Print Page
News & Press: Opinion

Enquiring about inquiries in terms of the Tax Administration Act

Saturday, 22 February 2014   (0 Comments)
Posted by: Author: Danielle Botha
Share |

Author: Danielle Botha (Cliff Dekker Hofmeyer)

On 17 February 2014, judgment was handed down in the Western Cape High Court in the matter of GW van der Merwe & 12 Others v CSARS (unreported judgment, case number 1984-14). The first applicant was Gary van der Merwe (GVM), who is best known for his involvement in the helicopter industry. He ran the Huey Extreme Club which offered joyrides over the Cape Peninsula in a Vietnam-era Bell Huey chopper. GVM was arrested in 2004 in a joint operation between the South African Revenue Service (SARS) and the Scorpions and faced charges relating to the alleged fraudulent sale of shares in two companies, World On-Line Limited and Wellness International Network, respectively. Additionally, he faces charges relating to the alleged under-declaration of income and fraudulent VAT claims. These charges are still being disputed in court.

The present matter related to an authorisation that SARS had obtained to hold an inquiry in terms of s50 of the Tax Administration Act, No 28 of 2011 (TAA). In terms of s51(1) of the TAA, a judge may grant authorisation for an inquiry, if he is satisfied  that there are reasonable grounds to believe that a person has: 

 (i) failed to comply with an obligation imposed under a tax Act; or

 (ii)committed a tax offence; and

relevant material is likely to be revealed during the inquiry, which may  provide proof of the failure to comply or the commission of the offence.

GVM, his daughter and 11 other applicants who were affected by the inquiry, brought an application requesting a temporary interdict. The applicants sought an interdict preventing the inquiry pending a review or declaration that the provisions of the TAA, which permit the authorisation of an inquiry nothwithstanding ongoing civil or criminal proceedings, are unconstitutional and invalid.  Additionally, the applicants sought an order allowing them access to the court file relating to the authorisation application by SARS, to allow  them to  prepare for the requested review.

In determining whether the interdict against the inquiry should have been granted on grounds of ‘pending’ civil or criminal proceedings, the court looked at the meaning of ‘pending’ in s58 of the TAA. The court ruled that the term meant that an inquiry must continue even during civil or criminal proceedings.

On the second matter relating to access to the court file, it was common cause that SARS refused to grant the applicants access to the court file, subsequent to the granting of the inquiry application. The court found, given that the applicants’ attack on the constitutionality of the TAA provision turned on the interpretation of the section and not the contents of the court file and given that the interpretation contended for had no prospect of being upheld, the application for the court file could not succeed.

Interestingly, this matter has drawn considerable press attention, given that preservation orders have been served both on GVM and his daughter, Candice van der Merwe (CVM),who is  the second applicant in this matter. It is alleged by SARS  that certain monies and assets received by CVM,  allegedly for modeling pursuits, may have been given to her by her father in an attempt to avoid the revenue authorities. Time will tell whether the inquiry by SARS will yield the results they are hoping for.

This article first appeared



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.

  • Tax Practitioner Registration Requirements & FAQ's
  • Rate Our Service

    Membership Management Software Powered by YourMembership  ::  Legal