Marshall NO and Others v Commissioner, South African Revenue Service

• Jurisdiction: South Africa
• Judgment Date: 25 April 2018
• Citation: 2019 (6) SA 246 (CC)

Marshall NO and Others v Commissioner, South African Revenue Service
2019 (6) SA 246 (CC)

2019 (6) SA p246

Citation	2019 (6) SA 246 (CC)
Case No	CCT 208/17; [2018] ZACC 11
Court	Constitutional Court
Judge	Mogoeng CJ, Zondo DCJ, Cameron J, Froneman J, Jafta J, Kathree-Setiloane AJ, Kollapen AJ, Madlanga J, Mhlantla J, Theron J and Zondi AJ
Heard	April 25, 2018
Judgment	April 25, 2018
Counsel	DC Mpofu SC (with TN Ngcukaitobi and R Naidoo) for the applicants.; AR Sholto-Douglas SC (with H Cassim) for the respondent.

Flynote : Sleutelwoorde

Statute — Interpretation — Ambiguous legislation — Custom — Weight to be F accorded to consistent interpretation by administrative body — No justification in constitutional democracy for unilateral practice of executive playing role in determining reasonable meaning to be given to ambiguous statutory provision.

Revenue — Fiscal legislation — Interpretation — Ambiguous legislation — Sars interpretation notes — Weight to be accorded to consistent G interpretation by administrative body — No justification in constitutional democracy for unilateral practice of executive playing role in determining reasonable meaning to be given to ambiguous statutory provision.

Headnote : Kopnota

In an application for leave to appeal a Supreme Court of Appeal decision, [*] the H Constitutional Court invited the parties to file written submissions on the extent to which a court may consider or defer to an administrative body's interpretation of legislation — such as Sars' interpretation notes — and whether the SCA's approach was in accordance with this.

2019 (6) SA p247

The appellant submitted, inter alia, that courts must determine the meaning of A legislation independently, so that no consideration should have been given to the interpretation notes (see [4]); Sars submitted that, where the wording of a statutory provision was ambiguous, courts may have regard to interpretation notes as evidence that it had been interpreted in a consistent way for a substantial period of time by those responsible for its administration (see [5]). B

These submissions raised the issue of the weight to be accorded to custom in the contextual interpretation of ambiguous legislation.

Held

The role of custom in interpreting ambiguous legislation was adapted to contextual interpretation in CSARS v Bosch, [*1] changing it from 'tipping the balance' in ascertaining legislative intention to the assistance that could be C gained from evidence of a custom in determining the meaning that should reasonably be placed upon those words. Missing from this reformulation was any explicit mention of a further fundamental contextual change — that from legislative supremacy to constitutional democracy. Why should a unilateral practice of one part of the executive arm of government play a role in the determination of the reasonable meaning to be given to a D statutory provision? It cannot conceivably be justified where the practice was unilaterally established by one of the litigating parties. It was difficult to see what advantage evidence of the unilateral practice would have for the objective and independent interpretation by the courts of the meaning of legislation, in accordance with constitutionally compliant precepts. It was best avoided. (See [9] – [10].) E

An objective, independent interpretation of the relevant sections of the Act led to the conclusion that the SCA came to; and the application for leave to appeal would accordingly be dismissed (see [11] and [15]).

Cases cited

Biowatch Trust v Registrar, Genetic Resources, and Others 2009 (6) SA 232 (CC) (2009 (10) BCLR 1014; [2009] ZACC 14): applied F

Commissioner, South African Revenue Service v Bosch and Another 2015 (2) SA 174 (SCA) ([2014] ZASCA 171): dictum in para [17] qualified

Commissioner, South African Revenue Service v Marshall NO and Others 2017 (1) SA 114 (SCA) ([2016] ZASCA 158): confirmed on appeal

Ellert v Commissioner for Inland Revenue 1957 (1) SA 483 (A): referred to G

Master Currency (Pty) Ltd v Commissioner, South African Revenue Service 2014 (6) SA 66 (SCA) ([2013] ZASCA 17): referred to

Natal Joint Municipal Pension Fund v Endumeni Municipality 2012 (4) SA 593 (SCA) ([2012] 2 All SA 262; [2012] ZASCA 13): referred to

Nissan SA (Pty) Ltd v Commissioner for Inland Revenue 1998 (4) SA 860 (SCA) ([1998] ZASCA 59): referred to H

R v Lloyd 1920 AD 474: qualified

Rex v Detody 1926 AD 126: dictum at 202 – 203 qualified

Stopforth v Minister of Justice and Others; Veenendaal v Minister of Justice 2000 (1) SA 113 (SCA) ([1999] 4 All SA 383; [1999] ZASCA 72): referred to. I

Case Information

DC Mpofu SC (with TN Ngcukaitobi and R Naidoo) for the applicants.

AR Sholto-Douglas SC (with H Cassim) for the respondent.

2019 (6) SA p248

An A application for leave to appeal a decision of the Supreme Court of Appeal.

Order

1.

Condonation is granted for the late filing of the application for leave B to appeal.

2.

The application for leave to appeal is dismissed.

Judgment

Froneman J (Mogoeng CJ, Zondo DCJ, Cameron J, Jafta J, Kathree-Setiloane AJ, Kollapen AJ, Madlanga J, Mhlantla J, Theron J and C Zondi AJ concurring):

[1] This is an application for leave to appeal against a decision of the Supreme Court of Appeal [1] on the proper interpretation of ss 8(5) and 11(2)(n) of the Value Added Tax Act. [2] The effect of the Supreme Court of Appeal decision is that the South African Red Cross Air Mercy Service Trust D (the Trust) [3] is not exempt from paying value-added tax (VAT) on payments it receives for actual services it renders to provincial health departments.

[2] In the course of coming to her conclusion on the proper interpretation of the relevant sections of the Act, Dambuza JA, writing for a E unanimous court, referred to interpretation notes issued by the South African Revenue Service on 8 February 2013, setting out the VAT treatment of public authorities before and after April 2005. [4] She commented:

'These Interpretation Notes, though not binding on the courts or a taxpayer, constitute persuasive explanations in relation to the interpretation and application of the statutory provision in question. Interpretation Note 39 has been in circulation for years and has not been brought into contention until now.' [5] [Footnote omitted.]

The note accorded with the interpretation she gave to the relevant sections of the Act.

[3] G The parties were invited to file written submissions on the extent to which a court may consider or...