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1、CSARSvSairaEssaProductionsCCTHESUPREMECOURTOFAPPEA1.0ISOUTHAFRICAJUDGMENTCaseno:162/10Inthematterbetween:THECOMMISSIONERFORTHESOUTHAFRICANREVENUESERVICEAppellantandSAIRAESSAPRODUCTIONSCC1stRespondentSAIRAESSA2ndRespondentMARKCOR1.ETT3rdRespondentNeutralcitation:TheCommissionerfortheSARevenueServicev
2、SairaEssaProductionsCC(162/10)2010ZSCA154(30November2010)Coram:HARMSDP,NUGENT,C1.OETE,MYAANDTSHlQlJJAHeard:17November2010Delivered:30November2010Summary:SmallBusinessTaxAmnestyandAmendmentofTaxation1.awsAct9of2006whethertherespondentsweregrantedamnestyfromcriminalprosecutionwhethertheregionalcourtsh
3、ouldhaveinterruptedcriminalproceedingspendingadeclarationorderbytheHighCourt.ORDEROnappealfrom:NorthGautengHighCourt,Pretoria(PotterillJsittingascourtoffirstinstance):1.Theappealisupheldwithcosts,includingthecostsoftwocounsel.2.Theorderofthecourtbelowissetasideandissubstitutedwiththefollowing:1.Thea
4、pplicationisdismissed.2.Theapplicantsareorderedtopaythecostsoftheapplicationonanattorneyandclientscale,includingthecostsoftwocounsel,jointlyandseverally.JUDGMENTTSHIQIJ(HarmsDP,Nugent,CloeteandMayaJJconcurring):1ThisisanappealagainstanorderintermsofwhichtheNorthGautengHighCourt,Pretoria(PotterillJ)d
5、eclaredthattherespondentshaddulycompliedwiththeirobiigationsundertheSmallBusinessTaxAmnestyandAmendmentofTaxation1.awsAct9of2006(theAct)andwereaccordinglyexemptfromprosecutiononchargespendingagainstthemintheregionalcourt,Gcrmiston.TheapplicationwaslaunchedafterthecriminalproceedingsWerepostponed,bya
6、greement,toenabletherespondentstoapproachtheHighCourtforadeclaratoryorderonwhethertherespondentsqualifiedforamnestyagainstprosecutionwithregardtothependingcriminalcharges.Theappealisbroughtwithleaveofthecourtbelow.2Thectcameintooperationon25July2006.ThepurposeoftheActwastoencouragesmal1businesseswhi
7、chwerenotregisteredfortaxandthosewhichwereregistered,butwherebusinessincomefortheyearsprecedingthe2006yearofassessmenthadnotbeendeclaredorwasunderstatedoroutstanding,todeclaretheirincomeandapplyforamnesty.Intermsofs8(c),taxpayerswereentitiedtoreiefforpaymentofanyVATintermsoftheVATActinrespectof(inte
8、ralia)anysupplyofservicesduringthequalifyingperiodsieupto28February2006.Thereliefwas,however,subjecttocertainexclusionsintermsofss5(2)and10（八）oftheAct,whichprovideasfollows:5(2)TheCommissionermaynot,subjecttosubsection，approveanapplicationintermsofsubsection(1)iftheCommissioner,atanytimebeforethesub
9、missionoftheapplicationfortaxamnesty,deliveredanoticetothatapplicantorthatapplicant*srepresentativeinformingthatapplicantofanaudit,investigationorotherenforcementactionrelatingtoanyfailurebythatapplicanttocomplywithanyActinrespectofwhichapplicationfortaxamnestyismade.(Subsection5(4)isirrelevantforpr
10、esentpurposes.)10Thetaxamnestyreliefdoesnotapplyinrespectofanyamountoftax,levy,contribution,interest,penaltyoradditionaltax,totheextentthatit（八）hadalreadybeenpaidbeforethesubmissionoftheapplication3Intermsofs5oftheSecondSmallBusinessTaxAmnestyandAmendmentofTaxation1.awsAct10of2006(SecondAmnestyAct),
11、anapplicantwhoseapplicationforamnestyhasbeenapprovedintermsofs5isdeemednottohavecommittedanoffenceintermsofanyActtowhichtheamnestyActrelates.Consequentlysuchapersonwouldnotbe1iableforcriminalprosecution.1Twopertinentissuesariseinthisappeal.Thefirstisajurisdictionalissueanditiswhetherthecriminalproce
12、edingsintheregionalcourtshouldhavebeensuspendedpendingthedeterminationofthequestionoflawbytheHighCourt.Thesecondpertainstothemeritsoftheordergrantedbythecourtbe1ow.Ishal1dealwiththesecondquestionfirst.5Thesecondrespondent(MsEssa)andthirdrespondent(MrCorlett)arehusbandandwifeandjointmembersofthefirst
13、respondent,SairaEssaProductionsCC(theCO.MsEssaisanactressandproducerandusestheCCasavehicletocarryonbusiness,thebulkofwhichcomprisesofservicesrenderedtotheSouthAfricanBroadcastingCorporation.6InJuly2003,SRScommencedWithcriminalinvestigationsagainsttherespondentsfornon-paymentofPYE,underdeclarationofV
14、Tandnon-filingoftaxreturnsforthe2003/2004taxyears.On11August2004,therespondentsweredulynotifiedabouttheinvestigationsandwereaffordedanopportunitytoliaisefurtherwithSARSwithaviewtosubmittingalloutstandingreturnsandforadiscussionofpossiblecriminalchargesarisingoutoftheinvestigations.Inresponsetothisle
15、tter,therespondentssubmitiedtherelevanttaxreturns.TheysubsequentlybetweenAugust2004andSeptember2005paidthemoniesduetoSRSforVATandalsopaidadmissionofguiltfinesinrespectofPAYE.SRSproceededwithcriminalchargeswithregardtotheVT.Itisthesechargeswhichformedthesubjectmatteroftheapplicationinthecourtbelow.7F
16、rom12September2005,therespondentsmadeatleastsevenappearancesintheregionalcourt,Germiston,beforetheproceedingswerepostponedpendingtheapplicationbeforetheHighCourt.ThemagistrateagreedtopostponethecriminalproceedingsbecausetheActhadinthemeantimecomeintooperationon25July2006.Therespondentslegalrepresent
17、ativereferredthemagistratetotheAct.ThemagistrateindicatedthatitwasnotcleartohimwhethertherespondentscouldrelyontheActtoescapeprosecution.HeagreedtopostponethecriminalproceedingstoenabletherespondentstobringanapplicationtotheHighCourtforadeclaratoryordertoclarifythelegalimplicationsoftheAct.Theapplic
18、ationwasissuedon20February2008.8Whentheissueoftheamnestywasraisedwiththemagistrate,andwhentheapplicationforadeclaratoryorderwasmadeintheHighCourt,SRShada1readycommunicateditsstanceontheissueoftheamnestyfortheVTtotherespondentsinwriting.ThesequenceofthecorrespondencebetweenSARSandtherespondentswasasf
19、ollows:On27October2006,MsEssaandMrCorlettsubmittcdindividualapplications,andoneonbehalfoftheCC,foramnestytoSARSintermsoftheAct,interaliainrespectofincometaxandVAT.Itseemsthaton10January2007therespondentscommunicatedwithSRS,becauseon26January2007SARSaddressedalettertotheirattorneyinrep1ytoalette,from
20、himdated10January2007.Inthatlettertherespondentswereinformedunambiguouslythatthesummonsinthecriminalprosecutiondealtwithamountsthatwereexcludedfromamnesty.furtherletterdated12March2007fromSARStotherespondentsattorneysrestatedSRSpositioninthisregard.9SARSrespondedtoal1threeapplicationsforamnesty.Itis
21、onthethreeresponseswhichtherespondentsplacereliancefortheirimmunityfromprosecution.Al1threeresponsesarecontainedinaproformaamnestyapprovalform,andareaddressedtotheindividualrespondents.Theyal1statethat:IntermsoftheSmallBusinessTaxAmnesty1.egislation,youareherebyadvisedthatyourapplicationhasbeenappro
22、vedsubjecttoreceiptofful1paymentoftheamnestylevy.Alltheapprovalscontaintheindividualincometaxnumbersoftherespondentsandstatethattheassessmentinformationwasfor2006TaxableBusinessIncome.WhatisglaringlyabsentinallthreeapprovalsisanyreferencetoVTandinthecaseoftheCC,theVATreferencenumberoftheCC.Counselfo
23、rtherespondentssoughttoplacerelianceonthesinglesentencequotedaboveasconstitutingapprovaloftheapplicationsforVATamnesty.ItpatentlywasnotbothbecauseofthetermsoftheresponsesthemselvestowhichIhavejustreferred,andbecauseofthelettersquotedinthepreviousparagraphofthisjudgmentwhichprecededtheresponses.Theco
24、urtaquoerredinfindingthat,asafact,amnestyhadbeengrantedinrespectofVAT.10IntermsoftheprovisionsofS5(2),SARSwasprecludedfromapprovinganapplicationforamnestyincircumstances1ikethepresent,whereanoticeofinvestigationhadbeenissuedrelatingtoanyfailuretocomplywithataxrelatedActinrespectofwhichtheapplication
25、foramnestyismade,andS.RSwasfurtherprecludedfromdoingsobecauseofthetermsoftheprovisionsofS10（八）,inasmuchastheVAThadbeenpaidbeforetheapplicationforamnestyhadbeensubmitted.TheprovisionsoftheActareclearandunambiguus.ItisnotclearwhythemagistratefelttheneedtoreferthisissuetotheHighCourt.11Thejurisdictiona
26、lissue:ThiscourthasonseveraloccasionsdiscouragedthepracticeofinterruptingcriminalproceedingsinmagistratescourtsforthepurposeofclarifyingaquestionoflawintheHighCourtandhascautionedcourtsontheconsequencesofsuchapractice.ThemostrecentreportedjudgmentisNationalDirectorofPublicProsecutionsvKing1whereHarm
27、sDPsaidat152b-c:Thefairtrialrightdoesnotmeanapredilectionfortechnicalnicetiesandingeniouslegalstratagems,ortoencouragepreliminarylitigationapervasivefeatureofwhitecollarcrimecasesinthiscountry.Tothecontrary:courtsshouldwithintheconfinesoffairnessactivelydiscouragepreliminarylitigation.Theundesirable
28、consequencewhicharoseinthismatterwasthattheorderoftheHighCourtamountedtoanacquittaloftherespondents(accusedinapendingcriminalmatter)byacivilcourtonabasiswhichwasnotsupportedbytheevidence,andwhichwasincompetentinlaw.12010(2)SCR146(SCA).12Section319oftheCriminalProcedureAct51of1977providesforasystemat
29、icmannerinwhichasuperiorcourtmayreservequestionsoflawforconsiderationbythiscourt.213Sofarasproceedingsinmagistratescourtsareconcerned,inWahlhausvAdditionalMagistrate,Johannesburg3NicholasJAstated:Itistruethat,byvirtueofitsinherentpowertorestrainillegalitiesininferiorcourts,theSupremeCourtmay,inaprop
30、ercase,grantreliefbywayofreview,interdict,ormandamus-againstthedecisionofamagistrateScourtgivenbeforeconviction.(SeeEllisvVisserandAnother,1956(2)S117(W),andRvMarais,1959(1)SA98(T),wheremostofthedecisionsarecollated).This,however,isapowerwhichistobesparinglyexercised.Itisimpracticabletoattemptanypre
31、cisedefinitionoftheambitofthispower;fo,eachcasemustdependuponitsowncircumstances.ThelearnedauthorsofGardinerand1.ansdown(6thed.,vol.Ip.750)state:Whi1easuperiorcourthavingjurisdictioninrevieworappealwillbeslowtoexerciseanypower,whetherbymandamusorotherwise,upontheUnterminatedcourseofproceedingsinacou
32、rtbe1ow,itcertainlyhasthePoWertodoso,andwilldosoinrarecaseswheregraveinjusticemightotherwiseresultorwherejusticemightnotbyothermeansbeattained.Ingeneral,however,itwillhesitatetointervene,especialIyhavingregardtotheeffectofsuchaprocedureuponthecontinuityofproceedingsinthecourtbelow,andtothefactthatre
33、dressbymeansofrevieworappealwillordinarilybeavailable.Inmyjudgment,thatstatementcorrectlyreflectsthepositioninrelationtounconcludedcriminalproceedingsinthemagistratescourts.Iwoudmerelyaddtwoobservations.Thefirstisthat,whiletheattitudeoftheAttorney-Generalisobviouslyamaterialelement,hisconsentdoesnot
34、reIievetheSuperiorCourtfromthenecessityofdecidingwhetherornottheparticularcaseisanappropriateoneforintervention.Secondly,theprejudice,inherentinanaccusedsbeingobligedtoproceedtotrial,andpossibleconviction,inamagistratescourtbeforeheis2Section319provides:(1)Ifanyquestionoflawarisesonthetrialinasuperi
35、orcourtofanypersonforanyoffence,thatcourtmayofitsownmotionorattherequesteitheroftheprosecutorortheaccusedreservethatquestionfortheconsiderationoftheAppellateDivision,andthereuponthefirst-mentionedcourtshal1statethequestionreservedandshalldirectthatitbespecialIyenteredintherecordandthatacopythereofbe
36、transmittedtotheregistraroftheAppellateDivision.(2)Thegroundsuponwhichanyobjectiontoanindictmentistakenshal1,forthepurposesofthissection,bedeemedtobequestionsoflaw.(3)Theprovisionsofsections317(2),(4)and(5)and318(2)shallapplynutatismutandiswithrefeincetoallproceedingsunderthissection.Seealsoss317and
37、318oftheCriminalProcedureAct.31959(3)SA113()at119H：120E.accordedanopportunityoftestingintheSupremeCourtthecorrectnessofthemagistrate,sdecisionoverrulingapreliminary,andperhapsfundamental,contentionraisedbytheaccused,doesnotpersenecessariIyjustifytheSupremeCourtingrantingreliefbeforeconviction(seetoo
38、theobservationofMURRAY,J.,atPP1234ofElliscase,supra).sindicatedearlier,eachcasefalIstobedecidedonitsownfactsandwithdueregardtothesalutarygeneralrulethatappealsarenotentertainedpiecemeal.Oneofthefundamentalconsiderationsfornotreservingquestionsoflawunti1thecriminalproceedingshavebeenfinalised,isthatt
39、hequestionwou1dbeacademicifnoconvictionfollowsattheendofthetrial:RvAdamsothers.4Inthepresentmatter,sincetherewasnoquestionofi1legalityintheregionalcourt,theHighCourtcouldnotexerciseitsinherentpowertoreviewbywayofdeclaratoryorder.14SARShadaskedinitsansweringaffidavitforapunitivecostsorder.Counselfort
40、herespondentscouldnotofferanybasisonwhichsuchanorderwou1dnotbeappropriateinthecircumstancesanditclearlyis.Asstated,theproceedingsintheregionalcourtshouldnothavebeeninterrupted.Theonlyinferenceisthattherequesttosuspendthecriminalproceedingswasaimedatdelayingthemstillfurther.Thisistheonlyinference,bec
41、auseapartfromthefactthattherewasnobasisforthis,thepositionwithregardtoVThadbeenmadepatentlyclearbySRSintheirtwolettersinJanuaryandMarch2007,evenbeforethelettersofapprovalweresenttotherespondents.TheomissionofanyreferencetoVATinthelettersofapprovalmerelyconfirmedthestanceofSARS.Inthecircumstancesthea
42、pplicationtotheHighCourtwasvexatiousandthisisamplejustificationforapunitivecostsorderagainsttherespondents.15Thefollowingorderismade:1.Theappealisupheldwithcosts,includingthecostsoftwocounsel.2.Theorderofthecourtbelowissetasideandissubstitutedwiththefollowing:1.Theapplicationisdismissed.2.Theapplica
43、ntsareorderedtopaythecostsoftheapplicationonanattorneyandclientscale,includingthecostsoftwocounsel,jointlyandseverally.41959(3)S753()at761.Z1.1.TshiqiJudgeofppealAPPEARANCESAPPE1.1.ANT:JJGAUvr1.ETTSC(withhimHGASNYMN)InstructedbyMketsuAssociatesIncPretoria;MatsepesInc,Bloemfontein.RESPONDENTS:AEBHAMSCInstructedbyGarickeBousfieldIncPretoria;Webbers,Bloemfontein.
