Tax Court: When SARS are late what are the condonation principles?

We prepared to argue an application for default judgment against SARSThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... in the Tax Court on 13 September 2019.

SARSThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... were very late in filing their opposing papers, as they were with everything else leading to the default judgment application in the first place. We ended up not arguing the case as SARSThe South African Revenue Service (SARS) is the official tax authority responsible for the administration and enforcement of tax laws in South Africa. It plays a crucial role in managing the country’s fiscal policy by collecting revenue, administering customs, and ensuring compliance with tax legislation. Established under the South African Revenue Service Act, No. 34 of 1997, SARS functions independently... settled the matter.

So we conducted research on when late filing can be condoned by the Tax Court in this case (by Deone Roos of Pieterse TRM Erasmus):

THE COURT’S DISCRETION

• The court has inherent discretion to grant condonation where the interest of justice demand it and where the reasons for non-compliance with the time limits have been explained to the satisfaction of the court.  
• The decision to grant condonation is either yes or no: there is no wide range of available options for the decision-maker. A court can either grant or deny the condonation.
• Where the nature of the discretion is one in the “true” sense (where the lower court “has an election of which option it will apply and any option can never be said to be wrong as each is entirely permissible”), an appellate court should be slow to substitute a decision of the lower court with that of its own.

WHAT MUST THE COURT CONSIDER

Granting condonation must be in the interest of justice

• The CC referred to the factors that must be considered in determining whether or not it is in the interests of justice to grant condonation set out in Grootboom:

1. the nature of the relief sought;
2. the extent and cause of the delay;
3. the effect of the delay on the administration of justice and other litigants;
4. the reasonableness of the explanation for the delay;
5. the importance of the issue to be raised in the intended appeal;
6. and the prospects of success.

• The particular circumstances of each case will determine which of these factors are relevant
• The party seeking condonation must show sufficient cause by providing a full explanation of the non-compliance with the rules or court’s discretion
• The explanation must be reasonable enough to excuse default
• If the period of delay is short and there is an unsatisfactory explanation but there are reasonable prospects of success, condonation should be granted.
• Despite the presence of reasonable prospects of success, condonation may be refused where the delay is excessive, the explanation is non-existent and granting condonation would prejudice the other party.