IN THE HIGH COURT OF SOUTH AFRICA
GAUTENG DIVISION, PRETOR IA
CASE NO: 2023-09981 1
(l) REPORTABLE: ,¥g/NO
(2) OF INTEREST TO OTHER JUDGES: ,¥g/NO
(3) REVISED.
05/03/2025
SIGNATURE DATE
In the application for leave to appeal of:
COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE Applicant
and
ASPASANPC
AFRISAM (SUTH AFRICA) (PTY) LTD
LAFARGE (PTY) LTD
AFRIMAT SUBSIDIAR IES
LISTED IN SCHEDULE 1 First Respondent
Second Respondent
Third Respondent
Fourth to Eleventh Respondents
APPLICATION FOR LEAVE TO APPEAL: JUDGMENT
LABUSCHAGNE J
Page 2
[1] The applicant seeks leave to appeal the judgment and order delivered on 6
December 2024. In that judgment I made an order as envisaged in section
105 of the Tax Administration Act, 28 of 2011 to assume jurisdiction to
adjudicate the dispute (paragraph 1 of the Order). A declarator was issued
that “bulk” as used in respect of aggregates in Schedule 2 to the Mineral and
Petroleum Resources Royal Act, 28 of 2008 means the condition in which shot
rock (blasted rock) exists at the muck pile prior to processing (i.e. crushing or
other form of beneficiation). Accordingly, aggregates as at the muck pile is
the condition stipulated by Schedule 2. I also granted a strike out of specific
portions of the answering affidavit together with an order in favour of ASPASA
in respect of the strike out and the costs of the application, including costs of
two counsel on Scale C.
[2] SARS seeks leave to appeal the declarator issued in paragraphs [2] and [3]
of the Order.
[3] SARS applies for leave on the basis that there are reasonable prospects that
another Court would come to a different conclusion (section 17(1)(a)(i)) and
that there are compelling reason s why the appeal should be heard (section
17(1)(a)(ii) ). Five grounds of appeal are advanced. The crux relates to the
interpretation of “bulk”. The interpretation exercise set out in the judgment
deals the SARS interpretation now posited and sets out why it is incorrect.
[4] It is contended that I have crossed the divide between interpreting legislation
and making legislation. I am satisfied that there is no reasonable prospect that
another court would agree with SARS.
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[5] The interpretation given to “bulk” in the order is consistent with the
interpretation by SARS in its own non -binding opinion pertaining to Afrimat .
[6] The interpretation of “bulk” is also consistent with the interpretation of senior
officials of SARS and the ind ustry in the period prior to 2019. Such
interpretation is consistent with the current industry specific meaning of the
word “bulk” when it pertains to aggregates.
[7] In assigning a meaning to the word “bulk” the term was interpreted with
reference to text, context and the purpose of the legislative provision in which
it appears. This is consistent with the now trite principles pertaining to
interpretation of statutes. No words have been added. “Bulk ” has been
interpreted to mean the condition of aggregates at the muck pile.
[8] SARS’s grounds of appeal are unpersuasive. They :
8.1 Seek to construe “aggregates” (the word used in the Act) as
“commercial aggregates” (a concept nowhere found in the Act);
8.2 Result in the absurdity that royalties are only incurred after
beneficiating aggregates, and therefore do not recompense the State
for the natural resource extracted.
8.3 Rest on an interpretation which frustrates the apparent purpose of a
statute, namely compensating the State by means of a royalty for the
use of its mineral resources and incentivising beneficiation.
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8.4 Culminate in a construction which is unbusinesslike and insensible in
that it ignores the commercial viability, marketability and exploitability
of aggregates in the state as they exist at the muck pile; and
8.5 Create a lacuna in the legislative scheme, rendering aggregates
unregulated by the royalty regime (and therefore royalty -free by
default) prior to their beneficiation in the form of post -fragmentation
crushing and screening into various sizes.
[9] The interpretation advanced by SARS places reliance upon explanatory notes
of 2013 and 2019 which are not authoritative in the process of determining
context for statutory interpretation. They are historical indicators of past
contentions. There is one strong indicator of why the interpretation of SARS
does not pass muster and has poor prospects on appeal. The interpretation
advance d by SARS results in the redundancy of section 6(2)(b) of the Royalty
Act, while the interpretation in the judgment does not.
[10] I take note that the interpretation in the judgment was the result of a need in
the industry for clarity. However, the applicant seeks to utilise the grounds on
which I assumed jurisdiction in terms of section 105 of the Tax Administration
Act to decide the issue, as a matter of law, as a reason why there are now
compelling reasons to have the matter heard on appeal. The reasons
advanced do not rise to that level. They motivate the reason why the Court
assumed jurisdiction in terms of section 105 of the Tax Administration Act,
while paragraph 1 of the Order granted is not being appealed.
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[11] The argument advanced by SARS has poor prospects on appeal and I do not
regard the grounds advanced as constituting compelling reasons why an
appeal should be heard in the context of section 17(1)(a)(ii) of the Superior
Courts Act.
[12] In the premises the application for leave to appeal is dismissed with costs.
LABUSCHAGNEJ
JUDGE OF THE HIGH COURT