30 March 2023 by and Tax & Exchange Control Alert

Reviewing a SARS assessment in the High Court: Only if the High Court says so

In the recent Supreme Court of Appeal (SCA) judgment in Commissioner for the South African Revenue Service v Rappa Resources (Pty) Ltd (Case no 1205/2021) [2023] ZASCA 28, the South African Revenue Service (SARS) raised assessments against Rappa Resources (Pty) Ltd (Rappa) for the payment of value-added tax, interest and penalties.

As is standard with an assessment, Rappa was informed that if it wished to object to the assessments raised, it would need to do so in accordance with section 104 of the Tax Administration Act 28 of 2011 (TAA).

Instead of filing an objection in the ordinary course, Rappa launched an urgent application to the High Court seeking, inter alia, the following relief:

1. Reviewing and setting aside the decision of the Commissioner to issue the Assessments (“the decision”);

  1. Reviewing and setting aside the Assessments;
  2. Declaring the decision of the Commissioner to issue the Assessments to be in conflict with the constitutional principle of legality and accordingly unconstitutional, unlawful and invalid.

Under the review in terms of Rule 53(1)(b) of the Uniform Rules of Court (Rules), Rappa further requested that the High Court order that SARS be obliged to make available the record of its decision under review. When SARS was not forthcoming with the record, Rappa instituted an interlocutory application to compel SARS to make the record available.

SARS’ argument

In its answering papers, SARS indicated that it would not produce the record, as Rappa’s application for review (and the incidental application to compel) was not competent, due to it not following the usual procedure in terms of section 104 of the TAA. In addition, SARS argued that the High Court had not made an order in terms of section 105 of the TAA, which provides as follows:

A taxpayer may only dispute an assessment or “decision” as described in section 104 in proceedings under this Chapter, unless a High Court otherwise directs.” (our emphasis)

On this basis, SARS contested Rappa’s application for review, as well as its application to compel, as Rappa did not apply for the High Court’s direction in terms of section 105 of the TAA. SARS stated that Rappa should have followed the procedure to dispute the assessment in accordance with section 104 of the TAA, or alternatively, made an application in terms of section 105 of the TAA requesting that the High Court direct that the review could be heard by a High Court, as opposed to making an objection in the ordinary course, in accordance with section 104.

The High Court subsequently decided the application to compel in favour of Rappa and ordered SARS to provide Rappa with the record. SARS applied for leave to appeal this decision to the SCA, which was granted on the basis of SARS’ main argument: that the High Court lacked jurisdiction in the review due to the provision in section 105 of the TAA, and therefore also could not make a decision on matters incidental thereto (in other words, the application to compel).

Rappa’s defence

Rappa raised the defence that section 105 of the TAA was not applicable in its review to the High Court, as the review was based on grounds relating to the legality of the assessments, as opposed to the merit thereof. In response to this defence, the SCA referred to the decision in Africa Cash & Carry (Pty) Ltd v The Commissioner for the South African Revenue Service (783/18) [2019] ZASCA 148 where it was held that:

The point of departure should always be that a tax court is a court of revision and, “not a court of appeal in the ordinary sense”. The legislature “intended that there could be a re-hearing of the whole matter by the Special Court and that the Court could substitute its own decision for that of the Commissioner”, if justified on the evidence before it.” (our emphasis)

The SCA thereby refuted the defence raised by Rappa, stating that the, “wide power of revision of the tax court includes the power to determine the legality of an assessment on grounds of review”. Therefore, even where the merits are not contested by the taxpayer, the process in section 104 of the TAA should still be the default route, and in the alternative, the taxpayer can apply for direction from the High Court in terms of section 105 of the TAA.

Significantly, the SCA also confirmed, with reference to Metcash Trading v Commissioner, SARS [2001] (1) SA 1109 (CC), that the High Court is not barred from determining tax disputes, and may do so, subject to section 105 of the TAA. Section 105 allows for necessary judicial intervention in relation to a decision by the Commissioner, in certain circumstances, one of which includes the determination of the High Court’s jurisdiction to determine tax cases.

The decision

The SCA had to decide whether a High Court has jurisdiction in an application for review of an assessment made by a taxpayer who did not seek the High Court’s prior endorsement in accordance with section 105 of the TAA.

The SCA discussed the case of Competition Commission of South Africa v Standard Bank of South Africa [2020] ZACC 2 (CCSA v Standard Bank), specifically in relation to the ability of the High Court to make a decision in respect of production of a record, as well as the appealability of an interlocutory application to compel.

According to the decision in CCSA v Standard Bank, a High Court cannot make an order for the production of a record in a review, where it has not first established whether it has jurisdiction in the main review. Furthermore, the court in CCSA v Standard Bank held that a decision made by a High Court in respect of an application to compel the delivery of a record, was indeed appealable.

The SCA held that overall, the purpose of section 105 of the TAA, “is clearly to ensure that, in the ordinary course, tax disputes are taken to the tax court”. Therefore, by not making an order in terms of section 105 of the TAA, the High Court did not have the necessary jurisdiction to hear the review application, nor issue the application to compel production of the record.

SARS’ appeal was thus upheld with costs, and the order of the High Court was set aside and replaced with an order dismissing the application with costs, including those of two counsel.


It is important to note that the wording of section 105 of the TAA is in fact peremptory as the SCA held that, “an order under section 105 … is not simply to be had for the asking”. Furthermore, the SCA notably quoted CCSA v Standard Bank, where it was held that, “we ‘should not pre-empt the [high court’s] decision on its jurisdiction”. Therefore, a taxpayer must first apply for the High Court’s direction, prior to applying to a High Court for review.

Taxpayers must therefore always endeavour to follow the procedure provided for in the TAA, such as in section 105, which has been created by the legislature to ensure that specialised matters are mainly dealt with by specialised courts created for that purpose. Taxpayers cannot merely choose to follow the route of civil procedure instead of the specialised tax procedure. Therefore, regardless of the route chosen by a taxpayer seeking a review, the starting point must always be the TAA.

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