Andre Daniels | Head | Tax Controversy and Dispute Resolution | Tax Consulting SA | mail me |
Two recent Tax Court judgments produced markedly different outcomes. These outcomes raised questions about condonation in the court. In particular, they highlighted uncertainty in how condonation principles apply. Practitioners often recognise this tension. However, case law rarely states it so directly.
A comparison between Taxpayer EV vs The Commissioner for SARS IT 25180 (9 December 2025) and The Commissioner for South African Revenue Service (SARS) vs Taxpayer 3C VAT 12167 (12 March 2026) shows a clear divergence. In one case, the taxpayer faced strict scrutiny despite a short delay. In the other, SARS obtained relief after a multi-year delay. This contrast raises concerns about consistency in condonation in the court.
The taxpayer’s uphill battle
In Taxpayer EV, the taxpayer requested condonation in the court for the late filing of expert notices and a summary. The delay lasted only one day in each instance. At first glance, this delay seems minor. Courts often overlook such delays in the interests of justice. However, the court extended its enquiry beyond the immediate delay. It required an explanation for several years of earlier non-compliance. The expert report already existed during this period. Yet the taxpayer did not file it.
The taxpayer cited budget constraints. The court rejected this explanation. It also criticised the conduct as tactical and reactive. The timing of filings, especially after SARS disclosed its own expert evidence, influenced this view.
The court also examined the taxpayer’s honesty. It noted a lack of candour when the taxpayer initially denied the need for condonation in the court. This weakened the application further.
Next, the court assessed the expert evidence. It found the evidence largely inadmissible. The report included legal interpretation instead of proper expert opinion. This proved decisive.
Because the evidence lacked probative value, the taxpayer failed to show prospects of success. As a result, the Court refused condonation in the court. Importantly, condonation in the court expanded beyond delay. It became a full review of conduct, strategy and evidentiary strength.
SARS and the elasticity of delay
The outcome in Taxpayer 3C contrasts sharply. In this matter, SARS filed its Rule 31 statement four years late. This delay was substantial by any standard. SARS explained the delay through the medical incapacity of an official. It also cited internal capacity issues. Finally, it pointed to an administrative failure to reassign the matter.
The court accepted these explanations. It acknowledged the long delay. It also recognised prejudice to the taxpayer. However, it still granted condonation in the court. The court then considered broader factors. It emphasised the importance of tax administration. It also highlighted the public interest in resolving tax disputes fully.
In addition, the court examined the merits. It found weaknesses in the taxpayer’s VAT position. This supported SARS’s case. On this basis, the court granted condonation in the court. It imposed costs on SARS. However, it allowed the matter to proceed on the merits.
Two approaches, one principle
Both judgments applied the same legal test. This includes explanation for delay, bona fides, prospects of success, and interests of justice. However, the application differed in intensity.
In Taxpayer EV, the court demanded a detailed explanation covering years of conduct. It also scrutinised litigation strategy and evidentiary quality. This created a strict threshold for condonation in the court.
In contrast, Taxpayer 3C applied a more flexible approach. The court accepted a broad explanation despite a long delay. It weighed this against public interest considerations. As a result, condonation in the court operated differently across the two matters.
The role of merits and interests of justice
The merits played different roles in each case. In Taxpayer EV, weak evidence undermined the application. The merits, therefore, are limited to condonation in the court.
In Taxpayer 3C, the merits supported SARS. The court used them to justify granting relief. This strengthened condonation in the court despite procedural delays. The interests of justice also shifted in meaning. For taxpayers, it demanded strict compliance. For SARS, it supported substantive resolution over procedural failure.
Several factors explain this difference. First, courts prioritise public revenue collection. This strengthens the case for hearing disputes on their merits. Second, courts recognise institutional constraints within SARS. These include staffing and administrative limitations. Third, courts expect taxpayers to maintain procedural discipline. They scrutinise conduct more closely where litigation appears strategic.
These factors influence how condonation in the court is applied in practice.
Implications for taxpayers
Taxpayers must treat procedural rules seriously. Even short delays can trigger full scrutiny. Courts may extend condonation in the court enquiries beyond the delay itself.
Explanations must remain complete and honest. They must cover the entire period of non-compliance. Importantly, condonation in the court cannot fix weak evidence or a poor strategy. At the same time, these cases show variability. SARS may receive more flexibility in certain contexts. However, courts may still impose costs or note shortcomings.
Ultimately, condonation in the court depends on context. The same legal test can produce different outcomes depending on facts, conduct and perceived public interest.
