The South African Revenue Service (SARS) welcomes the judgment on Friday by the Supreme Court of Appeal of South Africa in the matter involving the businessman, Mr. Dave King.
The SCA unanimously overturned a previous judgment of the Pretoria High Court handed down in January 2005, by Judge E. Patel, wherein an order for the liquidation of Hawker Air Services Pty (Ltd) ("HAS"), a company of which King is a current director (launched in December 2003) was refused. A provisional sequestration order for the estate of the partnership, in which HAS was a partner, was also denied.
The abovementioned ruling by Judge Patel, which the SCA overturned, resulted in a three year delay in the finalisation of VAT collections, to the detriment of SARS and the fiscus. It was further found that the criticism of the Commissioner of SARS and his officials by Judge Patel is unjustified. Judge Patel's findings regarding the unconstitutionality of certain statutory provisions of laws administered by SARS, were also overturned.
SARS furthermore endorses the learned judges' views, as stated in the SCA media release: "At the centre are the tax debts of nearly R 2.5 billion the Commissioner claims Mr. Dave King, the sole director of HAS, and a number of parties connected to him owe - and the Commissioner's attempts over the last four years to ensure that HAS' principal asset, its interest in a Falcon B900 jet aircraft, remains available for the partial satisfaction of that and other tax debts."
Consequently, the SCA has ordered the final liquidation of HAS, and the provisional sequestration of the partnership and afforded SARS the cost of two counsels.
SARS feels vindicated by the judgment and confident that the judgment is not only paramount to the King matter, but sends a strong message of greater compliance with the tax laws that SARS administers. SARS is confident that this is an important step in ensuring current and future tax compliance by high nett worth individuals, like Mr Dave King and his associated companies. It also serves as an indication that the tax net is closing in on those who continue to challenge the tax laws in this country.
ISSUED BY THE COMMISSIONER FOR THE SOUTH AFRICAN REVENUE SERVICE