Sepataka v Commissioner SARS  JOL 26139 (GSJ)
16 May 2012
Posted by: SAIT Technical
Gauteng High Court had to
consider the taxpayer’s application for
rescission of judgment in terms of s
91(1)(b) of the Income
Tax Act 58 of 1962 and on the
ground that the taxpayer had not been aware of the South Gauteng High Court judgment until he applied for a bond and
a credit check had revealed this outstanding monetary judgment against him.
Commissioner raised an additional assessment because he believed that there had
been ‘unexplained income’ based on an income tax audit.
Despite objection by the taxpayer to the additional
assessments raised, the Commissioner continued to exercise his power to obtain a
judgment against the taxpayer by filing a written statement with the South Gauteng High Court, without the
issue of summons and without notice to the taxpayer.
The issue before the court was
whether the judgment granted against the taxpayer could be rescinded or
otherwise set aside.
of the view that there had been ‘unexplained income’ based on an income tax
audit and, as a consequence, raised additional assessments on the taxpayer.
taxpayer duly objected to the additional assessments and was allowed by SARS.
of the powers conferred on the Commissioner in terms of s 78
(read with ss 79, 81(1), 89quat and
91 of the Income Tax Act), he obtained a judgment against the taxpayer based on
Spilg J, who
delivered the judgment of the court, rescinded the South Gauteng High Court judgment granted against the taxpayer and
declared it null and void.
§ The powers conferred on the Commissioner entitling him to obtain
judgment based on an estimate are draconian and should therefore be exercised
with care by properly experienced and suitably qualified personnel, since it
may otherwise be reduced to an arbitrary guesstimate with grave consequences
for the taxpayer;
§ The judgment in issue could not be competently sought in the face
of a pending objection.
§ Since the judgment could not be lawfully obtained regard being had
to the objection that was noted and not finalised, it was a nullity and fell to
be set aside, rescission being competent in these circumstances.
§ Care must be taken to ensure that before a statement is filed
under s 91(1)(b) of
the Act a responsible person in the Commissioner’s office has satisfied himself
or herself that there is no pending objection or appeal.