Computek v The Commissioner, SARS (830/2011)  ZASCA 178
30 November 2012
Posted by: SAIT Technical
Author: SAIT Technical
The Supreme Court of Appeal ruled in the matter between Computek and CSARS on 29 November 2012.
During 2003, SARS conducted an audit of Computek's tax affairs which revealed that the Computek had under-declared VAT to SARS. As a result, Computek was assessed to VAT to the amount of R4 million which included additional tax and interest.
The revised assessment contained the following statement:
‘Should you wish to lodge an objection, kindly do so in writing and clearly marked for the attention of the writer. The objection must be received within 30 days of receipt of this notice. You are obliged in terms of s 32 of the ACT to specify in detail the grounds for the objection.'
The owner of the entity, Mr Henry Chakhala, filed a notice of objection.
Nowhere on that objection form nor on annexures filed commensurately with it did he state that there was an objection to the capital amount. SARS informed the taxpayer that its objection had been disallowed because, as SARS put it, there was 'no objection to the quantum of additional vat output raised suggesting your acceptance of these figures'.
Computek subsequently filed a notice of appeal in respect of SARS' disallowance of its objection. This notice of appeal also contained no reference to the capital amount.
It was only when the taxpayer filed its rule 11 statement with the Tax Court on 15 March 2011 that it raised issue for the first time. The Tax Court found in favour of SARS but granted leave to Computek to appeal to the SCA. The SCA held that it is quite clear that Computek did not object to the capital amount, which Mr Chakhala could quite easily have done by ticking the appropriate box on the objection form.
Did Computek object against the capital amount by implication by referring to the globular amount of R4million?
Findings by the SCA (judgment)
The SCA held that not having raised an objection to the capital assessment in its notice of objection, Computek was precluded from raising it on appeal before the tax court and that when the taxpayer challenged the capital amount for the first time in its rule 11 statement, it effectively raised a ‘new objection' directed at an individual assessed amount that had not previously been objected to.
The SCA added as no objection had been lodged against SARS' assessment that the taxpayer was liable for additional VAT output tax in the sum of R1 246 177.60, that assessment became final and conclusive in April 2007. And as a period of three years has elapsed, Computek could not thereafter lawfully require SARS to revisit its assessment.
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