ERS’S APPEAL AGAINST RATE RULING SET ASIDE

MBABANE – The High Court has set aside the Eswatini Revenue Service’s (ERS) appeal against a decision made by the Revenue Appeals Tribunal Eswatini (RATE).  

ERS made an appeal in the court against a decision of the Revenue Tax Tribunal in terms of Section 36 of the VAT Act 2011. This appeal stems from a case of one local company called SIMSD-ERS Joint Venture (PTY) LTD to the tribunal against ERS. RATE had ruled in favour of the company, but ERS was dissatisfied with the ruling, and hence ran to appeal in court.
According to the court judgment, a dispute arose between the applicant (ERS) and the first respondent (SIMSD-ERS Joint Venture (PTY) LTD) concerning inter alia the date of registration of the first respondent as a VAT vendor and/or whether there were any VAT obligations expected from the first respondent from about November 2017 to August 2018 and finally whether the first respondent was entitled to a refund.

Venture

The merits of the dispute between the parties were deemed not germane to this judgment. After an objection made to the ERS commissioner general in keeping with Section 35 of the VAT Act, was unsuccessful, SIMSD-ERS Joint Venture as the aggrieved party made an appeal to the RATE in terms of Section 15 (1) of the Revenue Appeals Tribunal Act, 2019. Having heard the appeal, the Tribunal found in favour of the first Respondent in a Ruling dated November 17, 2023. Being dissatisfied with the judgment of the Tribunal, ERS instituted appeal proceedings to the High Court in terms of Section 37 of the VAT Act.

SIMSD-ERS Joint Venture, in response, sought to have the appeal set aside on the grounds that it was an irregular step because sections 36 and 37 of the VAT Act were excluded by the minister in Legal Notice No.12 of 2012 when the Act was put into operation.SIMSD-ERS Joint Venture argued that since sections 36 and 37 of the VAT Act were never brought into operation, the Ruling of the Tribunal is final in terms of Section 17 (4). The 1st respondent further argued that even if sections 36 and 37 were operational, ERS’ appeal is still bad in law in that it was filed well beyond the 30 days provided for in subsection (1) of Section 37.

Proceedings

In an affidavit deposed to by Gugu Mahlinza the then acting Commissioner of General of the ERS, the appellant first took umbrage with the Rule 30 Notice, arguing that an objection in terms of Rule 30 cannot be taken against process initiating proceedings, that in any case the notice was itself not in terms of the rules of this court, as it is accompanied by an affidavit. Concerning Section 36 of the VAT Act, ERS argued that the Act was passed by Parliament and not the minister and as such the minister cannot exclude sections of an Act of Parliament from becoming operational.

The Value Added Tax Act makes specific provisions that the minister will appoint a day and publish the same in the gazette for come into effect of the Act and that he may appoint different dates for the coming into operation of different sections of the Act. The minister in Legal Notice No.12 of 2012 specifically left out sections 36 and 37, and until and unless the minister publishes in the Gazette the date or dates on which these sections become operated, they shall remain inoperative.

Section 17 (4) of the Revenue Appeals Tribunal Act provides that a decision of the Tribunal shall be final. Clearly, the decision is final unless set aside by this or any court having jurisdiction to do so. However, a person aggrieved by a decision of the Tribunal may approach the court, in terms of Subsection (8) for a review of such decision.  The Act does not state the grounds, upon which an aggrieved party may rely on for the review. It seems safe to assume that such a litigant would have to comply with Rule 53 of the rules of this court on grounds permissible at common law.

Before court, is not an application for review, but an appeal grounded on Section 36 of the Value Added Tax Act that is yet to be put into operation by the minister.
In the premise, the appeal by ERS to the court is deemed an irregular step and the proceedings are set aside.

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