Rappa Resources (Pty) Ltd v CSARS (21/21045)

A previous tax alert, summarised the outcome of the High Court’s judgement in the preceding case of Rappa Resources (Pty) Ltd & Another v CSARS (20/18875). The High Court ruled against the taxpayer on the repayment of refunds by SARS.

Preceding case

In terms of the preceding case, SARS extended the scope of the audit to include periods for which refunds were due. The taxpayer made an application on an urgent basis to the high court for the payment of the refunds on the basis that they relied on the refunds to conduct their business and that the verification or audit extended wider than the actual refunds it was on prior years of assessment.

As there was no security that could be offered by the taxpayer in respect of the repayment of the refund it would be to the prejudice of SARS if the court had ordered the repayment of the refund. The court, however, acceded to the request by the taxpayer to order SARS to complete the audit by a specific deadline (11 December 2020).

The case summarised above can be accessed here.

Current case

The current case is an opposed interlocutory application in review proceedings launched by the taxpayer, relating to the preceding case.

In summary, the taxpayer argues that it is entitled to the record of the proceedings pursuant to which the respondent decided to issue certain assessments pertaining to VAT refunds on 29 March 2021.

SARS, during argument, challenged the documents sought by the taxpayer as being overly broad and referred to various portions of the answering affidavit that referred to certain documents being privileged or confidential. The judge notes that insofar as documents are privileged, the taxpayer would not be entitled thereto. The judge furthermore highlights that SARS should be afforded a proper opportunity to object to the production of any documents particularised in the amended notice of motion. On the other hand, if the record which is provided by SARS is insufficient it should be open to the taxpayer to seek further documents.

The judge consequently granted an order directing SARS to dispatch to the registrar and the taxpayer, a complete record containing all documents and all electronic records that relate to the decision which is the subject of the review application, together with such reasons as SARS is by law required to give or make. 

The full judgement in the current case can be accessed here.

04/11/2021