THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT
Reportable
Case no: 1303/2023
In the matter between

COMMISSIONER FOR THE SOUTH AFRICAN
REVENUE SERVICE APPELLANT

and

VIRGIN MOBILE SOUTH AFRICA (PTY) LTD RESPONDENT

Neutral citation: Commissioner for the South African Revenue Service v Virgin Mobile
South Africa (Pty) Ltd (1303/2023 ) [2025] ZASCA 77 (04 June 2025)
Coram: NICHOLLS AND KEIGHTLEY JJA AND MUSI , WINDELL AND
MOLITSOANE AJJA
Heard: 28 February 2025
Delivered: This judgment was handed down electronically by circulation to the parties’
legal representatives by email, publication on the Supreme Court of Appeal website, and
by release to SAFLII. The date and time for hand -down is deemed to be 11h00 on 04
June 2025.
Summary: Tax law – Tax Administration Act 28 of 2011 – default judgment –
condonation – whether a party is exempted from applying for condonation for the late
filing of a Rule 31 statement when that party files their statement after receiving a notice
in terms of Rule 56(1) – whether the high court correctly interpreted the provisions of Rule
56(1) of the Tax Court Rules.

2


ORDER


On appeal from: Gauteng Division of the High Court, Pretoria Mabuse J (minority) Van
Niekerk AJ and Sethusha -Shongwe AJ (majority) , sitting as a court of appeal :
1 The appeal is upheld with costs, including the costs of two Counsel.
2 The order of the high court is set aside and replaced with the following:
‘2.1 The appeal is upheld with costs.
2.2 The order of the tax court is set aside and replaced with the following:
“2.2.1 The application for default judgment is declared an irregular step and set
aside.
2.2.2 The taxpayer is ordered to pay the costs of this application. ”’


JUDGMENT


Musi AJA (Nicholls and Keightley JJA and Windell and Molitsoane AJJA
concurring):

Introduction
[1] This appeal is against the majority judgment and order of the full court of the
Gauteng Division of the High Court, Pretoria (the high court ), in which it dismissed an
appeal against a judgment from a single judge of that court , sitting as the Tax Court (the
tax court). The tax court had dismissed an application in terms of Rule 30(1) of the
Uniform Rules in which the appellant, the Commissioner for the South African Revenue
Service (SARS), sought an order to set aside a default judgment application against it by
the respondent, Virgin Mobile South Africa (Pty) L td (taxpayer), as an irregular step.
Before the hearing, this Court requested the parties to file supplementary heads of
3

argument on whether the full court’s order is appealable. Any reference to the Rules in
this appeal is a reference to the Tax Court Rules ,1 unless otherwise stated .

[2] SARS issued an additional assessment against the taxpayer for the 2014, 2015
and 2016 tax years. The taxpayer filed a notice of appe al against the assessment on
22 May 2019. In terms of Rule 31, SARS was then obliged to file a statement within 45
days in response to the appeal. SARS failed to file its statement.

[3] Despite compliance reminders being sent to SARS , it remained in default. On
13 October 2020, the taxpayer filed a notice in terms of Rule 56(1) (a) calling upon SARS
to remedy its default within 15 days, failing which, it would apply for default judgment
against it. On 20 October 2020 ( five days after the notice was served) SARS complied
with the notice and filed its Rule 31 statement. Notwithstanding SARS’ compliance with
the notice, the taxpayer applied for default judgment, on 30 November 2020.

[4] On 14 December 2020 , SARS filed a notice in terms of Rule 30 of the Uniform
Rules, read with Rule 42, calling upon the taxpayer to withdraw the default judgment
application, failing which, it would launch an application to set it aside as an irregular step.
SARS contended that it had complied with the taxpayer’s notice , thereby curing its default.

[5] The taxpayer disagreed, prompting SARS to launch the Rule 30 application , which
the tax court dismissed with costs. SARS , in turn, appealed against th e tax court ’s order
to the high court , the majority of which dismissed the appeal with costs. This Court granted
SARS leave to appeal . I now turn to decide the appealability issue before determining the
merits.

[6] The taxpayer argued that the order is not appealable because : (a) it is not final in
effect , and (b) it is interlocutory. SARS contended that it would be in the interests of justice

1 Rules Promulgated under section 103 of the Tax Administration Act 28 of 2011 published in Government
Gazette No. 37819 of 11 July 2011 .
4

for this Court to decide the main issue due to the divergent judgments in different tax
courts. It further contended that a decision of this Court would create certainty.

[7] Section 117(3) of th e Tax Administration Act 28 of 2011 (TAA) deals with the
jurisdiction of the tax court. In terms of s 117(3), it may hear and decide an interlocutory
application or ‘an application in a procedural matter relating to a dispute under … Chapter
9 as provided for in the “rules” .’ Section 129(2) of the TAA prescribes the powers of the
tax court. It provides :
‘In the case of an assessment or “decision ” under appeal or an application in a procedural matter
referred to in s 117(3), the tax court may –
(a) confirm the assessment or “decision”;
(b) order the assessment or “decision ” to be altered;
(c) refer the assessment back to SARS for further examination and assessment; or
(d) make an appropriate order in a procedural matter .’

[8] Section 133(1) addresses the issue of appealability in respect of decisions of the
tax court : a taxpayer or SARS may appeal against ‘a decision of the tax court under ss
129 and 130 ’. Section 130 has no relevance to this appeal. The question is thus whether
the dismissal of a n application in terms of Rule 30 of the Uniform Rules is a decision as
contemplated in s 129(2) of the TAA .

[9] Section 129( 2)(d) gives the tax court the power to make appropriate orders in
proce dural matter s. This power is linked to that court’s jurisdiction under s 117(3) to hear
applications in procedural matters relating to disputes . The taxpayer’s appeal against
SARS ’ additional assessment was a dispute under Chapter 9 of the TAA. Was the Rule
30 application filed by the taxpayer a procedural matter relating to that dispute? If so, the
decision of the tax court is appealable. The Rules do not provide for a procedure akin to
Rule 30 of the Uniform Rules . In the absence of any Rule in this regard, a party may, in
terms of tax court Rule 42, utilise the most appropriate Rule under the Uniform Rules. In
this instance, it appears that rule 30 of the Uniform Rules is the most appropriate rule to
5

have a step declared irregular. In SA Metropolitan Lewensversekeringsm aatskap py Bpk
v Louw2 it was said:
‘I have no doubt that Rule 30 (1) was intended as a procedure whereby a hindrance to the future
conducting of the litigation, whether it is created by a non -observance of what the Rules of Court
intended or otherwise, is removed .’3

[10] Essentially an irregular step is taken when one party takes a procedural step
inconsistent with the Rules, in order to advance the litigation, to the prejudice of the other
party. This was illustrated i n Wingate -Pearse v Commissioner South A frican Revenue
Service (Wingate -Pearse ),4 in which this Court held that an application in a procedural
matter relating to a Chapter 9 dispute as prov ided in the Rules , is appealable.

[11] Black Mountain Mining (P ty) Ltd v Commissioner for the South African Revenue
Service (Black Mountain ) 5 qualified the appealability of an order in a procedural matter
thus:
‘We therefore conclude that the reference to an “interlocutory” application in s 117(3) refers to a
simple interlocutory application and resulting order, whilst reference to “an application in a
procedural matter relating to a dispute under this Chapter as provided for in the “Rules”, refers to
those orders arising from applications specifically provided for in the Rules; provided they are final
in effect and cannot be altered by the Tax Court, are definitive of the parties’ rights and dispositive
of at lea st a substantial portion of the issues .’6

[12] The proviso , in Black Mountain , with regard to the appealability of orders in
procedural matters , as described in the TAA , is couched in similar terms as the common
law test for appealability laid down in Zweni v Minister of Law and Order7 (Zweni ). It
postulate s a bifurcated enquiry in order to determine the appealability of an order in a

2 SA Metropolitan Lewensversekeringsmaatskappy Bpk v Louw 1981 (4) SA 329 (O).
3 Ibid at 333G -H.
4 Wingate -Pearse v Commissioner, South African Revenue Service [2017] ZAGPJHC 218; 2017 (1) SA 542
(SCA) para 14.
5 Black Mountain Mining (Pty) Ltd v Commissioner for the South African Revenue Service [2021] ZAGPJHC
800; 2021 JDR 3319 (GJ).
6 Ibid para 36.
7 Zweni v Minister of Law and Order 1993 (1) SA 523 (A) at 532I -533A .
6

procedural matter. First , it must be subjected to the Zweni test and, if it does not meet
those requirements , then the interest s of justice standard should be applied.

[13] The factors in Zweni , though still relevant, have been subsumed by the interest s
of justice standard which is n ow the only standard to be met .8 Whether it would be in the
interests of justice to determine the appealability of an order in a procedural matter must
be decided on a case -by-case basis , after weighing -up all the relevant factors , including
those in Zweni . In my view, the better approach would be that an application in a
procedural matter relating to a dispute under Chapter 9 of the TAA is appealable , provided
it is in the interests of justice to consider the appeal. I turn to consider the relevant factors
in this matter.

[14] In terms of Uniform R ule 30(2) (a) an application to set aside an irregular step may
be made only if the applicant has not taken a further step in the cause with knowledge of
the irregularity. If SARS were to apply for condonation, it would amount to a further step
in the progress of the matter and it w ould not be able to utili se the Rule to complain about
the same irregular step. The order has a final effect and cannot be revisited by the tax
court.

[15] There are conflicting decisions in the tax court on the main issue, which creates
uncertainty. Uncertainty as to the correct legal position is not in the interest of justice.
Rather, the interests of justice require clarity regarding the proper interpretation of Rule
56(1).

[16] Accordingly, t he application in terms of Uniform R ule 30(1) to remove the irregular
step, is an application in a procedural matter as contemplated in the TAA and it would be
in the interests of justice to hear and determine the appeal. I turn now to the merits of the
appeal , commencing with the relevant Rules .

8 City of Tshwane Metropolitan Municipality v Afriforum and Another [2016] ZACC 19; 2016 (6) SA 279 (CC);
2016 (9) BCLR 1133 (CC) para 40. See also: United Democratic Movement and Another v Lebashe
Investment Group (Pty) Ltd [2022] ZACC 34; 2022 (12) BCLR 1521 (CC); 2023 (1) SA 353 (CC) paras 34
to 35.
7

[17] Since SARS had not complied with Rule 31, this Rule serves as a convenient
starting point. It states:
‘Statement of grounds of assessment and opposing appeal
(1) SARS must deliver to the appellant a statement of the grounds of assessment and opposing
the appeal wi thin 45 days after delivery of —
(a) the documents required by SARS under rule 10(5);
(b) if alternative dispute resolution proceedings were followed under Part C, the notice by the
appellant of proceeding with the appeal under rule 24(4) or 25(3);
. . . .
(2) The statement of the grounds of opposing the appeal must set out a clear and concise
statement of —
(a) the consolidated grounds of the disputed assessment;
(b) which of the facts or the legal grounds in the notice of appeal under rule 10 are admitted and
which of those facts or legal grounds are opposed; and
(c) the material facts and legal grounds upon which SARS relies in opposing the appeal.
(3)… ’

[18] Rule 4 reads:
‘Extension of time periods
(1) Except where the extension of a period prescribed under the Act or these rules is otherwise
regulated in Chapter 9 of the Act or these rules, a period may be extended or shortened by
agreement between —
(a) the parties;
(b) a part y or the parties and the clerk; or
(c) a party or the parties and the registrar.
(2) A request for an extension must be delivered to the other party before expiry of the period
prescribed under these rules unless the parties agree that the request may be delivered after
expiry of the period.
(3) If SARS is afforded a discretion under these rules to extend a time period applicable to SARS,
SARS must in the notice of the extension state the grounds of the extension.
(4) . . . ’

[19] Rule 52(6) provides:
8

‘A party who failed to deliver a statement as and when required under rule 31, 32 or 33, may apply
to the tax court under this Part for an order condoning the failure to deliver the statement and the
determination of a further period within which the statem ent may be delivered. ’

[20] Rule 56(1) stipulates:
‘(1) If a party has failed to comply with a period or obligation prescribed under these rules or an
order by the tax court under this Part, the other party may —
(a) deliver a notice to the defaulting party informing the party of the intention to apply to the tax
court for a final order under section 129(2) of the Act in the event that the defaulting party fails to
remedy the default within 15 days of delivery of the notice; and
(b) if the defaulting party fails to remedy the default within the prescribed period, apply, on notice
to the defaulting party, to the tax court for a final order under section 129(2). ’

[21] The tax court held that where a party has not complied with the period in Rule 31
it must request an extension of time in terms of Rule 4(2). It found that the delivery of a
Rule 56(1) notice and timeous response thereto, does not exempt the defaulting party
from compliance with Rule 4(2). It reasoned that , absent an application for condonation
or a Rule 4(2) extension , there is no impediment against an application for default
judgment by the innocent party because in these circumstances the Rule 31 statement is
invalid .

[22] The majority of the high court found that ‘obligation ’ in the context of Rule 56(1)
read with ‘default ’ refers to SARS’ obligation to file a statement in terms of Rule 31 which
complies in substance, form and time with the prescripts of Rule 31 and failing which
SARS must cure the defect in terms of Rule 4 or Rule 52 (6). It opined that to hold
otherwise , would render Rules 4 and 52 (6) superfluous. The minority found that , since
SARS complied with the Rule 56(1) notice , there was no need for it to apply for
condonation or an extension of time. It would have held that the application for default
judgment was an irregular step.

[23] In this appeal , SARS argued that the 15 days in the Rule 56(1) notice is an
extension of a period ‘otherwise regulated ’ as contemplated in Rule 4(1) and that the latter
9

Rule is therefore not applicable. It further argued that it cured the default as called upon
and nothing further was needed. However, the taxpayer contended that , above and
beyond SARS’ compliance with Rule 56(1), it had an obligation to apply for condonation.
SARS’ failure to do so opened a pathway for it to apply for default judgment.

[24] An interplay between the above Rules is discernible. Rule 4 governs agreements
between the parties to extend or shorten periods. If a party fails to comply with Rules 31,
32 or 33 , it may approach the tax court with a condonation application , in terms of Rule
52(6), and request a further period within which it may deliver the statement. This is a
voluntary application by a party who has failed to comply with the Rules. Rule 56 (1) is
coercive in that the innocent party endeavours to force the defaulting party to comply on
pain of a final order being made against it.

[25] It is common cause that SARS did not seek an agreement with regard to the
extension of any time periods. Rule 4(2) does not contain an outer limit within which SARS
could request an extension . However, SARS argued that given the history of legal
skirmishes with the taxpayer , such a request would not have yielded a positive result.

[26] Rule 56(1) states that if a party has failed to comply with a period or obligation
prescribed under the Rules or a tax court order (my emphasis ), the innocent party may
deliver a notice to the defaulting party calling upon it to remedy the default within 15 days ,
failing which , the innocent party may apply, on notice to the defaulting party , for a final
order under s 129(2).9 It is significant that the rule maker used the disjunctive ‘or’ and not
the conjunctive ‘and’.

[27] It is trite that words should be given their ordinary grammatical meaning, unless
doing so would lead to an absurdity. In Natal Joint Municipal Pension Fund v Endumeni
Municipality10 it was said that in interpreting a document regard must be had to the text,


10 Natal Joint Municipal Pension Fund v Endumeni Municipality [2012] ZASCA 13; [2012] 2 All SA 262
(SCA); 2012 (4) SA 583 (SCA) para 18.
10

context and purpose of the document. The process of interpretation is unitary and
objective. A sensible meaning is to be preferred to one that leads to insensible or
unbusinesslike results.

[28] There is no reason why ‘or’ in the Rule should be read as ‘and’ ; the Rule makes
sense as it is. There is no indication that ‘and’ would have been more sensible in this
context. Rule 31 simultaneously contains a time period and obligations. SARS must
deliver its statement within 45 days after the taxpayer has, inter alia , delivered its notice
of appeal and f ailure to comply with the period could trigger a Rule 56 (1) notice. However,
non-compliance with the period is one basis for a Rule 56(1) notice. Another basis would
be if SARS delivered an otherwise non -compliant statement and in so doing failed to
comply with its obligations under the Rules.

[29] In terms of Rule 31(2) , SARS must set out a clear and concise statement of (a) the
consolidated grounds of the disputed assessment ; (b) which facts or legal grounds in the
notice of appeal are admitted and which are opposed ; and (c) the material facts and legal
grounds upon which SARS relies in opposing the appeal. These are obligations that
SARS ha s to fulfil. Non-compliance with these obligations would only come to the other
party’s knowledge after the statement ha d been delivered. If it fails to meet any of these
obligations, it would be in default and the innocent party would be able to serve a Rule
56(1) notice on SARS. That is why it is either the period or the obligation that can trigger
the Rule 56 (1) notice.

[30] If the tax court has determined that SARS should, in terms of Rule 52(6), file its
Rule 31 statement on a particular day and it fails to comply with the order, the innocent
party may enforce compliance by way of a Rule 56(1) notice. This notice would be
delivered because the defaulting party had not complied with the tim e determined by the
court for the other party to receive the Rule 31, 32 or 33 statement. The innocent party
would enforce the court order because the court gave it a procedural right to receive the
relevant statement on a determined date. The order thus creates an obligation on the
defaulter towards the innocent party .
11

[31] Any of the scenarios in para graph s 29 to 31 above can trigger a Rule 56 (1) notice
being served on the defaulter. The Rule 56 (1) notice serves the purpose of a compliance
notice. It is a procedural mechanism which assists an innocent party to advance the
appeal, either by ensuring compliance or by securing a default judgment. Absent
compliance, the innocent party may , after giving the defaulter notice of its application,
apply for default jud gment. Since a final order under s 129(2) can be drastic, sufficient
notice should be given before it is sought. However, the underlying objective of the Rule
56(1) notice procedure is not punitive . It is aimed at facilitating finality of the dispute by
coercing compliance. Once compliance has been achieved, the Rule will have served its
purpose.

[32] It is for this reason that, a fter compliance with the notice, there is no need for the
defaulter to apply for condonation. Rule 56(1) is self -contained: its purpose was achieved
when SARS complied with the demand that it files its Rule 31 statement within the period
specified in the notice. The notice in this matter call ed upon SARS to remedy its failure to
file its Rule 31 statement but incorrectly stated that SARS ha d ‘consequently failed to
comply with the periods and obligations under the Rules’ . (My emphasis .)

[33] Firstly, it incorrectly used the word ‘and’. Second ly, it assumed, without the benefit
of the statement , that SARS would not comply with its obligations. An application for
condonation was, at this stage, not one of SARS’ obligations. I t is trite that a party seeking
condonation must make out a case entitling it to the court’s indulgence.11 The duty to
apply for c ondonation for non -compliance with the Rules is a matter between the court
and the defaulting party , whereas t he reference to obligations in Rule 56(1) relates to
obligations between the parties.

[34] The majority of the high court opined that SARS’ contention that the defaulting
party need not apply for condonation after delivery of a Rule 56 (1) notice is incorrect
because it would render Rules 4 and 52 superfluous. It does not. Rules 4 and 52 serve

11 Grootboom v National Prosecuting Authority [2013] ZACC 37; 2014 (2) SA 68 (CC) para 23.
12

different purposes before the delivery of a Rule 56(1) notice: respectively an extension of
time by agreement and a determination of time by the tax court. The purpose of Rule
56(1) is to coerce compliance becaus e a party has shunned the Rules, including Rules 4
and 52 .

[35] The majority of the high court found it irrational that a party can ignore the Rules
and wait for a Rule 56(1) notice to comply therewith and so avoid having to apply for
condonation . It is how the Rules were designed. They allow a party to play possum even
beyond non -compliance with a Rule 56 (1) notice but before default judgment is granted.
In Taxpayer v Commissioner for the South African Revenue Services ,12 the taxpayer’s
application for default judgment was refused after SARS failed to comply with a Rule 56 (1)
notice, without having applied for condonation . In that instance SARS did not comply
within the 15 -day period allowed by Rule 56(1) .

[36] Compliance with a Rule 56 (1) notice is akin to complying with a notice of bar in
terms of Rule 26 of the Uniform Rules . If a party is served with a notice of bar , it is enjoined
to file the required pleading in the five days set out in the notice . If such party complies ,
the bar is automatically lifted by dint of compliance with the notice. A condonation
application is therefore not necessary.

[37] In terms of the Uniform Rules, a defendant may file a notice of intention to defend
and fail to deliver a plea for years . Nothing will happen to advance the matter, until the
plaintiff decides to deliver a notice of bar.13 The defaulting defendant may then deliver its
plea without applying for condonation. It may even do so after the application for default
judgment had been filed, subject to an adverse costs order. No condonation application
is necessary under these circumstances.


12 Taxpayer v Commissioner for the South African Revenue Services [2019] ZATC 17.
13 Uniform Rule 22 read with Rule 26. See Magdelena v Road Accident Fund [2024] ZAGPPHC 398
(unreported Case no: 24056/2020 Gauteng Division, (Pretoria)) delivered on 15 April 2024 in which the
defendant failed to file a plea for three years.
13

[38] In an adversarial system such as ours, where the Rules allow the parties to
regulate the advancement of a matter, specifically before litis contestatio , it is important
for the innocent party to timeously invoke a Rule that is aimed at ensuring compliance
with the Rules. The innocent party must be vigilant. The law favours and assists those
who timeously pursue their procedural and substantive rights, and not those who delay
or neglect them. The taxpaye r could have invoked Rule 56 (1) immediately after the lapse
of the 45 days stipulated in Rule 31.

[39] The high court ought to have held that a party who is served with a Rule 56 (1)
notice need not apply for condonation after complying with the notice. It should have found
that the default judgment application was an irregular step and granted the Uniform Rule
30 application.

[40] There is no reason why the costs should not follow the cause. SARS was
successful and is entitled to its costs.

[41] I, accordingly , make the following order:
1 The appeal is upheld with costs, including the costs of two counsel.
2 The order of the high court is set aside and replaced with the following:
‘2.1 The appeal is upheld with costs.
2.2 The order of the tax court is set aside and replaced with the following:
“2.2.1 The application for default judgment is declared an irregular step and set
aside.
2.2.2 The taxpayer is ordered to pay the costs of this application. ”’



_______________________
C J MUSI
ACTING JUDGE OF APPEAL

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Appearances

For the appellant K W Luderitz SC (with S T Seshoka)
Instructed by Van Hulsteyns Attorneys , Johannesburg
Hendre Conradie Inc. , Bloemfontein

For the respondent M J Bishop (with E Cohen)
Instructed by Osborn Wellsted Paulsen Inc. , Johannesburg
Honey Attorneys , Bloemfontein .