Barnard zacc full#
In Kruger I, the full bench of the Cape Provincial Division held on appeal that a tax judgment was indeed susceptible to rescission in terms of section 36(a) of the Magistrate’s Court Act 32 of 1944, which allows the magistrates’ court to “ rescind or vary any judgment by it in the absence of the person against whom that judgement was granted”. While the Constitutional Court agreed with this contention, it also referred to Kruger v Commissioner for Inland Revenue (1966 (1) SA 457 (C)) (“Kruger I”) and Metcash Trading Ltd v Commissioner, South African Revenue Service Z(1) SA 1109 (CC) 2001 (1) BCLR 1 (CC) (“Metcash”), which it held was binding precedent which the High Court should have considered, but did not. Firstly, SARS contended that the civil judgment secured by the filing of a certified statement “ lacks the rights-determining character of a judicially issued judgment”.īriefly, the Constitutional Court’s reasons for its decision that tax judgments are capable of rescission were: Acting-Judge Rogers discussed authorities from 1965 to 2011, as well as more recent cases. The Constitutional Court’s discussion and comparison of tax judgments in terms of the TAA, to the provisions of the (now repealed but equivalent provisions of) Income Tax Act 58 of 1962 (“IT Act”) and Value-Added Tax Act 89 of 1991 (“VAT Act”), makes for an interesting read. This is a distinguishing factor in this case, as the former argument would put this matter squarely within the dispute resolution mechanisms provided for in the TAA. BL Inc did not argue that the assessment itself was wrong, but rather that SARS had failed to appropriate payments made to the relevant assessed taxes. When filing its certified statement in terms of section 172(1) of the TAA (see article on tax judgements) with the Registrar of the Western Cape Division, SARS did not take into account certain payments made by BL Inc (the taxpayer). In this matter, SARS obtained a tax judgment against Barnard Labuschagne Incorporated (“BL Inc”), a law practice which encountered some difficulties with SARS regarding payments which were made but were not allocated properly. The Western Cape High Court had previously pronounced that tax judgements cannot be rescinded, and after being refused leave to appeal in the High Court and the Supreme Court of Appeal, the Constitutional Court agreed to hear the appeal as “ the question of rescindability, raises an arguable point of law of general public importance”.
“ The position thus remains that a tax judgment in terms of the TAA is susceptible of rescission, in terms of section 36(1)(a) of the Magistrates’ Courts Act or, in the High Court, in terms of the common law jurisdiction to rescind judgments taken in the absence of the other party” Recently the Constitutional Court finally set the record straight in Barnard Labuschagne Incorporated v South African Revenue Service and Another ZACC 8 by finding that tax judgments are rescindable. If a taxpayer owes money to SARS and does not pay, SARS may file a certified statement with a competent court, which will be “treated as a civil judgment” (section 174 of the Tax Administration Act 28 of 2011 (“TAA”)).
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