As evident from part 1 of this series of articles, the history of the dispute between the taxpayer and SARS in the case of L’Avenir Wine Estate (Pty) Ltd v C:SARS (16112/2021) [2022] ZAWCHC 28 (11 March 2022) shows that several procedures were unsuccessfully followed by the taxpayer in an attempt to resolve a simple dispute between the taxpayer and SARS.

In parts 2 and 3 we analysed the procedures followed by the taxpayer before approaching the High Court. All of them were unsuccessful (pending the 2018 appeal and request for reduced assessment in relation 2010).

The taxpayer therefore eventually decided to institute action against SARS in the High Court. The main aim of which was to force SARS to issue an assessment for the period April 2009 to December 2009 indicating the loss for that period. This application to, was unsuccessful. We set out below why and provide some concluding comments on this unfortunate series of events that left the issue unresolved for at least 10 years despite several attempts to try and resolve it.

The judgment

SARS opposed the taxpayer’s application on three main grounds, to wit:

  • The taxpayer is seeking to side-step the 2018 appeal pending in the Tax Court (see our comments on this process in part 3 of this series) and thereby the process catered for in Chapter 9 of the TAA;
  • Section 105 ousts the High Court’s jurisdiction to deal with a dispute regarding an assessment unless the High Court otherwise directs; and
  • Since SARS’ decision in respect of the taxpayer’s 2010 reduced assessment request is still pending, the taxpayer would have to wait for SARS’ decision on that request and may then, if that decision is to decline the request, launch a review application in terms of the Promotion of Administrative Justice Act, 3 of 2000 (“PAJA”).

The taxpayer’s reply thereto did not satisfy the court. In particular, the court stated that the taxpayer’s reply to SARS’s second and third grounds for opposing the application was overlooked.

In particular, the court held that in the case of ABSA Ltd and another v CSARS 2021 (3) SA 513 (GP) it was decided that a taxpayer can only dispute an assessment in the High Court directly as opposed to following the process of objection and appeal as provided for in chapter 9 of the TAA in exceptional circumstances. This follows from the wording of section 105 of the TAA which states: A taxpayer may only dispute an assessment … in proceedings under [Chapter 9 of the TAA] unless a High Court otherwise directs. [My insertion]. In the ABSA case it was held that the High Court may otherwise direct in exceptional circumstances, such as where the dispute revolves only around a point of law.

The court concluded that in the present matter, there were no exceptional circumstances.

As regards the question of whether the taxpayer ought to bring a PAJA review application to have the reduced assessment requests reviewed: it seems the taxpayer conceded it should in fact have done so. Following an analysis of whether the application can be converted into a review application under PAJA, the court concluded it was not possible and dismissed the application.


Section 105 prevents a taxpayer from disputing an assessment in the High Court. If there is no assessment, then section 105 simply cannot apply. Therefore, the existence or otherwise of “exceptional circumstances” would be completely irrelevant to determining whether the High Court’s jurisdiction is ousted by section 105 of the TAA. The fact is though that by requesting the loss for the period 1 April 2009 to 31 December 2009 to be assessed, the taxpayer is effectively asking the court to compel SARS to issue reduced assessment for the 2010 year of assessment. In the result, the taxpayer was effectively trying to dispute the 2010 assessment directly in the High Court.

Could the High Court have intervened to force a reduced assessment on 2010? Stated differently, are there exceptional circumstances that would have warranted the High Court’s intervention of the matter? Whilst a lot had, by the time, happened on the case and many years had lapsed, it is our view that that, in and of itself, would not constitute exceptional circumstances. In addition, the fact that the time periods have lapsed for the taxpayer to launch any form of chapter 9 remedy also is arguably irrelevant (see Joseph Nyalunga v CSARS (90307/2018) [2020] ZAGP (6 May 2020).  Bear in mind, the taxpayer’s 2010 reduced assessment request, which, apart from the 2010 objection which had been invalidated, is the first directed effort that was made to get the 2010 assessment altered was only submitted shortly before launching the application. Secondly, SARS’ decision on that request was, at the time of the High Court application, still pending.  

As regards the reduced assessment request and the fact that the taxpayer ought to bring a review application. A review application may be available in respect of the 2010 assessment but then again, that request was made shortly before bringing the application to the High Court and no decision had been made at that stage. Perhaps a PAJA review at that stage may have been a little pre-mature.

In the result, the sorry state affairs persist.

Concluding comments

The taxpayer is arguably not completely blameless though. Objections and reduced assessment requests were arguably incorrectly filed and/or were filed late and the taxpayer did not respond timeously to the invalidated 2010 objection as perhaps it should have.   

SARS’ stance on this matter is, however, somewhat astonishing!

Whilst indeed our series of articles highlights several legal complexities, at its core, the gist of the issue is quite frankly, very straightforward:  the issue was caused by a mix up of what the year of assessment actually was and that resulted in the taxpayer missing out on a tax benefit (the loss for the period April 2009 to December 2009). This much is abundantly clear.

SARS was timeously informed about the problem. The taxpayer did object against the 2010 assessment, as it should have and in time. SARS, quite frankly, based on the taxpayer’s version of the facts, incorrectly invalidated that objection.

Further, although the reduced assessment request was first submitted in relation to 2009, a proper understanding of the law would have made it clear that the issue actually relates to 2010 and that there is an obvious and glaring error in the 2010 assessment. As was mentioned previously, SARS does not have to wait for the taxpayer to submit a reduced assessment request before it may act under section 93(1)(d) and could have in fact out of its own realised what the problem was and fixed it.

Further still, it seems SARS has never argued that the loss the taxpayer is seeking does not exist. Rather, it appears “technicality” after “technicality” was thrown in the way.

To be fair though, SARS’ job is to enforce the relevant legislation and if in doing so the perception is created that SARS simply using “technicalities” to deny what seems to be a benefit to the taxpayer, then that, we guess, is simply an unfortunate consequence of the job that they are mandated by law to perform.  

However, it is our view that SARS could have resolved this problem a long time ago and still have acted within the empowering provisions of the law. In doing so they may have heeded the “service” in the name “South African Revenue Service”.

Authors – N Theron & W Swart (Unicus Tax Specialists SA)