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[2019] ZAGPJHC 455
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Siphayi and Another v Commissioner for SARS and Others (34975/2019) [2019] ZAGPJHC 455; 82 SATC 248 (25 October 2019)
REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
LOCAL DIVISION, JOHANNESBURG
Case
No: 34975/2019
In
the matter between
Kenneth
Siphayi Applicant
Kenny
Bricks
CC Second
Applicant
and
Commisioner
for
SARS 1
st
Respondent
South
African Revenue
Service 2
nd
Respondent
Pearl
Moodley 3
rd
Respondent
Draft
Judgment
Van
der Linde, J:
[1]
The first applicant is the sole member of the second applicant which
is a close Corporation. The second applicant is a taxpayer
who is
indebted to the first and second respondents, respectively the
Commissioner for the South African revenue services, and
the revenue
services itself. The two applicants bring an urgent application for
various forms of relief but primarily it is aimed
at declaring that
the deducting of funds from the bank account of the first applicant
in respect of a tax debt of the second applicant
is unlawful and
invalid. The applicants also seek an order directing that SARS be
ordered and directed to resend notices of intention
to hold the first
applicant liable for the tax debts of the second applicant.
[2]
The application is brought by way of urgency and urgency is disputed.
The application was launched on 4 October 2019 and it
gave SARS
opportunity till 10 October 2019 to file its answering affidavit. The
answering affidavit was filed although after that
date. The case of
the applicant is that in terms of section 184 of the tax
administration act to recover tax from a person held
personally
liable under section 155 or 157 of that act, as it has against the
taxpayer itself. But that section obliges SARS 1
st
to give
notice to the person intended to be held personally liable. It is the
case of the applicants that the first applicant was
not given such
notice.
[3]
The attached urgency lies in the fact that if the tax liability of
the second applicant is deducted from the account of the
first
applicant, then the first respondent will be haplessly affected in
his ability to conduct his business and to serve as his
creditors. He
has employees who are required to be paid and creditors as well. He
also needs to pay water, electricity, rates and
taxes. These are
obviously in matters of a commercial nature but it does not make the
relief sought less urgent and I have decided
to share the matter on
the basis of urgency.
[4]
It was argued on behalf of the respondent that the first applicant is
not sought to be held liable as a representative taxpayer
for the
purposes of section 184 of the act. But this cannot be correct
because the very notices upon which SARS relies for holding
the first
applicant liable for the tax liability of the second applicant
expressly provides that the first applicant is the representative
taxpayer of the second applicant as provided for in terms of section
153 (one) of the tax administration act. That being so, the
personal
liability provisions set out in section 155, 157, 180 and 184 of the
tax administration act expressly apply.
[5]
The liability of the second applicant to SARS is in excess of 26
million wrong. According to this AR this appropriate notices
in terms
of section 184 of the act were sent to the first applicant 23 email
addresses and they were also posted to a physical
address. The
letters that were sent to the physical address were by registered
post but the tracking notes reflect that they were
returned because
the registered letters were not collected at the post office. The
emails were sent respectively on 7 June 2019
and 6 August 2019.
Nothing is said as to whether these emails were bumped back.
[6]
In consequence, SARS appointed Nedbank as a third-party in terms of
section 179 of the tax administration act to withhold and
immediately
pay over to SARS all available funds, not exceeding for time million
wrong. It is not clear whether the bank account
at Nedbank is an
account of the second applicant close Corporation, order whether it
is an account of the first applicant natural
person. According to the
papers by the applicant’s the monies were deducted from the
first applicant’s personal bank
account head held at Nedbank on
17 September 2019.
[7]
The case of the applicant’s is that the second applicant does
not oh SARS the monies because the second applicant was
in fact
defrauded by its accountant. Criminal charges were laid against the
accountant but the public prosecutor disinclined to
prosecute.
[8]
More importantly for present purposes is that the first applicant
says that he did not receive the notices of 7 June 2019 and
5 August
2019 on which SARS in turn relies. He says that had he received them
he would have acted and it would have made representations
as
requested in the notices. In his replying affidavit the applicant
again stresses that he never received the notices.
[9]
The applicant argues that
Section 253 (1) provides
that a notice, document or other communication issued, given, sent or
served in the manner referred to
in section 251 or 252, is regarded
as received by the person to whom it was delivered or left, or if
posted it is regarded as having
been received by the person to whom
it was addressed at the time when it would, in the ordinary course of
post, have arrived at
the a addressed place. Subsection (1) does not
apply if— (a) SARS is satisfied that the notice, document or
other communication
was not received or was received at some
other time; or - (b) a court decides that the notice, document or
other communication
was not received or was received at some other
time.
[10]
The
applicant submits further that if SARS is satisfied that a notice,
document or other communication (other than a notice of assessment)
issued, given, sent or served in a manner referred to in section 251
or 252 (excluding paragraphs (a) and (b) thereof)— (i)
has not
been received by the addressee; or - (ii) has been received by that
person considerably later than it should have been
received; and the
person has in consequence been placed at a material disadvantage, the
notice, document or other communication
must be withdrawn and be
issued, given, sent or served anew.
[11]It
remains a mystery as to what happened to the emails that were sent to
the email addresses referred to at paragraphs 23 and
24 of the
answering affidavit. But since only interim order is sought at this
stage, I must assume that the version that the applicants
put up,
unless the version of the SARS costs serious doubt on the applicant’s
version. I do not believe that it can be said
that it does. In the
result I make the following order:
(a) Pending the re-enrolment of this
application by either party, the first and second respondents are
interdicted from deducting
monies from the first applicant’s
bank account in terms of section 184 of the tax administration act 28
of 2011.
(b) The first and second respondents
are directed to resend notices of intention to hold the first
applicant liable for the tax
debts of the second applicant at the
following email addresses: (to be supplied).
(c) The remainder of the relief sought
in this application is postpone sine die.
(d) Costs are reserved.
WHG
van der Linde
Judge,
High Court
Johannesburg
Date
heard: 25 October 2019
Date
judgment: 25 October 2019
Counsel
for the Applicant
Adv.
Instructed
by
VM
Mashele
C/O
Denga Attorneys
85
Main Street
7
th
Floor, Nedbank Building
Johannesburg
Tel:
011 9805651
Fax:
011 980 7971
Email:
info@vmasheleattorneys.co.za
Counsel
for the first and second respondents
Adv
Instructed
by Majang Inc Attorneys.
Fancourt
Office Park, Building 12,First Floor
Cnr
Northumberland & Feistead Avenue
Northriding
Johannesburg
Tel:
011 7041348
Email:majang@majanginc.co.za