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Default judgement in tax litigation
Under previous Tax Court rules, if the Commissioner for the South African Revenue Service (SARS) did not comply with the prescribed time frames there was little a taxpayer could do. The position has changed due to new rules. Taxand South Africa takes a look at how this will affect taxpayers.
Part F of the new Tax Court rules allow for an application for default judgment to be made in the event of non-compliance with the rules by either the taxpayer or SARS. If SARS is at fault the taxpayer may deliver a notice to SARS informing SARS of their intention to apply to the Tax Court for a final order in the event that SARS fails to remedy the default within 15 days of delivery of the notice. In the event that SARS fails to remedy the default within the prescribed period the taxpayer may apply, on notice to SARS, to the Tax Court for a final order to the effect that SARS’ assessment or decision be altered.
From a litigation point of view careful consideration of issues such as delays, requests for extensions and the granting of extensions may become very important if an application under this new rule is to be brought.
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The new dispensation which allows for an application for default judgment, to be made in the event of non-compliance with the rules by either the taxpayer or SARS could prove to be favourable to both the taxpayer and SARS where either party does not comply with the prescribed time periods and obligations in the dispute resolution process.