Cell C (Pty) Ltd v Commissioner, South African Revenue Service

• Jurisdiction: http://justis.com/jurisdiction/166,South Africa
• Judge: Tolmay J
• Judgment Date: 11 March 2022
• Court: Gauteng Division, Pretoria
• Hearing Date: 11 March 2022
• Citation: 2022 (4) SA 183 (GP)
• Counsel: CE Puckrin SC (with JP Vorster SC) for the applicant. G Marcus SC (with M Mbikikwa) for the respondent.
• Docket Number: 30959/2019

Tolmay J:

[1] This is an application in terms of rule 30A to compel the respondent, Sars/the Commissioner, to dispatch a record in relation to a decision regarding a tariff determination (the impugned decision), which the applicant (Cell C) seeks to review and set aside in the main application.

[2] In the main application Cell C seeks to appeal a tariff determination and asks that such determination be withdrawn and redetermined. It also seeks that the impugned decision be reviewed, set aside and varied retrospectively.

[3] The central dispute before this court is whether, in the light of the wide appeal afforded to a party in s 47(9)(e) of the Customs and Excise Act 91 of 1964 (the CEA), the High Court has jurisdiction to review Sars tariff determination in terms of rule 53 of the Uniform Rules of Court. If the institution of review proceedings is competent, then it is common cause that Sars is obliged to produce a record and reasons under rule 53. However, if it does not have review jurisdiction, then rule 53 does not apply and there is no basis upon which to compel Sars to produce a

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record. It has been confirmed by the Constitutional Court in Competition Commission v Standard Bank [1] that a court must first decide the question of review jurisdiction, and the production of the record can only be ordered if such jurisdiction is established.

[4] This application turns therefore primarily on a question of statutory interpretation, which is an objective inquiry. [2] This court is required to interpret s 47(9)(e) of the CEA in light of its context and purpose and to determine whether, properly interpreted, a taxpayer challenging a tariff determination is confined to the wide appeal remedy provided for in s 47(9)(e).

[5] Section 47 of the CEA is concerned with the determination of the customs and excise duty payable on goods. In terms of s 47(1) customs and excise duty is payable on all imported and excisable goods, at the time of entry, for home consumption, in terms of sch 1.

[6] Section 47(9)(e) provides that an appeal against any such determination lies to the division of the High Court in the area wherein the determination was made, or the goods were entered for home consumption.

[7] Rule 53(1) of the Uniform Rules of Court provides for review proceedings of decisions and proceedings of any tribunal, inferior court, board or officer performing judicial, quasi-judicial or administrative functions. It also requires that a record and reasons be provided.

[8] There is a marked difference between a wide appeal, as provided for by s 47(9)(e), and review proceedings. Reasons play an important part in review proceedings, but in a wide appeal the court hears the matter de novo and is not bound by the reasons given. [3]

[9] The distinction between an appeal and review was set out in Tikly and Others v Johannes NO and Others. [4] It was said that an appeal in the wide sense is a complete rehearing and fresh determination on the merits, with or without additional evidence or information. An ordinary appeal, or one in the strict sense, is a rehearing on the merits but limited to the evidence or information on which the decision under appeal was given and the only determination is whether that decision was right or wrong. A review on the other hand, with or without additional evidence or information, is not to determine whether the decision was correct or not but whether the arbiters exercised their powers and discretion

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honestly and properly. [5] This leads to the conclusion that the essential nature of a review is not directed at correcting a decision on the merits but is aimed at the maintenance of legality. [6] A review is therefore only concerned with whether a decision is lawful, whereas an appeal is concerned with whether it is correct. [7] A review is ultimately concerned with process and regularity. This will be determined on the basis of the record and reasons. [8] In a review an administrator is bound by the reasons given at the time of the decision. [9] In Levi Strauss SA (Pty) Ltd v Commissioner for the South African Revenue Service [10] the preliminary nature of tariff determinations was recognised as well as the fact that the subsequent appeal allows for a complete reconsideration.

[10] It is therefore apparent that a wide appeal is fundamentally different from an appeal in the strict sense or a review, because the matter is heard de novo. The court is not confined to the record and is in the same position as the first-instance decision-maker. [11] As a result the record and reasons have very little value in a wide appeal. It follows that a wide appeal could, if evidence is led, be compared to a trial in all material respects.

[11] The question then arises whether s 47(9)(e) precludes the appellant who brings a wide appeal from instituting review proceedings. This must be answered by considering the statutory framework as a whole. Section 47(9)(e) gives jurisdiction to the High Court to hear a wide appeal in relation to a tariff determination, and as a result it is clear that the legislature intended the High Court to have jurisdiction to not only enforce, but also grant, the appropriate remedy. The statute is silent on the question of whether a review would still be available. This question will be answered by considering the provisions of the relevant statute as

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a whole, [12] as well as the ambit and scope of the wide appeal provided for in s 47(9)(e).

[12] Relying on Madrassa Anjuman Islamia v Johannesburg Municipality, [13] it was argued on behalf of Sars that, where legislation restricts an aggrieved party to a particular remedy, that party has no further legal remedy, otherwise the remedy provided by the statute will be cumulative. However, it was also argued in Anjuman that it does not follow that in any particular case the rule should necessarily prevail, as the question is one of construction and if a court is satisfied from the language of the legislature that the intention was that the special remedy provided by the Act should not be in substitution of, but in addition to, the common-law remedies, then effect must be given to that intention. The court, however, emphasised such a case would be the exception to the general rule and the onus is on the person relying on such a contention. [14] It was also argued, relying on what was stated by Lord Macnaghten in Passmore v Oswaldtwistle Urban Council, [15] after adopting the law as laid down by Lord Tenterden, that —

'whether the general rule is to prevail, or an exception to the general rule is to be admitted, must depend on the scope and language of the Act which creates the obligations and an [sic] considerations [sic] or policy and convenience'. [16] The general rule must be considered in the context of the CEA, the ambit of a s 47(9)(e) appeal and with due consideration of the case law.

[13] In Pahad Shipping CC v Commissioner, South African Revenue Service [17] the application was based on s 65(6)(a) of the CEA. This section provides similarly to s 47(9)(e) for a wide appeal to the High Court. It should be noted these sections are identically worded. The SCA held that the Commissioner is not obliged to keep a record or provide reasons. The following was said in relation to a wide appeal:

'The parties dealt with the case as if it was an appeal in the wide sense, ie as if it was a complete re-hearing of the case and a fresh determination of the merits of the case. Correctly so, in my view, for the following reasons:

(a)

The Act does not require of the respondent to hear evidence, to give any reasons for his determination or to keep any record of proceedings. As was held in Tikly (supra) at 592B – C, these considerations militate completely against the "appeal" being an appeal in the strict sense.

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(b)

It is implicit in the provisions of s 65(4)(c)(ii)(bb) to the effect that the determination by the respondent cease to be in force from the date of a final judgment by the High Court or this Court that the court must itself make a determination upon appeal to it. That eliminates the appeal being a review in the sense set out in (iii) above (see Tikly at 591H – 592A).

(c)

As there is no provision for a hearing before the determination of the transaction value by the respondent the Legislature must, in my view, have intended appeal to be an appeal in the wide sense.' [18]

[14] The consequence of the aforesaid is that if no record-keeping or reasons are required, there is no legal basis on which an applicant can require the delivery of such a record. Although a review is not specifically excluded in terms of the CEA as a whole, the scope of a wide appeal seems to negate the need for a review, as will be explained later on in the judgment.

[15] In Distell and Another v Commissioner for the South African Revenue Services and Another the court was called upon to determine whether either under s 47(9)(e), or the common law, alternatively PAJA, certain tariff determinations made by the Commissioner could be impugned. [19] The matter proceeded to the full court, [20] which argued that, because an appeal in terms of s 47(9)(e) is an appeal in the wide sense, there is no need to resort to PAJA. It was argued that the wording of the CEA is 'trenchant' and the prescribed remedy for an aggrieved party is 'irrespective of whether it is founded on the Commissioner's alleged wrong interpretation of the relevant statutory provisions . . . or his incorrect application of the said provisions to the facts' an appeal in terms of s 47(9)(e)'. [21]

[16] In order to determine whether the Distell full court decision made a finding that an applicant is confined to a s 47(9)(e) appeal, one needs to consider all the judgments in Distell, as well as the wording of the Distell full court's finding. In dismissing the application...