A N Vehicle Hire and Civils CC v Commissioner, South African Revenue Service

• Jurisdiction: South Africa
• Judge: Ploos van Amstel J
• Judgment Date: 11 November 2013
• Docket Number: 10956/2013
• Court: KwaZulu-Natal High Court, Durban
• Hearing Date: 08 October 2013
• Citation: 2013 JDR 2687 (KZD)

REASONS FOR JUDGMENT

Ploos van Amstel J

[1]

The applicant in this matter is AN Vehicle Hire and Civils CC, a supplier of plant, machinery, equipment and vehicles to the civil engineering industry. It owes the respondent (SARS) in excess of R10 million and seeks to review and set aside a refusal by SARS to conclude an instalment payment agreement with it as contemplated in section 167 of the Tax Administration Act, 28 of 2011. The hearing before me related to interim orders pending the review. I dismissed the application for interim relief and adjourned the review application for the filing of further affidavits. These are the reasons for the order which I made.

2013 JDR 2687 p2

Ploos van Amstel J

[2]

The deponent to the founding affidavit is Aaron Naidoo, who is the sole member of the applicant. He says the applicant owes SARS an amount of R10 029 240, which is made up of R6 473 963 in respect of VAT, R2 298 594 in respect of PAYE, R831 389 in respect of UIF and R425 292 in respect of SDL. He says the applicant's tax debt is not in dispute and it intends to pay it in full. The debt relates to the year 2009 and the years following.

[3]

The applicant seeks to explain its failure to pay its tax liability on the basis that some of its customers went insolvent while others simply failed to make payment of monies which were owing, and the fact that it received poor advice and service from its accountants.

[4]

On 21 June 2013 SARS gave notice to the Department of Transport (DOT) in terms of section 179 of the Act, requiring it to pay all sums that it owed to the applicant to SARS in respect of the applicant's tax liability. Section 179(1) provides that a senior SARS official may by notice to a person who holds or owes or will hold or owe any money, including a pension, salary, wage or other remuneration, for or to a taxpayer, require the person to pay the money to SARS in satisfaction of the taxpayer's tax debt.

[5]

On 20 September 2013 the applicant's attorney wrote to SARS and requested that an instalment payment agreement be entered into in terms of section 167. The request was declined. On 30 September 2013 the applicant's attorney made a new proposal, the effect of which was that the appointment of DOT would remain in place, that DOT would pay to SARS an amount of R250 000 per month and the balance to the applicant. This was also declined.

[6]

Section 167(1) provides that a senior SARS official may enter into an agreement with a taxpayer in the prescribed form under which the taxpayer is allowed to pay a tax debt in one sum or in instalments within the agreed period if satisfied that-

(a)

criteria or risks that may be prescribed by the Commissioner by public notice have been duly taken into consideration; and

(b)

the agreement facilitates the collection of the debt.

2013 JDR 2687 p3

Ploos van Amstel J

[7]

Section 168 provides that a senior SARS official may enter into an instalment payment agreement only if:

(a)

the taxpayer suffers from a deficiency of assets or liquidity which is reasonably certain to be remedied in the future;

(b)

the taxpayer anticipates income or other receipts which can be used to satisfy the tax debt;

(c)

prospects of immediate collection activity are poor or uneconomical but are likely to improve in the future;

(d)

collection activity...