We explained that in the United Manganese of Kalahari and Rappa Resources decisions, the SCA found in SARS’ favour and held that in terms of section 105 of the Tax Administration Act 28 of 2011 (TAA), it is required that a taxpayer must first apply to the High Court to direct that it has jurisdiction to hear an application for review of an assessment, before the application can be heard. In these cases, it was essentially held that section 105 of the TAA will only apply in exceptional circumstances. We noted at the time that the judgments may be appealed to the Constitutional Court (CC), but that it would be interesting to see what the outcome was in the Absa Bank Limited case, where SARS had appealed to the SCA after the High Court found in the taxpayer’s favour regarding the application of section 105 of the TAA and the review application.

On 29 September 2023, the SCA handed down judgment in the long-awaited case now cited as The Commissioner for the South African Revenue Service v Absa Bank Limited and Another (596/2021) [2023] ZASCA 125. In this case, SARS had indicated its intention to apply the general anti-avoidance rules (GAAR) in the Income Tax Act 58 of 1962, which were not the tax provisions at issue in the other cases. In Absa Bank Limited, the SCA has now also found in SARS’ favour and overturned the High Court decision. Considering the complexity of the matter as it involves the application of the GAAR, we will leave discussing the judgment for another day, but for purposes of this article, we note the SCA’s finding that as “the dispute did not involve solely a question of law, no exceptional circumstances existed to justify the high court assuming jurisdiction in the matter”.

Constitutional Court the final arbiter?

Since the publication of our previous article, it appears from the CC’s website that the taxpayers in United Manganese of Kalahari and Rappa Resources, have applied to the Constitutional Court for leave to appeal the SCA judgments. Another interesting development, is that the taxpayer in Forge Packaging (Pty) Ltd v Commissioner for the South African Revenue Service ZAWCHC 119 (13 June 2022), discussed in our Tax and Exchange Control Alert of 21 July 2022, has also applied for leave to appeal to the CC, which matter also involved the application of section 105 of the TAA. Given the SCA’s judgment in Absa Bank Limited, which may also be appealed, it is possible that the CC will hear four appeals (possibly jointly) all dealing with the application of section 105 of the TAA. Of course, this also depends on whether leave to appeal is granted in each case, and one should also appreciate that the CC may direct that the issue of leave to appeal is addressed during oral arguments, with the merits of the appeals. The CC’s final decision as to these appeals remains to be seen, but there is little doubt that considering the importance of the issue at hand, it will be helpful for the CC to have the final say regarding the application of section 105 of the TAA and how it should be interpreted