CSARS v State Structured Mezzanine Investment (Pty) Ltd and Another (1824/2021) [2024] ZAECMKHC 106 (17 September 2024))
29 October 2024
This case focuses on addressing significant issues related to SARS’s authority under the Tax Administration Act No. 28 (2011) (“TAA”) and the responsibilities of taxpayers in providing requested information.
Key Issues
- Authority of SARS: SMI challenged the authority of SARS to issue a request for relevant material in terms of section 46 of the TAA for years beyond the prescribed audit period. SMI was of the view that the audit period had expired, and thus, SARS had no legal basis to issue any further assessments.
- Compliance with section 46 of the TAA: SARS maintained that the TAA does not limit the timeframe for requesting information, but restricts SARS’ ability to raise additional assessments beyond three years from the original assessment.
- Confidentiality and Fairness: SMI contended that SARS’ request constituted an administrative action and that SARS was prematurely seeking judicial intervention and must comply with principles of legality, reasonableness, and procedural fairness. SMI was also of the view that some of the relevant material requested was confidential and SARS was , therefore, not entitled to request this relevant material.
Court Findings
The court ruled in favour of SARS, and highlighted that SARS may conduct a robust information-gathering exercise. The prescription periods as contemplated in section 99(2) of the TAA do not apply to requests for relevant material.
The court ruled that the timeframe limitations apply to raising assessments, not to the information requests themselves. Additionally, the court dismissed SMI’s arguments regarding the confidentiality and fairness of the section 46 request, stating that SARS actions were within the legal framework provided by the TAA.
Conclusion
This case emphasises the extensive powers of SARS in enforcing tax compliance and the obligations of taxpayers to provide requested information in accordance with the provisions of the TAA. The ruling serves as a reminder for taxpayers to ensure that they maintain supporting documentation and ensure relevant material requests are timeously attended to.
Read the full court case here.
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