From the Courts: Key Takeaways from a Recent SARS Dispute

by Vusi Ngcobo

At Mageja Customs Consulting, we closely monitor legal disputes involving SARS, particularly cases that make their way to court. A recent high court case between Southern Ambition 1942 CC and Another vs. The Commissioner for the South African Revenue Service caught our attention, offering valuable insights into the appeal process and the high standards required for granting leave to appeal. 

Understanding the Case 

The applicants sought leave to appeal to the full bench of the Free State Division of the High Court against a judgment and order issued on 27 June 2024. Their argument was based on the belief that another court might find the initial ruling flawed, particularly regarding the dismissal of their application for condonation and the upholding of the respondent’s special plea. 

However, SARS contended that the applicants failed to demonstrate that another court would likely rule differently, emphasizing the stringent requirements under Section 17 of the Superior Courts Act. 

What Does Section 17(1) of the Superior Courts Act Say? 

Under this section, leave to appeal is only granted if: 

  • The judge believes the appeal has a reasonable prospect of success or there are compelling reasons for it. 
  • The decision sought on appeal does not fall under Section 16(2)(a) of the Act. 
  • The appeal would contribute to a just and prompt resolution of the case. 

Precedents That Shaped the Court’s View 

The court relied on past cases to assess the likelihood of success: 

  • Matoto vs Free State Gambling and Liquor Authority & Others – This case established that the bar for granting leave to appeal has been raised. It’s no longer about whether another court might reach a different conclusion but whether it would. 
  • Smith vs S – The court emphasized that an appeal must have a realistic chance of success, not just a remote possibility. 
  • MEC for Health, Eastern Cape vs Mkhitha & Another – This ruling reinforced that leave to appeal should not be granted unless there is a truly reasonable prospect of success. 

The Court’s Final Decision 

In its judgment, the court found that: 

  • The applicant’s arguments were largely a repetition of their original case and did not present new, compelling reasons. 
  • The issues raised had already been thoroughly debated in previous proceedings. 
  • The applicants had not demonstrated compliance with Sections 89 and 96(1)(a) and (c) of the Customs and Excise Act, leading to unnecessary delays. 

Consequently, the court dismissed the application, agreeing with SARS that the appeal had no merit. 

Key Takeaways for Traders and Businesses 

There are two main ways to resolve disputes with SARS: 

  • Internal Dispute Resolution – Section 77 of the Customs and Excise Act provides for internal mechanisms that are quicker and more cost-effective. 
  • Court Proceedings – While legally guaranteed, this route can be time-consuming and costly. Many cases are pursued not for justice but to delay SARS enforcement. 

This ruling highlights the importance of carefully evaluating the likelihood of success before appealing a lower court’s decision. As the honorable Chesiwe J noted, the bar for appeals has been significantly raised. 

At Mageja Customs Consulting, we specialize in internal dispute resolution and legal advisory services related to SARS. If you find yourself in a dispute, reach out to us—we’re here to advocate for you every step of the way.