The Johannesburg High Court has set aside two South African Revenue Service (SARS) decisions refusing to reconsider a taxpayer’s assessments after claims that tax returns had been submitted without authorisation.
The case involves TEG Asset & Risk Management CC, which disputed income tax assessments for the 2017 tax year and value-added tax (VAT) assessments for periods between 2015 and 2017.
The company argued that a consultant had submitted tax returns without its permission, resulting in substantial tax liabilities.
"SARS rejected the request, reasoning that the accountant was the taxpayer's appointed public officer and that the statutory provision therefore did not apply. Following a further unsuccessful engagement with SARS, the taxpayer approached the High Court".
Richan Schwellnus, Team Lead: Tax Controversy & International Tax at Tax Consulting SA, said the judgment showed that SARS must consider the facts of each case rather than relying only on the appointment of a public officer.
"The Court therefore distinguished between the legal appointment of a public officer and the factual question of who submitted the disputed returns, and under whose authority," Schwellnus said.
How the tax dispute started
TEG appointed an accountant in 2010 to manage its accounting affairs, including submitting tax returns.
The accountant allegedly passed some tax work on to another consultant, Ms Buitendag, who the company said had submitted returns without its authority.
After an audit, SARS issued assessments that TEG disputed. In June 2020, SARS recovered money directly from the company’s bank account.
In October 2022, TEG asked SARS to reduce the assessments under section 93(1)(e)(iii) of the Tax Administration Act.
The court accepted that the accountant had been properly appointed as public officer. However, it found that this did not answer the question of whether the consultant had been authorised to submit the returns.
Judge Wright noted that SARS had not denied the allegation that the consultant acted without authorisation.
“The reason for the decisions is wrong,” the judge said in the ruling delivered on 8 October 2026.
The court set aside SARS’s decisions of 28 October 2022 and 23 February 2023 and ordered the revenue service to reconsider the requests.
The revenue service was also ordered to pay the company’s legal costs.
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