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[2020] ZAGPPHC 459
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SARS v Glencore Operations (Pty) Ltd (Leave to Appeal) (11696/2018) [2020] ZAGPPHC 459 (12 February 2020)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE NO
:
11696/2018
DATE
: 2020-02-12
In the matter between
SARS
Applicant
and
GLENCORE
OPERATIONS (PTY)
LTD
Respondent
J U D G M E N T (LEAVE TO APPEAL)
VAN
DER WESTHUIZEN J
: In matter
11696/2018 an ex tempore judgment follows.
The
Respondent in the main application, namely, The Commissioner for the
South African Revenue Service seeks leave to appeal against
the whole
of my judgment and order that was delivered and granted on 24 October
2019 on a number of grounds set out in the Notice
of Application for
Leave to Appeal. In particular, five grounds have been
stipulated in terms of which it is submitted another
Court would come
to a different conclusion than I had come in my judgment.
The first ground upon which the Commissioner
relies is in respect of
the manner in which I dealt with the matter, and had erred
accordingly in doing so. It is submitted
to be in conflict with
the unreported judgment under the name
Canyon Resources (Pty) Ltd
and the Commissioner for the South African Revenue Service,
Case
Number 68281/2016.
The submission is that the principles
enunciated in that judgment is
different and contrary to that which I found and applied in my
judgment. A copy of that judgment
was handed up at the hearing
of this matter, and I had a quick glance through it.
I could not find, and it was conceded
by Mr Ellis on behalf of the
Commissioner, that it did not deal with the interpretation of the
word “include”, which
is the primary issue that had to be
decided in my judgment and which formed the primary reasoning for the
order that I granted.
It further is gleaned from that matter,
that the issue was whether
the particular Contractor, on behalf of whom a rebate was claimed,
conducted a so-called wet or dry
contract. On the facts in that
matter it was held by Davis J, that the particular Contractor did not
perform a so-called
dry contract, as defined in that judgment, but a
wet contract. The issue was whether the processing and the processes
that were
undertaken by that particular Contractor fell within the
particular section and note on which reliance was placed in that
matter.
It is further gleaned, that it merely
dealt with the washing and
crushing of coal, or the particular mineral that was the subject of
the claim. It was common cause
between the parties at the
hearing of the matter before me, that the Applicant in the main
application, Glencore Operations (Pty)
Ltd, did in fact do crushing
and washing. However, it was not done by using diesel fuel but
electricity. Hence it was not
an issue whether a diesel rebate should
have been allowed.
The judgment by Davis J, in Canyon Resources
(Pty) Ltd, clearly does
not deal with the interpretation of the word “include”.
It dealt with specific wording,
whether on the facts of that matter,
that wording covered the particular issue, or action.
That judgment related to an application
of the wording of the
particular note, or subsection, on whether the facts fell within that
particular wording. Primarily,
as recorded earlier in my
judgment under consideration, it dealt with the interpretation of the
word “include”, whether
it is to be interpreted in a
narrow sense, or in a broader sense.
Further in that regard, the third ground
upon which the Commissioner
relies in the Application for Leave to Appeal, whether it has a
bearing upon the principles enunciated
by the Constitutional Court in
the matter of
De Reuck v Director of Public Prosecutions
,
Witwatersrand Local Division 2004 [1] SA 406 CC at paragraph 80,
where that Court considered the interpretation of the word “include”.
It held that there are three possibilities of interpretation, and
dealt with those various modes of interpretation, or rather meaning
of the word “include”. In my judgment under
consideration, I dealt with that particular argument. I held that
the
present case did not fall within the third possibility of meaning
that was contended for by the Commissioner in this matter.
It was submitted in argument on behalf
of the Commissioner that I had
erred in not applying the third possibility that is set out in the De
Reuck matter to the issues
that were before me for consideration.
In that regard, it was submitted on behalf
of the Commissioner, that
I had to reconsider my findings on whether the circumstances were not
leaning more towards an application
of the third possible meaning as
set out in the De Reuck matter.
The submission is further that another
Court reconsidering that
issue, would find in favour of the Commissioner rather than in the
favour of Glencore Operations (Pty)
Ltd.
The second ground on which the Application
for Leave to Appeal is
premised, is that I had misconstrued the purpose of the note
concerned. I dealt with that issue in
my judgment. In
particular, I dealt with the Budget Speech by the Minister of Finance
during 2001 that was relied upon in the matter
before me.
When considering the levies on fuel and
payable by Consumers of
distributed diesel fuel, that are raised in respect of the Road
Accident Fund, some leniency is called
for, and ought to be
introduced to encourage competitiveness with International
Competitors of Mining and Land as a primary production
sector. When
dealing with that issue in my judgment I made a finding contrary to
the stated purpose of the act to collect revenue
and not to hand
revenue out. I dealt comprehensively in my judgment with that
issue, and intend to not deal with it further.
The fourth ground that is raised, is that
I dealt with the arguments
raised before me on behalf of the Commissioner, in a circular
manner. In doing so, I commenced
on the wrong premise to arrive
back at the same wrong premise. That ground was not debated
further in oral argument, and
it has not been shown where I had
departed from such a wrong reasoning premise and how it was circular
to arrive back there at.
The fifth ground raised was on whether
or not I had considered the
words:
‘But not including post recovery,
or post mining processing of
those minerals in Note 6 [iii] [cc].’
It was submitted that it rather supports
the Commissioner’s
interpretation than the one I had given to the word “include”.
I dealt with the various
issues in my judgment and need not deal with
that again.
It is clear that the Commissioner primarily
relies on the three main
grounds that were raised in oral argument on behalf of the
Commissioner. The fact that there are two judgments
by this Court
which are divergent and thus requires the attention of a Court of
Appeal to settle as it were for “once and
for all” the
proper interpretation to be given to the word “include”.
Mr Voster, on behalf of Glencore Operations
SA (Pty) Ltd submitted
that, apart from the fact that the Canyon Resources (Pty) Ltd matter
is clearly distinguishable on the facts,
there is no difference in
approach, and as already recorded, that Court did not deal with the
interpretation of the word “include”.
It is not to be found in that judgment
that it considered that issue,
and it does not appear from that judgment that it gave any
consideration of the De Reuck judgment,
or which of the three
possible interpretations are to be applied to the word “include”.
In my view there is no disharmony in the
two judgments that would
require the attention of a Court of Appeal.
I have already dealt with the second ground
relating to the alleged
misconstruing of the purposes of the enactment which in fact runs
hand-in-hand with the third ground.
It is highlighted by Mr Voster, on behalf
of Glencore Operations SA
(Pty) Ltd, that I dealt with the concession by the Commissioner in
his Answering Affidavit, that
any contention that an activity
cannot qualify as an own primary production activity in mining
because it is not one of the activities
listed in note 6 [F] [iii] of
the Schedule. It is further submitted that that argument is flawed.
On the basis of that concession it is
difficult to understand how
another Court would come to a different conclusion than on the one
that I had arrived at.
It follows that I am not persuaded
nor convinced that another
Court would come to a different conclusion to that which I have come
to in my judgment. In particular,
where there are no contradicting
judgments on the very issue that I had decided.
It follows that the Application
for Leave to Appeal cannot
succeed.
There is no reason why the usual norm
in respect of costs should not
be applied.
I grant the following Order:
The Application for Leave to Appeal is
dismissed. The Commissioner
for the South African Revenue Service is to pay the costs, such costs
include the cost consequent on
the employ of senior Counsel.