Rappa Resources (Pty) Ltd v Commissioner of the South African Revenue Service (21/21045) [2021] ZAGPJHC 555 (16 September 2021)

About SAFLII
Databases
Search
Terms of Use
RSS Feeds
South Africa: South Gauteng High Court, Johannesburg
SAFLII
>>
Databases
>>
South Africa: South Gauteng High Court, Johannesburg
>>
2021
>>
[2021] ZAGPJHC 555
|

|

Rappa Resources (Pty) Ltd v Commissioner of the South African Revenue Service (21/21045) [2021] ZAGPJHC 555 (16 September 2021)

REPUBLIC
OF SOUTH AFRICA
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION,
JOHANNESBURG
CASE
NUMBER:
21/21045
DELETE
WHICHEVER IS NOT APPLICABLE
REPORTABLE:
NO
OF
INTEREST TO OTHER JUDGES: NO
REVISED:
NO
In
the matter between:
RAPPA
RESOURCES (PTY) LTD
Applicant
and
COMMISSIONER
OF THE SOUTH
AFRICAN
REVENUE SERVICE
Respondent
JUDGMENT
Delivered:
This judgment was handed down
electronically by circulation to the parties’ legal representatives
by e-mail. The date and time for
hand-down is deemed to be 14h00 on
the 16
th
September 2021.
DIPPENAAR
J
:
[1]
This is an opposed interlocutory application under r 30A in
review
proceedings launched by the applicant under r 53 in which the
applicant primarily seeks a compelling order directing the respondent
to file the record.
[2]
Pursuant
to receiving the respondent’s answering papers, and attached to its
replying affidavit, the applicant sought to amend its
notice of
motion by the inclusion of a directive under s105 of the Tax
Administration Act
[1]
(“the
TAA”) under the preface“
to
the extent necessary, the applicant seeks a directive
”.
In that notice of amendment, it also sought to substantially expand
on and particularise the “record” referred to in its
initial
notice of motion. The amendment introduced in prayer 1 is: “
Insofar
as might be necessary and to the extent that s105 of the TAA applies,
it is directed in terms of that section that this court
hears and
determines the compelling application and the review application of
which it forms part”.
[3]
The respondent did not oppose the granting of the amendment
but
contended that: (i) the inclusion of an order seeking a directive
under s105 constituted a concession that a directive under
s 105 was
necessary and (ii) the ambit of the proposed record was overly broad.
No further affidavits were delivered by the parties,
nor was an
opportunity sought to do so. The amendment to the notice of motion
will be allowed.
[4]
In
summary, the applicant’s case was that it is of right entitled to
the record of the proceedings pursuant to which the respondent
decided to issue certain assessments pertaining to VAT refunds on 29
March 2021. Reliance was placed on the provisions of uniform
r 53 and
the applicant’s constitutional right under s33 of the Constitution.
The applicant maintained that the review proceedings
were squarely
based on some 30 grounds under various of the subsections of s6 of
the Promotion of Administrative Justice Act
[2]
(“PAJA”)  and some 10 grounds underpinning a legality
review.
[5]
In its founding papers in the review application, the applicant
characterised the review as being that the decision to issue the
assessments is reviewable and contrary to the provisions of ss 3
and
6 of PAJA and s 33 of the Constitution, alternatively fell foul of
the rule of law and the constitutional principle of legality,
in
particular ss 2 and 172 of the Constitution.
[6]
It was argued that the Tax Court does not have the necessary
jurisdiction to entertain a review under PAJA or one based on the
principle of legality and thus that it is as of right entitled
to the
record underpinning the respondent’s decision to issue the
assessments. As such a directive under s105 of the TAA is not
necessary and the section is not applicable as it only applies to
disputes under chapter 9 of the TAA.
[7]
In the main review application, the applicant seeks the setting
aside
of the respondent’s decision to issue assessments and an order
declaring the decision of the respondent to issue the assessments
to
be in conflict with the principle of legality and accordingly
unconstitutional, unlawful and invalid. It further seeks an order
setting aside the assessments. Its case is predicated on a review
against the decision to issue the assessments on 29 March 2021,
based
on PAJA and under the principle of legality.
[8]
In summary, the respondent’s case was that the applicant had
no
right to launch review proceedings prior to obtaining a directive
from the High Court in terms of s105 of the TAA and that the
application to compel was fatally defective absent such directive. As
such, it refused to provide the record. It objected to the
belated
application to seek such directive after delivery of its founding
papers and contended that it should have been sought by
the applicant
in its founding papers, rather than by way of a later amendment and
should not have been sought in speculative terms,
predicated by the
phrase “insofar as may be necessary”.  Its case was
predicated on the contention that the applicant had
not illustrated
exceptional circumstances to warrant a departure from the dispute
resolution mechanisms provided in Chapter 9 of
the TAA. It
characterised the review proceedings as an abuse as the review would
not be dispositive of the disputes between the parties
and the
applicant had raised the grounds of review on almost the exact basis
in an objection to the assessment. The same issues raised
in the
review would thus have to be determined in the Tax Court, resulting
in a duplication of litigation, piecemeal litigation and
the risk of
different findings. The respondent framed the primary question to be
decided as whether the applicant is entitled to
launch a review
application. If not, its case is that the compelling application is
premature.
[9]
In my view, the first issue to determine is whether this is
the
appropriate point to determine whether s105 of the TAA is applicable
and whether a court should direct the proceedings to proceed
in the
High Court. If not, no other reason has been proffered by the
respondent why the record should not be produced. The respondent’s
only complaint was that the documents sought were over broad.
[10]
S105 of the TAA provides:
“
Forum for
dispute of assessment or decision.
A taxpayer may
only dispute an assessment or decision as described in section 104 in
proceedings under this Chapter, unless a High
Court otherwise
directs”.
[11]
To determine whether s 105 is applicable involves a consideration of
the nature of
the review proceedings and raises matters of some
complexity. It requires consideration of both the exact nature of the
review proceedings
and whether exceptional circumstances exist. The
primary contention of the respondent is that the review proceedings
are flawed and
constitute an abuse and that it should not be directed
that the review proceedings proceed in the High Court.
[12]
At
this stage of the proceedings, the applicant is still able under r
53(4) to supplement its papers upon the production of the record.
It
is trite that the applicant’s case is only fully stated after the
applicant has had access to the record and has filed its
supplementary
affidavit
[3]
.
[13]
I agree with the applicant that it would be premature to determine
the merits of the
review application at this stage in circumstances
where it is open to the applicant to supplement its papers once it
has obtained
the record. To effectively predetermine the prospects of
success of the main review proceedings at present by determining the
issues
pertaining to s105 of the TAA, would be improper and
prejudicial to the applicant.
[14]
Moreover,
the current application is an interlocutory one in which the
production of the record is sought under r 53(1)(b). To determine
matters of some legal complexity in interlocutory proceedings which
seek the disclosure of a record, would in my view be
inappropriate.
[4]
[15]
In those circumstances I shall not express any view on the ultimate
success of the
application or the validity of the s 105 point raised
by the respondent and shall not deal with the arguments raised by the
respective
parties on the issue.
[16]
The court ultimately hearing the review application would be better
placed to determine
whether an order should be issued under s105 of
the TTA and whether it is applicable. I conclude that the issue
should be deferred,
to be determined together with the main review
application. This issue has already been canvassed in the application
papers and the
parties’ heads of argument.
[17]
The
applicant placed reliance on
Peolwane
Properties (Pty) Ltd v Commissioner of the South African Revenue
Service
[5]
wherein it was held that a respondent in a review application may not
refuse to provide the record of its decision because in its
view
the review application was flawed and a defence of a failure to
exhaust internal remedies under s7(2) of PAJA was rejected.
Peolwane
may ultimately be found to be distinguishable as it was determined
under a previous version of s105 of the TAA and made a determination
on the issue of whether the applicant had a right to review, an issue
which I have concluded should be dealt with in the hearing
of the
main review application. I however respectfully agree that the
applicant is under r53(1)(b) entitled to the record and that
defences
applicable to the main review proceedings do not arise at this early
stage of the proceedings
[6]
.
[18]
Under
r 53 (1)(b), the applicant has a right to access to the record of the
decision under review, which forms an important part of
the right to
review of administrative action
[7]
and is an important tool in the review process
[8]
.
The applicant further has a constitutional right under s34 of the
Constitution to access of the record of the decision under review
[9]
.
[19]
I conclude that the applicant is thus entitled to the record of the
proceedings which
dealt before the decision maker when it decided to
issue the assessments on 29 March 2021.
[20]
It was undisputed that in the amended notice of motion, the applicant
substantially
expanded on the specific documents sought as part of
the record. As it was not contained in the original notice of motion,
the respondent
was at a disadvantage to deal in its answering
affidavit with any objections to the production of any of the
documents referred to
in the amended notice of motion.
[21]
The
respondent, during argument, challenged the documents now sought as
being overly broad and referred to various portions of the
answering
affidavit and documentation attached thereto that referred to certain
documents being privileged or confidential. Insofar
as documents are
privileged, the applicant would not be entitled thereto
[10]
.
In my view, the respondent should be afforded a proper opportunity to
object to the production of any documents particularised in
the
amended notice of motion. On the other hand, if the record which is
provided by the respondent is insufficient it should be open
to the
applicant to seek further documents. Provision will be made in the
order for an appropriate challenge to be launched if production
is
challenged on appropriate grounds.
[22]
The normal principle is that costs follow the result. The applicant
has been substantially
successful and there is no reason to deviate
from this principle.
[23]
I grant the following order:
[1] The applicant’s
notice of motion is amended by the introduction of prayer 1 which
provides: “
Insofar as might be necessary and to the extent that
s105 of the TAA applies, it is directed in terms of that section that
this court
hears and determines the compelling application and the
review application of which it forms part”.
[2] The relief
sought in prayer 1 pertaining to the applicability of
s105
of the
Tax
Administration Act 28 of 2011
and whether a directive should be
issued thereunder is postponed sine die, to be enrolled for hearing
together with the main review
application.
[3] The respondent
is directed to comply, within 15 days of granting of this order,
with uniform r53(1)(b) by dispatching to
the registrar and the
applicant, a complete record containing all documents and all
electronic records (including correspondence,
contracts, memoranda,
advice, recommendations, evaluations, internal deliberations and the
like) that relate to the decision which
is the subject of the review
application under case number 2121/21045, together with such reasons
as the respondent is by law required
or desires to give or make;
[4] The record must
contain, subject to [5] below, (i) all documents that served before
the relevant decision maker in relation to
the decision to issue the
additional  assessments made on 29 March 2021; (ii) all reports,
submissions, memoranda and other
records which were placed before the
person or committee who took the decision to issue the additional
assessments; (iii) all working
papers, schedules, notes memoranda and
minutes prepared by the respondent pertaining to: (a) the matters
recorded in the letter of
audit findings dated 11 December 2020; and
(b) the finalisation of audit letter dated 29 March 2021;
[5] The respondent
is afforded a period of fifteen days to object to the production of
any documents forming part of the record and
in such objection must
provide comprehensive grounds for the basis of such objection;
[6] In the event
that the respondent fails to produce the record or objects to the
production of certain documents, and the applicant
does not accept
the grounds of objection raised, the applicant is authorised to
approach the court, on the same papers, duly supplemented,
for
appropriate relief within 15 days of receipt of the objection;
[7] The respondent
is directed to pay the costs of the application.
EF
DIPPENAAR
JUDGE OF THE HIGH
COURT
JOHANNESBURG
APPEARANCES
DATE
OF HEARING
:
10 August 2021
DATE
OF JUDGMENT
:
16 September 2021
APPLICANT’S
COUNSEL
: Adv. R Bhana SC
:
Adv. G. Goldman
:
Adv. G. Singh
APPLICANT’S
ATTORNEYS
: Girard Hayward Inc.
RESPONDENT’S
COUNSEL
: Adv E. Coetzee SC
:
Adv. H De Wet SC
RESPONDENT’S
ATTORNEYS
: VZLR Inc.
[1]
28
of
2011
[2]
3 of 2000
[3]
Cape
Town City v South African National Roads Authority
2015 (3) SA 386
(SCA) para [35]
[4]
Carte Blanche Marketing CC and Others v Commissioner South African
Revenue Services (26244/2015) ZAGPPHC 253 (26 May 2017) para
[50]
[5]
(34483/2014)
unreported judgment of Tsoka J in the Gauteng Local Division (22
October 2015)
[6]
Peolwane fn 5 supra,para [20]
[7]
Jockey
Club v Forbes
[1992] ZASCA 237
;
1993 (1) SA 649
(A) 660E-H
[8]
Turnbull Jackson v Hibiscus Coast Municipality
2014 (6) SA 592
(CC)
para [37]
[9]
Democratic Alliance v Acting National Director of Public
Prosecutions
2012 (3) SA 486
(SCA) para [37]; Helen Suzman
Foundation v Judicial Service Commission
2017 (1) SA 367
(SCA) para
[13]
[10]
Comair limited v Minister of Public Enterprises and Others