Commissioner for the South African Revenue Service v Virgin Mobile South Africa (Pty) Ltd (1303/2023) [2025] ZASCA 77 (4 June 2025)

Case Note

Commissioner for the South African Revenue Service v Virgin Mobile South Africa (Pty) Ltd — [2025] ZASCA 77 — 2025-06-04

Dates, Case No & Neutral Citation

2025-06-04; Case No 1303/2023; Commissioner for the South African Revenue Service v Virgin Mobile South Africa (Pty) Ltd (1303/2023) [2025] ZASCA 77

Court and Coram

Supreme Court of Appeal of South Africa; Nicholls JA, Keightley JA, Musi AJA, Windell AJA, Molitsoane AJA

Reportability

Reportable

HEADNOTE

Summary

Tax law – Tax Administration Act 28 of 2011 – default judgment – condonation – whether a party is exempted from applying for condonation for the late filing of a Rule 31 statement when that party files their statement after receiving a notice in terms of Rule 56(1) – whether the high court correctly interpreted the provisions of Rule 56(1) of the Tax Court Rules.

Held

The appeal is upheld with costs, including the costs of two Counsel. The order of the high court is set aside and replaced with the following: The application for default judgment is declared an irregular step and set aside. The taxpayer is ordered to pay the costs of this application.

Cases, Statutes and Texts Cited

Cases: SA Metropolitan Lewensversekeringsmaatskappy Bpk v Louw; Wingate-Pearse v Commissioner South African Revenue Service; Black Mountain Mining (Pty) Ltd v Commissioner for the South African Revenue Service; Zweni v Minister of Law and Order; Taxpayer v Commissioner for the South African Revenue Services; City of Tshwane Metropolitan Municipality v Afriforum and Another; Natal Joint Municipal Pension Fund v Endumeni Municipality; Magdelena v Road Accident Fund

Legislation: Tax Administration Act 28 of 2011

Rules of Court: Uniform Rules; Rule 30; Rule 31; Rule 4; Rule 52(6); Rule 56(1)

THE FACTS

SARS issued an additional assessment against the taxpayer for the 2014, 2015 and 2016 tax years. The taxpayer filed a notice of appeal against the assessment on 22 May 2019. SARS failed to file its statement within the required 45 days. After receiving a Rule 56(1) notice, SARS complied and filed its Rule 31 statement, but the taxpayer still applied for default judgment.

THE ISSUES

Whether SARS was exempt from applying for condonation after complying with a Rule 56(1) notice and whether the high court correctly interpreted the provisions of Rule 56(1).

ANALYSIS

The court analyzed the interplay between the relevant rules, particularly focusing on the implications of compliance with Rule 56(1) and the necessity of applying for condonation. It concluded that compliance with Rule 56(1) negated the need for a condonation application.

REMEDY

The appeal was upheld, the high court's order was set aside, and the application for default judgment was declared an irregular step.

LEGAL PRINCIPLES

The principles regarding the appealability of procedural matters and the interpretation of rules concerning compliance and default judgments were central to the decision.