Page 746 - SAIT Compendium 2016 Volume1

CASE DIGEST 2012–2013
Facts
Kadodia, the applicant, is a businessman who imports tobacco products and cigarettes into South Africa.
The applicant wanted to import 70 cases of Remington Gold Cigarettes from Zimbabwe into South Africa at the beginning of 2002. South Africa has a trade agreement with Botswana, Lesotho and Namibia (‘BNLS countries’) in terms of which goods imported into South Africa only attract VAT and not customs duty. Zimbabwe is not a signatory to
this agreement.
The applicant was advised to route the intended cargo into South Africa thereby avoiding customs duty.
When the applicant subsequently sought to import the goods from Namibia into South Africa, the goods were seized
and impounded at the Nakop Border Post.
The applicant was requested to produce proof of payment of the duties payable in terms of s 102 of the Customs and
Excise Act 91 of 1964 (‘the Act’) before 12:00 on 8 May 2002.
SARS advised the applicant, in a hand-delivered letter, that there had been an underpayment of VAT and customs duty
amounting to R171 731.01.
The applicant’s attorney responded to the SARS letter on 4 May 2002 and effectively admitted that the applicant had
contravened the Act. The attorney proposed that the goods be sold to offset the amounts claimed or to release the goods to the applicant so that he can dispose of it and thereafter pay the debt to SARS.
SARS replied on 15 May 2002 and rejected the applicant’s proposals as the Act did not allow SARS to do so. The Act provides for various dispute-resolution mechanisms which the applicant did not use (in any event, the applicant had admitted full liability for the SARS claim).
The matter went dormant for ve years in which time neither party took any further steps. During July 2007, SARS sent a nal demand for the payment of the outstanding VAT, duties and penalties. Attention was drawn to s 114(1)(a) (ii) of the Act, which empowers SARS to le a statement with the Registrar of the High Court and obtain a judgment in terms thereof.
The matter went dormant again for a period of four and a half years until June 2012, when SARS lodged a statement in terms of 114(1)(a)(ii) with the Registrar of the High Court.
a) b) c)
In order to succeed, the applicant must establish the following:
He must give a reasonable explanation for his default.
His application must be bona de.
He must show that he has a bona de defence to the claim of SARS which, prima facie, has some prospect of success.
Held
It was held that even if accepted that the applicant acted bona de, it does not amount to a bona de defence in view of the applicant’s unequivocal admission that he owes the amount to SARS.
In Saphula v Nedcor Ltd 1999 (2) SA 76 (W), it was held that the object of a rescinding judgment is to ‘restore a chance to air a real dispute’. It was held that there was no dispute in the present matter.
The application was dismissed with costs.
[Link: http://c.ymcdn.com/sites/www.thesait.org.za/resource/resmgr/2014_case_law/kadodia_v_commissioner_for_s. pdf]
15. Claim for reimbursement for a double payment made to SARS (because of a stolen cheque) in order to settle the vendor’s VAT liability
[Kirsten and Thomson CC t/a Nashua East London v CSARS – Case Number 1681/08 (North Gauteng High Court – 6 March 2013)]
Introduction
In this matter, the plaintiff claimed reimbursement for a double payment it had made to the defendant in order to settle its VAT liability. The plaintiff relied on the condictio indebiti against the defendant. The condictio indebiti is an equitable remedy which seeks to ensure that no one is unjusti ably enriched at the expense of another.
Facts
Kirsten and Thomson CC t/a Nashua East London (‘plaintiff’) was liable to pay VAT to SARS (‘ rst defendant’) for its trading activities for the period February – March 2007 in the amount of R432 375.34.
In order to discharge its liability, the plaintiff drew a cheque on 5 April 2007 on the East London branch of FNB. It was made payable to SARS and marked ‘non-transferable’. The cheque was delivered to the East London branch of SARS on the same date.
SARS did not deposit the cheque or receive its proceeds, as it was probably stolen by an unknown person. The unknown person then copied certain particulars of the cheque and effectively cloned the original cheque.
The name of the payee on the cloned cheque was changed from SARS to ‘Bihlongwa Construction CC’. The cloned cheque was deposited at an ABSA branch on 30 April 2007 for the credit of Bihlongwa.
Since the proceeds of the original cheque were never collected by SARS, the plaintiff’s VAT liability remained due and in order to avoid interest and penalties in the amount of some R40 000, a second cheque was issued by the plaintiff on 18 May 2007.
The following elements of condictio indebiti had to be considered: impoverishment, enrichment and sine causa.
Held
There were clearly visible discrepancies in the dates of the original cheque and it was argued that FNB should have refused to pay the cheque and should have sent it back to ABSA so that it could be referred to drawer. The plaintiff failed to prove that FNB was not negligent and therefore failed to establish impoverishment on the facts.
738 SAIT CompendIum oF TAx LegISLATIon VoLume 1