TEG wins fresh SARS review over disputed tax returns
JOHANNESBURG — A company challenging tax assessments linked to allegedly unauthorised returns has secured a fresh hearing from SARS after the Johannesburg High Court overturned two decisions rejecting its requests for reductions.
The ruling, delivered on 8 October, sends TEG Asset & Risk Management CC’s requests back to SARS for reconsideration. It does not cancel the underlying assessments or order a refund. SARS must also pay the company’s legal costs.
The dispute concerns the company’s 2017 income tax assessment and VAT periods between 2015 and 2017. TEG appointed an accountant in 2010 to handle its accounting and tax returns. It alleged that he subsequently subcontracted the filing work to a consultant whom the company had never authorised.
SARS recovered money from the company’s bank account in June 2020. In October 2022, TEG requested reduced assessments under the Tax Administration Act, arguing that the returns had been submitted fraudulently by an unauthorised person.
SARS relied on the accountant’s valid appointment as public officer to reject the requests. Judge Wright found that this did not resolve the separate allegation that the consultant had actually submitted the returns without authority, which SARS had not denied.
The judgment also explains that an unauthorised submission alone does not establish fraud. The relevant provision requires both a fraudulent return and an unauthorised submitter, while responsibility for correct, timely returns remains with the taxpayer.
Wright nevertheless cautioned against blaming the SARS decision-makers, finding that the documents had not always presented the facts clearly and the consultant’s role became clear only during litigation.
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