Fin24

Sars reeling under court judgment

2012-05-29 17:01

Johannesburg - The South African Revenue Service (Sars) was today dealt a severe blow in what could be a precedent-setting judgment by the North Gauteng High Court.

The court ruled that it is unlawful for the taxman to invalidate tax clearance certificates without giving taxpayers an opportunity to defend themselves.

Durban businesswoman and multimillionaire Shauwn Mpisane – who is under investigation for alleged tax fraud – was granted an urgent interdict this afternoon preventing Sars from withdrawing a tax clearance certificate for one of her companies, Zikhulise Cleaning, Maintenance and Transport CC.

Mpisane, a close friend of suspended police commissioner Bheki Cele, argued that she was not given an opportunity to defend her company before Sars informed her that her clearance certificate had been withdrawn because of alleged non-compliance.

Judge Gregory Wright ruled that Sars acted “unlawfully” when it invalidated Mpisane’s tax clearance certificate for the period January 17 2012 to January 16 2013.

Mpisane’s lawyer, Rafik Bhana SC, said the interim judgment could have wide-ranging ramifications for the taxman – it could mean that all non-compliant taxpayers should be given an opportunity to defend themselves.

“This will mean that Sars may not just withdraw a tax clearance certificate and then inform the taxpayer later. This is a precedent-setting judgment because Sars can’t just arbitrarily take away the certificate,” said Bhana.

“Sars acted unlawfully in invalidating the certificate as it should have given Mpisane the right to be heard before taking a decision to withdraw the certificate.”

According to court papers, Sars withdrew the certificate on March 16 this year.

The certificate was issued on January 17 2012 to last a year and this would allow Mpisane’s company to bid for government tenders, conduct business and retain its compulsory registration with the Construction Industry Development Board and the National Homebuilders Registration Council.

Mpisane had argued that without the certificate her company would not be able to do any business, let alone be paid for work already done by her company.

“There is no explicit statutory provision or rule of any sort which grants Sars the power to issue so-called tax clearance certificates which Sars must take into account before issuing such certificates,” said Mpisane in court papers.

She argued that Sars had sought to regulate the issuing of such certificates using an unlawful policy.

The court agreed with Mpisane that Sars failed to act in a procedurally fair manner by giving Mpisane’s company adequate notice of the withdrawal.

“In fact Sars only advised Zikhulise of the decision which had taken approximately one month after it had taken the decision,” argued Mpisane in court papers.

Mpisane’s victory comes just days before she heads back to the Durban regional court where she is facing charges of tax fraud involving R2.4m for allegedly submitting false invoices to reclaim Value Added Tax.

A spokesperson for Sars said the organisation would respond to the outcome of today’s case at a later stage.

- City Press

Comments
  • arthur.hugh - 2012-05-29 17:27

    Not sure if it's such a win-win case, the pendulum can swing both ways.

  • Sonja - 2012-05-29 17:32

    geeeezzz.... it took a skiniving dirt bag currupt swine to set a precedent....not good news for our legal system and country as a whole

  • wesley.nel.5 - 2012-05-29 17:33

    She was not investigated for tax fraud, they found out she is a close freind of Bheki Clele

  • rickvcooper - 2012-05-29 17:34

    Fantastic ruling! Well done Mpisane for having the b@lls to take the matter to court.

  • frans.vanderpoll - 2012-05-29 17:41

    She is a friend of Bheki Cele after all. Preferential treatment no doubt. Maybe Cele's advisor/spokesperson helped her.

  • braamc - 2012-05-29 17:45

    From fraudulent collection to fraudulent spending and stealing

  • david.lebethe - 2012-05-29 17:49

    I think the judgement will go a long way to show Sars that it is not a law unto itself. Often Sars act arbitrarily against tax payers and often without fear of any retribution from the law. As it is, the law makes it obligatory for CCMA settlement to be subjected to tax yet no one (not even the CCMA), knows how much tax will Sars charge. Often employees find heavy deductions have been made from settlement amount thus iundermining any attempt by parties to settle the dispute with less pain of having to find who is a guilty party. On this basis, I find the judgment fair and will open the way for me to challenge Sars under the circumstances. I think every right thinking South African must commend the judgment. It wqas a good judgment ever made by our courts.

  • david.lebethe - 2012-05-29 17:49

    I think the judgement will go a long way to show Sars that it is not a law unto itself. Often Sars act arbitrarily against tax payers and often without fear of any retribution from the law. As it is, the law makes it obligatory for CCMA settlement to be subjected to tax yet no one (not even the CCMA), knows how much tax will Sars charge. Often employees find heavy deductions have been made from settlement amount thus iundermining any attempt by parties to settle the dispute with less pain of having to find who is a guilty party. On this basis, I find the judgment fair and will open the way for me to challenge Sars under the circumstances. I think every right thinking South African must commend the judgment. It wqas a good judgment ever made by our courts.

  • Repline - 2012-05-29 17:54

    Irrespective of Mpisane, this is an interesting judgement and a good judgement for your everyday-honest taxpayer. This means SARS can no longer just do whatever they want to do. There has to be clear guidance and procedure to what they are doing - and most important of all he has to make sure the taxpayer is aware.

  • Repline - 2012-05-29 17:55

    Irrespective of Mpisane, this is an interesting judgement and a good judgement for your everyday-honest taxpayer. This means SARS can no longer just do whatever they want to do. There has to be clear guidance and procedure to what they are doing - and most important of all he has to make sure the taxpayer is aware.

  • thandeka.mncwango.5 - 2012-05-29 17:57

    This makes perfect sense to me. It is procedurally unfair for SARS to just withdraw some1z tax clearance certificate without giving them at least an opportunity to state their case. This ensures that SARS is accountable to the people. Secondly it limits the abuse of power by SARS. Thirdly it gives authority on courts to evaluate whether the decision taken was just or not. Whether she is friends with Bheki Cele or not is besides the legal point. I think this decision justly limits SARS power in such a process and I anticipate just decision going toward!

  • Dragan - 2012-05-29 18:12

    Perhaps the next step will be to ask SARS what do they do with all of the taxes they collect.. I am of the opinion that I do not get a cent of the 50% + taxes I pay back... I pay private security, fuel levy school, hospital, tolls, licences etc etc nada zilch not eve a thank you letter at the end of the year. In all reality I consider myself a half day slave.

  • rodney.genricks - 2012-05-29 18:22

    well done...this is about time as in my case I was not able to pay my vat due to none payment from a govt institution for which I was now being penalised on top of not being paid.The govt institution took some sevrn months to pay the bill but in the interim we were put under major financial strain through no fault of our own.It is no wonder more companies are starting to invest elsewhere.

  • Trevor - 2012-05-29 18:26

    Sars Reeling, ag please man

      Koos - 2012-05-29 23:10

      she wasn't paying anyway.

  • Dragan - 2012-05-29 18:28

    I pay 50% + taxes and receive not a cent back.. In all reality I consider myself a half day slave.

      Repline - 2012-05-30 11:59

      Lol you pay 50%? Good God man.. you should get yourself a better accountant/auditor.

      dennis.schmelzenbach.5 - 2012-05-31 16:16

      The good news Dragan, is that 1 July, we can start working for ourselves.Until then, the first six months we work for SARS!

      dennis.schmelzenbach.5 - 2012-05-31 16:16

      The good news Dragan, is that 1 July, we can start working for ourselves.Until then, the first six months we work for SARS!

  • Dragan - 2012-05-29 18:30

    I pay 50% + taxes and receive not a cent back.. In all reality I consider myself a half day slave.

  • nhlokza - 2012-05-29 18:49

    SARS get away with way too much heavy handed treatment of citizens

  • Philip Buys - 2012-05-29 18:58

    You might have won the battle, but you are not going to win the war.

      Pierre - 2012-05-30 04:55

      Kzn not the sharpest pencil? He was referring to SARS appealing the ruling, and the upcoming "I am an ANC crony" corruption trial this madam will be facing in the coming months. Real question is why every second crony runs a cleaning service thats involved in construction.

      Pierre - 2012-05-30 04:55

      Kzn not the sharpest pencil? He was referring to SARS appealing the ruling, and the upcoming "I am an ANC crony" corruption trial this madam will be facing in the coming months. Real question is why every second crony runs a cleaning service thats involved in construction.

  • prakash.singh.169 - 2012-05-29 20:22

    WHY DID MPISANE BOTHER TO GET A TAX CLEARANCE CERTIFICATE IN THE FIRST PLACE, BECAUSE THE TENDERS AWARDED TO THEM ARE IRREGULAR AND NOT WON ON MERIT. IT'S A PITY THAT MR PATHER FROM THE ETHEKWENI HOUSING HAS RESIGNED, SHAME HE HAD NOTHING TO HIDE BUT ONLY INCREASED AN ORIGINAL TENDER FROM 84 MILLION RAND TO 584 MILLION RAND.

  • prakash.singh.169 - 2012-05-29 20:24

    WHY DID MPISANE BOTHER TO GET A TAX CLEARANCE CERTIFICATE IN THE FIRST PLACE, BECAUSE THE TENDERS AWARDED TO THEM ARE IRREGULAR AND NOT WON ON MERIT. IT'S A PITY THAT MR PATHER FROM THE ETHEKWENI HOUSING HAS RESIGNED, SHAME HE HAD NOTHING TO HIDE BUT ONLY INCREASED AN ORIGINAL TENDER FROM 84 MILLION RAND TO 584 MILLION RAND.

  • freddy.vanwijk - 2012-05-29 20:42

    If SARS do not get "their house in order", more legal action will follow. If they do not pay refunds on taxes owing to taxpayers, then taxpayers must demand equal interest on amounts outstanding on the same lines as what SARS will demand from taxpayers on taxes due. If SARS fail to comply, then SARS officials must be arrested and detained untill refunds are payed back or even face the fact that assets even belonging to the state be seized and auctioned off to pay outstanding amounts.

  • j.c.s.mailbox - 2012-05-29 23:15

    I am so glad that some of SARS illegal actions somewhere become public and end in a court room. As for me i was penalised for late or non submission on tax income after some of their employer tell me my pension is under the limit for tax paying All of a sudden i get an urgent notification at the 19th Dec 2011 which was posted at 18th oct.2011 It took the snailmail more than two months to reach my residential and it isnt even at registered post. In the meantime all efforts to contact SARS at their website or on telephone was all in vain and the penalty just doubled when i was early in January able to approach their offices at VRNG. My representations was flat out ignored and i have to pay a R1000-00 penalty for not being present my so called arrears in due time as taking from the 18th of Oct.2011. Snailmail boycot me in the first place and nobody available during Dec. so thats my fault and i have to pay R1000-00 penalty ...that is how SARS is doing business.....

  • j.c.s.mailbox - 2012-05-29 23:16

    I am so glad that some of SARS illegal actions somewhere become public and end in a court room. As for me i was penalised for late or non submission on tax income after some of their employer tell me my pension is under the limit for tax paying All of a sudden i get an urgent notification at the 19th Dec 2011 which was posted at 18th oct.2011 It took the snailmail more than two months to reach my residential and it isnt even at registered post. In the meantime all efforts to contact SARS at their website or on telephone was all in vain and the penalty just doubled when i was early in January able to approach their offices at VRNG. My representations was flat out ignored and i have to pay a R1000-00 penalty for not being present my so called arrears in due time as taking from the 18th of Oct.2011. Snailmail boycot me in the first place and nobody available during Dec. so thats my fault and i have to pay R1000-00 penalty ...that is how SARS is doing business.....

  • j.c.s.mailbox - 2012-05-29 23:17

    I am so glad that some of SARS illegal actions somewhere become public and end in a court room. As for me i was penalised for late or non submission on tax income after some of their employer tell me my pension is under the limit for tax paying All of a sudden i get an urgent notification at the 19th Dec 2011 which was posted at 18th oct.2011 It took the snailmail more than two months to reach my residential and it isnt even at registered post. In the meantime all efforts to contact SARS at their website or on telephone was all in vain and the penalty just doubled when i was early in January able to approach their offices at VRNG. My representations was flat out ignored and i have to pay a R1000-00 penalty for not being present my so called arrears in due time as taking from the 18th of Oct.2011. Snailmail boycot me in the first place and nobody available during Dec. so thats my fault and i have to pay R1000-00 penalty ...that is how SARS is doing business.....

  • Trevor - 2012-05-30 07:32

    Close friend of Bheki Cele involved in Governement Tenders. mmmmm...I wonder who will win the tender? It's a joke!!

  • sharon.truebodyvice - 2012-05-30 08:10

    A friend of Bheke Cele .................say no more

  • sharon.truebodyvice - 2012-05-30 08:10

    A friend of Bheke Cele .................say no more

  • wally.williams.148 - 2012-05-30 08:36

    Well done for a change. No wonder the Crts are being criticised, or some "bought" into the lap of Govt. This arbitrary way of doing business is just not in line with recognised law and principles of fairness and natural justice - of which being fair is certainly one of the mainstays. No matter who you are, you still deserve the right to put your case before Crt. Same applies to some other law enforcement agencies and Local Authorities who are adopting the same principle of acting arbitrarily with the individual being found between a rock and a hard place. "Rules is Rules..." yes, they are, even unto Govt Depts and Agencies and their personnel.

  • wally.williams.148 - 2012-05-30 08:38

    Well done for a change. No wonder the Crts are being criticised, or some "bought" into the lap of Govt. This arbitrary way of doing business is just not in line with recognised law and principles of fairness and natural justice - of which being fair is certainly one of the mainstays. No matter who you are, you still deserve the right to put your case before Crt. Same applies to some other law enforcement agencies and Local Authorities who are adopting the same principle of acting arbitrarily with the individual being found between a rock and a hard place. "Rules is Rules..." yes, they are, even unto Govt Depts and Agencies and their personnel.

  • lungile.ndyibithi - 2012-05-30 13:58

    This is good news

  • Tamaranui - 2012-05-30 14:33

    The Judiciary system in this country is in desperate need of a overhaul as this current protocols are farcical at the very least.

  • geetheswar.baijnath - 2012-05-30 22:32

    Mpisane, a close friend of suspended police commissioner Bheki Cele has got the power to take sars to court . What about the poor pensioners who sars have charged penalties because they did not submit tax returns.10 years later they were told that they should have submitted their tax returns in spite of their income being way below the taxable amount.

  • Eidel - 2012-05-31 07:46

    Oops...

  • Paul - 2012-05-31 10:01

    When will this circus ever end! This business still gets Govt.Tenders through her political connections even though it is fraught with questionable deals, time is on the side of the corrupt in SA. why is there no blacklist of companies in SA - note a company who did in a Municipality in Gauteng and had assets seized to the tune of 121 Million is still doing business with other Municipalities in KZN. SA has its own morals when it comes to business -the cancer way!

  • naphtaly.calvin - 2012-05-31 13:12

    South Africa my land ......

  • naphtaly.calvin - 2012-05-31 13:12

    South Africa my land ......

  • naphtaly.calvin - 2012-05-31 13:13

    South Africa my land ......

  • naphtaly.calvin - 2012-05-31 13:43

    South Africa my land ......

  • naphtaly.calvin - 2012-05-31 13:44

    South Africa my land,why all this things .....

  • eric.vanvuuren - 2012-05-31 14:30

    Anything that nails SARS is a good thing. Is there more ways to clamp down on the biggest rip-off in the country? There is no transparency and no defence. As people of this country we should have at least some way to protect ourselves and our lifestyles against all forms of racketeering. Curb the whole ‘government access to tax money’ and if you feel there is really no sense in paying taxes, which are just mismanaged and stolen, the whole time, while the same people are pushing to make you a second class citizen in your own country. Then there should be away to stop paying taxes. Come to think of it there should be a provision somewhere in the law that should actually class it as an acceptable form of civil disobedience to point out a problematic area in government. And only one way to look at it, so it’s immune to different forms of interpretations. So there are no loopholes on this type of point. Just to uphold and protect the citizens of SA. To make you a criminal just because you don’t agree is criminal in itself. There should be no law to force someone in to financial slavery in support of some useless government, where the hell is our protection as the taxpaying citizens of this country. The buck should stop here and all involved in creating and maintaining this current system should be brought to light and answer for their actions.

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