Commissioner: South African Revenue Services, Gauteng West v Levue Investments (Pty) Ltd

Levue Investments (Pty) Ltd purchased a decommissioned town, Kragbron, for R25,65 million and paid transfer duty of approximately R2,565 million. As a registered VAT vendor, Levue claimed a VAT refund of R2,581,317 on the basis that it had acquired second-hand goods (fixed property) wholly for making taxable supplies. SARS disallowed the claim, contending that the properties related to exempt supplies and that Levue had not demonstrated an intention to make taxable supplies. While Levue’s objection under the Value Added Tax Act was pending, it faced severe financial distress and successfully brought an urgent application in the High Court compelling SARS to pay the refund. SARS obtained leave to appeal but filed the appeal record about ten months late and sought condonation and reinstatement of the lapsed appeal.

The application for condonation for the late filing of the record and reinstatement of the appeal was refused. The appeal therefore failed, and the Commissioner was ordered to pay the respondent’s costs of appeal, including the costs of two counsel.

The case reaffirms the strict approach of South African appellate courts to compliance with procedural rules and confirms that even strong prospects of success will not excuse flagrant, unexplained delays. It underscores the importance of diligence by organs of state and their legal representatives in appellate litigation.