Sars loses appeal against SA supermodel’s tax bill in R142m gift

Sars loses appeal against SA supermodel’s tax bill in R142m gift

The Western Cape High Court has for the second time dismissed the five year-long appeal by the South African Revenue Service (Sars) to tax about R44 million out of R142m gifted to a South African swimwear model by former Lebanese prime minister Saad Hariri, after the Tax Court had found against her without hearing her representation on the matter.

In a judgment delivered on Friday, Western Cape High Court Judge Ashley Binns-Ward struck off the roll Sars’s application with costs, which included the costs incurred by the appellant in raising an objection to the court’s jurisdiction to decide the application.

The case by fashion model, Candice van der Merwe – also now known as Candice-Jean Poulter – dates back to 2019 when she received a gift of R142m as a means to add glamour and exclusivity to an event at a holiday resort on the Seychelles Islands.

Poulter contested the requirement by the tax court to pay the R44m as a tax obligation on the gift, and subsequently lost an appeal to the challenge which would not be entertained as she was represented by her father who is not a legal practitioner.

The high court earlier this year heard her application in which she said the tax court had erred in not allowing her representative to act on her behalf, and maintained that the court had acted incorrectly in ruling that only legal practitioners could facilitate her case.

The court ruled in April that the Taxation Act was silent on if a representative needed to be a qualified legal practitioner.

Now, in upholding the appeal from the tax court, the high court on Friday said it held that tax courts were courts of revision, not courts of law.

It held that the bar against lay representation in courts of law consequently did not apply in proceedings in a tax court.

“The effect of this court’s judgment is that the appellant may proceed with her appeal in a tax court represented by her chosen and duly authorised lay representative on a date to be advised by the registrar of the Tax Court,” the court ruled.

Poulter in April had objected to Sars’s application to the high court for leave to appeal “an irregular step”.

The high court in April found that the tax court had proceeded correctly, deciding the case based on the evidence available when Poulter did not appear and it exercised its power to make decisions if a party or their authorised representative did not appear, provided that proper notice had been given.

“Mindful that our judgment in the principal proceedings had been given in a matter brought on appeal to this court, we would have raised the jurisdictional issue of our own accord even if the appellant had not done so,” Judge Binns-Ward said.

The high court said it did not have jurisdiction to determine an application for leave to appeal from its judgment in the principal proceedings.

JUdge Binns-Ward said in the circumstances, the court had no reason to address the merits of the application for leave to appeal.

“Suffice it to say, however, that it should be evident from our judgment in the principal proceedings that the respondent’s contention that the tax courts are courts of law goes against the weight of authority.

“And we consider that it would be difficult for a further court of appeal to uphold the contention in the face of the finding by the Constitutional Court that appeals to the special tax courts involve a first-level of adjudication that takes place ‘outside the normal forensic hierarchy,” Judge Binns-Ward said.

Sars was not immediately available for comment though there were reports that it would seek to appeal the ruling as its next course of action.

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