Page 736 - SAIT Compendium 2016 Volume1

CASE DIGEST 2012–2013
farming operations. In contrast, the documentary evidence provided by the respondent suggested that the appellant was a farmer.
The court placed a higher value on the documentary evidence provided by the respondent, stating that the onus was still on the appellant to support the statements of its witnesses with objective facts or evidence.
The court also referred to the sales agreement between the appellant and E, which stated that the business was sold as a going concern and subsequently VAT was levied at zero percent on the sale. The fact that the appellant reversed this entry and subsequently paid the VAT, made no difference to the intention of the parties on the date that the agreement was signed.
The documentary evidence presented to the court (including contracts and nancial statements) indicated that the appellant was conducting a business of plantation farming, that it sold the plantation business as a going concern and then employed E to manage the plantation business on its behalf. Therefore, the court ruled that s 26(1) of the Act did apply to this transaction and that the proceeds on the sale of the plantation were correctly included in the appellant’s gross income in terms of para 14(1) of the First Schedule to the Act.
[Link: http://c.ymcdn.com/sites/www.thesait.org.za/resource/resmgr/2014_case_law/tc_it_13002_wc.pdf]
3. Whether a vendor should be allowed to deduct input tax in respect of supplies made to it by sponsors of an event?
[ABC (Pty) Ltd v CSARS (Case No 872: Tax Court Cape Town – 2 December 2013)]
Introduction
This is an appeal in terms of the provisions of s 33 of the Value-Added Tax Act 89 of 1991 (‘the VAT Act’). The issue in dispute is whether the appellant should be allowed to deduct input tax in respect of supplies made to it during the relevant periods of assessment, even though tax invoices were not issued in respect of those supplies. The CSARS had disallowed the appellant’s objection to the assessment raised.
Facts
The appellant carried on business as the owners and organisers of a world-acclaimed festival. In the course of organising such events, the appellant obtained sponsorships for its 2006 and 2007 edition of the festival. In terms of the sponsorship agreements, the sponsors agreed to contribute and did contribute to the organisation and bringing into fruition festivals for the years 2006 and 2007 by providing the appellant with certain services and cash payments. The sponsors did not charge VAT on the supply of goods and services made or rendered to the appellant and no VAT was paid by the appellant on the sponsorships so received. Furthermore, the sponsors did not issue tax invoices to the appellant in respect of the services they provided to the appellant. Consequently, the appellant did not issue the sponsors with tax invoices in respect of the services it provided to the sponsors in terms of the sponsorship agreements. The appellant did not declare output tax on the value of the services supplied to it by the sponsors in its VAT returns for the relevant periods of assessment nor did it claim input tax on the value of the services supplied to it by the sponsors in any of its VAT returns.
The appellant informed the respondent of the failure by the sponsors to provide it with the required tax invoices, coupled with a demand that the respondent, consistent with its responsibility to carry out the provisions of the VAT Act, forces the sponsors to issue the appellant with the required tax invoices.
The respondent raised assessments and levied taxes based on an audit it had conducted into the tax affairs of the appellant. In response, the appellant objected to the assessments in dispute and to other assessments relating to the disallowance of input tax claimed on certain entertainment expenses and rental of passenger vehicles.
The appellant’s objections to the other assessments and the penalties levied on the sponsorship’s output tax were allowed, but its objections to the output tax on the sponsorship and interest levied thereon were disallowed.
Held
The court held that the fact that the sponsors did not issue the appellant with a tax invoice did not leave the appellant without a remedy. There is an obligation on registered vendors, which includes the appellant, to comply with the provisions of the VAT Act. The appellant cannot, now that it failed to comply with the provisions of the VAT Act in the rst place, contemplate any form of relief in terms of which the respondent is ordered to force the sponsors to issue the appellant with the required invoices. The relief provided for in s 20(7)(b) does not assist the appellant either. The appellant had failed to make out a case for the relief it sought in this appeal. Therefore, the appeal was dismissed.
[Link: http://c.ymcdn.com/sites/www.thesait.org.za/resource/resmgr/2014_case_law/tc-vat_872_wc.pdf]
4. Determining the validity of various anti-dumping duties imposed under the Customs and Excise Act 91 of 1964.
[Association of Meat Importers v ITAC (Case No 769, 770, 771/12) [2013] ZASCA 108 (13 September 2013)]
Introduction
Summary: Anti-dumping duties imposed under the Customs and Excise Act 91 of 1964 – termination – effect of World Trade Organisation Agreement – effect of regulations promulgated under the International Trade Administration Act 71 of 2002.
Background: This appeal concerns the validity of various anti-dumping duties imposed under the Customs and Excise Act. The proceedings were prompted by the decision in Progress Of ce Machines CC v The South African Revenue Service 2008 (2) SA 13 (SCA), which has caused some concern to the customs and revenue authorities. They say the decision has signi cant and far-reaching implications for the discharge of their statutory powers and functions, and that
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