Eskom v Bojanala Platinum District Municipality and Another

Eskom, a statutory electricity utility, paid Regional Services Council (RSC) levies for several years to various local authorities, including Bojanala Platinum District Municipality and Rustenburg District Council. Following legal advice and subsequent litigation, Eskom established that it was statutorily exempt from paying such levies because local authorities formed part of ‘the State’. Despite this, Eskom continued paying the levies for a period, sometimes under protest. After its final success in the Supreme Court of Appeal confirming the exemption, Eskom instituted actions to recover levies paid over several years. The respondents raised prescription as a defence.

The appeal was dismissed with costs, including the costs of two counsel.

The case clarifies that the extended 30-year prescription period for taxation debts under the Prescription Act operates only in favour of the State and not taxpayers. It authoritatively confirms that claims for refunds of unlawfully paid taxes or levies prescribe after three years, reinforcing certainty in fiscal administration and prescription law.