Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

CHAPTER 4 – SECTION 195(1) OF THE CONSTITUTION AND PUBLIC ADMINISTRATION DUTIES WITH REFERENCE TO SECTIONS 74A AND 74B

4.2.7 Limitations to s 195(1)Although s 195(1) of the Constitution regulates Public Administration generally by imposing constitutional obligations upon organs of state such as SARS, the Constitutional Court has held that it does not give rise to justiciable rights. In Chirwa v Transnet Limited and Others88 the court held:

[76] Therefore although section 195 of the Constitution provides valuable interpretive assistance it does not found a right to bring an action.

The court did not conduct a thorough analysis by arriving at this decision, and merely passed judgment that as an alternate justiciable right to bring the action, the applicant could not rely on the provisions of s 195. The court did not say that public administrators did not have to adhere to these constitutional obligations. This brings non-compliance by SARS within the realm of the constitutional principle of legality.

In taking this line of reasoning further, if SARS fails to adhere to a constitutional obligation, it would be conduct inconsistent with the Constitution and invalid. The taxpayer would be entitled to approach the court for judicial review as contemplated in section 5.5.6 below in terms of s 172(1) if the Constitution to have the unconstitutional conduct declared invalid. With the proper factual motivation in line with the analysis provided in this thesis, the court would not be able to ignore this, and the unconstitutional and ‘invalid’ conduct would be reviewable, either in terms of ss 6(2), 7 and 8 of PAJA,89 or in terms of the principle of legality,90 through a rule 53 application.

In the recent Constitution Court decision Glenister v President of the Republic of South Africa and Others91 the Constitutional Court held that the High Court had jurisdiction to hear applications challenging the non-fulfilment of constitutional obligations such as ‘to act reasonably and accountably; to cultivate good human resource management; to respect international treaty obligations; … and to respect values enshrined in the Bill of Rights.’ This opens the possibility for taxpayers to approach the courts if SARS fail to adhere to their constitutional obligations in s 195(1).

Next:  CHAPTER 5 – JUDICIAL REVIEW WITH REFERENCE TO SS 74A AND 74B – 5.1 INTRODUCTION

*******************

Footnotes:

88 2008 (4) SA 367 (CC) at para’s [74] – [76], [146] and [195].
89‘…the action is otherwise unconstitutional or unlawful’, s 6(2)(i) of PAJA.
90 Which entails inter alia a basic level of rationality in SARS’ decision-making, that SARS should apply its mind properly in deciding whether and in what manner to exercise its discretionary investigative powers, and that SARS should exercise such powers only for the purposes they were conferred in compliance with its constitutional obligations; Pharmaceutical Manufacturers Association of SA & Another: In re Ex parte President of South Africa & Others 2000 (2) SA 674 (CC) at para’s [79]-[90].
91 2011 (3) SA 347 (CC) at para’s [13] and [22].