Director of Public Prosecutions, Western Cape v Parker

Step-in-Time Supermarket CC, a registered VAT vendor, and its sole representative, Mohamed Shakiel Parker, failed over several years to submit VAT returns and to pay VAT due to SARS. They were charged under the Income Tax Act and the Value-Added Tax Act, and additionally with sixteen counts of common law theft based on the alleged misappropriation of VAT collected. Parker pleaded guilty to all charges and was convicted and sentenced, including five years’ imprisonment for theft. On appeal, the Western Cape High Court set aside the theft convictions, holding that VAT collected belonged to the vendor and that the relationship with SARS was not one of trust. The State appealed to the Supreme Court of Appeal on the legal question whether a VAT vendor who misappropriates collected VAT can be charged with common law theft.

The appeal was dismissed with costs, including the costs of two counsel; the High Court’s setting aside of the theft convictions and sentence was confirmed.

The case authoritatively clarifies that non-payment or misappropriation of VAT by a vendor does not amount to common law theft. It affirms the principle of legality in criminal law and confirms that tax enforcement must occur within the statutory framework created by the VAT Act. The judgment limits prosecutorial attempts to seek harsher penalties by resorting to common law crimes where legislation has provided specific offences.