After the High Court ruled against the SA Revenue Service (Sars) in an decades-long battle against a swimwear model who received a R142m “gift” from an overseas companion, Sars lost its appeal bid.
Sars’ fight with Candice-Jean Poulter will, however, return to the tax court, after the full bench of the High Court ruled in a landmark decision in April that SA taxpayers could be represented by accountants, not just lawyers, in tax court.
The April judgment’s findings on tax courts now remain precedent throughout SA. This affects every taxpayer in SA, since the law says any challenge to the receiver’s findings must first go to tax court before the ordinary “courts of law”, such as a high court.
The same full bench of the Western Cape High Court dismissed Sars’ appeal recently. Sars argument “goes against the weight of authority”, the court found.
Sars’ fight began in 2013, with Poulter and her father, businessperson Gary Walter van der Merwe, over what Sars deemed as tax debts.
Sars noted she received a R142m “gift” from an unknown person overseas, and began interrogating her payments. It was agreed she would pay R44m in tax. However, Poulter then contested payment years later in tax court.
The tax court ruled against her and confirmed she must pay the R44m payment to Sars. The tax court refused her father’s request to act on her behalf, throughout proceedings, so she effectively was unable to present counter evidence. The tax court said only a legal practitioner could represent her, because it regarded itself as a court of law.
Poulter appealed to the full bench of the Western Cape High Court leading to the landmark April decision.
Prior to the judgment, practitioners were uncertain whether tax courts were like other “courts of law” or more akin to, for example, the CCMA.
The full bench ruled against Sars and ordered the matter back to the tax court, allowing Poulter’s father to represent her.
Sars sought leave to appeal from the High Court, to fight in the Supreme Court of Appeal (SCA). Sars wanted to challenge the finding that non-lawyers could represent taxpayers, but lost.
Writing for a unanimous court, Western Cape High Court judge Ashley Binns-Ward said, “it would be an anomaly, bordering on absurdity” for him to grant leave.
He pointed out Sars’ challenge against the court’s finding about tax courts “goes against the weight of authority” the full bench already outlined in its April judgment.
Though Binns-Ward agreed that the issue of whether tax courts were courts of law “may be a matter of public interest”, he said there were no prospects of success on appeal for Sars. If there were no prospects, a court would not grant leave to appeal. Sars had failed to show why it would succeed in another court.
Binns-Ward ordered Sars to pay the legal costs and confirmed the matter must be heard in tax court at a future date.
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