Johannesburg company wins court fight with SARS over tax returns it never approved

• A Johannesburg company challenged years of tax calculations it says were submitted by an unauthorised outside consultant
• TEG Asset & Risk Management argued the filings triggered heavy penalties it should never have been liable for
• The Johannesburg High Court found serious fault with how SARS handled the company's objection to the disputed bills

A South African company has won a significant legal battle against the South African Revenue Service (SARS) after convincing the Johannesburg High Court that tax returns filed on its behalf during a three-year period were submitted without its knowledge or approval.

TEG Asset & Risk Management took the tax authority to court over disputed assessments covering the 2015 to 2017 tax years. The company's central argument was that an external consultant, acting independently, had submitted tax documents that resulted in substantial financial penalties the company never agreed to incur.

SARS pushed back on this, maintaining that the company's registered tax practitioner had the legal authority to act on TEG's behalf. However, the court drew a clear distinction between having an official representative on record and granting a separate, third-party individual specific permission to file those returns. The judge found that one did not automatically imply the other.

Critically, SARS failed to dispute the company's claim that the outside consultant had acted without consent. The court viewed this failure as a significant oversight, ultimately declaring the revenue authority's original refusal to reconsider the matter improper.

The judge set aside two decisions made by SARS and sent the case back to the revenue authority for fresh consideration. SARS was also ordered to pay TEG's legal costs.

The ruling highlights the importance of clearly establishing who has authorisation to act on a taxpayer's behalf, particularly when third parties are involved in preparing and submitting financial documents.

More on SARS

• Briefly News recently reported that SARS has hit Mpumalanga taxi boss Bafana Sindane with a R17 million tax demand linked to 16 years of alleged non-compliance.
• A Cape Town software engineer was expecting a R30,000 tax refund but got a bill from SARS instead.
• SARS has collected R992.2 billion in net revenue in the first half of the 2026/27 financial year, beating budget projections.

Source: Briefly News

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