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The Commissioner For The South African Revenue Service v Miles Plant Hire (Pty) Ltd

21 October 2013   (0 Comments)
Posted by: Author: SAIT Technical
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Author: SAIT Technical

Introduction

The Commissioner for the South African Revenue Service (the applicant) applied for the final winding-up of Miles Plant Hire (Pty) Ltd (the respondent). The respondent opposed this application based on the provisions of section 177(3) of the Tax Administration Act. In terms of this section the before-mentioned proceedings "may only be instituted with leave of the Court before which the proceedings are brought” in the event that tax debt is still pending for appeal to the Tax Court. 

Facts

The respondent claimed that the application had to be dismissed since the applicant failed to seek the court’s leave (to institute the winding-up proceedings) prior to the institution of these proceedings. According to the respondent’s interpretation of section 177(3), an application of winding-up may be instituted if, and only if, prior leave has been granted by the court before which any winding-up proceedings are ultimately brought. 

Held

In this matter the court had to determine when the discretion to permit the winding-up proceedings, referred to in section 177(3), must be exercised by a court. The court found that the words ‘the proceedings may only be instituted with the leave of the Court before which the proceedings are brought” only mean that the tax debt under dispute is not recoverable under the ‘pay now, argue later’ rule during winding-up proceedings, unless the court before which those proceedings serve, permits it.  

The respondent could not convince the court that there were any grounds in terms of which the court should have refused to institute winding-up proceedings on account of the pending appeal. Since the respondent was hopelessly insolvent it was inevitable that the respondent’s affairs would be wound up. As a result, the court granted leave to the applicant to institute the winding-up proceedings and placed the respondent under a final order of winding-up. 

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