Barnard Labuschagne Incorporated v South African Revenue Service and Another

Barnard Labuschagne Incorporated (BLI), an incorporated firm of attorneys, was issued with a certified statement by the South African Revenue Service (SARS) under section 172(1) of the Tax Administration Act 28 of 2011, reflecting an alleged outstanding tax debt of R804 747 arising from BLI’s self-assessed VAT, PAYE, UIF and SDL obligations. In terms of section 174 of the Act, the certified statement was filed with the High Court and treated as a civil judgment in favour of SARS. BLI did not dispute the correctness of its self-assessments but contended that it had already made payments which SARS failed to allocate properly, rendering the certified statement incorrect. BLI applied to the High Court for rescission of the ‘tax judgment’. SARS opposed the application, arguing that such a judgment was not legally susceptible to rescission. In the alternative, BLI challenged the constitutionality of sections 172 and 174 if rescission were unavailable. The High Court dismissed the rescission application and the constitutional challenge. Leave to appeal was refused by both the High Court and the Supreme Court of Appeal, prompting BLI to seek leave to appeal to the Constitutional Court.

Leave to appeal was granted; the appeal was upheld; the High Court’s order was set aside; the rescission application was remitted to the High Court for hearing on the merits before a different judge; costs in the remitted proceedings were reserved; SARS and the Minister of Finance were ordered to pay BLI’s costs in the applications for leave to appeal and in the Constitutional Court.

This judgment reaffirms, at Constitutional Court level, that certified statements filed by SARS under the Tax Administration Act and treated as civil judgments are susceptible to rescission. It restores doctrinal clarity after conflicting High Court decisions and reinforces the binding force of precedent as an aspect of the rule of law. The case is significant for taxpayers and practitioners because it confirms that judicial oversight remains available against tax judgments, which was a crucial factor in upholding the constitutionality of the ‘pay now, argue later’ tax collection regime.