IN THE HIGH COURT OF SOUTH AFRICA
(GAUTENG DIVISION, PRETORIA)
DELETE WHICHEVER IS NOT APPLICABLE
(1) R EPORTABL E: YES /Ne
(2) OF INTEREST TO OTHER JUDGES: YES /N-6
(3) REVISED
DA TE: 25 November 2025
SIGNATURE:.···
In the matter between:
INHLAKANIPHO CONSULTANTS (PTY) LTD
And
THE COMMISSIONER FOR THE SOUTH
AFRICAN REVENUE SERVICE
Coram: Mngq ibisa-Thusi, Nyathi & Millar JJ
Heard on: 9 October 2025
1
Case No. A333/2024
APPELLANT
RESPONDENT

Delivered:
Summary:
25 November 2025 -This judgment was handed down electronically
by circulation to the parties' representatives by email, by being
uploaded to the CaseLines system of the GD and by release to
SAFLI I. The date and time for hand-down is deemed to be 1 OHOO on
25 November 2025.
2
Tax Administration Act 28 of 2011 - Parties bound by agreement
entered into lawfully - agreement represented the final agreed
position between the parties - intention of the parties can be
ascertained from the agreement - intention was a settlement of the
appellant's liabilities of the specified periods - confidence in
agreements entered with SARS and its abiding with the terms of those
agreements is paramount- appeal upheld.
JUDGMENT
MILLAR J (MNGQIBISA-THUSI ET NYATHI JJ CONCURRING)
[1] This appeal concerns one of the two certainties of life - tax. The appellant is a
taxpayer who entered into an agreement with the respondent for the payment of
tax relating to certain periods. The appellant complied with its obligations in terms
of the agreement.
[2] Ordinarily, it is to be expected in such circumstances that the appellant, the
taxpayer, having "rendered unto Caesar that which is Caesar's," would have
discharged its obligation and that, having entered into an agreement with
reciprocal obligations, Caesar would do the same.

3
[3] The heart of this appeal is whether the respondent is bound to the terms of the
agreement that it has entered into with the appellant. It is common cause
between the parties that the appellant has complied with its obligations in terms
of the agreement and that the agreement, in all its terms and particularly having
regard to the Tax Administration Act1 (TAA) was entered into lawfully and is
binding on both the parties2.
[4] When the matter came before the Court a quo, the appellant sought the following
order:
1 28of2011 .
"1. It is declared that the applicant is not indebted to the respondent or the
South African Revenue Service in respect of any of the "amounts in
dispute" as defined in clause 1. 1. 3 of the written agreement between the
parties dated 20 September 2018, in respect of the "tax periods under
dispute" as defined in clause 1.1.15 of the said written agreement, or
otherwise.
2. The respondent is ordered, within ten (10) days after the date of this order,
to render an account to the applicant in respect of any interest that may
be due and payable by the applicant to the respondent, in respect of the
"amounts in dispute" as defined in clause 1.1.3 of the written agreement
referred to in paragraph 1 above.
3. The respondent is ordered to, in respect of such account, take into
account the provisions of Chapter 12 and Chapter 13 of the Tax
Administration Act, 28 of 2011 (as amended).
2 Section 148 of the T AA .

4
4. The parties are ordered to, within a period of thirty (30) thirty business
days after the rendering of such account, debate such account between
themselves.
5. The applicant is authorised to again enroll this application pursuant to the
debate of such account on the same papers, duly supplemented, for
consequential relief.
6. The respondent is ordered to pay the applicant's costs on the scale
applicable between attorney and client, such costs to include the costs
consequent upon the employment of two counsel, including the reserved
costs of 04 February 2022:"
[5] The Court a quo , dismissed the application with costs.3 In its judgment, it
correctly identified that "the main issue is not, as the notice of motion suggests,
whether the applicant has paid amounts stipulated in the Agreement. On the contrary, it
is whether the respondent has correctly allocated the payment made by the applicant in
respect of the periods in question." [my underlining]
[6] What was agreed between the parties and what happened after the appellant had
made the agreed payment?
[7] Pursuant to a series of assessments raised by the respondent in respect of the
VAT liability of the appellant, objections were lodged. The objections were
allowed in part and in respect of the part that was not allowed, this was dealt with
by way of an appeal noted to the Tax Court in terms of section 107 of the T AA .
3 There had also been an application brought by the respondent before the Court a quo, for condonation
for the late filing of its answering affidavit and that application was granted with no order as to costs.
When this appeal was heard, although the order granting condonation was also appealed against, it was
not pursued at the hearing. No more need be said on this aspect other than that with the respondent's
version before the Court a quo and now this Court, the appeal may be properly considered.

5
This appeal was resolved by way of a referral to alternative dispute resolution.4
This culminated in a written agreement of settlement which was signed by the
parties on 17 September 2018 and 20 September 2018, respectively. The
agreement provided, inter alia, that:
"The Commissioner considers that it will be to the best advantage of the State to
resolve the Dispute on the basis as set out herein. The Parties are in agreement
that this Agreement is fair and equitable to both Parties. The Parties accordingly
agree to enter into this Agreement, which for purposes of completeness,
incorporate issues resolved in terms of both Rule 23 and Rule 24 and such issues
will therefore not be contained in a separate agreement." [My underlining].
[8] The parties furthermore agreed on a revision and reduction of prior assessments
and the amount of understatement penalties. After the calculation of these
amounts, the agreement recorded in paragraph 4.3.1 that:
"The Appellant, therefore, accepts a total liability for the revised amounts in
dispute, totaling RS 910 972, 60, as calculated from the amounts stated in clauses
4.1.2 and 4.2.1.1."
[9] The respondent also undertook to alter the assessments within 30 days from the
effective date of the agreement to give effect to it and additionally, in
consequence thereof:
"The Appellant has agreed to pay the total liability for the revised amounts in
dispute, totalling R5 910 972, 60, as per clause 4. 3. 1 within 21 days from the date
of altering the Assessments ... "
4
Rule 23 of the rules of the Tax Court in terms of section 103 of the T AA.

6
[1 0] Lastly, besides agreeing that no variation of the agreement would be valid save
were it to be recorded in writing, the appellant and the respondent agreed:
"This Agreement represents the final agreed position between the Parties and
includes all the issues in Dispute."
[11] That the agreement represented the final agreed position between the appellant
and the respondent appears in both the preamble of the written agreement as
well as in the main body of the agreement. It is clear from this that it was intended
that the agreement would bring an end to the dispute relating to the two tax
periods (04/2010 and 02/2014) in question, not only in respect of the amounts to
be paid for those two periods but also in respect of the understatement penalties.
[12] Properly construed, the agreement provided that once the agreed amounts had
been paid all that would be left to be calculated, because the agreed amounts
had not yet been paid when the agreement was signed, was the interest. The
calculation of this could self-evidently only occur once the revised assessments
had been raised and payment made.
[13] It is clear in terms of the agreement that the interest is calculable as a fixed
amount. The interest can be calculated by taking the date on which payment of
the respective assessments were due as the starting date and the date on wh ich
payment was made as the ending date. The agreement, in its terms, is clear in
this regard. The calculation is for a fixed period and readily determinable.
[14] So , why, if the parties had agreed the amount to be paid and the respective time
periods and the appellant complied with what had been agreed, was it necessary
for the appellant to approach the Court a quo for the orders as set out in
paragraph 4 above? The orders sought may be divided into three categories.
The first is a declarator of a factual position. The second, is to compel the
respondent to render an account for the interest due, together with the

respondent to render an account for the interest due, together with the
mechanism by which, in the event of a dispute, it could be resolved. The last is
costs.

7
[15] It is certainly unusual that a taxpayer in the position of the appellant would have
to approach the Court for such orders. The reason that this was precipitated was
a volte face on the part of the respondent.
[16] Notwithstanding the clear and unequivocal terms of the agreement entered
between the parties, the respondent inexplicably decided to take the position that
the payment of the agreed amount did not discharge the liability for the periods.
It took the position that once the liability for the periods had been determined in
respect of the assessments and understatement penalties, interest began to run
immediately.
[17] The respondent took the view that when payment of the agreed amount was
made , this did not discharge the principal debt, leaving only interest outstanding
but was in reduction of the combined amount of the original assessment,
understatement penalties and interest that had been accruing on an ongoing
basis. The consequence of this approach is that when payment of the agreed
amounts was made , this only served to reduce the total outstanding inclusive
amount, was insufficient to touch the principal debt as it only discharged interest
and penalties and for that reason, the principal debt with further interest was now
still outstanding.
[18] This approach by the respondent was hinged upon section 166 of the TAA which
provides:
"166. Allocation of payments. -
(1) Despite anything to the contrary contained in a tax Act, SARS may
allocate payment made in terms of a tax Act against an amount of penalty
or interest or the oldest amount of an outstanding tax debt at the time of
the payment, other than amounts -
(a) for which payment has been suspended under this Act; or

8
(b) that are payable in terms of an instalment payment agreement under
section 167.
(2) SARS may apply the first-in-first out principle described in subsection (1)
in respect of a specific tax type or a group of tax types in the manner that
may be prescribed by the Commissioner by public notice.
(3) In the event that a payment in subsection (1) is insufficient to extinguish
all tax debts of the same age, the amount of the payment mav be allocated
among these tax debts in the manner prescribed by the Commissioner by
public notice.
(4) The age of a tax debt for purposes of subsection (1) is determined
according to the duration from the date the debt became payable in terms
of the applicable Act." [My emphasis].
[19) While section 166 of the TAA is permissive in its terms with the use of the word
"may" providing the respondent with a discretion as to whether it will allocate
payments in the way prescribed in the T AA, this was nothing more than a
convenient peg upon which to hang its failure to comply with what had been
expressly agreed with the appellant.
[20) The Court a quo, in dealing with this aspect, summarised the opposition of the
respondent to the orders sought as follows:
"However, the respondent explained that its accounting system did not permit the
allocation of payments to capital rather than interest and that what was sought by
the applicant was accordingly not possible - at least not without a substantial
overhaul of its system. It also stated that that fact had been communicated to the
applicant. The applicant contended that that was not a sufficient answer as, so the
argument went, what the respondent was seeking to rely on was inconvenience
rather than impossibility."

9
[21] Having regard to the terms of the agreement between the parties, and the relative
ease with which the calculation of the interest can be effected as has been set
out above, this militates in favour of the position adopted by the appellant.
[22] However, the Court a quo rejected this and went on to explain:
"I have no hesitation in rejecting this argument. Impossibility is, in a sense, relative.
Indeed, many things which are frequently referred to as impossible are in fact
achievable given a sufficient budget. That is, however, not the standard which the
law imposes. The respondent has an existing accounting system which, as
explained in its papers, conforms to the provisions of section 166 of the Act, which
system applies to all taxpayers. It is not possible for that system to allocate the
payments in the way in which the applicant seeks to have them allocated and the
respondent is not obliged to cause its system to be overhauled simply to
accommodate the applicant. Thus, given the context, what the applicant seeks to
have done, and what the respondent appears to at a point to have agreed to do,
falls to be regarded as impossible." [my underlining].
[23] The Court a quo then went on to hold that "the fact that the amounts which were
disputed comprised capital and interest did not imply that the respondent was bound to
allocate the payment made by the applicant to those heads. The Agreement, which is
silent on the issue, falls to be construed in the light of the provisions of the Act."
[24] In the case of written agreements, regard must be had to the contents of the
agreement. From these contents, given their ordinary meaning, the intention of
the parties is ascertained. It is trite that this is to be done contextually and in a
businesslike manner.5
[25] It is readily apparent that what was intended was a settlement of the appellant's
liabilities for the specified periods. The reference in the agreement to it being "fair

liabilities for the specified periods. The reference in the agreement to it being "fair
and equitable to both Parties" and the repeated references to it being the "final
5 Capitec Bank Holdings Limited and An other v Coral Lagoon Investments 194 (Pty) Ltd and O thers 2022
(1) SA 100 (SCA ) at para [25]; South African Nursing Council v Khanyisa Nursing School (Pty) Ltd and
Another 2024 (1) SA 103 (SCA) ; Van Zyl NO v Road Accident Fund 2022 (3) SA 45 (CC ) (minority
judgment) at para [130].

10
agreed position between the Parties and includes all the issues in Dispute" make plain
what was intended between the parties. I am fortified in this view, having regard
to the provisions of sections 148(1) and (2) of the T AA, which provide that:
"(1) The settlement agreement represents the final agreed position between
the parties and is in full and final 'settlement' of all or the specified aspects
of the 'dispute' in question between the parties.
(2) SARS must adhere to the terms of the agreement, unless material facts
were not disclosed as required by section 147(1) or there was fraud or
misrepresentation of the facts."
[26] The computer or other systems which the respondent operates in its tax collection
process, are beyond the realm of the agreement and peculiarly within the
knowledge of the respondent. This was so at the time that the agreement was
entered into and subsequently. Furthermore, when the respondent entered into
the agreement, it knew of the provisions of section 148 of the TAA and that the
appellant would be entitled to rely on those provisions in requiring SARS to
comply with its obligations in terms of what had been agreed.
[27] In this regard, it was argued on behalf of the respondent that the appellant could
not claim a "reasonable reliance on any representation allegedly made by SARS
regarding Payment Allocation, as Payment Allocation is governed by statute not by
private representations or agreements.
11
[28] The Supreme Court of Appeal in Trustees, Oregon Trust and Another v Beadica
231 CC and Others, 6 held:
" ... the parties will know what their contract means and that they are entitled to
rely on its terms, unless these are against public policy, or their enforcement would
be unconscionable.
11
6 2019 (4) SA 517 (SCA) at para [26].

11
[29] The Constitutional Court in Beadica 231 CC and Others v Trustees, Oregon Trust
and Another, 7 expounded the position of our law in this regard as follows:
"[71] There is only one system of law in our constitutional democracy. As
recognised by this Court in Pharmaceutical Manufacturers, this system of
law is shaped by the Constitution, which is the supreme law, and all law,
including the common law, derives its force from the Constitution and is
subject to constitutional control. The determination of public policy is now
rooted in the Constitution and the objective, normative value system it
embodies. Constitutional rights apply through a process of indirect
horizontality to contracts. The impact of the Constitution on the
enforcement of contractual terms through the determination of public
policy is profound. A careful balancing exercise is required to determine
whether a contractual term, or its enforcement, would be contrary to public
policy. As explained by the Supreme Court of Appeal in Barkhuizen SCA ,
and endorsed by this Court in Barkhuizen, the Constitution requires that
courts - 'employ [the Constitution and] its values to achieve a balance that
strikes down the unacceptable excesses of "freedom of contract", while
seeking to permit individuals the dignity and autonomy of regulating their
own lives [emphasis added}.
[72] It is clear that public policy imports values of fairness, reasonableness and
justice. Ubuntu, which encompasses these values, is now a/so
recognised as a constitutional value, inspiring our constitutional compact,
which in turn informs public policy. These values form important
considerations in the balancing exercise required to determine whether a
contractual term, or its enforcement, is contrary to public policy.
[73] While these values play an important role in the public policy analysis,
they also perform creative, informative and controlling functions in that
they underly and inform the substantive law of contract. Many established

they underly and inform the substantive law of contract. Many established
doctrines of contract law are themselves the embodiment of these values."
[references omitted].
7 2020 (5) SA 247 (CC ) at paras (71]-(73].

12
[30] It is clear and unequivocal from the written agreement entered between the
parties what they intended by entering into that agreement. The position of the
respondent is a unique one. It can hardly be said that in entering into the
agreement with the appellant, that it was disadvantaged in any way. It knew its
capabilities as well as its limitations when it did so. The agreement, it is common
cause, is lawful in all respects and it is consonant with public policy that taxpayers
pay what is due by them and that the respondent receive this from them in
discharge of that obligation.
[31] I agree with the characterisation by the appellant that the plea ad miseracordium
by the respondent that it would be subjected to inconvenience is no defence at
all. Although not before this Court, it is likely that many of agreements in similar
terms have been entered into by the respondent with taxpayers over the course
of the last eight years since the agreement in this matter was concluded.
[32] The Court a quo accepted uncritically the version of the respondent that it would
require an overhaul of its systems and that it could not implement the agreement
in the terms it had agreed.
[33] The bare allegation made in the answering affidavit was that:
"In accordance with section 166 of the TAA , SARS has developed payment
allocations that prioritise the allocation of payments to older periods (old tax debts)
as described above. This allocation pattern prescribed by the Payment Allocations
is best suited to the efficient running of SARS because it is in line with section 166
of the TAA.
A deviation from the section 166 Payment Allocations is therefore not authorised.
I am advised that such a deviation is not presently possible without a significant
overhaul of current systems and procedures and given the immense work burden
that SARS is under, this deviation is prohibitively cumbersome and will prejudice
the efficient running of the respondent."

13
[34] There was no evidence before the Court a quo to demonstrate that this was in
fact so. This bare allegation is hearsay8, unsubstantiated and clearly in conflict
with the agreement and yet this was surprisingly accepted uncritically and
elevated to the status of established fact, grounding the finding of impossibility.
[35] Given the position of the respondent,9 confidence in agreements entered with it
and its abiding with the terms of those agreements is paramount. The respondent
is in the same position as any other party who enters a contract and if it cannot
comply it behooves it to take such steps as it may legally do so to order its affairs
in consequence thereof. It is simply not open to the respondent to adopt a
contrived and self-serving reliance on section 166 of the T AA when on the facts
of the matter it is clearly not entitled to do so.
[36] By entering into the agreement in the terms that it did, it eschewed its entitlement
to rely upon section 166 of the TAA for the specific periods concerned. This was
lawful and it was bound to what it had agreed in terms of section 148(2) of the
TAA.10 To adopt any other interpretation would render the concept of an
agreement entered with the respondent in terms of the relevant rules of the Tax
Court entirely pointless and would in fact dis-incentivize settlement because
parties would know that no reliance could be placed upon any agreement that
had been reached.
[37] For the reasons set out above, the appeal will succeed.
[38] The appellant sought punitive costs in the Court a quo. They did not seek punitive
costs in this Court. Had the appellant sought punitive costs in this Court, I would
seriously have considered granting it given the circumstances of the matter.
8 The respondent sought to rely on Plascon-Evans Paints Ltd v Van Riebeeck Paints (Pty) Ltd 1984 (3)
SA 623 (A) in support of the argument that the simple 'say so' of a representative of the respondent who

had been "advised" of a state of affairs was sufficient for a Court to accept it without more. In the present
case, having regard to the provisions of the written agreement, the common cause position that the
agreement was lawful in all respects and section 148(2) of the TAA, the version preferred is simply not
acceptable.
9 See Metcash Trading Ltd v Commissioner, SARS and Another 2001 (1) SA 1109 (CC) at para [23].
10
Minister of Public Works v Kyalami Ridge Environmental Association 2001 (3) SA 1151 (CC).

14
[39] In the circumstances, I propose the following order:
[39.1]
[39.2]
[39.3]
The appeal is upheld.
The respondent is ordered to pay the costs of the appeal on the scale
as between party and party, which costs are to include the costs
consequent upon the engagement of two counsel. The costs of
counsel are on scale C.
The order of the Court a quo is set aside and replaced with the
following:
"1. It is declared that the applicant is not indebted to the respondent
or the South African Revenue Service in respect of any of the
"amounts in dispute" as defined in clause 1.1.3 of the written
agreement between the parties dated 20 September 2018, in
respect of the "tax periods under dispute" as defined in clause
1. 1. 15 of the said written agreement, or otherwise.
2. The respondent is ordered, within ten (10) days after the date of
this order, to render an account to the applicant in respect of any
interest that may be due and payable by the applicant to the
respondent, in respect of the "amounts in dispute" as defined in
clause 1. 1. 3 of the written agreement referred to in paragraph 1
above.
3. The respondent is ordered to, in respect of such account, take
into account the provisions of Chapter 12 and Chapter 13 of the
Tax Administration Act, 28 of 2011 (as amended).

15
4. The parties are ordered to, within a period of thirty (30) thirty
business days after the rendering of such account, debate such
account between themselves.
5. The applicant is authorised to again enroll this application
pursuant to the debate of such account on the same papers, duly
supplemented, for consequential relief.
6. The respondent is ordered to pay the applicant's costs on the
scale applicable between attorney and client, such costs to
include the costs consequent upon the employment of two
counsel, including the reseNed costs of 04 February 2022:"
I AGREE AND IT IS SO ORDERED
A MILLAR
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA
N MNGQIBISA-THUSI
JUDGE OF THE HIGH COURT
GAUTENG DIVISION, PRETORIA

I AGREE ,
HEARD ON:
JU DGMENT DELIVERED O N :
COUNSEL FOR THE APP E LLANT:
INSTRUCTED BY:
REFERE N CE:
COUNSEL FOR THE RESPONDENT :
INSTRUCTED BY :
REFERENCE :
16
JS N YA THI
JUDGE OF THE HIGH COUR T
GAUTENG DIVISION, PRETORI A
9 OCTOBE R 2025
25 NOVEMBER 2025
ADV. P SWANEPOEL SC
ADV. C BOONZAA IER
L MBANGI IN CORPORATED
MR. L MBANG I
ADV. L HASKINS
MOTHLE JOOMA SABDIA INC.
MR. JOOMA