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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.TherespondentslegalrepresentativereferredthemagistratetotheAct.ThemagistrateindicatedthatitwasnotcleartohimwhethertherespondentscouldrelyontheActtoescapeprose
