THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
JUDGMENT

Reportable
Case no: 785/2021

In the matter between:

THE COMMISSIONER FOR THE SOUTH
AFRICAN REVENUE SERVICE

APPELLANT

and

AIRPORTS COMPANY SOUTH AFRICA
RESPONDENT

Neutral citation:
The Commissioner for the South African Revenue Service v
Airports Company for South Africa (Case no 785/2021) [2022]
ZASCA 132 (7 October 2022)

Coram:
PONNAN and HUGHES JJA and BASSON, WEINER and WINDELL
AJJA

Heard:
8 September 2022

Delivered:
7 October 2022

Summary: Tax Administration Act 28 of 2011 – application for amendment to
objection against an additional assessment - no procedure in the Act for
amendment of an objection - taxpayer not entitled to amendment in terms of
Uniform rule 28(1), read with rule 42(1), of the tax court rules.

_________________________________________________________________

ORDER

On appeal from: Tax Court, Johannesburg (Ally AJ sitting as court of first
instance):
1 The appeal is upheld with costs.
2 The order of the tax court is set aside and replaced with the following:
‘The application is dismissed’.

________________________________________________________________
JUDGMENT
________________________________________________________________
WINDELL AJA (PONNAN and HUGHES JJA, WEINER and BASSON AJJA
concurring)
[1] Two questions arise in this appeal. First, is it permissible to amend the
grounds of objection against an additional assessment issued by the appellant, the
Commissioner for the South African Revenue Service (SARS), after the expiry of
the periods prescribed in the tax court rules?1 Second, is such an order
appealable? Although the second is the logically anterior question, I shall first
consider the former, which as shall presently become apparent is necessarily
dispositive of the latter.

[2] The tax court (Ally AJ) held that the taxpayer, Airports Company South
Africa (the taxpayer), is permitted, under rule 42(1) of the tax court rules (rule
42(1)), read with rule 28(1) of the Uniform Rules of Court (Uniform rule 28), to

1 The tax court rules were promulgated in terms of section 103 of the Tax Administration Act 28 of
2011 and came into effect on 11 July 2014.

amend its objection against an additional assessment issued by SARS on 30
March 2016 in respect of the taxpayer’s 2011 year of assessment. The appeal is
with the leave of the tax court.

Background facts
[3] During December 2015 to February 2016, SARS conducted an income tax
audit in respect of the taxpayer’s 2011 year of assessment. SARS issued a Letter
of Audit findings on 8 February 2016. The taxpayer was advised that SARS
intended to, inter alia: (a) disallow a deduction claimed by the taxpayer in respect
of corporate social investment (CSI) expenditure in terms of s 11(a), read with s
23(g), of the Income Tax Act 58 of 1962 (the Act); (b) disallow an allowance
claimed by the taxpayer in terms of s 13quin of the Act; (c) disallow an allowance
claimed by the taxpayer in terms of s 12F of the Act; and (d) impose
understatement penalties (USPs) in terms of the Tax Administration Act 28 of 2011
(TAA).

[4] In a letter dated 8 March 2016, the taxpayer, through its erstwhile attorneys,
addressed the adjustments in relation to (a) and (b) above and sought an extension
to deal with (c). A week later, on 15 March 2016, the taxpayer addressed a further
letter to SARS in which it indicated that it ‘deemed it appropriate to concede to the
findings made by SARS in the Letter of Findings in respect of the application of
section 12F’. On 30 March 2016, SARS issued a Finalisation of Audit letter in
respect of the taxpayer’s 2011 year of assessment and issued an additional
assessment. It disallowed the CSI expenditure, as well as the s 13quin and s 12F
allowance, and imposed USPs and interest in terms of the TAA.

[5] On 12 May 2016, the taxpayer lodged an objection to the additional
assessment. It only objected to the disallowance of the CSI expenditure. No
objection was lodged to the s 13quin and s 12F allowances and the imposition of
USPs and interest. The objection to the disallowance of the CSI expenditure did

not find favour with SARS. On 28 October 2016, the taxpayer lodged a notice of
appeal in respect of the disallowance of the CSI expenditure.

[6] Subsequent to the filing of the notice of appeal, the parties entered into
‘without prejudice’ settlement discussions in relation to the CSI expenditure. They
agreed to suspend the appeal litigation. As a result, the taxpayer did not file a
statement in terms of rule 31. On 25 January 2017, the parties commenced
alternative dispute resolution proceedings (ADR), which were ultimately
unsuccessful.

[7] On 22 January 2019, SARS issued a Letter of Audit Findings in respect of
the taxpayer’s 2012 to 2016 years of assessment. Consistent with its earlier stance
adopted in respect of the 2011 tax year, it indicated that it intended to disallow the
deductions claimed by the taxpayer in respect of the CSI expenditure, the 13quin
and 12F allowances, and to impose USPs and interest, in terms of the TAA.  In a
reply to the Letter of Audit Findings, the taxpayer queried the disallowances and
imposition of USPs and interest. On 29 March 2019, SARS issued a Finalisation
of Audit Letter and disallowed the aforementioned deductions and allowances
claimed, and imposed USPs and interest, in terms of the TAA.

[8] On 6 September 2019, the taxpayer addressed a letter through its newly
appointed attorneys, Edward Nathan Sonnenberg (ENS), to SARS seeking an
indulgence to amend the objection that it had lodged in May 2016 in respect of the
2011 year of assessment. The taxpayer sought to object to the adjustments
effected by SARS in respect of the allowances claimed in terms of ss 13quin and
12F, as well as the imposition of USPs and interest. SARS refused to allow the
objection as it was of the opinion that s 104 of the TAA, read with rule 7 of the tax
court rules (rule 7), precluded such an amendment and that the taxpayer was
seeking to introduce new grounds of objection, which was impermissible in terms
of rule 32(3) of the tax court rules.

[9] As neither the Act, nor the tax court rules, make provision for the
amendment of an objection to an additional assessment, the taxpayer applied to
the tax court, Johannesburg for leave to amend in terms of Uniform rule 28(1), read
with rule 42(1).

[10] Rule 42(1) reads:
‘If these rules do not provide for a procedure in the tax court, then the most appropriate
rule under the rules for the High Court made in accordance with the Rules Board for Courts
of Law Act and to the extent consistent with the Act and these rules, may be utilised by a
party or the tax court.’ (My emphasis.)

[11] The taxpayer asserted that Uniform rule 28(1) was the most appropriate rule
under the rules for the High Court, which states that ‘[a]ny party desiring to amend
a pleading or document other than a sworn statement, filed in connection with any
proceedings, shall notify all other parties of his intention to amend and shall furnish
particulars of the amendment’. (My emphasis.)

[12] The tax court held that ‘rule 42 of the Tax Court Rules permits an applicant
to approach a court for an amendment in terms of rule 28 of the Uniform Rules of
Court’. This constitutes the full extent of the tax court’s analysis of the applicable
provisions. It failed to address the legal arguments advanced on behalf of SARS
and made no findings as to the legal basis for its conclusion. The approach
adopted by the tax court, which offers no guidance, is regrettable.

The application of Uniform rule 28(1)
[13] Uniform rule 28(1) is applicable to pleadings and documents filed once legal
proceedings have commenced. Uniform rule 28(1) does not, for example, apply to
correspondence or notices exchanged between the parties, before the
commencement of legal proceedings. Rule 42(1) specifically caters for a situation
where the tax court rules do not provide for ‘a procedure in the tax court’. This
suggests that should Uniform rule 28(1) find application at all in the tax court, it will

only apply to pleadings and documents that have been filed once legal
proceedings have commenced. The first issue that therefore arises is when do
legal proceedings commence in the tax court? Secondly, is an objection a pleading
or a document filed in connection with legal proceedings in the tax court?

[14] When the TAA and the tax court rules came into operation, the rules
provided for the filing of a statement of grounds of assessment and opposing
appeal by SARS (rule 31), a statement of grounds of appeal by the taxpayer (rule
32) and a reply to the grounds of appeal (rule 33). Rule 34 of the tax court rules
provides that the issues in an appeal to the tax court will be those contained in the
rule 31 and rule 32 statements and the rule 33 reply, if any. Rule 35 provides that
such statements may be amended, either by consent or with the leave of the court
in terms of rule 52(7). Neither the TAA, nor the tax court rules provide for the
amendment of an objection against an assessment or decision.

[15] Objections against an assessment or decision are dealt with in Part B of
Chapter 9 of the TAA, which is concerned with dispute resolution. Section 104(3)
provides that a taxpayer aggrieved by an assessment may object to an
assessment and must lodge an objection in the manner, under the terms and within
the period prescribed in the rules. In the tax court rules, the procedures dealing
with objections and appeals are dealt with in Part B under the heading ‘[r]easons
for assessment, objection, appeal and test cases’. Rule 7 of the tax court rules
sets out in detail the procedure for the lodging of an objection.

[16] This period of objection may be extended in terms of s 104(4) of the TAA
and as prescribed in rule 7, by a senior SARS official if they are satisfied that
reasonable grounds exist for the delay in lodging the objection. In terms of s 104(4)
of the TAA, a senior SARS official may extend the period within which the
objections must be made as prescribed in rule 7, if they are satisfied that
reasonable grounds exist for the delay in lodging the objection. The period for an
objection may, however, not be extended for a period exceeding 30 business days,

unless a senior SARS official is satisfied that exceptional circumstances exist
which gave rise to the delay in lodging the objection, or if more than three years
have lapsed from the date of assessment or the ‘decision’.2

[17] The next step provided for in the TAA is for SARS to consider the objection
in terms of s 106. It may either allow or disallow the objection in whole or in part.3
After SARS has made its decision,4 a taxpayer objecting to an assessment may
appeal against the assessment to the tax board or tax court in the manner
prescribed in the TAA and the tax court rules.5 The taxpayer and SARS may still
attempt to resolve the dispute through ADR6 and the proceedings on the appeal
are suspended, while that procedure is ongoing.7 SARS may also concede an
appeal before the matter is heard by the tax board or the tax court.8

[18] If the dispute is not resolved, it will ordinarily proceed to the tax court. The
further conduct of the matter will then fall to be governed in terms of Part E of the
tax court rules, headed, ‘Procedures of the tax court’, which only come into
operation once the objection and appeal stages governed under Part B of the tax
court rules have run their course.

[19] If regard is had to the procedure outlined above, legal proceedings before
the tax court only commence once the appeal is noted to the tax court.9 The rule
31, rule 32 and the rule 33 statements constitute the pleadings in the appeal which
may be amended in terms of tax court rule 35.

2 Section 104(5) (a) and (b) of the TAA.
3 Ibid, s 106(2).
4 Ibid, s 106(4).
5 Ibid, s 107(1).
6 Ibid, s 107(5).
7 Ibid, s 107(6).
8 Ibid, s 107(7).
9 See Commissioner of Taxes v Pan African Roadways Ltd 1957 (2) SA 539 (FC) at 541 E-G.

[20] The objection phase described above is part of the pre-litigation
administrative process referred to by Kriegler J in Metcash Trading Ltd v
Commissioner, South African Revenue Service and Another,10 when he said that
‘[t]he Commissioner is not a judicial officer and assessments and concomitant
decisions by the Commissioner are administrative, not judicial actions’.11 It also
accords with SARS’ ‘Dispute Resolution Guide: Guide on the rules promulgated in
terms of s103 of the Tax Administration Act, 2011’, where it is stated that ‘an
objection is decided at branch level by a committee the majority of which comprise
officials not involved in the audit and assessment process’.

[21] An objection is therefore part of the pre-litigation administrative process and
is not a pleading. It is also not a document filed in connection with judicial
proceedings envisaged in terms of Uniform rule 28(1). Furthermore, rule 42(1) only
comes into play when the tax court rules do not make provision for a procedure in
the tax court. Rule 42(1) does not apply to those procedures governed under Part
B of the tax court rules, which constitute pre-litigation administrative procedures
such as an objection to an assessment. The tax court thus erred in granting leave
to the taxpayer to amend its notice of objection in terms of Uniform rule 28.

[22] Moreover, once an objection has been disallowed, rule 10(2)(c)(iii) of the
tax court rules makes provision for a taxpayer to introduce a new ground upon
which it appeals against an assessment. Rule 10(3), however, provides that such
new ground cannot constitute a new objection against a part or amount of the
disputed assessment not objected to in the notice of objection under rule 7.

[23] The effect of the amendment sought by the taxpayer will be to extend the
period for the filing of an objection (or the filing of new grounds of objection) long
after the peremptory periods prescribed in s 104 of the TAA, read with rule 7, have

10 Metcash Trading Ltd v Commissioner, South African Revenue Service and Another 2001 (1) SA
1109 (CC).
11 Ibid para 32.

expired. The prescribed time periods provided for in the TAA, read with rule 7,
taken together with the ability of a taxpayer to secure an extension of time within
the permitted parameters, achieves a fair balance between SARS and the
taxpayer. To permit amendments to an objection would unjustifiably undermine the
principles of certainty and finality referred to in Commissioner, South African
Revenue Service v Brummeria Renaissance (Pty) Ltd and Others,12 which
underpin a revenue authority’s duty to collect taxes.

[24] It would also permit the taxpayer to impermissibly introduce new grounds of
objection to the additional assessment. In terms of s 100(1) of the TAA an
assessment or a decision referred to in s 104 (2) is final if, in relation to the
assessment or decision –
‘(a) . . .
(b) no objection has been made, or an objection has been withdrawn;
(c) after the decision of an objection, no notice of appeal has been filed or a notice has
been filed and is withdrawn.’

[25] The term ‘assessment’ is defined in s 1 of the TAA as ‘the determination of
the amount of a tax liability or refund, by way of self-assessment by the taxpayer
or assessment by SARS’. In First South African Holdings Pty Ltd v Commissioner
for South African Revenue Service,13 Harms DP stated that an assessment was a
determination by the Commissioner of ‘one or more matters’.14 This is expressly
contemplated in s 104, read with rule 7(2)(b) of the tax court rules, which clearly
and unambiguously state that a taxpayer who lodges an objection must specify the
grounds of the objection in detail, including the part or specific amount of the

12 Commissioner for the South African Revenue Service v Brummeria Renaissance Pty Ltd 2007
(6) SA 601 (SCA) para 26. See also Matla Coal Ltd v Commissioner for Inland Revenue 1987 (1)
SA 108 (A) at 125C-J; HR Computek (Pty) Ltd v Commissioner South Africa Revenue Services
[2012] ZASCA 178.
13 First South African Holdings Pty Ltd v Commissioner for South African Revenue Service [2011]
ZASCA 67 para 15.
14 See also HR Computek fn 12 above.

disputed assessment objected to. As no objection was made against the
disallowance of the allowances in terms of ss 13quin and 12F of the Act and the
USPs, that assessment became final and conclusive.

Appealability of the order
[26] The taxpayer contends that the order of the tax court is interlocutory and
thus not appealable. As I have shown the tax court wholly misconceived the matter.
As a result, the order issued is plainly wrong and it can hardly be in the interests
of justice to permit it to stand.15

[27] In the result the following order is made:
1 The appeal is upheld with costs
2 The order of the tax court is set aside and replaced with the following:
‘The application is dismissed’.

_______________________
L WINDELL
ACTING JUDGE OF APPEAL

15 See Director-General, Department of Home Affairs and Another v Islam and Others [2018]
ZASCA 48 para 10 and the cases there cited.

APPEARANCES

For appellant:

G D Goldman
Instructed by:

Vezi De Beer Attorneys, Pretoria

Mcintyre Van Der Post, Bloemfontein

For taxpayer:

P A Swanepoel with R M Molea

Instructed by:
Edward Nathan Sonnenbergs Inc Johannesburg

Webbers Attorneys, Bloemfontein

THE SUPREME COURT OF APPEAL OF SOUTH AFRICA
MEDIA SUMMARY OF JUDGMENT DELIVERED IN THE SUPREME COURT OF
APPEAL

From:
The Registrar, Supreme Court of Appeal
Date:

7 OCTOBER 2022
Status:
Immediate
The following summary is for the benefit of the media in the reporting of this case and does not form part of
the judgments of the Supreme Court of Appeal
The Commissioner for the South African Revenue Service v Airports Company for South Africa
(Case no 785/2021) [2022] ZASCA 132 (7 October 2022)
Today the Supreme Court of Appeal (SCA) handed down judgment upholding the appeal, with costs,
against the Tax Court, Johannesburg (the tax court).
The issues in this appeal were whether it was permissible to amend the grounds of objection against
an additional assessment issued by the appellant, the Commissioner for the South African Revenue
Service (SARS), after the expiry of the periods prescribed in the tax court rules and whether such an
order is appealable.
During December 2015 to February 2016, SARS conducted an income tax audit in respect of the
taxpayer’s 2011 year of assessment. SARS issued a Letter of Audit findings on 8 February 2016. The
taxpayer was advised that SARS intended to, inter alia: (a) disallow a deduction claimed by the taxpayer
in respect of corporate social investment (CSI) expenditure in terms of s 11(a), read with s 23(g), of the
Income Tax Act 58 of 1962 (the Act); (b) disallow an allowance claimed by the taxpayer in terms of s
13quin of the Act; (c) disallow an allowance claimed by the taxpayer in terms of s 12F of the Act; and
(d) impose understatement penalties (USPs) in terms of the Tax Administration Act 28 of 2011 (TAA).
In a letter dated 8 March 2016, the taxpayer, through its erstwhile attorneys, addressed the adjustments
in relation to (a) and (b) above and sought an extension to deal with (c). A week later, on 15 March
2016, the taxpayer addressed a further letter to SARS in which it indicated that it ‘deemed it appropriate
to concede to the findings made by SARS in the Letter of Findings in respect of the application of section
12F’. On 30 March 2016, SARS issued a Finalisation of Audit letter in respect of the taxpayer’s 2011
year of assessment and issued an additional assessment. It disallowed the CSI expenditure, as well as
the s 13quin and s 12F allowance, and imposed USPs and interest in terms of the TAA.
On 12 May 2016, the taxpayer lodged an objection to the additional assessment. It only objected to the
disallowance of the CSI expenditure. No objection was lodged to the s 13quin and s 12F allowances
and the imposition of USPs and interest. The objection to the disallowance of the CSI expenditure did
not find favour with SARS. On 28 October 2016, the taxpayer lodged a notice of appeal in respect of
the disallowance of the CSI expenditure.
On 22 January 2019, SARS issued a Letter of Audit Findings in respect of the taxpayer’s 2012 to 2016
years of assessment. Consistent with its earlier stance adopted in respect of the 2011 tax year, it
indicated that it intended to disallow the deductions claimed by the taxpayer in respect of the CSI
expenditure, the 13quin and 12F allowances, and to impose USPs and interest, in terms of the TAA. In
a reply to the Letter of Audit Findings, the taxpayer queried the disallowances and imposition of USPs

and interest. On 29 March 2019, SARS issued a Finalisation of Audit Letter and disallowed the
deductions and allowances claimed, and imposed USPs and interest, in terms of the TAA
On 6 September 2019, the taxpayer addressed a letter through its newly appointed attorneys, Edward
Nathan Sonnenberg (ENS), to SARS seeking an indulgence to amend the objection that it had lodged
in May 2016 in respect of the 2011 year of assessment. The taxpayer sought to object to the
adjustments effected by SARS in respect of the allowances claimed in terms of ss 13quin and 12F, as
well as the imposition of USPs and interest. SARS refused to allow the objection as it was of the opinion
that s 104 of the TAA, read with rule 7 of the tax court rules (rule 7), precluded such an amendment
and that the taxpayer was seeking to introduce new grounds of objection, which was impermissible in
terms of rule 32(3) of the tax court rules.
As neither the Act, nor the tax court rules, make provision for the amendment of an objection to an
additional assessment, the taxpayer applied to the tax court, Johannesburg for leave to amend in terms
of Uniform rule 28(1), read with rule 42(1).
The SCA held that an objection is part of the pre-litigation administrative process and is not a pleading.
It is also not a document filed in connection with judicial proceedings envisaged in terms of Uniform rule
28(1). Furthermore, rule 42(1) only comes into play when the tax court rules do not make provision for
a procedure in the tax court. Rule 42(1) does not apply to those procedures governed under Part B of
the tax court rules, which constitute pre-litigation administrative procedures such as an objection to an
assessment. Therefore, held the SCA, the tax court erred in granting leave to the taxpayer to amend
its notice of objection in terms of Uniform rule 28.
The SCA held further that the effect of the amendment sought by the taxpayer would be to extend the
period for the filing of an objection (or the filing of new grounds of objection) long after the peremptory
periods prescribed in s 104 of the TAA, read with rule 7, have expired. The prescribed time periods
provided for in the TAA, read with rule 7, taken together with the ability of a taxpayer to secure an
extension of time within the permitted parameters, achieves a fair balance between SARS and the
taxpayer. To permit amendments to an objection would unjustifiably undermine the principles of
certainty and finality, which underpin a revenue authority’s duty to collect taxes.
~~~~ends~~~~