Editor’s Note:
In this sixth newsletter for 2024 we consider the following:
Right of Appearance in Tax Court Expanded
ADR Process accelerated to Objection Stage
Introducing a “new” Ground of Appeal, post original Objection
SARS Interpretation Notes (INs), Draft Ins, BGRs, BCRs, BPRs, guides and draft
guides Noter-Up
Tony Davey – Editor | Duncan McAllister – Co-Editor
It is proposed that section 12 of the Tax Administration Act (TAA) be amended by the Tax Administration Laws Amendment Bill, 2024 to permit a natural person (other than a legal practitioner duly admitted and enrolled under the Legal Practice Act 2014) to appear on behalf of a taxpayer in the Tax Court, provided the president of the Tax Court is satisfied that such person is a fit and proper person to appear. (See Davey’s Locker 4.2024 and 5.2024 re Poulter v C: SARS).
This amendment enacts the recent decision of the High Court in the Poulter case in which the taxpayer appealed the Tax Court’s decision refusing her father the right (as a layman as distinct from a legal practitioner) to represent her in the said court. The full bench of the High Court allowed the appeal and referred the matter back to the Tax Court for hearing of the main dispute.
The effective date of this enactment is the date the proposed Bill is approved and promulgated as an Act, which in our experience is likely December 2024
ADR PROCESS ACCELERATED TO OBJECTION STAGE
The Tax Administration Laws Amendment Bill, 2024 proposes to expand Section 104 of the Tax Administration Act (TAA) to permit Alternate Dispute Resolution (ADR) proceedings to commence at the earlier phase of Objection against an assessment. The current position is governed by Section 107, under which ADR commences only at the Appeal phase.
The proposed additional subsection to Section 104 provides that by mutual agreement, SARS and the taxpayer may attempt to resolve the dispute through ADR under the procedures specified in Rules 13 to 25.
Objection proceedings will be suspended while the ADR proceedings are ongoing. Clearly, the objective of the proposed amendment is to resolve disputes more timeously and earlier in the protected cycle of Objections and Appeals.
INTRODUCING A “NEW” GROUND OF APPEAL, POST ORIGINAL OBJECTION
In the recent case of TALT v C: SARS (2024 ZAGPJHC, 27 August 2024) after disallowance of Objections by SARS, the taxpayer upon Appeal raised an additional ground of Objection in its Tax Court Rule 32 Statement, to its original Objection grounds.
The Tax Court upheld SARS contention that the introduction of this additional ground was a new ground (not an additional ground) and was thus impermissible. On appeal to the full bench of the High Court, the taxpayer succeeded and was thus granted leave to
introduce this additional ground. The essence of this matter is contained in Tax Court Rule 32 (3) which states that ’The appellant may include in the statement a new ground of appeal unless it constitutes a ground of objection against a part or amount of the disputed assessment not objected to under rule 7’.
The High Court held that the fact that the taxpayer originally objected only on the grounds of prescription (being a time-bar) does not exclude the addition of a ground of appeal on the substantive merits of the dispute as the prescription ground should be broadly read as implicitly including an objection to the inclusion of a CGT gain in its taxable income. Simply put, the High Court held that this ground constituted an additional ground and not a new ground of appeal and was thus permissible. A broad and generous interpretation in our view and we await whether SARS will take this on appeal to the SCA.