Africa Cash & Carry (Pty) Ltd v The Commissioner for the South African Revenue Service

Africa Cash & Carry (Pty) Ltd operated a cash-and-carry business generating substantial cash sales. SARS investigated the taxpayer after uncovering widespread sales suppression practices in a related business group using point-of-sale systems capable of manipulating sales data. Searches and seizures revealed incomplete and unreliable records. SARS found that the taxpayer had fraudulently suppressed sales between 2003 and 2009, leading to under-declared income tax and VAT. Due to inadequate records, SARS issued estimated assessments based on an extrapolated gross profit margin derived from seven months of reliable data (August 2008–February 2009). Initial assessments were later shown to contain errors, resulting in a reduced gross profit margin and lower tax liability, which SARS pursued before the Tax Court without formally issuing revised assessments.

The appeal was dismissed with costs, including the costs of two counsel. The Tax Court’s order altering the assessments under s 129(2)(b) of the Tax Administration Act was upheld.

The case clarifies the scope of SARS’s powers to issue and defend estimated assessments where taxpayers have engaged in fraud and failed to keep proper records. It affirms the Tax Court’s authority to alter assessments under s 129(2)(b) and confirms that SARS may rely on corrected calculations without issuing new assessments during appeal proceedings. The judgment reinforces the principle that taxpayers bear the risk of uncertainty caused by their own inadequate record-keeping.