Case number 2010/A6421: CSARS v Fastmould Specialist CC
Juta Tax Law
An assessment is not always required before SARS can file a certificate with a competent court in an attempt to collect outstanding taxes. On 18 February 2010 SARS filed a certificate with a magistrates' court for outstanding VAT and employees’ tax. On 28 July 2010 the judgment was rescinded. SARS then appealed against the rescission.On the basis of the decision in Singh v CSARS 2003 (4) SA 520 (SCA), the taxpayer argued that SARS could not file a certificate to collect outstanding taxes, before the issuing of an assessment.
The court did not agree. In the case of outstanding VAT no certificate has to be issued. As the taxpayer submitted returns stating its VAT liability and as SARS accepted these returns, no need arose for SARS to issue an assessment. VAT becomes due the moment SARS accepts the correctness of the vendor’s return. In the Singh case it was made clear that SARS may start collection procedures once an amount is due. As in the Singh case an assessment was raised but no notice given to the taxpayer, that case can be distinguished from the present case.
Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.