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[2016] ZAGPPHC 913
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BMW South Africa (Pty) Ltd v Commissioner of the South African Revenue Service (35006/2016) [2016] ZAGPPHC 913 (21 October 2016)
IN
THE HIGH COURT OF SOUTH AFRICA
GAUTENG
DIVISION, PRETORIA
CASE
NO.: 35006/2016
21
October 2016
Reportable:
No
Of
interest to other judges: No
Revised.
BMW
SOUTH AFRICA (PTY)
LTD Applicant
and
THE
COMMISSIONER OF THE SOUTH AFRICAN
REVENUE
SERVICE Respondent
JUDGMENT
VAN
DER WESTHUIZEN, A J
1.
This matter comes before me on the unopposed motion court roll. It is
a somewhat unfortunate matter. The respondent had made
a finding that
the applicant had not paid the value-added tax payable for the period
October 2011 to February 2012 and had consequently
levied penalties
and interest due. The applicant had in fact made the payment, but due
to reasons best known to the respondent
the payment had not been
properly allocated.
2.
Despite proof of the payment by the applicant to the respondent, the
latter insisted on levying penalties and interest and compelled
payment thereof. The applicant's request for suspension of the
payment of penalties and interest was not favourably received by
the
respondent and further discussion in that regard was denied.
3.
The applicant was obliged to lodge this application. The respondent
did not file an intention to oppose the application. Counsel
for the
applicant filed heads of argument prior to the matter being heard in
which he traversed the issues and made submissions.
In particular
counsel made convincing submissions relating to the payback of the
penalties and interest that the applicant was
compelled to make prior
to the issue of alleged non-payment had been adjudicated. These heads
of argument were served upon the
respondent.
4.
The respondent eventually conceded the application. It consented to
an order setting aside the Commissioner's finding of non-payment
and
it to be substituted with an order that the value-added tax was paid
and that no penalties and interest are due by the applicant
to the
respondent. The respondent further consented to an order that the
penalties and interest paid by the applicant to be paid
back by the
respondent and the respondent further consents to payment of costs on
the scale as between attorney and client and
further on the basis
that the employment of senior counsel was justified.
5.
Initially the applicant sought the order for setting aside of the
Commissioner's finding of non-payment and the order to be substituted
as well as costs. As forewarned in the heads of argument, the
applicant applied for an amendment to the original notice of motion
to include repayment of the penalties and interest it was compelled
to pay under protest.
6.
When the matter was called, the respondent was represented by counsel
who was instructed to oppose only a limited issue. That
issue related
to the payment of interest on the amount of penalties and interest
paid by the applicant.
7.
The amendment to the original notice of motion was granted by
agreement between the parties.
8.
Mr Joubert
SC who appeared on behalf to the applicant submitted with reference
to the judgment in
Shuttleworth
v South African Reserve Bank et al
[1]
2015(1)
SA 586 (SCA) and the Tax Administration Act of 2012
[2]
,
that the applicant is entitled to interest on the amount of penalties
and interest paid by it under protest.
9.
Mr Ellis SC
who appeared on behalf of the respondent, submitted with reference to
the judgment in
Commissioner
for Inland Revenue v First National Industrial Bank Ltd
[3]
that no
mora
interest
was payable on the amount relating to the penalties and interest.
10.
There is no merit in that submission of counsel. The judgment in
Shuttleworth, supra,
and the provisions of the Tax
Administration Act clearly provide for the contrary.
11.
It follows that the applicant is entitled to interest on the amount
paid on 4 March 2016 in respect of the penalties and interest
levied
by the respondent.
12.
I grant the following order.
(a) The finding by
the Commissioner that value-added tax payable by the applicant for
the period of October 2011 to February
2012 was not paid by applicant
is set aside and is substituted with an order that the value-added
tax was paid by Applicant and
that no penalties and interest are due
by the applicant to the respondent;
(b) Respondent is
ordered to pay back the provisional payment of R15 660 300.70 made to
it by the applicant on 4 March 2016,
with interest a
tempore morae
thereon from 4 March 2016 to date of payment;
(c) Respondent is
ordered to pay applicant's costs, such costs to be taxed on the scale
as between attorney and client and
on the basis that employment of
senior counsel was justified.
________________________
C
J VAN DER WESTHUIZEN
ACTING
JUDGE OF THE HIGH COURT
On
behalf of Applicant:
A P Joubert
SC
Instructed
by:
Edward Nathan Sonnenbergs
On
behalf of Respondent:
P Ellis SC
Instructed
by:
The State Attorney
[1]
2015(1) SA 586 (SCA) at [33] and [34]
[2]
In terms of sections, 181, 188 and 190 of the Act.
[3]
1990(3) SA 641 (AD)