H R Computek (Pty) Ltd v The Commissioner for the South African Revenue Service

SARS conducted an audit of H R Computek (Pty) Ltd for VAT periods March 2002 to September 2003 and found under-declared output VAT. On 9 March 2004 SARS issued a revised VAT assessment totalling R4 040 377.28, comprising under-declared VAT, additional tax at 200% under s 60 of the VAT Act, penalties, and interest. The taxpayer lodged a notice of objection on 24 March 2004 but only challenged the additional tax, penalties, interest, and alleged procedural unfairness; it expressly described the capital VAT amount as 'uncontested'. SARS disallowed the objection. Years later, in its Rule 11 statement before the Tax Court, the taxpayer for the first time alleged that SARS had incorrectly included turnover of a related entity in calculating the VAT capital amount. The Tax Court held that the taxpayer had not objected to the capital amount and could not raise it on appeal. Leave to appeal to the Supreme Court of Appeal was granted.

The appeal was dismissed with costs, limited to the costs of one counsel.

The case affirms the strict procedural requirements governing objections and appeals under South African tax law and confirms that VAT disputes follow principles developed in income tax jurisprudence. It underscores that taxpayers are confined to the grounds expressly raised in their notices of objection and that unchallenged assessments become final and conclusive, promoting certainty and finality in tax administration.