Commissioner for the South African Revenue Service v Langholm Farms (Pty) Ltd

Langholm Farms (Pty) Ltd operated a pineapple farming enterprise and transported its produce to a processing plant using its own trucks. The trucks were refuelled with diesel at a third-party depot located at the processor’s premises, not on Langholm’s farm. Langholm, a registered diesel rebate user under the Customs and Excise Act 91 of 1964, claimed diesel rebates for fuel used during the relevant period. SARS audited the claims and issued a Notice of Intention to Assess, expressing the view that rebates were only allowable for diesel delivered to, stored, and dispensed from storage tanks on the user’s own premises, and that certain transport activities were not primary production activities. Before SARS issued a final assessment, Langholm approached the High Court seeking declaratory relief on the interpretation of s 75(1C)(a)(iii) of the Act. The High Court granted the declaratory orders in Langholm’s favour, and SARS appealed to the Supreme Court of Appeal.

The appeal was upheld with costs, including the costs of two counsel. The order of the High Court was set aside and replaced with an order dismissing Langholm’s application with costs.

The case clarifies the strict interpretation of diesel rebate provisions under the Customs and Excise Act and confirms that rebates are limited to diesel delivered to, stored, and used on the taxpayer’s own premises. It reinforces the application of the Endumeni approach to statutory interpretation in tax matters and underscores judicial restraint in extending tax benefits beyond the clear wording of legislation.