Curved Tobacco (Pvt) Ltd v Zimbabwe Revenue Authority

Curved Tobacco (Pvt) Ltd, a registered tobacco merchant in Zimbabwe, made self-assessments and paid US$597,777.71 to ZIMRA as non-resident tax on fees (NRTFs) for the period 2012-2014. These payments related to arrangement/commitment fees paid to CNT, a German financier, under facilitation agreements. The applicant subsequently claimed a refund on the basis that the payments were made under a mistaken belief that they were payable, arguing that under the Zimbabwe-Germany double taxation agreement, no NRTFs were due. ZIMRA refused the full refund but adjusted the assessment by reducing amounts payable by 7.5%, offering only a partial refund. The applicant appealed to the Special Court for Income Tax Appeals. That court struck off the appeal for want of jurisdiction, holding the refusal to refund was not an appealable "assessment" under s 65 of the Income Tax Act, though it also decided the merits adversely to the applicant. The applicant then appealed to the Supreme Court without obtaining leave from the Special Court. The Supreme Court struck off that appeal on 1 October 2020 for non-compliance with s 66(1)(b) of the Income Tax Act, which requires leave to appeal on questions of fact or mixed fact and law. On 29 October 2020, the applicant filed this composite application seeking condonation for late filing and leave to appeal.

• Whether condonation should be granted for the late filing of an application for leave to appeal filed approximately one year out of time
• Whether leave to appeal should be granted against the judgment of the Special Court for Income Tax Appeals
• Whether the application was procedurally defective for non-compliance with High Court Rules 262-269
• Whether proposed grounds of appeal must be explicitly stated in an application for leave to appeal
• Whether a composite application for both condonation and leave to appeal is permissible
• Whether three separate applications (condonation of condonation, condonation, and leave) are required when filing beyond 24 days
• Whether the applicant has reasonable prospects of success on appeal on the merits
• Whether self-assessments by taxpayers constitute 'assessments' appealable under the Income Tax Act
• Whether an appeal lies against obiter dicta remarks made by the court

i) Condonation of the late filing of the application for leave to appeal to the Supreme Court against the judgment of the Special Court dated 22 October 2019 in case no ITC 10/19 is granted. ii) Leave is granted for the applicant to appeal against the judgment of the Special Court on the grounds set out in its notice of appeal dated 11 November 2019 in case no ITC 10/16 which was struck off the roll by the Supreme Court on 1 October 2019 in case no SC 612/19. iii) No order as to costs.

1. A composite application for both condonation and leave to appeal is permissible under the High Court Rules; condonation is a means to an end (leave to appeal), not an end in itself, and therefore only two applications (not three) are required even when filing beyond the 24-day period in Rule 267. 2. The words "unless the judge otherwise orders" in Rule 267 permit applications for leave to appeal beyond the 24-day period where proper grounds for condonation are shown. 3. Procedural irregularities in court forms and papers that do not actually mislead or prejudice the opposing party should not result in striking off applications; courts should avoid being over-fastidious about technical defects. 4. Proposed grounds of appeal need not be explicitly restated in an application for leave to appeal where they are adequately identified through documents annexed to the founding affidavit. 5. In determining whether to grant leave to appeal, the test is whether the applicant has "reasonable prospects of success" or a "fighting chance" - whether the appeal is "free from predictable failure" - not whether the appeal will definitely succeed. 6. Factors for condonation must be considered cumulatively and conjunctively, with strong prospects of success potentially compensating for inadequacy in the explanation for delay, and vice versa. 7. Where an earlier appeal was struck off for a technical defect (lack of leave) rather than being dismissed on the merits, and the applicant acted in bona fide belief that no leave was required, this constitutes a reasonable explanation for delay in seeking condonation.

The court made several obiter observations: (1) It noted that the degree of precision demanded by the respondent regarding procedural requirements appeared to be "nit-picking" and represented "pettifogging objections" that made the judgment unnecessarily prolix. (2) The court observed that it would "make no sense" that a taxpayer could appeal against their own self-assessments, though this point was not determinative. (3) The court commented that the importance of obtaining an authoritative pronouncement from a superior court on substantive tax issues weighs in favour of granting access to appeal processes. (4) The court noted, without deciding, that the applicant's contention that self-assessments become assessments by ZIMRA upon service is "arguable" given the provisions of s 37A of the Income Tax Act. (5) The court observed that if the applicant succeeds on jurisdiction on appeal, findings on the merits that were characterized as obiter dicta would "cease to be obiter" and become the substantive part of the judgment. (6) The court expressed the view that "it is not my appreciation of these rules that it was intended to make access to justice so distant and far-flung," reflecting a philosophy favouring reasonable access to appellate remedies over technical barriers.

This case clarifies important procedural principles in South African and Zimbabwean tax appeal practice: (1) it confirms that composite applications for condonation and leave to appeal are permissible and that only two applications (not three) are required even when filing beyond the prescribed time limits; (2) it emphasizes that courts should not adopt an overly technical approach to procedural irregularities where the opposing party has not been actually misled or prejudiced; (3) it establishes that proposed grounds of appeal may be sufficiently identified through annexures without explicit restatement in the founding papers; (4) it applies the principle that condonation is remedial and should be granted where there is a bona fide explanation and reasonable prospects of success, particularly in matters of public importance requiring authoritative determination; (5) it clarifies the test for leave to appeal as whether the appeal has a "fighting chance" or is "free from predictable failure" rather than requiring proof the appeal will succeed; and (6) it addresses the relationship between self-assessments by taxpayers and assessments by revenue authorities, and the appealability of refund refusals under tax legislation - issues of ongoing importance in tax administration.