In the tax court , Held at Johannesburg case 11038/2006
25 March 2010
Posted by: TaxFind™
The Honorable Judge A Gildenhuys - President
Dr H A Coetzee - Accountant Member
Mr S Lumka - Commercial Member
Case no: 11038/2006
Heard on: 14 & 15 May 2009 and 19 & 20 August 2009
Judgment Delivered: …….. October 2009
In the matter between: The commissioner for the South African Revenue Service (Applicant) and ABC Holdings limited (Respondent)
In re the tax appeal of: ABC Holdings limited (Respondent) and The commissioner for the South African Revenue Service (Applicant)
In 2002, the respondent issued tax assessments against the appellant for the 1998 to 2000 tax years.The assessment related to profits made from the sale of shares which the appellant held in a number of companies listed on the Johannesburg Stock Exchange.The appellant appealed against the assessments.When the hearing of the tax appeal was set down, the appellant found itself unable to proceed with the hearing because a crucial witness ("King”) refused to consult with the appellant’ legal team.He made it known that he would decline to give evidence in the tax appeal, even if subpoenaed to do so, because it would intrude upon his constitutional right to remain silent, and also because he might incriminate himself if he testified.The appellant was granted a postponement of the hearing of the tax appeal as the judge found that it would not be possible to compel King to give evidence in the tax appeal before the criminal trial had been disposed of.He ordered that the tax appeal be postponed sine die and that it could not be set down or reinstated without leave of the Court.
In April 2008 a direct use immunity was issued to King by the National Prosecuting Authority.The respondent then applied for leave to re-enrol the tax appeal on the basis that there had been a material change in the relevant circumstances brought about by the issue of the direct use immunity to King.The matter came before the present Court which found that the issue of the immunity constituted a circumstance which would, in the absence of any other constraint, justify leave to the respondent to re-enrol the tax appeal.The present application was for a separation order.
The relief claimed by the respondent was twofold.Firstly, it sought an order separating the issues pertaining to the immunity, and secondly it sought a decision on those issues.Held that rule 33(4) of the Uniform Rules provides that "If it appears to the Court mero motu or on the application of any party that there is, in any pending action, a question of law or fact which may conveniently be decided either before any evidence is led or separately from any other question, the Court may make an order directing the disposal of such question in such manner as it may deem fit, and may order that all further proceedings be stayed until such question has been disposed of…”.
In the present matter, the Court found that the advantages to be gained by separating the compellability issue are outweighed by the disadvantages.The issue was not suitable for prior adjudication.The application was dismissed.
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