Page 749 - SAIT Compendium 2016 Volume1

CASE DIGEST 2012–2013
Held
It was held that the application required considering factual issues (such as determining whether the altering of the dates by SARS and on issues regarding legitimate expectation) was in bad faith and that the power to do this was that of the Tax Court.
The application was dismissed.
[Link: http://c.ymcdn.com/sites/www.thesait.org.za/resource/resmgr/2014_case_law/mtn_international_(mauritius. pdf]
18. Correct classi cation for customs duty purposes of vehicle known as a Kubota RTV Utility Vehicle
[Smith Mining Equipment (Pty) Ltd v CSARS (728/12) [2013] ZASCA 145]
Introduction
The Supreme Court of Appeal (SCA) heard the matter between Smith Mining Equipment (Pty) Ltd (‘appellant’) and the Commissioner for the South African Revenue Service (‘respondent’) on 17 September 2013. The judgment was delivered on 1 October 2013.
This matter is an appeal from the North Gauteng High Court and concerns a dispute relating to the classi cation of an imported Kubota RTV Utility Vehicle for customs duty purposes.
Facts
The respondent classi ed the vehicle under tariff heading (‘TH’) 8704.21.80 (comprising motor vehicles for the transport of goods), whilst the appellant argued that the vehicle falls within the ambit of TH 8709.19 (types of vehicles used in factories, warehouses, dock areas or airports).
The appellant submitted that the vehicle had the main distinguishing features summarised in the explanatory notes to heading 87.09 and therefore it was indicative of classi cation of the vehicle under that heading. However, the onus was on the appellant to convince the court of the latter.
The main issue was to determine the accurate approach in classifying goods for customs duty purposes. Reference to former case law indicated that the meaning of the relevant headings as well as section and chapter notes (in section XVII of Part 1 of Schedule 1 to the Customs and Excise Act 91 of 1964) should be used to classify goods. In dif cult or doubtful cases reference may be made to the Brussels Notes. However, the purpose of the before mentioned explanatory notes is not to override or contradict the tariff headings, but rather to explain such headings.
Held
The court determined that the primary question when classifying the appellant’s vehicle for Customs Duty purposes is whether the vehicle complies with the general meaning of tariff heading 87.09. The approach used by the appellant was incorrect since it relied mainly on the distinguishing features summarised in the explanatory notes. These notes only play a secondary role in the classi cation process.
As a result of the appellant’s failure to provide suf cient evidence that the vehicles contained features similar to those used in factories, warehouses, dock areas and airports (as described in the tariff heading), the appeal was dismissed with costs including the costs of two counsel.
[Link: http://c.ymcdn.com/sites/www.thesait.org.za/resource/resmgr/2014_case_law/smith_mining_equipment_(pty). pdf]
19. Liability of SARS for cheque mailed to taxpayer, subsequently lost and thereafter fraudulently cashed where the taxpayer has not agreed to the mode of payment
[Stabilpave (Pty) Ltd v South African Revenue Service 2014 (1) SA 350 (SCA)]
Introduction
The appellant in this case was Stabilpave (Pty) Ltd and the respondent was the South African Revenue Service (SARS). Stabilpave was issued with a tax assessment form (IB34), dated 16 October 2006, which stated that SARS owed Stabilpave a tax refund of R724 494.29. The tax assessment included a notice stating that the transfer will be made electronically but in the instance that the banking details are incomplete or incorrect, the payment will be made by issuing a cheque.
Facts
Stabilpave’s banking details were not available to SARS and therefore the payment was made by issuing a cheque. The cheque was crossed, marked ‘not transferable’, sealed and posted with Securemail. The cheque was stolen during transit and withdrawn by a third party. Stabilpave instituted action against SARS for payment which was not received. The argument used by Stabilpave was supported by the case Barclays National Bank Ltd v Wall 1983 (1) SA 149 (A) at 156H–157C, which stipulated that:‘in law there is no payment if a cheque is posted and lost before it reaches the creditor’.
SARS’ contention was that their obligation to pay the tax refund was deemed ful lled even though the amount was never credited by Stabilpave. SARS’ argument was grounded on the principle set by Dadoo & Sons Ltd v Administrator, Transvaal 1954 (2) SA 442 (T) at 445. This case stipulated: ‘if a creditor requests a debtor to settle his debt by sending a cheque through the post, he agrees to run the risk during transit’.
The court accepted the contention of SARS and the claim of Stabilpave was dismissed with costs. The case was later appealed.
SAIT CompendIum oF TAx LegISLATIon VoLume 1 741
CASE DIGEST 2012-2013