- PEALS BEFORE A TAX COURT
Part A:
Objections, Appeals and Alternative Dispute Resolution
Definitions
(1) In these rules, any meaning ascribed to any word or expression in the Act, shall bear the meaning so ascribed and, unless the context otherwise indicates, -
“Board” means the tax board established by section 83A of the Act; “Court” means the tax court established by section 83 of the Act; “day” means a day as contemplated in section 83(23) of the Act; “deliver” means-
handing the relevant document to the relevant person;
sending the relevant document to the relevant person by registered post;
telefaxing the relevant document to the relevant person;
transmitting the relevant document to the relevant person by electronic means; or
any other means of service authorised by the Court consisting of the President of the Court sitting alone: Provided that in the case of paragraphs (c) and (d), the original, signed document must be handed to that person or sent by registered post to that person within ten days of it being so telefaxed or transmitted by electronic means;
“documents” means documents as defined in section 74(1) of the Act; “information” means information as defined in section 74(1) of the Act;
“Registrar” means the Registrar of the Court appointed in terms of section 83(20) of the Act and includes any other person authorised to act in the place of the Registrar;
“SARS” means the South African Revenue Service as established in terms of the South African Revenue Service Act, 1997 (Act No. 34 of 1997);
“taxpayer” means a taxpayer as defined in section 1 of the Act and includes, for purposes of these rules, any person chargeable with any tax, levy, duty, charge or other amount imposed in terms of any other Act administered by the Com missioner;
“the Act” means the Income Tax Act, 1962 (Act No. 58 of 1962); “things” means things as defined in section 74(1) of the Act.
Office of Registrar
(1) The location of the office of the Registrar will be determined by the Commissioner from time to time and particulars there of must be published for general information in the Gazette.
(2) The office of the Registrar will be open every Monday to Friday, excluding public holidays, from 08h00 to 16h00.
Reasons for assessment
(1) (a) Any taxpayer who is aggrieved by any assessment may by written notice delivered to the Commissioner within 30 days after the date of the assessment, request the Commissioner to furnish reasons for the assessment. The written notice must specify the address at which the taxpayer will accept notice and delivery of such reasons and all documents in terms of the proceedings contemplated in rule 26.
(b) Upon request by the taxpayer, the period prescribed in paragraph (a) may be extended by the Commissioner for a period of not more than 60 days where the Commissioner is satisfied that reasonable grounds exist for the delay in complying with that period.
Where in the opinion of the Commissioner adequate reasons have already been provided, the Commissioner must, within 30 days after receipt of the notice contemplated in subrule (1), notify the taxpayer accordingly in writing which notice must refer to the documents wherein such reasons were provided.
Where in the opinion of the Commissioner adequate reasons have not yet been provided, the Commissioner must provide written reasons for the assessment within 60 days after receipt of the notice contemplated in subrule (1): Provided that where in the opinion of the Commissioner more time is required due to exceptional circumstances, the complexity of the matter or the principle or the amount involved, the Commissioner must, before expiry of that 60 day period, inform the taxpayer that written reasons will be provided not later than 45 days after the date of expiry of that first 60 day period.
Objection
A taxpayer who is aggrieved by an assessment may object to an assessment, which objection mustæ
be in such form as may be prescribed by the Commissioner in terms of section 65 of the Act;
be in writing specifying in detail the grounds upon which it is made;
specify an address at which the taxpayer will accept notice and delivery of the Commissioner’s decision in respect of such objection and all documents in terms of the proceedings contemplated in rule 26;
be signed by the taxpayer: Provided that where the taxpayer is unable to personally sign the objection, the person signing on behalf of the taxpayer must state in an annexure to the objection—
the reason why the taxpayer is unable to sign the objection;
that he or she has the necessary power of attorney to sign on behalf of the taxpayer; and
that the taxpayer is aware of the objection and agrees with the grounds thereof; and
be delivered to the Commissioner at the address specified in the assessment for this purpose, within 30 days afteræ
in the case where the taxpayer has requested reasons under rule 3, either the date of the notice by the Commissioner that adequate reasons have been provided or the date that reasons were furnished by the Commissioner, as the case may be; or
in any other case, the date of the assessment.
Commissioner’s decision
(1) (a) Where a taxpayer delivers an objection that does not comply with the requirements of rule 4(a), (b), (c) or (d), the Commissioner may inform the taxpayer by notice within 60 days that he or she does not accept it as a valid objection: Provided that the taxpayer may within ten days of such notice submit an amended objection.
(b) Where the taxpayer has failed to deliver his or her objection at the address specified in the assessment for this purpose, as required by rule 4(e), the document delivered in terms of rule 4 will be deemed to be invalid.
(a) Where the Commissioner is satisfied that the taxpayer has not furnished all the information, documents or things re quired to decide on the taxpayer’s objection, the Commissioner must, not later than 60 days after receipt of the objection, notify the taxpayer accordingly and request him or her in writing to deliver the information, documents or things as specified in that notice.
The taxpayer must, within 60 days after the date of the notice contemplated in subrule (2)(a), deliver all information, documents or things requested in that notice and as specified in that notice to the Commissioner.
The Commissioner may extend the period in subrule (2)(b) by not more than 30 days, where the Commissioner is satisfied that reasonable grounds exist on which the taxpayer is not able to deliver the information, documents or things specified by the Commissioner within that period and the taxpayer has, before expiry of that period, requested the Commissioner in writing that the period be extended, stating the grounds for the failure to provide such information, documents or things within that period.
The Commissioner must on receipt of the objection contemplated in rule 4, or the information contemplated in subrule (2), alter the assessment or disallow the objection in accordance with section 81(4) of the Act, reduce the assessment in accordance with section 79A of the Act or withdraw the assessment in accordance with section 79B of the Act, and must, subject to subrule (4), notify the taxpayer of his or her decision in writingæ
in the case where the Commissioner requested information under subrule (2), within 60 days after receipt of that information; or
in any other case, within 90 days after the date of receipt of the taxpayer’s objection in terms of rule 4 or amended objection in terms of the proviso to subrule (1)(a), as the case may be.
Where, in the opinion of the Commissioner, more time is required due to exceptional circumstances, the complexity of the matter or the principle or the amount involved, the Commissioner must, before expiry of the period prescribed by subrule (3), inform the taxpayer that he or she will decide on the objection within such longer period whichæ
in the case of subrule (3)(a), may not exceed 60 days; or
in the case of subrule (3)(b), may not exceed 90 days.
Notice of appeal
(1) Any taxpayer entitled to object to an assessment and who is dissatisfied with the decision of the Commissioner in terms of section 81(4) of the Act, may appeal against that decision.
A taxpayer who wishes to appeal must, within 30 days after the date of the notice informing him or her of the decision of the Commissioner in terms of section 81(4) of the Act, deliver to the Commissioner a notice of appeal which must be in such form as may be prescribed by the Commissioner in terms of section 65 of the Act and be signed by the taxpayer or his or her representative.
In the taxpayer’s notice of appeal in terms of subrule (2), he or she—
must indicate in respect of which of the grounds specified in his or her objection in terms of rule 4 he or she is appealing; and
may indicate that he or she wishes to make use of the alternative dispute resolution procedures contemplated in rule 7, should these procedures be available.
Alternative Dispute Resolution
Access
7.(1) Where—
the taxpayer has indicated in his or her notice of appeal that he or she wishes to make use of alternative dispute resolution, the Commissioner must inform the taxpayer by notice within 20 days of receipt of the notice of appeal whether or not he or she is of the opinion that the matter is appropriate for alternative dispute resolution and may be resolved by way of the procedures contemplated in this rule; or
the taxpayer has not indicated in his or her notice of appeal that he or she wishes to make use of alternative dispute resolution, and the Commissioner is of the opinion that the matter is appropriate for alternative dispute resolution and may be resolved by way of the procedures contemplated in this rule, he or she must inform the taxpayer accordingly by notice within ten days of receipt of the notice of appeal, and the taxpayer must deliver a notice stating whether or not he or she agrees thereto within ten days of the date of the notice by the Commissioner.
Terms and agreement on alternative dispute resolution
(a) The terms governing the alternative dispute resolution proceedings are set out in Schedule A to these rules.
(b) Where the Commissioner and the taxpayer agree to alternative dispute resolution as contemplated in subrule (1), a dispute may be resolved in accordance with the alternative dispute resolution procedures contemplated in this rule, which will only take place if the taxpayer accepts the terms set out in Schedule A.
Period of dispute resolution
(a) The period within which the alternative dispute resolution proceedings in terms of this rule is conducted commences 20 days after the date of receipt by the Commissioner of the notice of appeal contemplated in rule 6, and ends on the
date of termination of the proceedings in the manner provided for in the terms governing the alternative dispute resolution procedures.
The period contemplated in subrule (3)(a) interrupts the periods applicable for purposes of the procedures contemplated in rules 8 to 29 hereafter.
The parties must finalise the alternative dispute resolution proceedings not later than 90 days after the date of receipt by the Commissioner of the notice of appeal, or such further period as the Commissioner may agree to.
The facilitator
(a) The Commissioner may appoint any person, including a person employed by SARS, to facilitate the proceedings in terms of this rule.
Any person appointed to facilitate the proceedings in terms of this rule will be bound to the code of ethics set out in Schedule B to these rules.
The person appointed to facilitate the proceedings in terms of this rule may, if the Commissioner and the taxpayer agree thereto at the commencement of the proceedings, be requested to make a recommendation at the conclusion of the proceedings if no agreement or settlement as contemplated in subrule (7)(a) or (7)(b) below is ultimately reached between the parties, which recommendation will be admissible during any subsequent proceedings including court proceedings.
Proceedings
(a) The proceedings in terms of this rule will be conducted in accordance with the terms set out in Schedule A.
(b) During the proceedings contemplated in this rule, the taxpayer or his or her representative taxpayer :
may be accompanied by any representative of his or her choice; and
must be personally present unless the facilitator, in exceptional circumstances, allows the taxpayer or his or her representative taxpayer to be represented in their absence by a representative of their choice.
Reservation of rights
(a) The taxpayer and the Commissioner may participate in the proceedings contemplated in this rule with full reservation of their respective rights in terms of the procedures contemplated in rules 8 to 29.
Subject to section 4 of the Act and subrule (4)(c), the proceedings in terms of this rule shall not be one of record, and any representation made or document tendered in the course of the proceedingsæ
is made or tendered without prejudice; and
may not be tendered in any subsequent proceedings as evidence by any other party, except:
(aa) with the knowledge and consent of the party who made the representation or tendered the document during the proceedings in terms of this rule;
(bb) where such representation or document is already known to, or in the possession of, that party; or (cc) where such representation or document is obtained by that party otherwise than in terms of the
proceedings in terms of this rule.
No person may—
subject to the circumstances listed in paragraph (b)(ii)(aa) to (cc) above, subpoena any person involved in the alternative dispute resolution proceedings in whatever capacity to compel disclosure of any representation made or document tendered in the course of the proceedings; or
subpoena the facilitator of the alternative dispute resolution proceedings to compel disclosure of any representation made or document tendered in the course of the proceedings.
Agreement or settlement
(a) A dispute which is subject to the procedures in terms of this rule, may be resolved by agreement whereby either the Commissioner or the taxpayer accepts, either in whole or in part, the other party’s interpretation of the facts or the law applicable to those facts or both.
Whereæ
the Commissioner and the taxpayer are, despite all reasonable efforts, unable to resolve the dispute as contemplated in paragraph (a); and
the Commissioner personally or any person designated by the Commissioner for purposes of the regulations issued under section 107B of the Act, is of the opinion that the circumstances of the matter comply with the requirements contemplated in those regulations,
the parties may attempt to settle the matter in accordance with those regulations within the process contemplated in this rule.
Where an agreement contemplated in paragraph (a) or a settlement contemplated in paragraph (b) is concluded, the Commissioner must issue an assessment to give effect to that agreement or settlement, as the case may be, within a period of 60 days after the date of the conclusion thereof.
Where the proceedings are terminated in the manner provided for in the terms governing the alternative dispute resolution procedures, the taxpayer will, unless he or she informs the Commissioner otherwise, be deemed to pursue his or her appeal in the manner contemplated in rules 8 to 29.
Reporting requirements
(8)(a) Any agreement in terms of subrule (7)(a) whereby a dispute which is subject to the procedures in terms of this rule is resolved in whole or in part, must be reported internally in the manner as may be required by the Commissioner.
(b) Any settlement of a dispute in terms of subrule (7)(b) in accordance with the regulations issued in terms of section 107B of the Act, must be reported in the manner prescribed by the Minister of Finance in those regulations.
Appeal to Board or Court
(1) Where the provisions of section 83A of the Act apply, the matter will be dealt with by the Board.
The Commissioner must give written notice of the time and place appointed for the hearing of the appeal before the Board, which notice must be delivered to the taxpayer not later than 40 days after receipt of the notice of appeal or ter mination of alternative dispute resolution proceedings, but at least 21 days before the hearing of the appeal in accor dance with the provisions of section 83A(7)(b) of the Act.
(a) The Chairperson of the Board contemplated in section 83A(3) of the Act, must furnish his or her decision to the clerk of the Board contemplated in section 83A(5) of the Act, within 30 days of the hearing of the appeal.
(b) The clerk must by notice in writing furnish the Commissioner and the appellant with a copy of the Board’s decision within ten days of the receipt of the decision.
The provisions of rules 9 to 29 apply in respect of any appeal to be heard by the Court.
Limitation of issues in dispute
(1) Where the Commissioner and the taxpayer agree that it will be beneficial to attempt to limit the issues in dispute for pur poses of the anticipated litigation, the Commissioner may arrange to meet with the taxpayer which meeting may be held at any office of SARS or any other venue as agreed to by the parties, within 90 days after-
where the alternative dispute resolution procedures were followed in terms of rule 7, the date of termination of the alternative dispute resolution proceedings as contemplated in rule 7(3);
where the matter was heard by the Board
the date of receipt by the Commissioner of a notice by the taxpayer in terms of section 83A(13)(a); or
the date of the delivery by the Commissioner of a notice in terms of section 83A(13)(b); or
in any other case, the date of receipt by the Commissioner of the notice of appeal contemplated in rule 6.
(2) The Commissioner must within 15 days after the meeting contemplated in subrule (1), prepare and deliver to the taxpayer a minute recording-
the facts that are common cause;
the facts that are in dispute; and
the issues the Court is required to decide on:
Provided that where the taxpayer does not agree with the content of the minute, he or she must deliver an additional minute within ten days of the date of the delivery of the minute by the Commissioner recording the facts and issues con templated in paragraphs (a) to (c) and indicate exactly in what aspects he or she disagrees with the Commissioner’s minute.
Statement of grounds of assessment
(1) The Commissioner must deliver to the taxpayer a statement of the grounds of assessmentæ
where a meeting was held between the Commissioner and the taxpayer as contemplated in rule 9, within 60 days after the last set of minutes of that meeting was delivered by the Commissioner or the taxpayer, as the case may be;
where no meeting was held as contemplated in paragraph (a), within 90 days afteræ
where the alternative dispute resolution procedures were followed in terms of rule 7, the date of termination of the alternative dispute resolution proceedings as contemplated in rule 7(3);
where the matter was heard by the Board-
(aa) the date of receipt by the Commissioner of a notice by the taxpayer in terms of section 83A(13)(a); or (bb) the date of the delivery by the Commissioner of a notice in terms of section 83A(13)(b); or
in any other case, the date of receipt by the Commissioner of the notice of appeal contemplated in rule 6.
Where more time is in the opinion of the Commissioner required due to exceptional circumstances, the complexity of the matter or the principle or amount involved, the Commissioner must, before expiry of the period contemplated in subrule (1)(a) or (b), inform the taxpayer that he or she will deliver the statement of the grounds of assessment within such longer period which may not exceedæ
in the case of subrule (1)(a), 60 days; or
in the case of subrule (1)(b), 90 days.
The statement of the grounds of assessment must be in writing and be signed by the Commissioner or his or her representative and must be divided into paragraphs-
setting out a clear and concise statement of the grounds upon which the taxpayer’s objection is disallowed ; and
stating the material facts and legal grounds upon which the Commissioner relies for such disallowance.
Statement of grounds of appeal
(1) The taxpayer (hereinafter referred to as “the appellant”) must, within 60 days after the delivery by the Commissioner of the statement of the grounds of assessment, deliver to the Commissioner a statement of the grounds of appeal.
The statement must be in writing and be signed by the appellant or his or her representative and must be divided into paragraphsæ
setting out a clear and concise statement of the grounds upon which the appellant appeals;
stating the material facts and legal grounds upon which the appellant relies for such appeal; and
stating which of the facts and legal grounds alleged in the statement of the grounds of assessment are admitted and which of those facts and legal grounds are denied.
Issues in appeal
The issues in any appeal to the Court will be those defined in the statement of the grounds of assessment read with the statement of the grounds of appeal.
Amendments of statement of grounds of assessment or statement of grounds of appeal
(1) The Commissioner and the appellant may agree in writing to the amendment of the statement of the grounds of assessment or the statement of grounds of appeal or both.
The Court, consisting of the President sitting alone, may, on application on notice grant leave to amend the statement of the grounds of assessment or the statement of grounds of appeal, subject to such orders as to postponement and costs as the Court deems appropriate.
Discovery of documents, information or things
(1) The Commissioner and the appellant may, within 20 days after delivery of the statement of the grounds of appeal contem plated in rule 11, deliver a notice to the other party requesting him or her to make discovery on oath of all documents, in formation or things relating to the issues in appeal as contemplated in rule 12.
(a) Any party to whom a notice to discover has been delivered, must make discovery on oath of all documents, information or things relating to any matter in the appeal within 40 days after delivery by that party of that notice, specifying separatelyæ
the documents, information or things in his or her possession or control, or that of his or her agent;
the documents, information or things which were previously in his or her possession or control, or that of his or her agent, but which is no longer so in his or her possession or control or that of his agent; and
the documents, information or things in respect of which he or she has a valid objection to produce.
(b) The production or inspection of the documents, information or things takes place at a venue and in a manner as may be agreed between the parties.
If either party believes that there are, in addition to the documents, information or things so disclosed, other documents, information or things which may be relevant to any matter in question in possession of the other party, that party may give notice within ten days of the production or inspection of the documents, information or things in terms or subrule (2)(b) to that other party requiring him or her to make such documents, information or things available for inspection, or to state under oath within ten days that those documents, information or things are not in his or her possession, in which event he or she must state their whereabouts, if known to him or her.
Any document, information or thing not disclosed may not, save with the leave of the Court granted on such terms as it deems appropriate, be used for any purpose at the appeal by the party who is obliged but failed to disclose it, provided that any other party may use such document, information or thing.
Notice of expert witness
Neither party may, save with the leave of the Court or consent of the other party, call any person as a witness to give evidence as an expert upon any matter upon which the evidence of expert witnesses may be received, unless that party has-
not less than 30 days before the hearing of the appeal delivered notice to the other party and the Registrar of his or her intention to do so; and
not less than 20 days before the hearing of the appeal delivered to the other party and the Registrar a summary of such expert’s opinions and his or her reasons therefor.
Pre-trial conference
(1) The Commissioner must arrange for a pre-trial conference to be heldæ
where either party was requested to make discovery, within 60 days after all parties who were so requested have delivered their discovery notices; or
where neither party delivered a notice requesting the other party to make discovery, within 60 days after receipt by the Commissioner of the statement of the grounds of appeal.
During the pre-trial conference the Commissioner and the appellant must attempt to reach consensus onæ
the extent to which sufficient discovery has been made by both parties, the exchange of documents, information or things and the preparation of a paginated bundle of documentation in chronological order;
the manner in which evidence is to be dealt with, including any agreement on the status of any document, information or thing and whether any document, information or thing or parts thereof, will serve as evidence of what they purport to be;
whether evidence on affidavit will be admitted with or without the right of any party to cross-examine the deponent;
the necessity of any inspection in loco;
the resolution of any preliminary points that either party intends to take;
expert evidence;
any other means by which the proceedings may be shortened;
an estimate of the time required for the hearing; and
any means by which the dispute may be resolved or settled.
This conference must take place at any office of SARS or any other venue to be agreed between the parties.
The Commissioner must within ten days of the conclusion of the pre-trial conference contemplated in subrule (1), prepare and deliver a minute dealing with the matters set out in subrule (2): Provided that where the appellant does not agree with the content of the minute, he or she must deliver his or her minute to the Commissioner with ten days of the date of the delivery of the minute by the Commissioner.
Date of hearing
(1) After delivery of the pre-trial conference minute in terms of rule 16(4), the Commissioner must arrange a date for the hearing of the appeal and inform the Registrar accordingly.
The Registrar must deliver to the appellant and to the Commissioner a written notice of the time and place appointed for the hearing of the appeal at least 40 days before the hearing of the appeal, or such shortened period as may be agreed between the parties.
Dossier
(1) At least 30 days before the hearing of the appeal or as otherwise agreed between the parties in consequence of an agreement in terms of rule 17(2), the Commissioner must deliver to the appellant and the Registrar a dossier containing copies ofæ
all returns by the appellant relevant to the year of assessment in issue;
all assessments issued by the Commissioner relevant to the issues in appeal contemplated in rule 12;
where applicable, the notice requesting the Commissioner to furnish reasons for the assessment or the decision con templated in rule 3(1);
where applicable, the Commissioner’s notice or reasons contemplated in rule 3(2) and (3);
the appellant’s objection to the assessment in terms of the Act;
the notice of appeal in terms of the Act;
where applicable, the minutes of the meeting to limit the issues in dispute contemplated in rule 9(2);
where applicable, the statement of the grounds of assessment contemplated in rule 10;
where applicable, the statement of grounds of appeal contemplated in rule 11; and
any order by the Court in terms of rule 13(2) or 26 or both.
The dossier must be prepared in accordance with the requirements of rule 25.
The Registrar must deliver copies of the dossier to the Court at least 20 days before the hearing of the appeal or, in conse quence of the agreement contemplated in subrule (1), as soon as is reasonably possible after receipt of the dossier from the Commissioner.
Places at which Court sits
(1) The Judge President or the President of the Division of the High Court having jurisdiction in the area in which the Court will sit must determine the place and the times of the sittings of the Court by arrangement with the Registrar.
Every appeal must be heard and determined by the Court in the area determined in terms of subrule (1), which is nearest to the residence or principal place of business of the appellant: Provided that the Commissioner may, in the absence of the consent of the appellant, on reasonable grounds and with due notice to the appellant, request the Judge President or President of the High Court having jurisdiction in any other area that the appeal be heard by a Court in such other area.
Procedures not covered by Act and Rules
(1) Save as is otherwise provided in these rules, the rules issued in terms of section 43 of the Supreme Court Act, 1959 (Act No. 59 of 1959), shall apply in respect of the general practice and procedure of the Court in so far as such rules are applicable.
In the case of any procedural dispute during any proceedings in terms of the Act and the rules, except for rule 7, the President of the Court alone must decide on the procedures to be followed.
Subpoenas
(1) At the request of either party or by the directions of the Court, a subpoena may be issued by the Registrar requiring any person to attend the hearing of the appeal for the purpose of giving evidence in connection with any appeal, and such subpoena may require the person summoned to produce any book, document, information or thing which may be in his or her possession or under his or her control and which is relevant to the issues in dispute contemplated in rule 12.
The rules issued in terms of section 43 of the Supreme Court Act, 1959, governing the service of subpoenas in civil matters in the High Court will mutatis mutandis apply in respect of subpoenas issued under this rule.
Procedures in Court
(1) At the hearing of the appeal, the proceedings are commenced by the appellant unless the Commissioner takes a point in limine.
The appellant or the person appearing on his or her behalf, must present all evidence, including any witnesses, on which his or her appeal may be founded and must adhere to the rules of evidence.
After the case on the part of the appellant has been heard, the Commissioner must in like manner produce all evidence, including any witnesses, where required, in support of the assessment.
At the conclusion of the evidence, the appellant or the person appearing on his or her behalf, and thereafter the Commissioner, may be heard in argument.
The appellant or the person appearing on his or her behalf may reply to any new points raised in the argument presented by the Commissioner or to any other points with the leave of the President of the Court.
The Court must determine the matter in dispute or reserve its decision until a later date.
Where the decision is so reserved, the judgment must be delivered by the President of the Court in the manner he deems fit.
The hearing of an appeal may be adjourned by the Court from time to time to any time and place that the Court deems convenient.
The Registrar must by notice in writing deliver the written judgment of the Court to the Commissioner and the appellant or any person nominated by him or her within 15 days of the receipt thereof.
If neither the appellant nor anyone authorised to appear on his or her behalf appears before the Court at the time and place appointed for the hearing of an appeal, the Court may, upon the request of the Commissioner and upon proof that the prescribed notice of the sitting of the Court has been sent to the appellant or his or her representative, decide the appeal as contemplated in section 83(13) of the Act, unless any question of law arises, in which case the Court may call upon the Commissioner for argument in support of the assessment before giving its decision.
If neither the Commissioner nor anyone authorised to appear on his or her behalf appears before the Court at the time and place appointed for the hearing of an appeal, the Court may, upon the request of the appellant and upon proof that the prescribed notice of the sitting of the Court has been sent to the Commissioner, decide the appeal as contemplated in section 83(13) of the Act, unless any question of law arises, in which case the Court may call upon the appellant for argument in support of the objection before giving its decision.
Withdrawal or concession of appeal
(1) The appeal may, at any time before it has been set down for hearing as contemplated in rule 17(2), be—
withdrawn by the appellant;
conceded by the Commissioner;
resolved by an agreement as contemplated in rule 7(7)(a), read with rule 7(7)(c) and 7(8); or
settled as contemplated in rule 7(7)(b), read with rule 7(7)(c) and 7(8).
(2) Where an appeal has been set down for hearing as contemplated in rule 17(2) or is part-heard—
it may only be withdrawn by the appellant or conceded by the Commissioner with the consent of the other party, or with leave of the Court consisting of the President of the Court sitting alone, in which event—
the party who wishes to withdraw or concede an appeal as contemplated above, must deliver a notice of withdrawal or concession to the other party and the Registrar and may include in that notice a consent to pay costs, which consent will have the effect of an order of the Court for those costs; or
if no consent to pay costs is included in the notice referred to in subrule (2)(a)(i), the other party may apply for an order for costs—
(aa) where the appeal has been set down for hearing as contemplated in rule 17(2) but not yet heard by the Court, to the Court by application on notice in the manner contemplated in Part B; or
(bb) where the matter is part-heard, to the Court consisting of the President of the Court sitting alone.
any agreement as contemplated in rule 7(7)(a) or any settlement as contemplated in rule 7(7)(b)—
must relate to the appeal as a whole, including costs; and
may, by consent between the parties or by application by any party on notice in the manner contemplated in Part B, be made an order of the Court.
Postponement or removal of case from roll
(1) Where the Commissioner and the appellant agree to postpone the hearing of the appeal which has been set down for hearing as contemplated in rule 17(2), or to have that appeal removed from such roll, the party initiating the proceedings must notify the Registrar thereof in writing.
An application by a party to postpone or remove an appeal from the roll, which is opposed by the other party, may be heard and determined by the President of the Court sitting alone.
Pagination of documents
(1) In all proceedings before the Court, the documents that are filed with the Court must be paginated by the party who seeks to put them before the Court and, as far as practical, all the documents must be arranged in chronological order.
All documents must be accompanied by an index and documents filed with the Court must be paginated in accordance with this index, which must contain sufficient information to enable the Court to identify every document without having to refer to the document itself.
Where additional documents are filed after the index has been completed, those additional documents must be paginated following the original pagination and a supplementary index must be filed listing the additional documents.
Extension of prescribed periods, condonation and non-compliance with rules
(1) (a) Any decision by the Commissioner in the exercise of his or her discretion under rules 3(1)(b), 3(2), 3(3), 5(1) and 5(2)(c) will be subject to objection and appeal, and may notwithstanding the procedures contemplated in rules 6 to 18 be brought before the Court by application on notice.
The Court may upon application on notice under this subrule and on good cause shown, in respect of a decision by the Commissioner under:
rule 3(1)(b) or 5(2)(c), make an order extending the period prescribed therein;
rule 3(2) or 3(3), make an order remitting the matter for reconsideration by the Commissioner with or without directions to provide such reasons as in the opinion of the Court are adequate; or
rule 5(1), make an order declaring that any objection deemed to be invalid by the Commissioner shall be valid.
Any period contemplated in rules 5 and 8 to 18 may be extended by agreement between the parties and in the absence of any agreement, the Court may upon application on notice and on good cause shown, make an order extending any period prescribed by these rules or fixed or extended by an order of the Court on such terms as the Court deems appropriate.
The Court may order that any period contemplated in rules 5 and 8 to 18 be extended, notwithstanding the fact that the application for extension is made after expiry of the relevant period.
The Court may upon application on notice and on good cause shown, condone any non-compliance with these rules.
Where either party fails to comply with any requirement contained in these rules the Court may, upon application on notice by the other party, order the defaulting party to comply with that requirement within such time as the Court deems appropriate.
Where the defaulting party fails to comply with an order made in terms of subrule (1) or (5), the Court may, upon application on notice by the other party-
where the defaulting party is the taxpayer, make an order that the assessment against which the taxpayer has objected is confirmed, in which case the assessment shall be final and conclusive;
where the defaulting party is the Commissioner, make an order that the objection is allowed and that the Commissioner must alter the assessment in accordance with the objection; or
make such other order as the Court deems appropriate.
In addition to any order in terms of subrules (1) to (5), the Court may make any order as to costs as the Court deems appropriate.
For purposes of this rule, any reference to “Court” means the President of the Court sitting alone.
Costs
(1) Where the Court makes an order as to costs, or at the request of the Commissioner or the taxpayer where a consent to pay costs was made by the other party in terms of these rules, the Registrar may either perform the functions and duties of a taxing master or, at the request of the Court or any party, appoint any person to act as taxing master on such terms and for such period as the Registrar may determine.
The person appointed by the Registrar under subrule (1), must in the Registrar’s opinion be fit to perform the functions and duties which are assigned to, or imposed on, a taxing master by these rules.
The Commissioner or the appellant may apply to the President of the Court sitting alone for reconsideration of any items or portions of items in the bill of costs taxed by the Registrar or the person appointed to act as taxing master, and the President’s decision as to whether such items or portions of items shall be allowed, reduced or disallowed shall be final.
The fees, charges and rates to be allowed by the Court are, as far as applicable, those fixed by the tariff of fees and charges in cases heard before the Provincial or Local Division of the High Court within whose area of jurisdiction the Court sits.
In making any such order against an appellant, the Court may require the appellant to pay the costs of the Commissioner as appears to the Court to be right and proper.
Witness fees
(1) A witness in any proceedings before the Court is entitled to be paid in accordance with the tariff of allowances prescribed by the Minister for Justice and Constitutional Development and published in terms of section 42 of the Supreme Court Act, 1959 (Act No. 59 of 1959), by notice in the Gazette.
The Court may, notwithstanding subrule (1), order that no allowances or only a portion of the prescribed allowances be paid to a witness, at the request of any party to the matter before the Court.
Fees payable for transcripts
Where any person (other than the Commissioner) has filed with the Registrar a notice of intention to appeal under section 86A(3) of the Act against a decision of the Court, and that person requires a transcript of the evidence, or of a portion of the evidence, given at the hearing of the case by the Court, that person must deposit with the Registrar such sum as in the opinion of the Registrar is sufficient to cover the costs for the transcript, and must pay upon receipt of such transcript the outstanding portion of the fee as determined by the Registrar.
Part B:
Applications on Notice
Definitions
B1. (1) For purposes of the rules in this Part, any meaning ascribed to any word or expression in the Act or Part A shall, unless the context otherwise indicates, bear the meaning so ascribed.
Rules 19, 23 to 25 and 27 of Part A shall, to the extent applicable, apply mutatis mutandis to this Part.
Save as is otherwise provided in the rules of this Part, the general practice and procedure of the Court shall be that of the High Court in so far as such practice and procedure are applicable.
Application of Part B
B2. For purposes of the rules in Part A, any application on notice contemplated in those rules must be brought in the manner contemplated in the rules in this Part.
Notice of motion and founding affidavit
B3. Every application must be brought on notice of motion which must set out in full the order sought and must be supported by a founding affidavit as to the facts upon which the applicant relies for relief.
Delivery of notice of motion and founding affidavit
B4. Copies of the notice of motion and founding affidavit, and all annexures thereto, must be delivered to the Registrar, and the party against which the relief is claimed (hereafter referred to as the respondent) at the addressæ
where the respondent is the Commissioner, specified by him or her for this purpose in the assessment; or
where the respondent is the taxpayer, specified by him or her for this purpose in any request for reasons in terms of rule 3 of Part A, or his or her objection in terms of rule 4 of Part A, whichever is applicable.
Address and due date
B5. In the notice of motion, the applicant mustæ
indicate an address, if different from the address contemplated in rule B4, at which he or she will accept notice and delivery of all documents in such proceedings;
set forth a day, not less than ten days after delivery thereof to the respondent, on or before which the respondent is re quired to notify the applicant in writing, whether he or she intends to oppose that application; and
state that if no such notification is given, the application will be set down for hearing on the first available day determined by the Registrar, being not less than 15 days after service of that notice on the respondent.
Set-down for hearing where no intention to oppose
B6. If the respondent does not, on or before the day mentioned for that purpose in the notice in terms rule B5(b), notify the applicant of his or her intention to oppose, the applicant may request the Registrar to place the matter on the roll on the date determined by Registrar in terms of rule B5(c).
Notice of intention to oppose and answering affidavit
B7. If the respondent wishes to oppose the grant of an order sought in the notice of motion, he or she mustæ
within the time stated in that notice, give the applicant notice in writing, that he or she intends to oppose the application;
indicate in that notice contemplated in paragraph (a) an address, if different from the address contemplated in rule B4, at which he or she will accept notice and delivery of all documents in such proceedings; and
within 15 days of notifying the applicant of his or her intention to oppose the application, deliver his or her answering affidavit, if any, together with any relevant documents.
Replying affidavit
B8. (1) Within ten days of delivery of the affidavit and documents referred to in rule B7, the applicant may deliver a replying affidavit.
(2) The Court may in its discretion permit the filing of further affidavits.
Set-down for hearing where no answering affidavit
B9. Where no answering affidavit is delivered within the period referred to in rule B7(c), the applicant may within five days of the expiry of that period apply to the Registrar to allocate a date for the hearing of the application.
Application for date of hearing
B10. Where an answering affidavit is delivered the applicant may, within five days of the delivery of his or her replying affidavit or, if no replying affidavit is delivered, within five days of the expiry of the period referred to in rule B8, apply to the Registrar to allocate a date for the hearing of the application on the first available date suitable to both parties.
Application for set down by respondent
B11. (1) If the applicant fails to apply in terms of rule B10 to the Registrar to allocate a date for the hearing of the application within the periods contemplated therein, the respondent may do so immediately upon the expiry thereof.
(2) Notice in writing of the date allocated by the Registrar shall forthwith be given by the applicant or the respondent, as the case may be, to the other party.
Part C:
Transitional Arrangements
Definitions
C1. For purposes of the rules in this Part, any meaning ascribed to any word or expression in the Act or Part A shall, unless the context otherwise indicates, bear the meaning so ascribed , and—
“effective date” means 1 April 2003;
“the amendment Act” means the Second Revenue Laws Amendment Act, 2001 (Act No. 60 of 2001).
Assessment issued before effective date
C2. Where an assessment was issued in terms of the Act before the effective date and no objection against that assessment was lodged before that date—
rule 3 of Part A shall apply only where the request for reasons is delivered to the Commissioner after the effective date and that request is delivered to the Commissioner within the period contemplated in rule 3(1)(a) or (b);
rule 4 of Part A shall only apply to an objection against that assessment, where—
that objection is lodged within the period prescribed in that rule; or
the period of 30 days within which an objection had to be lodged in terms of section 81(1) of the Act, prior to its amendment by the amendment Act, was extended by the Commissioner in terms of section 81(2) of the Act and the last day of that period falls on a date on or after the effective date.
Objection lodged before effective date
C3. (1) Where an objection against an assessment was lodged before the effective date and—
no notice in terms of section 81(4) of the Act was delivered by the Commissioner before that date, rule 5 of Part A shall only apply in respect of that objection where—
the objection complies with the requirements of a valid objection as contemplated in section 81(3) of the Act, prior to its amendment by the amendment Act;
the taxpayer delivers a motivated request to the Commissioner that rule 5 of Part A be applicable in respect of the objection; and
the Commissioner, on good cause shown, agrees thereto in writing in which event the date of delivery to the tax payer of such decision will, for purposes of rule 5(2) – (4) of Part A, be deemed to be the date of the receipt of the objection contemplated in rule 5(2) – (4) of Part A; or
a notice in terms of section 81(4) of the Act was delivered by the Commissioner before that date, but no appeal was noted before that date, rule 6 of Part A shall only apply in respect of any appeal against the decision by the Commissioner, where—
that appeal is noted within the period prescribed in that rule; or
the period of 30 days within which an appeal had to be noted in terms of section 83(7)(a) of the Act, prior to its amendment by the amendment Act, was extended by the Commissioner in terms of that section and the last day of that period falls on a date on or after the effective date.
Any decision of the Commissioner in terms of subrule (1)(a)(iii) is subject to objection and appeal in the manner contemplated in rule 26(1)(a) of Part A.
Appeal noted before effective date
C4. (1) Where an appeal was noted in terms of the Act before the effective date and—
that appeal has not been set down for hearing by either the Board or the Courtæ
the taxpayer may request that the alternative dispute resolution procedures contemplated in rule 7 of Part A be applicable in respect of the dispute and the Commissioner must consider that request in accordance with rule 7(1) of Part A;
the taxpayer and the Commissioner may agree in writing that all of the procedures contemplated in rules 8 to 29 of Part A and Part B, to the extent applicable, apply in respect of that appeal, which procedures may commence with-
(aa) the meeting to limit the issues in dispute as contemplated in rule 9 of Part A to be held on a date to be agreed between the taxpayer and the Commissioner; or
(bb) where the taxpayer and the Commissioner agree that a meeting contemplated in rule 9(1) of Part A is not required, the delivery by the Commissioner of a statement of the grounds of assessment as contem plated in rule 10 of Part A on a date to be agreed between the taxpayer and the Commissioner; or
where no agreement contemplated in subparagraph (ii) was reached, the appeal must beæ
(aa) placed by the Commissioner before the Court in the manner contemplated in rule 17 of Part A as soon as is reasonably possible; and
(bb) dealt with in the manner contemplated in rules 18 to 29 of Part A and Part B, to the extent applicable; or
that appeal has been set down for hearing by either the Board or the Court but not yet heard by the Board or the Court, rules 8 and 18 to 29 of Part A and Part B, to the extent applicable, must apply in respect of that appeal; or
that appeal is part-heard before the Board or in the Court, rules 8, 19(1) and 20 to 29 of Part A and Part B, to the extent applicable, must apply in respect of that appeal.
(2) For purposes of rule 18 of Part A, the dossier must in addition to any other documents as contemplated in that rule, also contain—
where the statements contemplated in rules 10 - 11 of Part A have not been delivered, a short statement of case drafted by the Commissioner setting out the issues in appeal based on the grounds of the assessment in issue and the grounds of objection;
a copy of any agreement contemplated in subrule (1)(a)(ii); and
copies of all the correspondence relating to the assessment, return, objection and appeal.
SCHEDULE A
THE TERMS OF ALTERNATIVE DISPUTE RESOLUTION (“ADR”)
Main Rule
ADR is only available if these terms are accepted. Both the Commissioner and the taxpayer have to agree to the ADR process, for any agreement or settlement on resolution to have any effect.
Who may initiate ADR?
ADR may be initiated by either the taxpayer in his or her notice of appeal, or the Commissioner subsequent to the receipt of a notice of appeal by the taxpayer.
When may a dispute be referred for ADR?
The taxpayer can request the referral of a dispute for ADR if his or her objection has been disallowed or his or her assessment has been altered in consequence of the objection by the Commissioner, and the taxpayer is dissatisfied with such decision and wishes to appeal to the Tax Board or Tax Court. The Commissioner may then decide whether or not the matter is appropriate for ADR, and inform the taxpayer accordingly within 20 days after receipt of the notice of appeal wherein ADR is requested.
If the Commissioner is of the opinion that a matter is appropriate for ADR, then he or she must inform the taxpayer within 10 days of the receipt of the notice of appeal. The taxpayer is then required to notify the Commissioner in writing within 10 days of the date of the notice by the Commissioner, whether he or she agrees to ADR.
How?
A taxpayer whose objection is disallowed or whose assessment in consequence of the objection has been altered by the Com missioner, and who wishes to appeal to the Tax Board or the Tax Court against such decision must:-
complete the form “Notice of Appeal”, indicating “refer to ADR” and sign where provided at the bottom of the notice; and
deliver the completed “Notice of Appeal” form to the address specified in the “Notice of Appeal”.
When?
Every notice of appeal with a request for the referral of a dispute for ADR must reach the Commissioner within 30 days of the date of the notice of disallowance or the date of the notice of the alteration of the assessment in consequence of the objection.
The Facilitator
Where the Commissioner or the taxpayer, in terms of paragraph 3, has notified the other party that the dispute may be referred for ADR, the Commissioner must appoint a facilitator to facilitate the ADR process within 15 days after receipt of the notice by the taxpayer that he or she agrees to ADR, or the date of the notice by the Commissioner that a matter is ap propriate for ADR. The Commissioner must inform the taxpayer who has been appointed as facilitator.
The facilitator will, in the normal course, be an appropriately qualified officer of SARS and will be bound by a Code of Conduct.
The facilitator’s objective is to seek a fair, equitable and legal resolution of the dispute between the taxpayer and the Commissioner.
The facilitator cannot make a ruling or decision which binds the Commissioner or the taxpayer, nor may he or she compel the taxpayer and the Commissioner to settle the dispute.
At the conclusion of the ADR process the facilitator must record the terms of any agreement or settlement reached by the parties, or, if no agreement or settlement is reached, he or she shall record that fact.
The facilitator has the authority to summarily terminate the process of dispute resolution without prior notice if:-
any person fails to attend the meeting referred to in paragraph 8;
any person fails to carry out a request made in terms of paragraph 7;
he or she is of the opinion that the dispute cannot be resolved;
6.6.4. either of the parties agree that the issues in dispute cannot be reconciled in the resolution process; or
6.6.5 for any other appropriate reason.
Determining the process
The facilitator must, after consulting the taxpayer and the officer(s) of SARS responsible for issuing the assessment under dispute:-
determine the procedure to be adopted in the dispute resolution process;
determine a place, date and time at which the parties shall convene the ADR meeting; and
notify each party in writing which written submissions or any other document should be furnished or exchanged (if this is required at all), and when the submissions or documents are required.
ADR Meeting
A meeting between the parties to the dispute must be held for the purpose of resolving the dispute by consent, within 20 days of the appointment of the facilitator, or within such further period as the Commissioner and the taxpayer may agree.
Rules for the ADR Meeting
The taxpayer (or the representative taxpayer as contemplated in section 1 of the Act) must be personally present during the ADR meeting and may be accompanied by a representative of his or her choice.
The facilitator may, in exceptional circumstances, excuse the taxpayer or representative taxpayer from personally attending the meeting in which event they may be represented in their absence by a representative of their choice.
The meeting must be concluded:-
at the instance of the facilitator; or
after the parties agree that the meeting shall be concluded.
If both parties and the facilitator agree, the meeting may resume at any other place, date or time (set by the facilitator).
The parties may for the purpose of resolving an issue in dispute, and only if the facilitator agrees, lead or bring witnesses in the ADR process.
The facilitator may require either party to produce a witness to give evidence.
At the conclusion of the meeting the facilitator must record:-
All issues which were resolved (through the ADR process);
Any issue upon which agreement or settlement could not be reached; and
Any other point which the facilitator considers necessary.
The facilitator must deliver the report to the taxpayer and the Commissioner’s designated representative within 10 days of the cessation of the ADR process.
The facilitator may, if requested at the commencement of the ADR process, make a recommendation at the conclusion of the proceedings if no agreement or settlement is ultimately reached between the parties.
Reservations of rights
The proceedings may not be electronically recorded, and any representations made in the course of the meeting will be without prejudice.
Any representation made or document tendered in the course of the dispute resolution proceedings may not be tendered in any subsequent proceedings as evidence by any other party, except in the circumstances contemplated in rule 7(6)(b)(ii) of Part A.
Neither party, except in the circumstances contemplated in rule 7(6)(b)(ii) of Part A, may subpoena any person involved in the alternative dispute procedure in order to compel disclosure of any representation made or documentation produced in the course of the ADR process. The facilitator may not be subpoenaed under any circumstances.
Any recommendation made by the Facilitator in terms of paragraph 9.9. above, will be admissible during any subsequent proceedings including court proceedings.
Agreement or Settlement
Any agreement or settlement reached between the parties must be recorded in writing and must be signed by the tax payer and by the Commissioner’s designated official.
Should the parties not resolve all issues in dispute, the agreement or settlement in paragraph 11.1. must stipulate those areas in dispute:
that are resolved; and
that could not be resolved and on which the taxpayer may continue on appeal to the Tax Board or Tax Court.
Any agreement or settlement reached through the ADR process has no binding effect in respect of any assessments relat- ing to that taxpayer not actually covered by the agreement or settlement, or any other taxpayer.
Days
A day means a business day.
SCHEDULE B
CODE OF CONDUCT FOR FACILITATOR
The terms of this Code of Conduct will be binding upon every person appointed as a Facilitator (“the Facilitator”) by the South African Revenue Service (“SARS”) to facilitate the alternative dispute resolution process (“ADR”) as contemplated in rule 7 of the rules promul- gated under the provisions of section 107A of the Income Tax Act, 1962 (Act No. 58 of 1962).
Professionalism
Every Facilitator is duty bound to build the integrity, fairness and efficacy of the ADR process and to preserve the independence and impartiality of the Facilitator.
Every Facilitator must:-
Conduct himself or herself with honesty and integrity and with courtesy to all parties;
Act in good faith and with impartiality to all parties;
Either decline on appointment or obtain technical assistance when a case is outside their field of competence;
Duly act within the prescripts of the facilitation process and the law;
Respect time and attempt to bring the dispute to an expeditious conclusion;
Resist the exercise of improper influence from any person outside the facilitation process; and
Continuously seek to upgrade his or her proficiency in the handling of tax disputes, skill and knowledge.
Conflict of interest
A Facilitator must immediately disclose to the parties and to SARS any fact that is likely to either affect his or her impartiality or create the impression that his or her impartiality is effected.
A Facilitator should decline an appointment if a conflict of interest exists that will give rise to bias.
If one of the parties requests the Facilitator to recuse him or herself, the Facilitator may do so if it will facilitate the resolution of the dispute.
SARS may not remove a facilitator once he or she has commenced with the ADR process, save by the request of the Facilitator or by agreement between both parties.
Confidentiality
Information disclosed to the Facilitator in confidence by a party during the course of the facilitation should be kept by facilitators in the strictest confidence and should not be disclosed to the other party unless authority is obtained for such disclosure from the party that disclosed the information.
The proceedings and outcome of all processes and related documentation will remain confidential, unless all the parties to the process agree otherwise or disclosure is allowed by any law.
Conclusion of Facilitation
Facilitators should reduce all agreements, settlement or a recommendation (if requested by both parties) to writing in a clear and concise format.
Quality Control
The SARS has the right to request parties to submit evaluations of the Facilitation Process, including an assessment of the Facilitator, from any party, which evaluations the SARS is entitled to treat confidentially.
SARS may remove a Facilitator from the list of facilitators for good reason, which includes the incompetence of the facilitator.
ANNEXURE D – Settlement Provisions in terms of sections 88A-H ITA (Part IIIA of Chapter III of the ITA)
PART IIIA OF CHAPTER III
Settlement of Dispute
Definitions
88A. For the purposes of this Part—
‘dispute’ means a disagreement on the interpretation of either the relevant facts involved or the law applicable thereto, or of both the facts and the law;
‘settle’ means to resolve a dispute by compromising any disputed liability, otherwise than by way of either the Commissioner or the person concerned accepting the other party’s interpretation of the facts or the law applicable to those facts, or of both the facts and the law, and ‘settlement’ shall be construed accordingly.
Purpose of Part
88B. (1) The basic principle in law is that it is the duty of the Commissioner to assess and collect taxes, duties, levies, charges and other amounts according to the laws enacted by Parliament and not to forgo any such taxes, duties, levies, charges or other amounts properly chargeable and payable.
Circumstances may, however, require that the strictness and rigidity of this basic principle be tempered where it would be to the best advantage of the state.
The purpose of this Part is to prescribe the circumstances whereunder it would be inappropriate and whereunder it would be appropriate that the basic rule be tempered and for a decision to be taken to settle a dispute.
Circumstances where inappropriate to settle
88C. It will be inappropriate and not to the best advantage of the state to settle a dispute, where, in the opinion of the Commissioner,—
the action on the part of the person concerned which relates to the dispute, constitutes intentional tax evasion or fraud and no circumstances contemplated in section 88D exist;
the settlement would be contrary to the law or a clearly established practice of the Commissioner on the matter, and no exceptional circumstances exist to justify a departure from the law or practice;
it is in the public interest to have judicial clarification of the issue and the case is appropriate for this purpose;
the pursuit of the matter through the courts will significantly promote compliance of the tax laws and the case is suitable for this purpose; or
the person concerned has not complied with the provisions of any Act administered by the Commissioner and the Commissioner is of the opinion that the non-compliance is of a serious nature.
Circumstances where appropriate to settle
88D. The Commissioner may, where it will be to the best advantage of the state, settle a dispute, in whole or in part, on a basis that is fair and equitable to both the person concerned and the Commissioner, having regard to inter alia—
whether that settlement would be in the interest of good management of the tax system, overall fairness and the best use of the Commissioner’s resources;
the cost of litigation in comparison to the possible benefits with reference to—
the prospects of success in a court;
the prospects of the collection of the amounts due; and
the costs associated with collection;
whether there are any—
complex factual or quantum issues in contention; or
evidentiary difficulties,
which are sufficient to make the case problematic in outcome or unsuitable for resolution through the alternative dispute resolution procedures or the courts;
a situation where a participant or a group of participants in a tax avoidance arrangement has accepted the Commissioner’s position in the dispute, in which case the settlement may be negotiated in an appropriate manner required to unwind existing structures and arrangements; or
whether the settlement of the dispute will promote compliance of the tax laws by the person concerned or a group of taxpayers or a section of the public in a cost-effective way.
Power to settle and disclosure
88E. (1) Dispute may be settled, as contemplated in section 88D, by the Commissioner personally or any official delegated by the Commissioner for that purpose.
(2) The Commissioner or the relevant delegated official must ensure that he or she does not have, or did not at any stage have, a personal, family, social, business, professional, employment or financial relationship with the person concerned.
Procedure for settlement
88F. (1) The person concerned should at all times disclose all relevant facts in discussions during the process of settling a dispute.
Any settlement will be conditional upon full disclosure of material facts known to the person concerned at the time of settlement.
All disputes settled in whole or in part, as contemplated in section 88D, must be evidenced by a written agreement between the parties in the format as may be prescribed by the Commissioner and must include details on—
how each particular issue was settled;
relevant undertakings by the parties;
treatment of that issue in future years;
withdrawal of objections and appeals; and
arrangements for payment.
The written agreement will represent the final agreed position between the parties and will be in full and final settlement of all or the specified aspects of the dispute in question between the parties.
The Commissioner must, where the dispute is not ultimately settled, explain the further rights of objection and appeal to the person concerned.
Subject to section 88G, the Commissioner and delegated official must adhere to the secrecy provisions with regard to the information relating to the person concerned and may not disclose the terms of any agreement to third parties unless authorised by law or by the person concerned.
The Commissioner must adhere to the terms of the agreement, unless it emerges that material facts were not disclosed to it or there was fraud or misrepresentation of the facts.
The Commissioner has the right to recover any outstanding amounts involved in the settlement in full where the person concerned fails to adhere to any agreed payment arrangement.
Register of settlements and reporting
88G. (1) The Commissioner must—
maintain a register of all disputes settled in the circumstances contained in these regulations; and
fully document the process in terms of which each dispute was settled, which document must be signed on behalf of the Commissioner and the person concerned.
The Commissioner must on an annual basis provide to the Auditor-General and to the Minister of Finance a summary of all disputes which were settled in whole or in part during the period of 12 months covered by that summary, which must—
be in such format which, subject to section 4(1)(b), does not disclose the identity of the person concerned, and be submitted at such time as may be agreed between the Commissioner and the Auditor-General or Minister of Finance, as the case may be; and
contain details of the number of disputes settled or part settled, the amount of revenue forgone and estimated amount of savings in costs of litigation, which must be reflected in respect of main classes of taxpayers or sections of the public.
Alteration of assessment on settlement
88H. (1) Where any dispute between the Commissioner and the person aggrieved by an assessment has been settled in terms of this Part, the Commissioner may, notwithstanding anything to the contrary contained in this Act, alter that assessment for purposes of giving effect to that settlement.
(2) Any altered assessment contemplated in subsection (1) shall not be subject to objection and appeal.
ANNEXURE E – ADR1
English
50 | Dispute Resolution
Trading name
Tax rolorertoc num¢'er
SOUTH AFRICAN REVENUE SERVICE
Addendum to notice of objection
In 1e+ms of rule 4(e) ‹hø taapayer musl deTiver h 5 objg.ction to SARS with in 30 daş'* aßcr -
ji f in Lhe case where the taxpayar h-as roques1ed reas<in s fœ an assassmcnt undar rule 3, m1hør the dado of tho notico by SARS that a4equale
reasons have bEeo provided or îhe daîe thin raasor'is were ^umishød by SARS, as Ihe case may be; Dr
jiiI in any ofhor case. 1ho dc1u of who assøssmonl (£-›rsl duo dafoj
Who a tht objeclwn is doiivc•od to SAMS wear iJ an »o p•øsc ibod pa iod mason la Æ ia« deuery must bø 6upoiio4 bcfo a yuu objoc5on
on bu oonüidorc-d
ompleGe this part only if pu signod who ACi£•:1 łJotiœ of of;jøction on behalf of an¢flber Laxpayor
jI1 is however oot applicable to the puł>Iio aff<:er a'a company. Ihe trustee at a trust or 1ha Iquidator/executor of an estato.)
fłea‹ona why the laxpøyer is unable te eign the objoc¢lon
Do you h-ava the nacessary power of attorney 1o sign on bohaI1 oJ 1ha Laxpayor?
NO
Is Ifie taxpayer aware of the objecLion and does h+i agrae wzfn use ground* tŁiereA YES NO
Afrikaans
SUID•AFRIKAANSE INKOMSTEDIENS
ltennlaqewlnp van Bsawsar
Mal‹ecaaaaef de aard van ver¥a$tpaa¥y mm 'n X ki na toapacäse baa{xej wna«xsa a4A8tn aaat laetel amos baerraat fa wnveag.
Neam assatXlof kaxlls dat u naar aa ean Ook mag eeldaeer.
I
52 | Dispute Resolution
I
Voba nazra
SUID-AFRIKAANSE INKOMSTEDIENS
Aanhangsel tot kennfsgewing van beswaar
• 1 •
ANNEXURE F – Example: Power of Attorney
POWER OF ATTORNEY
TO WHOM IT MAY CONCERN
I, the undersigned in my capacity as hereby nominate, constitute and appoint in his/her capacity as
to be my attorney and/or agent and/or delegate with full power and authority to act for me in respect of lodging and pursue an objection against the assessment issued against in respect of the
year/s of assessment, and to in my name, where required, note an appeal to the Tax Board or Tax Court and institute, prosecute and oppose any action and/or to sign the necessary documents and affidavits in the pursuance of such an appeal, including appearing on my behalf before the Tax Board, the Tax Court or any other Court.
THIS DONE, EXECUTED at , on this the
(Signature)
AS WITNESSES:
[Full name: ]
[Full name: ]
54 | Dispute Resolution
pr Trjsg ng npme
The rcferenga nnmfi›er
Full namojs) Tgl number Fax numbor
SOUTH AFRICAN REVENUE SERVICE
English
Notice of Appeal
as or co help tlxpdyer it
regisiered for npplio ble lxx
Pt•ya al 4¢ldro8s
Typg of Tgx: InComg TgXY5TC
If ”OLher', pleasa specify Naturoof Itie annum m dispute: Income
Deduction
Addi\iona I tax
Es1ale Duty
Imerest
Donations Tox Djhgr
Pe+iafly Olher
Date al disalfowance af objection
Amount of Lax in dispute in terms of lhe nrrlice of dJsallowance R
e Pfoase ‹nda:ata wh<D of the grounds specified in yo•ar objacLion you ara s1if1 relying an.
+ Tf the spaco provi¢fad is nan suñicia'nt, reasms should be prov•dad in a separale dc<umanl
The raason for the late appeal is:
Ghcose ie refer 1o ADFt tArlem‹ah oisp e Rosa inn ir vE S. reed ar›¢i gin the 1g'rmg qn {xagg g gif 1F‘a5 d0cvrnvjrr| I h•grehy r$qMesl Ihal1his dispula, lhe dgiads of who are gx;•nLainegin Ih”is tiga. be referred for Atjgznalzye O\spule Qesoli.run
Date CapaCiLy
56 | Dispute Resolution
Afrikaans
SUID-AFRIKAANSE INKOIdSTEDIENS
KennlBgewing van Appèl
Badzeg van bdaatlng u gacLg kg e«oIge nba kam en vernerj¥ng I
58 | Dispute Reso
ANNEXURE H – SARS Interpretation Note 15
INCOME TAX INTERPRETATION NOTE NO.15 (issue 2)
DATE : 8 November 2004
ACT : INCOME TAX ACT, 1962 (the Act)
SECTION : Sections 81(1), 81(2) read with section 107A rules
SUBJECT : OBJECTION: EXERCISE OF A DISCRETION – LATE OBJECTION
Purpose
The purpose of this note is to provide guidance as to the interpretation of the provisions of section 81(2) of the Act with reference to the exercise of a discretion and to indicate what factors the Commissioner will take into account in considering whether a late objec- tion may be condoned. It further serves to highlight the fact that a limitation is placed on the period in respect of which a late objection may be condoned.
Background
In terms of section 81(1) of the Act a taxpayer, who is aggrieved by any assessment in which such taxpayer has an interest, must lodge an objection against that assessment in the manner and within the period prescribed by the Act and the rules promulgated in terms of section 107A of the Act. Section 81(2) provides that the period within which an objection must be made, may be extended where the Commissioner is satisfied that reasonable grounds exist for the delay in lodging the objection.
Section 3(1) of the Act provides that the powers conferred and duties imposed upon the Commissioner by or under the provisions of the Act may be exercised or performed by him/her personally or by an employee engaged in carrying out those provisions under his control, direction or supervision. Employees of SARS, therefore, perform these powers and duties in order to carry out their daily tasks relating to the collection of taxes. The reference to the Commissioner in this note therefore includes an employee of SARS, to the extent that the employee has the delegated power to perform the functions.
Various other tax Acts administered by the Commissioner have also been amended to provide that the objection and appeal proce- dures and rules relating thereto and the settlement circumstances as contained in the Income Tax Act, will also apply to any dispute in terms of those Acts.
These Acts include the-
Transfer Duty Act, 1949 (Act No. 40 of 1949);
Estate Duty Act, 1955 (Act No 45 of 1955);
Stamp Duties Act, 1968 (Act No. 77 of 1968);
Value-Added Tax Act, 1991 (Act No. 89 of 1991);
Tax on Retirement Funds Act, 1996 (Act No. 38 of 1996);
Uncertificated Securities Tax Act, 1998 (Act No. 31 of 1998);
Skills Development Levies Act, 1999 (Act No 9 of 1999);
Unemployment Insurance Contributions Act, 2002 (Act No. 4 of 2002).
The Customs and Excise Act, 1964, contains its own provisions relating to dispute resolution.
The factors relevant to the exercise of the Commissioner’s discretion as indicated in this note are therefore also relevant to the exercise of a discretion where objections have been lodged in terms of the provisions of the Acts listed above.
The law
Section 81(1) read with rule 4 of the rules promulgated in terms of section 107A, specifies that an objection must be delivered to the Commissioner within 30 days after the date of the assessment. This requirement is also reflected on the reverse side of an assessment notice in accordance with the provisions of section 77(5) of the Act.
Dispute Resolution | 59
The aforementioned rule 4 provides as follows:
“A taxpayer who is aggrieved by an assessment may object to an assessment, which objection must –
be in such form as may be prescribed by the Commissioner in terms of section 65 of the Act;
be in writing specifying in detail the grounds upon which it is made;
specify an address at which the taxpayer will accept notice and delivery of the Commissioner’s decision in respect of such objection and all documents in terms of the proceedings contemplated in rule 26;
be signed by the taxpayer: Provided that where the taxpayer is unable to personally sign the objection, the person signing on behalf of the taxpayer must state in an annexure to the objection-
the reason why the taxpayer is unable to sign the objection;
that he or she has the necessary power of attorney to sign on behalf of the taxpayer; and
that the taxpayer is aware of the objection and agrees with the grounds thereof; and
be delivered to the Commissioner at the address specified in the assessment for this purpose, within 30 days after-
in the case where the taxpayer has requested reasons under rule 3, either the date of the notice by the Commissioner that adequate reasons have been provided or the date that reasons were furnished by the Commissioner, as the case may be; or
in any other case, the date of the assessment.”
“’Delivered’ in paragraph (e) above means –
handing the document to the relevant person;
sending the document to the relevant person by registered post;
telefaxing the document to the relevant person;
transmitting the document to the relevant person by electronic means; or
…
Provided that in the case of paragraphs (c) and (d), the original, signed document must be handed to that person or sent by registered post to that person within ten days of it being so telefaxed or transmitted by electronic means;”
Application of the law
The notice of objection must reach the Commissioner’s office within 30 days after the date of the assessment – rule 4(e).
The reference to “day” means any day other than a Saturday, Sunday or public holiday. The days between 16 December of
a year and 15 January of the following year, both inclusive, shall not be taken into account in determining the days allowed for complying with the provisions of section 81(2) read with the rules promulgated in terms of section 107A.
An objection not lodged within the 30-day time limit, is in fact an invalid objection. It is only in the event that the objection complies with the provisions of section 81(1), with reference to the manner and terms, read with rules 4(a) to 4(d) above, that the Commissioner will exercise his/her discretion in terms of section 81(2). The Commissioner is, therefore, unable to entertain an objection which is not rendered in time, unless he/she is satisfied that reasonable grounds exist for the delay. The limitation
of the period of time within which the objection must be lodged is of importance. In enacting time limits, it is the intention of the legislature that disputes should be brought to notice and resolved as speedily as possible so as to ensure the orderly administration of fiscal Acts and the collection of taxes.
There are no statutory guidelines in the Act as to how the discretion should be exercised. The Commissioner’s decision must comply with the requirements for administrative justice which are contained in section 33 of the Constitution read with the Promotion of Administrative Justice Act, 2000 (Act No. 3 of 2000). In particular, the Commissioner’s decision must be reasonable. For this purpose, the Commissioner is required to consider all relevant matters.
These would include matters such as -
the prospects of success on the merits;
the reasons for the delay;
the length of the delay; and
any other relevant factor, for example, the Commissioner’s interest in the determination of the final tax liability in view of the broader public interest relating to budgeting and fiscal planning.
60 | Dispute Resolution
It is, however, important to note that despite the fact that these factors are relevant to the exercise of a discretion, they are neither all embracing nor individually decisive and each case must be considered on its own merits.
Reasonable grounds
The ordinary dictionary meaning of “reasonable” is “having sound judgement; moderate; ready to listen to reason; not absurd; within the limits of reason; not greatly less or more than might be expected; tolerable; fair”.
Essentially, for a decision to be reasonable the Commissioner is required to consider all relevant matters. The Constitutional Court has held that there is no absolute standard of reasonableness – what is “reasonable” would depend on the particular circumstances of each case. (S v Makawanyane 1995 6 BCLR 665 (CC); 1995 3 SA 391(CC)).
Factors relevant to the exercise of discretion
The prospects of success on the merits
The fact that an objection may have good prospects of success in the matter will be a factor that the Commissioner considers. However, the strength of the merits of the matter does not relieve the taxpayer from the obligation of furnishing acceptable reasons for the delay in lodging an objection. The validity of the grounds of objection is therefore not a decisive factor which is taken into account in determining whether a late objection may be condoned.
The reason/s for the delay
An objection lodged outside the 30-day time limit should, together with a request for the condonation thereof, state in full the actual circumstances and the reasons for failure to lodge the objection within the 30 day period
as required by the relevant provisions of the Act. Should reasons not be furnished, the Commissioner will not be in a position to exercise his/her discretion.
A late objection may be condoned by the Commissioner where the delay was caused as a result of circumstances beyond the taxpayer’s control. Such circumstances would amongst others include a delay as a result of the illness of the taxpayer or his/her representative, the taxpayer being abroad at the time of the issue of the notice of assessment or postal delays. The taxpayer will, however, still be required to satisfy the Commissioner that the objection, under the specific circumstances, was lodged as soon as possible.
The time limit for the lodging of an objection is printed on the reverse side of an assessment notice. Ignorance of the law with regard to the period within which an objection must be lodged will therefore not be regarded as a sufficient reason for failure to comply with the requirements of the Act. Employing the services of a tax consultant or accountant does not absolve the taxpayer from his/her responsibility to comply with the provisions of the Act. Taxpayers should therefore ensure that the necessary action is taken to bring the dispute to the attention of SARS within the prescribed period of time.
The period of the delay
A taxpayer is required to furnish reasons for a delay in submitting an objection. The reasons should justify the period of such a delay and the longer the delay, the more convincing such reasons will have to be. The condonation of a late objection is not a right and it is therefore incumbent upon the taxpayer to substantiate the request for such condonation.
Where a taxpayer will not be able to formulate his/her grounds of objection within the required 30 day period, such taxpayer is advised to request an extension of time for submitting the grounds of objection before the 30 day time period expires. This would be the case where, for example, all the documentation/information required in order to formulate and/or substantiate the grounds of objection cannot be obtained within the prescribed time limit. The reasons for the delay should, however, be submitted together with the request for an extension of time.
Limitation on extension of time to lodge objection
Due to the fact that SARS is required to deal with objections and appeals within the time frames prescribed in the rules promulgated in terms of section 107A of the Act, a limitation has been placed on the extension of time that may be granted for the lodging of an objection. This limitation [inserted by section 71(1)(a) of the Revenue Laws Amendment Act, No 45
of 2003], which is contained in the proviso to section 81(2), applies with effect from 12 December 2003, and will be
Dispute Resolution | 61
applicable in respect of any objection which is lodged on or after 12 December 2003. In terms of section 81(2) the Commissioner may extend the 30-day period prescribed in rule 4(e) where reasonable circumstances exist for the delay in lodging the objection. In terms of the proviso referred to above, the Commissioner may not extend the period for the lodging of an objection -
for a period exceeding 30 days (reckoned from the end of the 30-day period referred to above, in other words after 60 days of the date of assessment), unless exceptional circumstances exist which gave rise to the delay;
where more than 3 years have lapsed from the date of the assessment, i.e. the assessment has expired; or
where the grounds for the objection are based wholly or mainly on any change in practice generally prevailing, which was applicable on the date of the assessment in dispute.
The objection process and timeframes can be illustrated as follows:
Have you lodged an objection against the assessment within 30 days from the date of the assessment in the prescribed format?
Yes
Your objection is in time and will be considered.
No
Is your objection based wholly or mainly on any change in “practice generally prevailing” that applied on the date of the assessment?
No
Have you lodged your objection within 60 days from the date of the assessment?
No
Yes
Yes
Your late objection may not be condoned nor may extension be granted. Your assessment is there- fore final.
If the grounds for late
Have you lodged your objection within 3 years from the date of the assessment?
Have you submitted reason- able grounds for not objecting within 30 days from the date of the assessment?
Yes
submission are acceptable, your late objection will be condoned and your objec- tion will be considered.
No
Your late objection may not be condoned nor may extension be granted. Your assess- ment is therefore final.
Yes
Do exceptional circumstances exist for not submitting your objection within 60 days from the date of the assessment?
No
Your late objection may not be condoned nor may extension be granted. Your assess- ment is therefore final.
No Yes
Your late objection may not be condoned nor may ex- tension be granted. Your as- sessment is therefore final.
If the circumstances are considered exceptional, your late objection will be condoned and your objec- tion will be considered.
62 | Dispute Resolution
The concept “exceptional circumstances” is not defined in the Act, but it is accepted law that when an Act refers to “exceptional circumstances” it contemplates something out of the ordinary and of an unusual nature. The South African Constitutional Court has held that the lawgiver cannot be expected to prescribe that which is inherently incapable of delineation – if something can be imagined and outlined in advance, it is probably because it is not exceptional. Each case must, therefore, be considered according to its own merits in order to determine whether the reason for requesting an extension of time beyond the 60 days after the date of assessment, is exceptional and therefore justifies the requested extension.
With regard to the “practice generally prevailing” applicable on the date of the assessment, the ”practice generally prevailing” at the time, is the practice known to and applied by the Commissioner personally or, in view of his powers of delegation, through a duly delegated division at the SARS Head Office. The “practice generally prevailing” is founded on the Commissioner’s (or delegated Head Office Divisions) interpretation of the law or upon the then existing judicial interpretation of the law. A “practice generally prevailing” is therefore one that has been expressly authorised by the Commissioner (personally or through the delegated Head Office Division) and is being applied throughout the country – it cannot be said that a practice that has its origin in a branch office of SARS falls within the concept of a “practice generally prevailing”.
The limitation of the condonation of a late objection, i.e. 60 days after the date of the assessment (and before the expiry of 3 years after the date of the assessment), to circumstances which are exceptional, is alleviated by the following factors:
The assessment notice and other public notices contain sufficient notice regarding the applicable time periods.
The new dispute resolution rules promulgated in terms of section 107A grant the taxpayer the right to request reasons for an assessment where reasons have not been provided. In such a case, the objection need not be filed before the reasons for the assessment have been received.
Format of application
Before any reasons for a late objection will be considered, it is imperative that the taxpayer advances facts and arguments, supported by documentation, where necessary, as required in terms of rule 4. Due to the fact that the taxpayer seeks condonation for non-com- pliance with the requirements of the Act, an application for condonation will not be regarded as having been filed in the absence of the necessary facts and/or documentation. The obligation to comply lies with the taxpayer and SARS bears no responsibility to make the relevant enquiries.
Refusal to grant condonation
Should SARS, after having considered the reasons furnished as to why an objection was lodged out of time, decide not to condone the late objection, the taxpayer may object and appeal against such a decision in terms of section 81(3) in accordance with the rules issued in terms of section 107A of the Act. Due to the fact that this decision is specifically subject to objection and appeal, the let- ter conveying the decision is an assessment in its own right (see definition of “assessment” in section 1 of the Act). A new objection must, therefore, be lodged against this assessment within 30 days after the date of the notice/letter to the taxpayer advising that the late objection was rejected.
In view of the amendments to section 81(2) (see paragraph 6.1) the Commissioner does not have a discretion to extend the period to lodge an objection where more than three years have elapsed from the date of the assessment. Therefore, no objection can be entertained which is delivered to SARS three years after the date of assessment.
Condonation of a late appeal
Any taxpayer who is entitled to object to an assessment and who is dissatisfied with the decision of the Commissioner in terms of section 81(4) of the Act may appeal against that decision within 30 days after the date of the notice informing him or her of the Commissioner’s decision in terms of section 81(4). The period of 30 days as prescribed by section 83 of the Act read together with the rules promulgated in terms of section 107A may be extended where the Commissioner is satisfied that reasonable grounds exist for the delay in noting the appeal.
Dispute Resolution | 63
ANNEXURE I – Legislative Extracts
INCOME TAX ACT NO. 58 OF 1962
1 Interpretation – In this Act, unless the context otherwise indicates; -
‘assessment’ means the determination by the Commissioner, by way of a notice of assessment (including a notice of assessment in electronic form) served in a manner contemplated in section 106 (2)—
of an amount upon which any tax leviable under this Act is chargeable; or
of the amount of any such tax; or
of any loss ranking for set-off; or
of any assessed capital loss determined in terms of paragraph 9 of the Eighth Schedule,
and for the purposes of Part III of Chapter III includes any determination by the Commissioner in respect of any of the rebates referred to in section 6 and any decision of the Commissioner which is in terms of this Act subject to objection and appeal;
‘date of assessment’, in relation to any assessment, means the date specified in the notice of such assessment as the due date or, where a due date is not so specified, the date of such notice;
‘representative taxpayer’ means-
in respect of the income of a company, the public officer thereof;
in respect of the income under his management, disposition or control, the agent of any person, including an agent appointed as such under the provisions of section ninety-nine, and for the purposes of this paragraph the term ‘agent’ includes every person in the Republic having the receipt, management or control of income on behalf of any person permanently or temporarily absent from the Republic or remitting or paying income to or receiving moneys for such person;
in respect of income the subject of any trust or in respect of the income of any minor or mentally disordered or defective person or any other person under legal disability, the trustee, guardian, curator or other person entitled to the receipt, management, disposal or control of such income or remitting or paying to or receiving moneys on behalf of such person under disability;
in respect of income paid under the decree or order of any court or judge to any receiver or other person, such receiver or person, whoever may be entitled to the benefit of such income, and whether or not it accrues to any person on a contingency or an uncertain event;
in respect of the income received by or accrued to any deceased person during his lifetime and the income received by or accrued to the estate of any deceased person, the executor or administrator of the estate of such deceased person,
in respect of the income received by or accrued to an insolvent estate, the trustee or administrator of such insolvent estate, but nothing in this definition shall be construed as relieving any person from any liability, responsibility or duty imposed upon him by this Act: Provided that for the purposes of this definition income includes any amount received or accrued or deemed to have been received or accrued in consequence of the disposal of any asset envisaged in the Eighth Schedule;
‘taxpayer’ means –
any person chargeable with any tax leviable under this Act and includes every person required by this Act to furnish any return;
Exercise of powers and performance of duties
The powers conferred and the duties imposed upon the Commissioner by or under the provisions of this Act may be exercised or performed by the Commissioner personally, or by any officer or person engaged in carrying out the said provisions under the control, direction or supervision of the Commissioner.
Any decision made and any notice or communication issued or signed by any such officer or person may be withdrawn or
It should be noted that the factors relevant to the exercise of a discretion in condoning a late objection are also relevant to the exer- cise of a discretion in condoning a late appeal. As indicated in paragraph 3.4, these factors are neither all embracing nor individually decisive and each case will be considered on its own merits.
Law Administration
SOUTH AFRICAN REVENUE SERVICE
Date of first issue: 18 June 2003
amended by the Commissioner or by the officer or person concerned, and shall for the purposes of the said provisions, until it has been so withdrawn, be deemed to have been made, issued or signed by the Commissioner: Provided that a decision made by any such officer in the exercise of any discretionary power under the provisions of this Act or of any previous Income Tax Act shall not be withdrawn or amended after the expiration of three years from the date of the written notification of such decision or of the notice of assessment giving effect thereto, if all the material facts were known to the said officer when he made his decision..
Any written decision made by the Commissioner personally in the exercise of any discretionary power under the provisions of this Act or of any previous Income Tax Act shall not be withdrawn or amended by the Commissioner if all the material facts were known to him when he made his decision.
(4) Any decision of the Commissioner under the definitions of ‘benefit fund’, ‘pension fund’, ‘provident fund’, ‘retirement annuity fund’ and ‘spouse’ in section 1, section 6, section 8 (4) (b), (c), (d) and (e), section 9D, section 10 (1) (cH), (cK), (e), (iA), (j) and (nB), section 11 (e), (f), (g), (gA), (j), (l), (t), (u) and (w), section 12C, section 12E, section 12G, section 13, section 14, section 15, section 22 (1), (3) and (5), section 24 (2), section 24A (6), section 24C, section 24D, section 24I,
section 25D, section 27, section 30, section 31, section 35 (2), section 38 (4), section 41 (4), section 57, paragraphs 6, 7, 9, 13, 13A, 14, 19 and 20 of the First Schedule, paragraph (b) of the definition of ‘formula A’ in paragraph 1 and
paragraph 4 of the Second Schedule, paragraphs 18, 19 (1), 20, 21, 22, 24 and 27 of the Fourth Schedule, paragraphs 2,
3, 6, 9 and 11 of the Seventh Schedule and paragraphs 29 (2A), 29 (7), 31 (2), 65 (1) (d) and 66 (1) (c) of the Eighth Schedule, shall be subject to objection and appeal.
79A. Reduced assessments
The Commissioner may, notwithstanding the fact that no objection has been lodged or appeal noted in terms of the provisions of Part III of Chapter III of this Act, reduce an assessment-
to rectify any processing error made in issuing that assessment; or
where it is proved to the satisfaction of the Commissioner that in issuing that assessment any amount which-
was taken into account by the Commissioner in determining the taxpayer’s liability for tax, should not have been taken into account; or
should have been taken into account in determining the taxpayer’s liability for tax, was not taken into account by the Commissioner:
Provided that such assessment, wherein the amount was so taken into account or not taken into account, as contemplated in sub- paragraph (i) or (ii), as the case may be, was issued by the Commissioner based on information provided in the taxpayer’s return for the current or any previous year of assessment.
The Commissioner shall not reduce an assessment under subsection (1)-
after the expiration of three years from the date of that assessment; or
if the amount was assessed in terms of an assessment accepted by the taxpayer and which was made in accordance with the practice generally prevailing at the date of that assessment..
79B Withdrawal of assessments
The Commissioner may, notwithstanding the fact that no objection has been lodged or appeal has been noted in terms of Part III of Chapter III, withdraw an assessment, which-
was issued to the incorrect taxpayer; or
was issued in respect of the incorrect year of assessment.
Any assessment withdrawn by the Commissioner in terms of this section shall for all purposes of this Act be deemed not to have been issued.
Part III
Objections and Appeals (ss 81-88)
81. Time and manner of lodging objections
Objections to any assessment made under this Act shall be made in the manner and under the terms and within the period prescribed by this Act and the rules promulgated in terms of section 107A by any taxpayer who is aggrieved by any assessment in which that taxpayer has an interest.
The period prescribed in the rules within which objections must be made may be extended by the Commissioner where the Commissioner is satisfied that reasonable grounds exist for the delay in lodging the objection.
Provided that the period for objection may not be so extended—
for a period exceeding 30 days, unless exceptional circumstances exist which gave rise to the delay in lodging the objection;
where more than three years have lapsed from the date of the assessment; or
where the grounds for objection are based wholly or mainly on any change in practice generally prevailing which applied on the date of that assessment.
Any decision by the Commissioner in the exercise of his or her discretion under subsection (2) shall be subject to objection and appeal.
The Commissioner may on receipt of a notice of objection to an assessment alter the assessment or may disallow the objection and shall send to the taxpayer or his or her representative notice of such alteration or disallowance, and record therein any alteration or disallowance made in the assessment.
Where no objections are made to any assessment or where objections have been allowed in full or withdrawn, such assessment or altered assessment, as the case may be, shall be final and conclusive.
Where any dispute between the Commissioner and the person aggrieved by an assessment has been resolved in accordance with the alternative dispute resolution procedures prescribed in the rules contemplated in section 107A (2), the Commissioner must alter that assessment for purposes of giving effect to that resolution.
Burden of proof as to exemptions, deductions, abatements, disregarding or exclusions
The burden of proof that any amount is-
exempt from or not liable to any tax chargeable under this Act; or
subject to any deduction, abatement or set-off in terms of this Act; or
to be disregarded or excluded in terms of the Eighth Schedule,
shall be upon the person claiming such exemption, non-liability, deduction, abatement or set-off, or that such amount must be disre- garded or excluded, and upon the hearing of any appeal from any decision of the Commissioner, the decision shall not be reversed or altered unless it is shown by the appellant that the decision is wrong.
Appeals to tax court against assessment
Any person entitled to object to an assessment, may, subject to the provisions of section 83A, appeal against such assessment to the tax court established in terms of the provisions of this section in the manner and under the terms and within the period prescribed by this Act and the rules promulgated in terms of section 107A.
(1A) The period prescribed in the rules within which appeal must be noted may be extended by the Commissioner where the Commissioner is satisfied that reasonable grounds exist for the delay in noting the appeal: Provided that any decision
by the Commissioner in the exercise of his or her discretion under this subsection shall be subject to objection and appeal. (1B) No notice of appeal shall be of any force or effect whatsoever which is not delivered at the Commissioner’s office within
the period prescribed for noting an appeal, or within such extended period as contemplated in subsection (1A). (1C) The Commissioner may alter any assessment against which an appeal has been noted, as contemplated in subsection
, where the Commissioner has conceded that appeal, *or resolved a dispute in terms of the alternative dispute resolution procedures prescribed in the rules contemplated in section 107A(2), in whole or in part, at any stage before-
the matter is heard by the tax board contemplated in section 83A, or the tax court contemplated in subsection (2); or
any appeal against a judgment of the tax court is heard, as contemplated in section 86A.
*pendlex – to be effected by the Revenue Laws Amendment Bill, 2004, not yet enacted.
There shall be a court to be known as the tax court which shall be a court of record.
The President of the Republic may, by proclamation in the Gazette, establish a tax court or courts for any area or areas as he may think fit, and may from time to time by proclamation abolish any existing court or courts or establish additional courts as circumstances may require.
Subject to subsection (4B), every tax court established in terms of this Act shall consist of a judge or an acting judge of the High Court, who shall be the President of the court, an accountant and a representative of the commercial community who shall be of good standing and who have appropriate experience: Provided that-
in all cases relating to the business of mining such third member shall, if the President of the court, the Commissioner or the appellant so desires, be a qualified mining engineer;
where any such appeal relates to the valuation of immovable property, or of both movable and immovable property, such third member shall, if the President of the court, the Commissioner or the appellant so desires, be a person appointed by the Commissioner from amongst persons approved by the President of the Republic, and who shall be a person appointed and carrying on business as a sworn appraiser who has skills or knowledge relating to the purpose for which the property is utilised; and]
when an appeal before the court involves a matter of law only or constitutes an application for condonation, the court shall consist of the President of the court sitting alone.
(4A) Any question as to whether a matter for decision involves a matter of fact or a matter of law, as contemplated in subsection (4)(c), shall be decided by the President of the court sitting alone.
(4B) The Judge President of the Provincial Division of the High Court having jurisdiction in the area where the tax court to hear the appeal is situated, may, where-
the amount which is the subject of the dispute exceeds R50 million; or
the Commissioner and the appellant agree thereto and have jointly applied to that Judge President,
direct that the tax court hearing that appeal shall consist of three judges or acting judges of the High Court, one of whom shall be the President of the tax court, and the members of the court, as contemplated in subsection (4).
(4C) If at any stage during the hearing of an appeal, or after hearing of the appeal but before judgment has been handed down—
one of the judges dies, retires or becomes otherwise incapable of acting in that capacity, the hearing of an appeal shall be heard de novo, unless the court consists of three judges, as contemplated in subsection (4B), and the remaining judges constitute the majority of judges before whom the hearing was commenced, in which case the hearing shall proceed before the remaining judges and members; or
one of the members dies, retires or becomes otherwise incapable of acting in that capacity, the hearing of an appeal shall proceed before the President and remaining members.
(4D) The judgment of the remaining judges and members contemplated in subsection (4C), shall be the judgment of the court.
(a) The members of any tax court other than judges shall be appointed by the President of the Republic by proclamation in the Gazette, and shall hold office for five years from the date of the relevant proclamation: Provided that the appointment of any such member may at any time be terminated by the President of the Republic for any reason which he considers good and sufficient, and shall lapse in the event of the abolition of the court in terms of subsection (3).
Any person so appointed shall be eligible for re-appointment for such further period or periods as the President of the Republic may think fit.
The members appointed under this section as on the date that the amendments to this section are introduced by the Second Revenue Laws Amendment Act, 2001, come into operation, shall be deemed to have been appointed under the provisions of this subsection until the expiry of the term of office of that member, as contemplated in subsection (5) (a).
The Judge President of the Provincial Division of the High Court having jurisdiction in the area for which a tax court has been constituted shall nominate and second a judge or an acting judge of that division to be the President of that tax court, and that secondment shall be for such period or for the hearing of such cases as the said Judge-President shall determine.
Any court established under the provisions of this Act may hear and determine any appeal lodged under the provisions of this Act, or any other Act administered by the Commissioner which provides that the objection and appeal procedures contained in this Part shall apply, whether or not the appellant is resident or carries on business within the area for which that court is established and whether or not the dispute arose within that area.
If an assessment has been altered, the assessment as altered shall be deemed to be the assessment against which the appeal is made.
…
(10) …
The sittings of the tax court shall not be public, and the court shall at any time on the application of the appellant exclude or require to withdraw from such sitting all or any persons whomsoever whose attendance is not necessary for the hearing of the appeal under consideration.
The Commissioner or any person authorized by him may appear in support of the assessment on the hearing of any appeal, and the appellant and any person who is interested in such appeal may appear in person or by his counsel, attorney or agent.
Subject to the provisions of this Act, the court may-
in the case of any assessment under appeal-
confirm the assessment; or
order that assessment to be altered; or
if it thinks fit, refer the assessment back to the Commissioner for further investigation and assessment;
in the case of any appeal against the amount of any additional tax imposed by the Commissioner, reduce, confirm or increase the amount of the additional tax so imposed, subject to the maximum amount chargeable in terms of this Act;
in the case of any other decision of the Commissioner which is subject to appeal, confirm or amend such decision.
hear any interlocutory application and decide on procedural matters as provided for in the rules of the tax court contemplated in section 107A.
Any altered assessment made by the Commissioner as a result of a referral of an assessment back to the Commissioner, as contemplated in subsection (13) (a) (iii), shall be subject to objection and appeal as provided in this Part and the rules promulgated in terms of section 107A.
…
…
Where-
the claim of the Commissioner is held to be unreasonable;
the grounds of appeal of the appellant are held to be frivolous;
the decision of the tax board contemplated in section 83A is substantially confirmed;
the hearing of the appeal is postponed at the request of one of the parties; or
the appeal has been withdrawn or conceded by one of the parties after a date of hearing has been allocated by the registrar,
the tax court may, on application by the aggrieved party, grant an order for costs in favour of that aggrieved party, which costs shall be determined in accordance with the fees prescribed by the rules of the High Court.
Any decision of the court under this section shall, subject to the provisions of section 86A, be final.
The President of the court may indicate which judgments or decisions of the court must be published for general information, in such form as does not reveal the identity of the appellant.
There shall be a registrar of the tax court, who shall be appointed by the Commissioner.
A person appointed as registrar shall become an employee of the South African Revenue Service.
The registrar shall exercise his or her functions in terms of the Act and the rules independently and impartially.
Any reference in this Part and the rules to ‘day’ means any day other than a Saturday, Sunday or public holiday: Provided that the days between 16 December of a year and 15 January of the following year, both inclusive, shall not be taken into account in determining days or the period allowed for complying with any provision in this Part or the rules.
83A Appeals to tax board
Any appeal referred to in section 83 (1) of this Act shall in the first instance be heard by the Board referred to in subsection (2) of this section, where-
the amount of the tax in dispute does not exceed such amount which the Minister may from time to time fix by notice in the Gazette, or, having regard to any assessed loss or assessed capital loss which may be carried forward, will probably not in total exceed such amount; or
the Commissioner and the appellant agree thereto; or
no objection to the jurisdiction of the Board to hear the appeal is made at or before the commencement of the hearing of the appeal:
Provided that where the Commissioner, at any time prior to the hearing of such appeal, or the Chairperson of the board, at any time prior to or during the hearing of such appeal, is of the opinion that on the ground of the disputes or legal principles arising or that may arise out of such appeal, such appeal should rather be heard by the tax court, such appeal shall be set down for hearing de novo before the tax court referred to in section 83.
A board, to be known as the tax board, is hereby established for the hearing of an appeal referred to in subsection (1).
The board shall consist of an advocate or attorney referred to in subsection (4), who shall be the Chairperson of the board, and, if the Chairperson, the Commissioner or the taxpayer considers it necessary, an accountant or a representative of the commercial community referred to in section 83 (4).
(a) The Minister of Finance shall in consultation with the Judge President of the Provincial Division within whose area of jurisdiction the board is to sit, appoint, by notice in the Gazette, advocates and attorneys to a panel, from which a Chairperson of the board shall be nominated from time to time or as required, and such persons shall hold office for five
years from the date of the relevant notice: Provided that the appointment of such a person may at any time be terminated by the said Minister for any reason which he considers good and sufficient.
(b) A person so appointed shall be eligible for reappointment for such further period or periods as the said Minister may think fit.
The Commissioner shall appoint a clerk of the Board.
The Commissioner shall determine the places for the hearing of appeals by the Board, and the Board shall hear an appeal at whichever place is closest to the appellant’s residence: Provided that the appellant and the Commissioner may agree that the appeal be heard at another place.
The clerk shall-
act as convener of the Board;
within the period prescribed in the rules contemplated in section 107A, furnish the members of the board and the appellant with a written notice of the time and place of the hearing of the appeal and a dossier containing copies of-
the assessment against which the appeal has been lodged;
the notice of objection and appeal;
the relevant return of income; and
any correspondence between the Commissioner and the appellant as well as any other documents which are, in the opinion of the Commissioner, relevant to the appeal.
The Commissioner shall designate an officer from his office to appear in support of the assessment at the hearing of the appeal.
The appellant shall-
in the case of a natural person who has the capacity to act, appear in person; or
in any other case, be represented by his representative taxpayer, at the hearing of the appeal: Provided that-
the appellant or his or her representative taxpayer may, together with his notice of appeal or within such further period as the Chairperson may allow, request permission to present his or her case otherwise than as contemplated in this subsection;
the Chairperson may as he or she deems fit permit the appellant to present his or her case in such manner as the Chairperson sees fit;
where the appellant’s return of income for the relevant year of assessment was prepared by any other person, such other person may appear on the appellant’s behalf.
(a) During the hearing of the appeal the Chairperson shall determine the procedures as he or she sees fit, subject to each party having the opportunity to put his or her case to the board in a reasonable manner.
The board shall not be required to record its proceedings, but the decision of the board shall be recorded in writing by the Chairperson, with a short statement of the facts of the case as found by the board and the reasons for its decision.
The hearing of an appeal may be adjourned by the Chairperson to any time and place that may seem convenient.
The clerk shall by notice in writing furnish the Commissioner and the appellant with a copy of the Board’s decision.
(i) If neither the appellant nor anyone authorized to appear on his or her behalf appears before the board at the time and place appointed for the purpose, the board may, at the request of the Commissioner’s representative and on proof that the prescribed notice of the sitting of the board had been submitted to the appellant, confirm the assessment in respect of which the appeal has been lodged, and thereafter such appellant shall not be entitled to request that the appeal be referred to the tax court in terms of subsection (13) (a).
(ii) If the Commissioner’s representative fails to appear before the board at the time and place appointed for the purpose the board may, at the request of the appellant, allow the appellant’s appeal and thereafter the Commissioner shall not be entitled to refer the appeal to the tax court in terms of subsection (13) (b).
The provisions of paragraph (e) shall not apply where the Chairperson is satisfied that sound reasons exist for the non- appearance and such reasons are advanced by the appellant or the Commissioner (as the case may be) within seven days after the date on which the appeal was set down for hearing.
If the appellant has failed to state the grounds of his objection and appeal in definite terms, the Board may, upon the opening of the proceedings, decide what shall be considered to constitute the grounds of the objection and appeal.
For the purposes of this section the provisions of sections 82, 83 (1B), (8), (11), (13), 87 and 88 shall mutatis mutandis apply.
Subject to the provisions of subsection (13), any decision of the Board in terms of this section, shall be final and conclusive.
(a) Where an appellant is not satisfied with the decision of the board, he may, within 30 days (or within such further period as the Chairperson may on good cause shown allow) after the date of the notice referred to in subsection (10) (d), require that the appeal be referred to the tax court for hearing.
(b) Where the Commissioner is not satisfied with the decision of the board, he may refer the appeal to the tax court for hearing and he shall notify the appellant thereof within 30 days (or within such further period as the Chairperson may on good cause shown allow) after the date of the notice referred to in subsection (10) (d).
An appeal which has been heard by the board and has been referred to the tax court by virtue of subsection (13) (a) or (b), shall be heard de novo by the tax court.
Summoning of witnesses and penalty for non-attendance
The Commissioner, the appellant or the President of a tax court may procure the attendance of any witness (whether residing or for the time being within the area of jurisdiction of that court or not) in the manner prescribed in the rules.
If any person who has been duly subpoenaed to give evidence at the hearing of an appeal or to produce any book, record, document or thing in his possession or under his control, fails without reasonable cause to attend or to give evidence or to produce that book, record, document or thing according to the subpoena or, unless excused by the President of the court, to remain in attendance throughout the proceedings, the President of the court may, upon being satisfied upon oath or by the
return of the person by whom the subpoena was served, that such person has been duly subpoenaed and that his reasonable expenses have been paid or offered to him, impose upon the said person a fine or in default of payment imprisonment for a period not exceeding three months.
If any person so subpoenaed fails to appear or unless duly excused to remain in attendance throughout the proceedings, the President of the court may also, upon being satisfied as aforesaid and in case no lawful excuse for such failure seems to him to exist, issue a warrant for the apprehension of that person in order that he may be brought up to give evidence or to produce any book, record, document or thing according to the subpoena, and on failure so to give evidence or produce that book, record, document or thing to be dealt with in the manner prescribed in subsection (2).
The President of the court may, on cause shown, remit the whole or any part of any fine or imprisonment which he may have imposed under this section.
The President of the court may order the costs of any postponement or adjournment occasioned by the default of a witness, or any portion of those costs, to be paid out of any fine imposed under this section.
A penalty imposed under subsection (2) or (3) shall be enforced mutatis mutandis as if it were a penalty imposed by a High Court in circumstances such as are described in the relevant subsection, and the provisions of any law which are applicable in respect of such a penalty imposed by a High Court shall mutatis mutandis apply in respect of a penalty imposed under either of the said subsections.
Contempt of tax court
If during the sitting of a tax court, any person wilfully insults a member of the court or any officer of the court attending at the sitting, or wilfully interrupts the proceedings of the court or otherwise misbehaves in the place where the court is held, the President of the court may make an order committing that person to imprisonment for any period not exceeding three months or order that person to pay a fine or in default of payment thereof to be imprisoned for such a period.
An order made under subsection (1) shall be executed mutatis mutandis as if it were an order made by a magistrate’s court under circumstances such as are described in that subsection, and the provisions of any law which are applicable in respect of such an order made by a magistrate’s court shall mutatis mutandis apply in respect of an order made under the said subsection.
…
86A Appeals against decisions of a tax court
The appellant in a tax court or the Commissioner may in the manner hereinafter provided appeal under this section against any decision of that court.
Such appeal shall lie-
to the provincial division of the High Court having jurisdiction in the area in which the sitting of the special court was held; or
where
the President of the tax court has granted leave under subsection (5); or
the appeal was heard by the tax court constituted in terms of section 83 (4B),
to the Supreme Court of Appeal, without any intermediate appeal to such provincial division
Any party who in terms of subsection (1) has a right to appeal against a decision of a tax court and intends to lodge an appeal against such decision under this section shall, within 21 days after the date of the notice issued by the registrar of the tax court notifying such decision or within such further period as the President of that court may on good cause shown allow, lodge with the said registrar and the opposite party or his attorney or agent a notice of his intention to appeal against such decision. (4)
Any such notice of an intention to appeal shall state-
in which division of the High Court the intending appellant wishes the appeal to be heard;
if the intending appellant wishes the appeal to be heard by the Supreme Court of Appeal, whether the whole or part only of the judgment is to be appealed against and if part only what part, and the contemplated grounds of the intended appeal, indicating the findings of fact or rulings of law to be appealed against; and
whether, for the purposes of preparing the record on appeal, a transcript is required of the evidence given at the hearing of the case by the tax court or, if only a part of such evidence is required, what part is required.
If an intending appellant wishes his appeal against a decision of the tax court to be heard by the Supreme Court of Appeal, the registrar of the tax court shall submit the notice or notices of intention to appeal lodged under subsection (3) to the President of the tax court who shall, having regard to the contemplated grounds of the intended appeal or appeals as indicated in the said notice or notices, make an order granting or refusing, as he sees fit, leave to appeal against such decision to the said Court, and the order so made shall be final.
If the person nominated as President of the tax court cannot act in that capacity for the purposes of this section by reason of his having ceased to be a judge or acting judge or if such person has died or if it is inconvenient for such person to act in the said capacity by reason of his absence or illness or for some other reason, the Judge President of the provincial division of the High Court having jurisdiction in the area for which the tax court has been constituted may nominate and second another judge or acting judge to act as President of the tax court for the purposes of this section in the place of the said person.
(a) Where in any case leave to appeal to the Supreme Court of Appeal has been granted under subsection (5), any appeal which any party is entitled to note against any decision given in that case shall, unless the parties otherwise agree, be noted to the said Court.
(b) Where such leave has been refused, the party by whom the notice of intention to appeal was lodged, may, subject to the provisions of this section, note an appeal to the appropriate provincial division of the High Court.
Any person who was entitled under this section to appeal against a decision of the tax court but has not within the time allowed by subsection (3) lodged a notice of his intention to appeal against such decision as required by that subsection, shall be deemed to have abandoned his right of appeal against such decision: Provided that he shall be entitled as the respondent in an appeal noted by the opposite party in the same case, to note in the manner hereinafter provided a cross- appeal in that case.
Any person who has in terms of subsection (3) lodged a notice of his intention to appeal against a decision of the tax court but has subsequently withdrawn such notice shall be deemed to have abandoned his right to note any appeal or cross-appeal against such decision.
(a) After the expiry of the time allowed under subsection (3) for the lodging of a notice of intention to appeal against a decision of the tax court the registrar of that court shall-
give notice to any person who has lodged a notice of intention in terms of the said subsection and has not withdrawn such notice, that if it is decided to appeal the appeal should be noted within 21 days after the date of the registrar’s notice;
supply to such person a certified copy of any order made by the President of the tax court under subsection (5) in relation to the intended appeal against the said decision; and
where the opposite party is not also an intending appellant in the same case, supply to the opposite party a copy of the notice given under subparagraph (i) and a copy of any order referred to in subparagraph (ii).
(b) Where it appears that an order be made by the President of the tax court under subsection (5) or where an intending appellant requires a transcript of evidence given at the hearing of the case by the tax court to enable him to prepare the record on appeal, the registrar of that court shall not give notice under paragraph (a) (i) until such order has been made and such transcript has been completed.
Any appeal under this section against a decision of a tax court shall be noted by lodging a written notice of such appeal with the registrar of the tax court, the opposite party or his attorney and the registrar of the appeal court.
Such notice of appeal shall be lodged within the period referred to in subsection (10) (a) (i) or within such longer period as may be allowed under the rules of the appeal court.
Any cross-appeal against a decision of the tax court in any case in which an appeal has been lodged under this section shall be noted by lodging a written notice of such cross-appeal with the registrar of the tax court, the opposite party or his attorney and the registrar of the appeal court.
Such notice of cross-appeal shall be lodged within 21 days after the date of the noting of the appeal or within such longer period as may be allowed under the rules of the appeal court.
A notice of appeal or cross-appeal lodged under this section shall state-
whether the whole or part only of the judgment is appealed against, and if part only, then what part;
the grounds of appeal or cross-appeal specifying the findings of fact or rulings of law appealed against; and
any further particulars that may be required under the rules of the appeal court.
(16)(a) A party may, by notice in writing lodged with the opposite party or his attorney or agent and the registrar of the tax court, abandon the whole or any part of a judgment of that court in his favour.
(b) Such notice of abandonment shall become part of the record.
The record lodged with an appeal court in an appeal against a decision of a tax court shall include any documents placed before the tax court in terms of the rules: Provided that merely formal documents and, if the parties consent, such other documents as do not relate to the matters in dispute in the appeal, may be excluded from the record.
Any application or notice which may in terms of this section be lodged with the registrar of the tax court shall be delivered to the registrar of that court during office hours.
Service of any notice which the registrar of the tax court is required to give to any person under this section or of any notice which any party may under this section lodge with an opposite party or his or her attorney or agent shall be effected by the registrar or the party lodging the notice, as the case may be, or by some person acting on the instructions of the registrar or such party, in the manner prescribed by law for the service of process of the High Court, or by dispatching such notice to the person to whom it is addressed by registered post addressed to such person’s residential or business address.
For the purposes of this section-
any application or notice duly despatched by registered post as contemplated in subsection (18) or (19) shall be deemed to have been given or lodged at the time of posting;
any notice served by or on behalf of the Commissioner or the registrar of the tax court upon the public officer of a company in his capacity as such shall be deemed to have been served upon the company;
......
Members of courts not disqualified from adjudicating
A member of any tax court or a judge of any division of the High Court of South Africa shall not solely on account of his or her liability to be assessed under this Act be deemed to be interested in any matter upon which he or she may be called upon to adjudicate thereunder.
Payment of tax pending appeal
The obligation to pay and the right to receive and recover any tax chargeable under this Act shall not, unless the Commissioner so directs, be suspended by any appeal or pending the decision of a court of law under section 86A, but if any assessment is altered on appeal or in conformity with any such decision or a decision by the Commissioner to concede the appeal to the tax board or the tax court or such court of law, a due adjustment shall be made, amounts paid in excess being refunded with interest at the prescribed rate, such interest being calculated from the date proved to the satisfaction of the Commissioner to be the date on which such excess was received and amounts short-paid being recoverable with interest calculated as provided in section 89.
The payment by the Commissioner of any interest under the provisions of this section shall be deemed to be a drawback from revenue charged to the National Revenue Fund.
106 Authentication and service of documents
Any form, notice, demand or other document issued or given by or on behalf of the Commissioner or any other officer under this Act shall be sufficiently authenticated if the name or official designation of the Commissioner or officer by whom the same is issued or given is stamped or printed thereon.
Any form, notice, demand, document or other communication required or authorized under this Act to be issued, given or sent to or served upon any person by the Commissioner or any other officer under this Act shall, except as otherwise provided in this Act, be deemed to have been effectually issued, given, sent or served-
if delivered to him; or
if left with some adult person apparently residing at or occupying or employed at his last known abode or office or place of business in the Republic; or
if despatched by registered or any other kind of post addressed to him at his last known address, which may be any such place or office as is referred to in paragraph (b) or his last known post office box number or that of his employer; or
(cA) if transmitted to that person by electronic means to that person’s last known electronic address;
in the case of a company-
if delivered to the public officer of the company; or
if left with some adult person apparently residing at or occupying or employed at the place appointed by the company under subsection (5) of section 101 or, in the case of any portfolio of a collective investment scheme referred to in paragraph (e) (i) of the definition of ‘company’ in section 1, the public officer of which is the manager, trustee or custodian referred to in the said subsection (5), by such manager, trustee or custodian, or where no such place has been appointed by the company, manager, trustee or custodian, as the case may be, if left with some adult person apparently residing at or occupying or employed at the last known office or place of business of the company, manager, trustee or custodian, as the case may be, in the Republic; or
if despatched by registered or any other kind of post addressed to the company or its public officer at its or his last known address, which may be any such office or place as is referred to in subparagraph (ii) or its or his last known post office box number or that of his employer.
if transmitted to the company or its public officer by electronic means to that company’s or public officer’s last known electronic address.
Any form, notice, demand, document or other communication referred to in subsection (2) which has been issued, given, sent or served in the manner contemplated in paragraph (c) or (d) (iii) of that subsection shall be deemed to have been received by the person to whom it was addressed at the time when it would, in the ordinary course of post, have arrived at the place to which it was addressed, unless the Commissioner is satisfied that it was not so received or was received at some other time or, where the time at which it was received or the fact that it was received is in dispute in proceedings under this Act in any court having jurisdiction to decide the matter, the court is so satisfied: Provided that the preceding provisions of this subsection shall not apply where any person is in criminal proceedings charged with the commission of an offence under this Act by reason of his failure, refusal or neglect to do anything which he is required to do in terms of the said form, notice, demand, document
or other communication, unless it was despatched to such person by registered or certified post.
If the Commissioner is satisfied that any form, notice, demand, document or other communication (other than a notice of assessment) issued, given, sent or served in a manner contemplated in paragraph (b), (c) or (d) (ii) or (iii) of subsection (2), has not been received by the person to whom it was addressed or has been received by such person considerably later than it should have been received by him and that such person has in consequence been placed at a disadvantage, the Commissioner may, if he is satisfied that the circumstances warrant such action, direct that such form, notice, demand, document or other communication be withdrawn and be issued, given, sent or served anew.
107A Rules of tax court
The Minister may, after consultation with the Minister of Justice, promulgate rules prescribing the procedures to be observed in lodging an objection and noting appeal against an assessment and the conduct and hearing of an appeal before a tax court.
The rules contemplated in subsection (1) may provide for alternative dispute resolution procedures in terms of which the Commissioner and the person aggrieved by an assessment may resolve a dispute.
107B Settlement of dispute
[…Repealed by s. 77 of Act No. 45 of 2003 – now incorporated in sections 88A-H]
VALUE-ADDED TAX ACT NO. 89 OF 1991
37. Burden of proof.
The burden of proof that any supply or importation is exempt from or not liable to any tax chargeable under this Act or is subject to tax at the rate of zero per cent or that any value upon which tax is chargeable under this Act or any amount of tax chargeable under this Act is subject to any deduction or set-off or that any amount should be deducted as input tax, shall be upon the person claiming such exemption, non-liability, rate of zero per cent, deduction or set-off, and upon the hearing of any appeal from any decision of the Commissioner, the decision shall not be reversed or altered unless it is shown by the appellant that the decision is wrong.
SUPREME COURT ACT NO. 59 OF 1959
Witness fees.
The Minister may in consultation with the Minister of Finance from time to time by notice in the Gazette prescribe a tariff of allow ances which shall be paid to a witness in civil proceedings or to any person who is to accompany any such witness on account of the youth or infirmity due to old age or any other infirmity of such witness.
Such notice may differentiate between persons according to the distances which they have to travel to attend the court to which they are summoned or subpoenaed, or according to their professions, callings or occupations, or between different classes of persons, and may empower such officers in the service of the State as may be specified therein, to order payment of allowances in accordance with a higher tariff than the tariff so prescribed, in cases where payment of allowances in accordance with the
last-mentioned tariff may cause undue hardship.
Notwithstanding anything to the contrary in any law contained, the court may order that no allowances or only a portion of the allowances prescribed shall be paid to any witness.
Rules of court.
. . . . . .
(a) . . . . . .
The judge president of a provincial division may make rules for regulating the proceedings of that division or of any local division within the area of jurisdiction of which such provincial division exercises concurrent jurisdiction, with reference to—
the times for the holding of courts;
the placing on the roll of actions for hearing; and
the extension or reduction as local circumstances may require of any period within which any act is in terms of the rules made under paragraph (a) required to be performed.
. . . . . .
. . . . . .
Different rules may be made in respect of different divisions.
Any rules made under any law repealed by this Act and in force at the commencement thereof, shall, subject to the provisions of this Act, and notwithstanding the repeal of that law by section forty-six of this Act, remain in full force and effect until amended or repealed under this section.
PROMOTION OF ADMINISTRATIVE JUSTICE ACT NO. 3 OF 2000
5. Reasons for administrative action.
Any person whose rights have been materially and adversely affected by administrative action and who has not been given reasons for the action may, within 90 days after the date on which that person became aware of the action or might reasonably have been expected to have become aware of the action, request that the administrator concerned furnish written reasons for the action.
The administrator to whom the request is made must, within 90 days after receiving the request, give that person adequate reasons in writing for the administrative action.
If an administrator fails to furnish adequate reasons for an administrative action it must, subject to subsection (4) and in the absence of proof to the contrary, be presumed in any proceedings for judicial review that the administrative action was taken without good reason.
(a) An administrator may depart from the requirement to furnish adequate reasons if it is reasonable and justifiable in the circumstances, and must forthwith inform the person making the request of such departure.
In determining whether a departure as contemplated in paragraph (a) is reasonable and justifiable, an administrator must take into account all relevant factors, including—
the objects of the empowering provision;
the nature, purpose and likely effect of the administrative action concerned;
the nature and the extent of the departure;
the relation between the departure and its purpose;
the importance of the purpose of the departure; and
the need to promote an efficient administration and good governance.
Where an administrator is empowered by any empowering provision to follow a procedure which is fair but different from the provisions of subsection (2), the administrator may act in accordance with that different procedure.
(a) In order to promote an efficient administration, the Minister may, at the request of an administrator, by notice in the Gazette publish a list specifying any administrative action or a group or class of administrative actions in respect of which the administrator concerned will automatically furnish reasons to a person whose rights are adversely affected by such actions, without such person having to request reasons in terms of this section.
(b) The Minister must, within 14 days after the receipt of a request referred to in paragraph (a) and at the cost of the relevant administrator, publish such list, as contemplated in that paragraph.
ANNEXURE J – Example: Notice of Motion
IN THE TAX COURT OF SOUTH AFRICA SEATED IN PRETORIA
In the matter between:- Case No:
(Name of Taxpayer) Applicant
and
THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE Respondent
NOTICE OF MOTION
[In terms rule 26 of the rules issued under s107A of the Income Tax Act, 1962]
PLEASE TAKE NOTICE that application will be made on behalf of the above-named Applicant for the following relief:
That the Respondent be ordered to take a decision in respect of an objection lodged by the Applicant on ? (date) as required by rule 5 of the rules issued in terms of section 107A of the Income Tax Act, 1962 (Act No. 58 of 1962) / That the Respondent be ordered to provide adequate reasons for its assessment dated ?;
That the Respondent be ordered to pay the costs of suit on an attorney and client scale;
Further and/or alternative relief.
AND PLEASE TAKE NOTICE that the Affidavit of ? (applicant) and ? will be used in support hereof.
TAKE FURTHER NOTICE that the Applicant has appointed ?, at ? as the address at which it will accept notice and service of all process in these proceedings.
TAKE FURTHER NOTICE that if you intend opposing this application you are required -
to notify Applicant’s attorney in writing on or before the ? day of ? 200? (10 days after delivery of Notice of Motion);
within 15 (fifteen) days after you have so given notice of your intention to oppose the application, to file your Opposing Affidavit, if any;
to appoint in such notification an address at which you will accept notice and service of all documents in these proceedings;
should no such notice of intention to oppose be given, the application will be made on the ? at 10:00 (15 days after service of Notice of Motion) or as soon thereafter as the Applicant may be heard.
DATED AT ON THE DAY OF
(Signature & address)
To: The Registrar of the Tax Court Law Administration: Litigation
299 Bronkhorst Street, Nieuw Muckleneuk, Pretoria, 0181 Private Bag X923, Pretoria, 0001
Tel no: (012) 422 5017/14/15
Fax no: (012) 422 5012
Email: mkenzie@sars.gov.za
Dispute Resolution | 75
ANNEXURE K – Example: Notice of Intention to Oppose
IN THE TAX COURT OF SOUTH AFRICA SEATED IN PRETORIA
In the matter between:- Case No:
(Name of Taxpayer) Applicant
and
THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE Respondent
NOTICE OF INTENTION TO OPPOSE
[In terms rule 26 of the rules issued under s107A of the Income Tax Act, 1962]
PLEASE TAKE NOTICE that the Respondent has appointed ?, at ? as the address at which it will accept notice and service of all process in these proceedings.
DATED AT ON THE DAY OF
(Signature & full address)
To: The Applicant ? At address: ?
And
To: The Registrar of the Tax Court Law Administration: Litigation
299 Bronkhorst Street, Nieuw Muckleneuk, Pretoria, 0181 Private Bag X923, Pretoria, 0001
Tel no: (012) 422 5017/14/15
Fax no: (012) 422 5012
Email: mkenzie@sars.gov.za
76 | Dispute Resolution
ANNEXURE L – Example: Founding/Opposing/Replying/Replicating Affidavit
IN THE TAX COURT OF SOUTH AFRICA SEATED IN PRETORIA
In the matter between:- Case No:
(Name of Taxpayer) Applicant
and
THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE Respondent FOUNDING / OPPOSING / REPLYING / REPLICATING AFFIDAVIT
I, the undersigned,
do hereby make oath and state as follows:-
I am an adult [female/male] employed as ? a [capacity] at ? [office& address].
(Contents of affidavit)…
Date Place
DEPONENT
I certify that prior to my administering the prescribed oath/affirmation*, I have put the following questions to the deponent and wrote down his/her answers thereto in his/her presence:
Do you know and understand the contents of the above statement? Answer
Do you have any objection to taking the prescribed oath/affirmation*? Answer
Do you regard the prescribed oath/affirmation*as binding on your conscience? Answer
I certify that the deponent acknowledges that he/she knows and understands the contents of this statement which was sworn to/affirmed* and signed by the deponent in my presence.
Justice of the Peace / Magistrate/ Commissioner of Oaths*
Designation (Rank) Date Place Full first names and surname Address
*Delete whichever is not applicable
To: (the other party) ?
At address: ?
And
To: The Registrar of the Tax Court Law Administration: Litigation
299 Bronkhorst Street, Nieuw Muckleneuk, Pretoria, 0181 Private Bag X923, Pretoria, 0001
Tel no: (012) 422 5017/14/15
Fax no: (012) 422 5012
Email: mkenzie@sars.gov.za
Dispute Resolution | 77
PLEASE NOTE:
The updated versions of this guide will be published on the SARS Dispute Resolution website at http://www.sars.gov.za/dr (launched on 2 June 2003).
The Guide on Tax Dispute Resolution can be found here: