SC: Advocate Must Protect Client Confidentiality Even after Client Turns Adversary  ||  SC: Revenue Record Mutation Alone Cannot Defeat a Person’s Property Title  ||  SC: SARFAESI Auction Valid Despite EMD Shortfall Where 25% Price Was Paid on Auction Day  ||  SC: Extended GST Limitation under S.74 Requires Notice to Specify Fraud or Concealment  ||  Allahabad HC Invalidates Key Provisions of Uttar Pradesh Tenancy Law  ||  Delhi HC: Writ Courts Cannot Prescribe Method for Determining Property Tax  ||  Bombay HC: ICC’s ‘No Sexual Element’ Finding Can Be Challenged under POSH Act  ||  Rajasthan HC: Road Widening Demolition Requires Title Claims and Fair Hearing  ||  Allahabad HC: Mere Presence or FIR Nomination is Insufficient for Conviction under Section 149 IPC  ||  MP HC: Employment Secured Through Forged Records Gives No Right to Hold Public Office    

Purveyors South Africa Mine Services (Pty) Ltd vs. Commissioner for the South African Revenue Services (Pty) Ltd - (07 Dec 2021)

Onus rests on the taxpayer to establish, on a balance of probabilities, that it has fully met the requirements of the provision

Direct Taxation

The primary issue before the SCA was whether the Commissioner for South African Revenue Services (SARS) was correct in rejecting Purveyors’ voluntary disclosure application for non-compliance with Section 227 of the Tax Administration Act, 2011 (the TAA), more specifically on the ground that, it was not made voluntarily.

The Tax Court agreed with SARS and dismissed Purveyors’ case. It found, that the application was not voluntary as there was an element of compulsion on the part of Purveyors, when it submitted the application.

Words ‘voluntary’ and ‘disclosure’ in the section of the Tax Administration Act, 2011 require that the voluntary disclosure application must measure up fully to the requirements of the section. It is clear that the onus rests on the taxpayer to establish, on a balance of probabilities, that it has fully met the requirements of the section. The language used in the section clearly indicates the legislature’s intention to arm the Commissioner with extensive powers to prevent taxpayers from disclosures which are neither voluntary nor complete in all material respects.

The fact that the section provides that the disclosure application must be made in the prescribed form or manner rather than obtaining ad hoc advice from SARS is a clear indication that the mischief sought to be prevented is one where a taxpayer discloses information to SARS and later on makes a voluntary disclosure application. In facts of present case, from the outset – and well before the submission of its voluntary disclosure application – Purveyors knew that it was liable for the import VAT on the aircraft and penalties, which were not going to be waived.

The voluntary disclosure application must comply with the provisions of the section in all material respects. Moreover, that the taxpayer must take SARS into their confidence and voluntarily make a proper and frank disclosure which is neither prompted nor made as a result of any fear or compulsion. SARS must undoubtedly not be aware of the default. The Court was of the opinion that upon a true analysis of the facts of the present case, Purveyors’ application does not pass the test. The application was not voluntarily made. Purveyors, in its application, did not disclose information of which SARS was unaware. Appeal dismissed.

Tags : VOLUNTARY DISCLOSURE   NON-COMPLIANCE   PROVISION  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved