Wingate-Pearse v The Commissioner for the South African Revenue Service

The appellant taxpayer, Mr Martin Wingate-Pearse, submitted returns of income for the tax years ending on the last day of February from 1998 to 2005. In April 2006, SARS issued revised assessments for each of those years amounting to approximately R41 million (later reduced to approximately R23 million). The taxpayer objected and subsequently lodged an appeal with the Tax Court in terms of section 83 of the Income Tax Act 58 of 1962 on 1 August 2007. The appeal was only set down for hearing on 9 February 2015 before Khumalo J. Prior to the hearing, the parties held a pre-trial conference and agreed that the taxpayer would commence by leading his evidence. However, at the commencement of the hearing, the taxpayer's counsel sought leave to argue a point in limine concerning the onus of proof and the duty to commence leading evidence. The Tax Court permitted argument and ruled on the onus and duty to begin. In April 2015, the Tax Court made a ruling on the onus of proof and which party had the duty to commence proceedings. The Tax Court subsequently granted leave to appeal to the Supreme Court of Appeal in terms of sections 134 and 135 of the Tax Administration Act 28 of 2011.

• Whether the decision of the Tax Court on an interlocutory ruling concerning the onus of proof and the duty to begin leading evidence was appealable under section 133(1) of the Tax Administration Act 28 of 2011
• Whether such an interlocutory ruling constituted a 'decision' under sections 129 and 130 of the Tax Administration Act 28 of 2011
• The correct interpretation of section 129(2) of the Tax Administration Act and the scope of appealable decisions from the Tax Court

The appeal was struck off the roll. The appellant was ordered to pay the respondent's costs, including those consequent upon the employment of two counsel.

In terms of section 133(1) of the Tax Administration Act 28 of 2011, only decisions made under sections 129 and 130 are appealable from the Tax Court. Section 129 contemplates only three types of appealable decisions: (1) decisions on appeals concerning assessments; (2) decisions on appeals against 'decisions' as defined in section 104(2); and (3) decisions on applications in procedural matters referred to in section 117(3). An interlocutory ruling on the onus of proof and the duty to begin leading evidence is not a decision of any of these types and is therefore not appealable under the Tax Administration Act. The legislative scheme deliberately excludes interlocutory applications from the ambit of appealable decisions, even though it includes decisions on applications in procedural matters under the dispute resolution rules. Additionally, a ruling made under Uniform Rule 39(11) is not final because it contains a proviso that it may be altered to prevent injustice, and therefore lacks the finality required for an appealable order under conventional principles.

The Court noted that the inability to appeal at this stage of proceedings would not prejudice the taxpayer, as any interlocutory decision adverse to the taxpayer would be remediable on appeal once the Tax Court had delivered judgment and made one of the orders contemplated in section 129(2) of the Tax Administration Act. The Court also commented that there may be a lacuna in section 129(2) in that it fails to make provision for an order where the appeal concerns an application in a procedural matter referred to in section 117(3), but noted that this did not affect the present case and that inferentially the Tax Court must be able to make an appropriate decision in such matters. The Court clarified that while the judgment in Sprigg Investment 117 CC t/a Global Investment remains relevant to understanding the meaning of a 'decision' in terms of section 133(1), the need to resort to the traditional distinction between final and interlocutory orders may be limited in view of the description in section 129(2) of the decisions that a Tax Court may make. It may only be of relevance to the question whether a particular order by the Tax Court in an application in a procedural matter referred to in section 117(3) is appealable, but the Court expressly declined to be definitive on this point.

This case is significant in South African tax law and civil procedure as it: (1) Clarifies the scope of appealable decisions from the Tax Court under the Tax Administration Act 28 of 2011; (2) Establishes that interlocutory rulings on matters such as onus and the duty to begin are not appealable decisions under section 129 of the Tax Administration Act; (3) Distinguishes between decisions on interlocutory applications and decisions on applications in procedural matters under the dispute resolution rules; (4) Interprets the legislative amendments made by the Tax Administration Laws Amendment Act 39 of 2013 and their deliberate limitation of appealable decisions; (5) Prevents delays in tax disputes through premature interlocutory appeals, while ensuring that any adverse interlocutory decisions can be remedied on appeal once the Tax Court has delivered its final judgment on the merits. The judgment promotes efficiency in tax litigation by preventing piecemeal appeals on procedural matters.