The recent judgment in Commissioner for the South African Revenue Service v Africa Cash and Carry (Crown Mines) (Pty) Ltd and Another (Case No. 42076/2022) demonstrates that successfully managing a tax dispute requires considerably more than merely filing an objection to a SARS assessment.
Richan Schwellnus
Team Lead: Tax Controversy & International Tax
Handed down by the Pretoria High Court on 2 October 2026, the judgment highlights that suspension of payment requests, dealings with SARS while the dispute is pending, taking steps to preserve assets, settlement negotiations and ultimately the collection of a tax debt, can prove equally important long after the immediate dispute has concluded.
This case also shows why decisions and representations made while a dispute is ongoing can have consequences much later, when SARS determines tax liabilities within corporate groups for outstanding tax obligations.
Tax disputes with SARS typically originate where a taxpayer is aggrieved with a SARS assessment issued to them. An objection may be lodged and sometimes an appeal may follow, with many taxpayers focusing on proving that SARS got it wrong. But this approach can be dangerously narrow.
A Tax Dispute Spanning More Than a Decade
The dispute in this case had a lengthy history. In June 2011, SARS issued Income Tax and Value Added Tax (“VAT”) assessments against Africa Cash and Carry (Pty) Ltd (“ACC”) relating to the 2003 to 2009 tax periods. ACC objected and ultimately appealed to the Tax Court.
The Tax Court confirmed ACC’s tax liability and SARS’s methodology, although the assessments were amended. ACC thereafter appealed to the Supreme Court of Appeal (“SCA”), which confirmed the Tax Court’s judgment in November 2019. No further appeal was pursued, and the amended assessments consequently became final and conclusive.
But while the underlying tax dispute was moving through the courts, another important battle was unfolding: whether SARS would ultimately be able to collect the disputed tax.
Suspension of Payment Is Not the End of the Matter
The Tax Administration Act operates on a firmly entrenched “pay now, argue later” principle. Disputing an assessment does not, by itself, suspend the obligation to pay.
ACC accordingly sought suspension of payment. In March 2012 SARS ultimately accepted a second request. Among the terms of the arrangement was that ACC would maintain stock worth more than R300 million, while SARS would refrain from enforcing the tax debt.
However, during the dispute, ACC sold its business as a going concern to Africa Cash and Carry (Crown Mines) (Pty) Ltd (“Crown Mines”) for nil consideration. SARS subsequently discovered that ACC had been divesting itself of the very business and assets relevant to its ability to satisfy the tax debt.
SARS eventually revoked the suspension following the material change in circumstances and demanded payment after affording ACC an opportunity to make representations.
The practical lesson is significant. Obtaining suspension of payment is not simply an administrative victory that can thereafter be forgotten. Taxpayers must carefully manage their affairs throughout the dispute and remain cognisant of the circumstances upon which the suspension was granted.
SARS Can Come Back Years Later
The judgment also contains an important warning concerning representations made during tax disputes. In September 2015, attorneys acting for Crown Mines addressed correspondence to SARS confirming that Crown Mines would accept liability for certain proven tax liabilities of ACC once the pending Tax Court proceedings had been adjudicated and finalised.
Years later, that undertaking became central to SARS’s case. The High Court found that the relevant conditions had ultimately been fulfilled. The assessments predated the transfer of ACC’s business, and ACC’s liability was subsequently confirmed through the appeal process. The Court accordingly found that Crown Mines had accepted liability for ACC’s 2003 to 2009 tax liability.
This is an important reminder that correspondence with SARS should never be treated casually. Representations made in support of a suspension request, settlement proposal or other procedural relief may have long-lasting consequences even after the dispute has ended.
SARS Can Look Beyond the Corporate Structure
Perhaps most striking in the judgment was SARS’s attack on the transfer of ACC’s business to Crown Mines.
SARS sought an order under section 20(9) of the Companies Act on the basis that Crown Mines’ incorporation and the transfer of ACC’s business constituted an unconscionable abuse of separate juristic personality.
Following the transfer, Crown Mines continued using ACC’s premises, employees, fixtures, accounting systems, computers, telephone numbers, stock, customers and suppliers. The Court recorded that Crown Mines had effectively “stepped into ACC’s shoes and continued its business under a different name.”
For taxpayers engaged in disputes with SARS, restructuring a business or transferring assets while a substantial tax liability remains unresolved therefore requires exceptional care. SARS’s collection powers cannot necessarily be defeated merely by moving the economic activity into another corporate vehicle.
Tax Debts Do Not Simply Disappear
The judgment also delivers an important finding on prescription. Crown Mines argued that SARS’s claim was subject to the ordinary three-year prescription period. The High Court rejected this position.
The Court concluded that section 171 of the Tax Administration Act applies to an established tax debt, meaning that the debt prescribes only after 15 years if SARS has not claimed it.
The Court regarded the relevant debt as having been established, at the latest, when the SCA delivered judgment in November 2019 and no further judicial challenge followed. The Court further held that, whether the 15-year or three-year period applied, the debt had in any event not prescribed.
This substantially changes the practical perspective once an assessment becomes final. The conclusion of the dispute may not mark the end of the taxpayer’s exposure. Instead, it may mark the beginning of a lengthy SARS collection horizon.
Tax Dispute Resolution Requires Strategy from Beginning to End
Africa Cash and Carry demonstrates that tax dispute resolution cannot be reduced to drafting a technically sound objection.
A taxpayer must consider the entire lifecycle of the dispute: the assessment, objection and appeal; whether payment should be suspended; what security or undertakings are provided to SARS; how the business and its assets are dealt with while litigation continues; whether settlement or compromise is appropriate; and what happens if the tax debt ultimately becomes final.
The consequences of getting that strategy wrong can be substantial.
In this matter, the Court ultimately described the conduct of ACC and Crown Mines as highly objectionable, found that their resistance to the tax liability justified the Court’s displeasure, and awarded punitive attorney-and-client costs.
For taxpayers facing substantial SARS assessments, early involvement of an experienced tax attorney is therefore not only about fighting the assessment. It is about protecting the taxpayer throughout the dispute and ensuring that decisions made today do not create an even greater problem years later.
