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 5 – JUDICIAL REVIEW WITH REFERENCE TO SS 74A AND 74B –
5.5.6.6 Reasonableness
In determining the reasonableness114 of the decision, SARS must satisfy a number of factors in justifying the reasonableness of its decision:
a) the nature of the decision;
b) the range of factors relevant to the decision;
c) The reasons for the decision;
d) The nature of the competing interests involved and ‘the impact of the decision on the lives and well-being of those affected.115
In this regard, SARS decisions must be rationally116 related to the purpose for which the power was given to them. Otherwise, its conduct is arbitrary and inconsistent with this requirement.117 If the purpose of the inquiry and audit is to obtain evidence for a criminal investigation that is running in tandem with the current inquiry and audit, the purpose is contrary the jurisdictional requirements of ss 74A and 74B, and s 35(3)(j) of the Constitution (dealing with the unlawfulness of being compelled118 to give selfincriminating evidence by a taxpayer).
Any transgression of the reasonableness requirement is also subject to review.
Next: 5.5.6.7 Natural justice and Procedural Fairness
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Footnotes:
113 See section 3.3: Lawfulness supra.
114 See section 3.4: Reasonableness supra.
115 Bato Star Fishing (Pty) Ltd v The Minister of Environmental Affairs and Tourism 2004 (4) SA 490 (CC) at para [45].
116 In University of Cape Town v Ministers of Education & Culture (House of Assembly & House of Representatives) 1988 3 SA 203 (C) ; LAWSA Volume 1 2nd ed Administrative Law Lexis Nexis at para 139 footnote 6. See also s 6(2)(f) of PAJA.
117 Pharmaceutical Manufacturers Association of South Africa and another: In Re: Ex Parte President of the Republic of South African and Others 2000 (2) SA 674 (CC) at para [85].
118 Sections 35(3)(h)-(j) of the Constitution; See also ITC 1818 69 SATC 98 and Seapoint Computer Bureau (Pty) Ltd v McLoughlin and de Wet NNO 1997 (2) SA 636 (W).
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